3.3   Purchasing Power

. Purchasing Power Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. If price increases, purchasing power will decline and vice-versa. Factors affecting Purchasing Power . Over population The population growth rate in India is high as . per . Large population leads to increasing demand, but supply was not equal to the demand. So, the normal price level will be going an higher. So, it affects purchasing power, especially in rural population. . Increasing prices of essential goods Even though there has been a constant growth in the GDP and growth opportunities in the Indian economy, there has been steady increase in the prices of essential goods. The continuous rise in the prices erodes the purchasing power and adversely affect the poor people. . Demand for goods When demand for goods increases, the price of goods increases then the purchasing power is affected. . Price of goods affect the value of currency When the price increases the purchasing power decreases and finally the value of currency decreases. . Production and supply of goods The production and supply of goods decline, the price of goods increases, then the purchasing power is affected. . Poverty and inequality There exists a huge economic disparity in the Indian economy. The proportion of income and assets owned by top % of Indian goes on increasing. This has led to an increase in the poverty level in the society. Generally purchasing power is affected by poverty and unequal distribution of wealth also. - - . . AM - - . . AM Food Security and Nutrition . Removing bureaucratic obstacles The policy has set another objective to remove bureaucratic obstacles on the farmers’ co-operative societies and self-help institutions so that they can work independently.