Which steps are taken to control …

i). Public Distribution System: Government in India, under its public distribution system ensures the availability of essential commodities such as wheat, rice, etc to the consumers at reasonable prices through a network of fair price shops. At present, there are about 4.61 lakh of fair price shop in the country.

ii). Administrative Price Mechanism: Administrative prices are those prices of goods and services, which are controlled by the government. Government of India has imposed price controls on a number of commodities. (Steel, automobiles). Producers of these commodities cannot charge price higher than the maximum prices fixed by the government.

iii). Monetary Policy/Measures: it is the policy of the Central Bank (RBI) to control money supply and credit in economy. This results in people’s tendency to consume less, which in turn reduces the demand for goods and thereby lower the prices.

iv). Fiscal Policy/Measures: it is the expenditure and revenue policy of the government to accomplish the desired goals. The intention of the government here is to reduce the money supply, which is kept in the hands of the people.