At present prices of all commodities including essential commodities, vegetables, eatables, grains, all other consumer goods started increasing due to shortage of supply according requirement of demand from the consumers. Hence there should be effective mechanism to control the prices increase and against artificial shortages due to hoarding of stocks. Which became more profitable than manufacturing.
1. Petroleum products:
The central govt. Proposed to enhance the petroleum products prices to reduce losses to the petroleum companies due to changes in foreign exchange rates, rates in international markets. The losses are not fully eliminated with this increase. It means that there is further enhancement proposal. Further it is stated that the prices will fluctuate according to international market conditions and foreign exchange rates.
Alternatively, the prices can be reduced if the state govt.s reduces its tax rates based on quality but not on percentage of prices. Ex: the increase of rs.3 per litre increased the retail price by rs.4 due to levy of state govt. Tax. It means indirectly the state govt. Is benefitted by the price increase which is hidden cost to consumers. Therefore there should be a relation between “cost price” and “consumer price”. It is advisable that the market retail prices should not contain more than a particular percentage towards taxes.
2. Essential commodities:
The prices of essential commodities are governed by demand and supply in the market. The supply restricted by defects in supply chain, hoarding, storage etc., the financial institutions are lending more and more to traders who in turn using the funds to mobilize more and more stocks and store for good prices after the end of the season. Hence the farmer is not getting the good prices and the consumer is also forced to pay high price since there is no alternative.
