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  • Category: Miscellaneous

    Learnt about inflation-let us discuss deflation

    Almost all of us know about inflation. Whenever we talk about price rise, we use this term. In layman's language. inflation can be described as general rise in the price of goods and services. Inflation is caused due to wars, high wages, uncontrolled expenditure by the Government and resultant buget deficit and uncontrolled expenditure by the ruler (Example: Construction of Taj Mahal by Shahjahan caused inflation in Mughal kingom). Uncontrolled inflation is harmful for the country's economy and common people.

    Now let us discuss deflation. Deflation is just opposite of inflation. It causes a decrease in the price of goos and services in a country. Is it good for the economy? No. Deflation always causes lesser demand for goods and services. So, the production goes down causing loss of jobs or drastic cut in salary. So, deflation is also bad for the economy of the country. Deflation happens when Government drastically cut the expenditure, or when the citizens suddenly start spending less.

    However, deflation is a very rare phenomenon.
  • #589286
    For a growing and developing country like India we cannot have inflation nor we can sustain deflation. We want sustained maintenance of economy. When ever the price rises, the government must take severe action on hoarders and black marketers. When even the price of particular product raise, the government must import such product and check the price. For example onion price was at its peak and the central government started importing onions from other countries and now we can have five kgs of onions for just 50 rupees. Same way the government should not allow farmers to suffer for lack of minimum support price. Only few days back there was over production of tomatoes in South India and the farmers were not getting the minimum price and thus they forced the tomatoes to be dumped on the roads as they cannot afford transport cost to take it back. So it is government to control the deflation too.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease


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