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Following are the causes of price rise:

(a) Black Marketing:

It broadly means holding the inventories and selling it at higher price. It creates artificial scarcity

in the economy inspite of increase in production and results in price rise,

(6) Black money:

In 1999-2000 India has reported to have the circulation of Rs. 7800 crores as unrecorded money,

i.e., Black Money in the country. Black money encourages the people to the demand of goods

and services in the economy thereby leading to high rise in general price level.

(c) Rapid Growth of Population:

The rapid growth of population means more mouths to feed, more demand of clothing and basic

necessities as compared to supply of goods and services which result in price rise.

(d) Deficit Financing:

It means printing more currency notes and coins. In India deficit financing is done mainly tomeet the budgetary deficit. It results in more supply of money in the economy but when increase

in supply of money corresponds with less increase in the supply of goods and services (National

output) there is rise in price of goods and services.

(e) Increase in Money Supply:

Money supply includes currency notes and coins, demands and time deposits. Increase in moneysupply shows that people in an economy are ready to spend more money for buying goods and

services.

Diesel price hike crushes state bus corp in

Kerala

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According to sources in KSRTC, the current round of hike in diesel price for bulk users would

cast an additional burden of Rs 180 crore on it by modest estimate, forcing it to choose betweenhard options like cutting down services or effecting a steep fare hike.

In the present circumstances, it would be totally unviable for the corporation to run services in

routes which would not yield a minimum collection of Rs 10,000 a day, sources said.

Commuters in the state capital, where the public depend heavily on KSRTC for short-distance

travels, have already started complaining about service cuts.

The Centre's decision to allow oil companies to deregulate diesel prices for bulk purchasers has

dealt a blow to the Kerala State Road Transport Corporation forcing the loss-making public

utility to drastically cut its services across the state.

Finding it difficult to operate the entire existing schedules, the KSRTC management has decided

to seek the Government's nod for stopping many more services in the "unviable routes."

According to KSRTC sources, this would mean that 1000 to 1500 services would be stopped, at

least for the time being.

The state cabinet is likely to take stock of the situation when it meets tomorrow as cutting such

a large number of services is a "sensitive issue" in view of the hardship it would cause to the

common people, Government sources said.