Parodox of Indian Economy
Parodox of Indian Economy :
Despite all measures taken by Govt for reducing money supply to the system by way of increasing unemployment in Govt sector, notebandi, giving precedence to loaning to have newer start-ups leading to supply of goods & services, reducing purchasing power by not providing higher government jobs through minimum government, maximum governance thus reducing demands of goods and services, the paradox remains there, that inflation remains at high pace and doesn't follow the classical theory of its dependence on demand and supply axioms.
Supply increase, Demand decrease should lead to lowering of inflation, which doesn't happen in India for reasons peculiar for India. Production increases but its increase doesn't effect the price level to decrease. Purchasing power decreased, but it doesn't lower price level of commodities.
Production increases but its increase doesn't effect the price level to decrease. It looks that shelf life of commodities are unnecessarily increased by some way or other. Like in Mumbai, the fruits are costly, just because despite being perishable, their shelf life is increased making their taste stale. Further, the commodities are circulated to second markets where they are processed and processd items are sold at a higher cost, thus giving manufacturer a better profit margin.
Purchasing power decreased, but it doesn't lower price level of commodities. People shift their preferences to substitute items thus adjusting to the higher cost level of items being used.
They also go for loans, thus increasing indebtedness. Democracy is, therefore, compromised because financial instability and lack of financial independence makes people to obey ethos like a slave.The people prefer to remain bonded with those jobs they are there in, rather looking for new jobs or venturing for new startup. They don't have will to act independently, nor have a viable setup to act so despite having liberty in their thoughts.