In the midst of the recent inflation in the prices of tomatoes in Indian cities, here is all you need to know about the phenomenon called ‘greedflation’, and its effects on the economy.
In a recent bout of inflation in India, tomato prices in multiple cities have doubled over the course of just one month, with Delhi, Mumbai, and Bengaluru being the worst hit by the sudden spike in tomato prices in the country.
While there is a perfectly logical explanation as to why the prices of tomatoes are on the rise in India, many also thought that it is the result of a phenomenon called ‘greedflation’. However, such is not the case, and the prices have been driven up due to extreme weather conditions and the low yield of tomatoes.
The tomato price hike in India is not a result of greedflation, but many citizens, especially those living in the United States and European countries have been paying higher prices for commodities due to this inflation phenomenon.
What is Greedflation?
Greedflation is currently on the rise in the United States and is one of the primary reasons why prices are being driven up in the country. Greedflation, in basic terms, is the inflation and hike in prices not driven by economic flow, but by corporate greed.
Greedflation is termed as the inflation in prices of basic commodities which is driven by the companies to increase their profit margins. Greedflation simply means big corporations squeezing out money from customers by jacking up the prices of their products, only to increase their profit margins.
Is greedflation happening in India?
Greedflation is on the rise in the United Kingdom and the US, but has not taken a fast pace in India yet. According to The Economic Times, greedflation has not taken a headway in India, but foreign companies in the nation continue to jack up the prices to gouge the customer for more profits.
However, due to the increasing privatization of industries in India, it is likely that greedflation will make its entry into the country soon if the government doesn’t regulate the prices to prevent the gouging out of customers.