ECONOMIC TRENDS

PRICE TRENDS

The study of the general level of prices is of importance because it helps to understand the economic condition of the people. Fluctuations in the level of prices is one of the most significant phenomena of our times. Hence it is of immense interest to study the salient trends in the price level.

The Khandesh District Gazetteer published in 1880 gave very valuable information about the trends of prices during the period 1788 to 1879, which is reproduced below.

"The returns of produce prices stretch over an unusually long series of years. They belong to two main sets, one for the thiity-three years ending 1820, prepared for the Amalner, Erandol and Nandurbar sub-divisions in 1820 under Captain Briggs' orders, and the other for the forty-six years ending 1878, compiled by the Dhulia mamlatdar from records and grain dealers' accounts. Between the two sets of returns is break of three years (1821 to 1823).

"The first set of thirty-three years includes three periods, one of ten years 1788 to 1797, one of twenty years 1798 to 1817, and one of three years 1818 to 1820. The first period, from 1788 to 1797, was a time of very cheap grain, with the rupee price of Indian millet, Jvari, ranging from 210 pounds in Erandol to 280 pounds in Amalner, and averaging 245 pounds. The second period, from 1798 to 1817, was, apart from the great 1802-3 famine when millet rose to about four pounds the rupee, a time of dearer grain, with millet prices ranging from 129 pounds in Amalner to 140 in Nandurbar and averaging 135 pounds. In the three years ending 1820, produce prices rose most markedly, Indian millet, jvari, varying from sixty-three pounds in Amalner to ninety-four pounds in Erandol and averaging seventy-six pounds. The following statement gives the chief available details.

KHANDESH PRODUCE PRICES (POUNDS THE RUPEE) 1788-1820.

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1821-1879: -"The years 1821, 1822 and 1823, for which no returns are available, are spoken of as a period of tillage and lower prices than had been known for thirty years. Then followed one or two seasons (1824-1826) of scarcity nearly amounting to famine, with Indian millet ruling at from seventy-four to seventy-nine pounds, or about as high as in 1817. The fifty three years since 1826 may be divided into five periods. Six years of cheap grain (1827-1832) with Indian millet ranging from ninety to 144 pounds and averaging about 117; four years of scarcity (1833-1836) with Indian millet varying from sixty -two to seventy-three pounds and averaging sixty-six; eighteen years (1837-1854), excluding the scarcity years of 1838-39 and 1845-46, of low prices with Indian millet ranging from eighty to 168 and averaging about 116 pounds; and thirteen years (1855-1867) of high prices, partly owing to several seasons of short crops and partly to the American war and the introduction of railways and public works, with prices varying from thirty-two to eighty-four and averaging fifty-four pounds. In the twelve years that have since passed (1868-1879), Indian millet prices have varied from seventy to 24½ and averaged about forty-six pounds. The tendency in these years has been to a fall in prices. But this tendency has been more than met by four bad harvests followed by almost famine prices, in 1868, 1871, 1876, and 1877. The following statement shows the available details of the prices of the chief cereals and pulses, and of cotton, between 1824 and 1879.

Captain Briggs [Gazetteer of Bombay Presidency, Khandesh District, 1880, pp. 202-04.] returns for the first set of thirty-three years (1788-1820) include some interesting particulars of the prices of fowls,

KHANDESH PRODUCE PRICES (POUNDS THE RUPEE),  1824-1879

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chickens and eggs. From these returns it would seem that on an average during the first of his three periods (1788-1797), fowls sold at 3d. (2 annas) a piece, chickens at 2½d. (12/3 annas), and eggs at about seven for a penny (8 pies). In the second period (1798-1817) the average price of fowls rose to about 5¼d. (3g annas), of chickens to about 3¼d. (2 1/6 annas), and of eggs to five for a penny (8 pies). The current (1880) prices of these three articles in the three sub-divisions, Amalner, Erandol and Nandurbar, to which the old returns refer, are for a fowl from 3d. to 1s. (2-8 annas), for a chicken from 1½. to 4½ (l-3annas), and for eggs about three for a penny (8 pies),"*

