ECONOMIC TRENDS

PRICES

The study of the trends of prices is a sine qua non for an appreciation of the economic condition and standard of living of the people. Various factors including the parity price of gold, rise in population, volume of production, imports and exports and the conditions of distribution affect the general price level. The changes due to these factors are of incidental nature; but a review of prices and the purchasing power over the last 50 years shows that there has been a rise in the prices and a fall in the purchasing power of the rupee.

No information about prices is available for the period prior to 1853. The Old Berar Gazetteer gives statistics of prices of various commodities which are reproduced below: -

(Figures in seers per rupee)

The prices of jowar and wheat between the period 1876 and 1895 are given in the following statement: -

THE PRICES OF JOWAR AND WHEAT

(Figures in seers per rupee)

((1 Seer=0.933 kilogram)

Before the close of the century, the district was afflicted by two severe famines, one in 1897 and the other in 1900, when the  prices of cereals stood as follows: --

(Quantity in seers sold per rupee)

From 1901, the prices were almost steady at about 16 seers of  jowar and about 9 seers of wheat per rupee, except in 1908 when  the crops were poor.

The prices prevailing during 1910-11 are given below:-

The rise in prices of foodgrains was attributed to the large increase in cotton cultivation fetching farmers ready cash (cotton being a commercial crop) and fall in the acreage under cereals.

The prices of cotton are given in the following statement:

(Price per Khandi of 784 lbs.)

The gradual fall in the cotton prices during the period could be explained in part by the general tenor of the prices prevailing in world markets and in part by the gradual substitution in Berar of a coarse but prolific type of cotton for a finer but less productive variety.

In 1897, the price of cotton was only Rs. 145 per khandi but went on declining till 1909 when it sharply rose to Rs. 187. Again in the following two years it declined, but in 1903 it rose by about 20 per cent and in 1904 reached its highest, that is Rs. 222. In the year 1908-09 the price of Amravati cotton in  Bombay was Rs. 240.

During 1920-21, the prices of staple foodgrains were high. In  the rural area of the district the rise in wages failed to keep pace  with increased cost of foodgrains. With the abnormal conditions prevailing in the decade, prices and the cost of living fluctuated widely. [Census Report-Central Provinces and Berar, 1921.]

Fluctuations of prices during the next decade (1921-30) are shown in the following table. The table gives the prices of staple foodgrains and cotton compiled for the Central Provinces and Berar. [Census Report-Central Provinces and Berar 1931.] They are more or less representative of the price trends in Amravati district.

(Prices in terms of seers per rupee)

(1 seer = O.933 Kilogram)

The figures for 1930 show an extraordinary slump in the prices of agricultural produce which was a feature of the worldwide depression at the end of the decade. The Depression which devastated the economies of the United States of America, the United Kingdom, France and Germany led to a momentous fall in demand for our agricultural produce in international markets. A slump in the demand for cotton and vegetable oils had a distressing effect on the Indian economy. This downward trend of prices continued till 1933 after which prices of all goods rose gradually. The outbreak of the Second World War in 1939 resulted in a sharp rise in prices. The shortage of consumer goods and increase in the supply of money in circulation let  loose the inflationary spiral. The cessation of hostilities brought  down the prices slightly which again soared up during the  Korean War boom of 1950. The fluctuations in the world  prices were reflected in our national economy which in turn  found an expression in the economy of the district also.

After the Korean War boom the prices of almost all the  commodities showed a slight fall. The prices of agricultural  commodities, however, were higher in 1952-53. This was mainly  due to the failure of monsoons in many parts of India.

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