INCREASED DEMAND FOR CONSUMABLE GOODS AND SERVICES

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  • Increased demand for consumable goods and services

Because of rising population, the demand for goods and services goes on to increase. Our country, despite agrarian in nature, always remains deficient in foodstuff, milk, meat, beef, poultry, wood, vegetables, pulses, grams and other necessities of life. Thus, because of increased demand for goods etc, the prices of goods go on to increase. The situation is contributing to inflation.
Moreover, in such state of affairs, the artificial shortages of goods is also created to reap abnormal profits. In this situation, the rich are getting rich while the poor getting poor. This means that rising population is responsible for widening the gap between have and have-nots aggravating the distributional issue. Efficiency of the poor is affected when they do not get the wages in accordance with the rise in prices. To remove the paucity of food-stuff etc they have to be imported. While on the other side, the rich have no alternative except to spend their abnormally gotten high incomes on imported luxurious consumption goods. Thus, the combined effect of rising population whether in the form of foodstuff imports or imports pertaining to conspicuous consumption has worthy affected the balance of payment position of the country. It was obvious from current account deficient of $3.4 billion during the year 2011-12.

  • Increased demand for social goods and services

Because of rising population, the demand for social and public goods like water, houses, roads, hospitals, schools, colleges, health centers, illiteracy and malaria eradication programs etc rises. But our countrymen, in spite of apparent prosperity, fail to deposit enough amount as taxes. Accordingly, to meet the rising expenditures (mostly unproductive in nature) due to increased population, government has to depend upon an excessive deficient financing. As during 2012-13, the budget deficient was above 8% of GDP a clear -cut threat to economic stability.

Because of increased population, in addition to social services, government has to spend a bulk amount on administration and its allied fields. Above all, the rising defense expenditures are insult to injury. It is evident from this fact that about 80% of our revenue budget is used to meet the expenditures of defense, administration and interest charges.

  • Absorption of population

The increased population has resulted in aggravating the problem of unemployment in the country. Agriculture is the main absorbing sector for rising population. But in such sector, more than the required number are employed. Consequently, t