PRICE RISE AND CONSUMER AWARENESS. — Social Science STD 10 — Question
Gujarat BoardEnglish MediumSTD 10Social SciencePRICE RISE AND CONSUMER AWARENESS.3 Marks
Question
Describe the steps taken to control price rise$?$
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Answer
The following steps are undertaken to control price rise:
$1.$ Monetary Measures:
The Reserve Bank of India reduces the supply of money so that the spending of the people decreases.
It also sells government securities to control money supply.
It increases the lending rate so money supply for investment decreases and activities like hoarding decrease.
$2.$ Fiscal Measures:
To reduce budgetary deficit the government reduces subsidies and public loans, thereby it reduces payment of interest and administrative expenses.
It increases direct taxes specially on commodities used by high income group people, this will reduce the demand and prices will automatically become stable.
$3.$ Public Distribution System:
The fair price shops provide essential commodities like food grains, sugar, kerosene, edible oil and soaps to poor people at a reasonable price so the activities of black marketing, hoarding and profiteering are controlled.
$4.$ Administered prices mechanism:
The government administers the prices of certain basic goods because an increase in their price reduces the purchasing power of the fixed income and poor people.
The Government has implemented the Essential Commodities Act to stop malpractices like profiteering and hoarding.
It also books the errant traders and producers under PASA (Prevention of Anti-Social Activities Act) by strict legal and punitive action.
$5.$ Other measures:
The government imports essential commodities to maintain the supply and do away with scarcity.
It takes steps to control the growth of population.
It Increases agricultural and industrial production by technological and infrastructure facilities.
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