ECONOMIC TRENDS

PRICES

The study of price trends becomes important as it affects not only the living standards of the people, but also the general economic pattern of a country. The modern economic theory of development is essentially a price oriented theory. The general price level is affected by various factors such as supply of and demand for goods; currency circulation, portion of gold reserves, rise in population, volume of production, imports and exports and the conditions of distribution.

A review of the price trends for a period of the last 100 years is given below. Information about prices for the period before 1840 is not available. Yearly price details, which are little more than estimates, are available for the forty-three years ending 1882. The details [Gazetteer of the Bombay Presidency, Vol. XIX, Satara (1885), pp. 191-92.] are as follows:—

TABLE NO. 1

GRAIN AVAILABLE IN POUNDS FOR THE RUPEE: 1840—82

First Period

Second Period

Third Period

Fourth Period

TABLE NO. 1—contd.

Fifth Period

Sixth Period

The forty-three years between 1840 and 1882 have been divided into six periods. Prices of only three commodities are given. These are of Indian Millet. Wheat and Rice.

During these forty-three years ending 1882, the rupee price of Indian Millet which is the staple grain of the district varied from seventeen pounds in 1879 to ninety-three in 1842 and averaged fifty-four pounds. Except in 1842 when the price was ninety-three pounds, and in 1846 and 1847 when the prices were forty-four and forty-five, respectively, in the first period of ten years ending 1849, the price varied from seventy-seven in 1843 to fifty-eight in 1840 and 1841 and averaged sixty-two pounds. In the second period of seven years ending 1856, the prices varied from eighty-five in 1850 to seventy in 1855 and averaged seventy-six pounds. In the third period of nine years ending 1865, the price varied from sixty-seven in 1864 to fifty-seven in 1857 and averaged sixty-three pounds. In the fourth period of five years ending 1870. the price varied from sixty-six in 1869 to fifty-three in 1867 and averaged fifty-six pounds. In the fifth period of ten years ending 1880, the price varied from thirty in 1871 to seventeen in 1879 and averaged twenty-four pounds. And in the sixth period of two years the prices were forty-nine pounds for 1881 and fifty-one for 1882 [ Gazetteer of the Bombay Presidency, Vol. XIX, Satara (1885), pp. 190-91.].

The following table shows the prices of some important commodities that prevailed in the old Satara district. The table also reflects conditions in some talukas of Sangli district which then formed part of the old Satara district.

TABLE NO. 2

PRICES IN 1922-23

[Statistical Atlas of Bombay Presidency, 1925, p. 114. ]

The above table shows a marked rise in the prices of almost all the commodities. This can be attributed to the first World War and the inflationary trends that followed.

If 1924 is taken as the base year in which whole sale prices of all commodities are conceived Rs. 100, following table shows the index of prices of different commodities in the years 1931, 1941 and 1947, which were prevailing in Bombay State:—

TABLE NO. 3

INDEX OF PRICES OF DIFFERENT COMMODITIES IN 1931, 1941 AND 1947 IN SANGLI DISTRICT

The great depression which occurred at the end of the twenties and which lasted up to the half of thirties hit. agricultural prices adversely and prices showed a precarious fall especially in the years between 1929 and 1932. Thereafter prices showed a general tendency to stabilise at the 1932 level. During and after the war prices showed rising trends.

The steepest rise registered during the years 1942-43 was due to cessation of imports from Burma and other eastern countries. Thereafter the free play of economic and other influencing factors came to an end and the prices began to be governed by the policy of Government.

Index numbers of wholesale prices of some important commodities as they prevailed in the years shown in the following table point as to how rapidly prices have been rising [Source: Reserve Bank of India Bulletin.]: —

TABLE No. 4

INDEX NUMBERS OF WHOLESALE PRICES OF SOME IMPORTANT COMMODITIES IN SANGLI DISTRICT.

[Base year 1952-53]

The following tables show the retail prices of some of the important food articles at three important towns in Sangli district in 1961-62.

The prices of cereals have risen continuously. In the first quarter of 1962, prices of all cereals have, more or less, shown rising trends.

Despite few variations in some months, prices of pulses were more or less constant, variation being negligible. Prices of groundnut and vanaspati have shown a downward trend in the first quarter of the year 1962.

TABLE NO. 5

AVERAGE RETAIL PRICES OF SELECTED COMMODITIES AT TASGAON IN 1961-62.

[Prices in Rs. and Paise]

TABLE NO. 5-contd.

TABLE NO. 6

AVERAGE RETAIL PRICES OF SELECTED COMMODITIES AT JATH IX 1961-62.

[Prices in Rs. and Paise]

TABLE NO. 7

RETAIL PRICES OF SELECTED COMMODITIES AT SANGLI CENTRE IN 1961-62.

[Prices in Rs. and Paise]

This section describes changes in the pattern of the wages of agricultural labourers over a period of more than 100 years.

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