Apart from temporary and seasonal fluctuations in prices there have been strikingly permanent changes in the purchasing power of the Indian rupee since the onset of this century. The purchasing power of the rupee has been on the decline since the commencement of hostilities during the First World War. Prices of all goods were very high during the War, and the same trend continued till the Great Depression of 1930. The Depression which slumped down the economies of the U. S. A., the U. K., France and Germany had an adverse effect on the prices of primary commodities in the international markets. The slump in the prices led to a momentous fall in the prices as well as demand for Indian goods. This had an inevitable effect on the Indian economy. The downward trend of prices continued till 1933, after which the trend was reverted. The Second World War brought about a sharp rise in prices from 1939. The shortage of consumers goods and increase in the supply of money in circulation permitted the prices to rise continuously. The cessation of hostilities in 1945 brought down the level of commodity prices slightly. This was however a temporary phase. The Korean War boom caused the rise in prices of all commodities in the international markets. These international fluctuations in prices were clearly reflected in the Indian economy which in turn affected the economy of Dhulia district from time to time.

After the Korean boom there was a slight recession in prices, but it was only short lived. The year 1952-53 witnessed a rise of agricultural prices because of scarcity conditions in the district.

The period between 1952 and 1958 did not show a consistent trend of prices. The harvest conditions during 1953-54, 1954-55 and 1955-56 were quite satisfactory. This kept the prices of agricultural commodities well under control. Prices however started rising from the year 1956-57 and registered a high level in 1959-60. The good harvest conditions during 1960-61 and 1961-62 brought down the prices below the 1959-60 level.

Table No. 1 gives the trend of wholesale prices of principal agricultural commodities at Nandurbar market during the period between 1948-49 and 1960-61.

Table No. 2 gives the monthly trend of wholesale prices of agricultural commodities at Dhulia market during 1958-59, 1961-62 and 1962-63.

TABLE No. 1

AVERAGE WHOLESALE PRICES AT NANDURBAR MARKET DURING 1948.61

(Prices in Rs. per maund)

contd.

TABLE No, 2

 AVERAGE WHOLESALE PRICES OF IMPORTANT COMMODITIES AT DHULIA MARKET IN 1958-59, 1961-62 AND 1962-63.

(Prices in Rs. per maund)

TABLE No. 2-contd.

TABLE No. 2-contd.

TABLE No. 2-contd.

TABLE No. 2-contd.

TABLE No. 2-contd

Table No. 3 gives the most common wholesale prices of agricultural produce at the Dhulia, Doudaicha, Nandurbar, Shirpur and Nawapur markets during 1963-64.

TABLE No. 3

MOST COMMON WHOLESALE PRICES AT PRINCIPAL MARKETS IN DHULIA DISTRICT DURING 1963-64.

*Prices in Rs. per maund for all commodities in Dhulia and those marked* in Shirpur. Rest of the prices are in Rs. per quintal.

The prices of all commodities started rising from the middle of 1964, and continued to do so upto the harvest season, when they registered a slight fall. After a short interval the prices again rose steadily. The Indo. Pakistan War of September 1965 also contributed immensely towards the subsequent inflationary pressure. The shortage of consumers goods, scarcity and famine conditions in several parts of the country and rising wages of the organised working class led to a considerable rise in prices. As a matter of fact the inflationary situation developed into a crisis. Devaluation of the Indian rupee in June 1966 added considerably to the inflationary pressure. The cost of manufactured goods and imports increased to a great extent. This had an adverse effect on the prices of producers as well as consumers goods which rose sharply. The increasing level of commodity taxation also added to the price spurt from time to time.

Agriculture is the main occupation of the people in the district. The class of landless labourers comprises a large number of workers viz. 2,32,913. This necessitates a careful study of wage trends in agricultural pursuits and allied occupations.

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