Category All About Money

MRP or maximum retail price is the price beyond which a packaged product cannot be sold to a consumer. The maximum price of any commodity in the packaged form includes all taxes local or otherwise, transport charges, and any other costs incurred by the manufacturer or seller.

The Centre regulates MRP to prevent retailers from overcharging customers. The Price Monitoring Division in the Department of Consumer Affairs is responsible for monitoring the prices of 22 essential commodities. It monitors the retail and wholesale prices of essential products on a daily basis.

Why was MRP launched?

The MRP was introduced in 1990 by the Department of Legal Metrology, Ministry of Civil Supplies by making an amendment to the Standards of Weights and Measures Act (Packaged Commodities Rules), 1976. It was meant to prevent tax evasion and protect consumers from profiteering by retailers.

Earlier, manufacturers had the freedom to print either the maximum retail price (inclusive of all taxes) or the retail price (local taxes extra). The latter method allowed the retailers to often charge more than the locally applicable taxes. The amendment mandated the compulsory printing of MRP on all packaged commodities.

Filing a complaint

If a shopkeeper charges more than the printed MRP, consumers can file a complaint with the Legal Metrology Department in the State where the shop is located. Besides, they can also file complaints at the Consumer Forum in their respective districts.

Selling a packaged product at a price higher than the printed MRP can attract a fine of Rs 25,000 or a jail term. India is the only country in the world to have a system wherein it is punishable by law to charge a price higher than the printed MRP.

However, hotels and restaurants are allowed to charge higher than the MRP of packaged food items. According to a Supreme Court ruling, restaurant and hotels are allowed to sell a packaged product at a higher cost as they provide extra services for their customers such as the ambience and cutlery, etc.

Meanwhile, the retailer is free to fluctuate the selling price as long as it is below or equal to the MRP.

Why are products at airports expensive?

The products at airports are expensive primarily because running a store at the airport is an expensive affair. Here, the retailers have to pay a high rent which is then added to the final price of the product. Another reason is that as airports are high-security zones, the workforce have to undergo daily background checks and training in security measures. This leads to a product price surge.

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In case someone enters an incorrect IFSC while making an online transfer, the funds are credited back to the sender’s bank account.

If you have a bank account, you must have seen an IFSC reference on the passbook. The unique code forms an essential part of the Indian banking infrastructure. Let us find out more about this unique code.

What is IFSC?

The Indian Financial System Code (IFSC) is an 11-character alphanumerical code that is used by banks to identify the branches where people have their bank accounts. Every bank branch has a unique IFSC and no two branches (even of the same bank) will ever have the same code. In an IFSC, the first four digits tell the name of the bank and the last six characters are numbers representing the branch. The fifth character is zero. The IFSC is assigned by the Reserve Bank of India (RBI).

Purpose of IFSC

The IFSC is used by electronic payment system applications such as Unified Payment Interfaces (UPI). It is used only to transfer or send funds within India. It is mandatory when transferring money from one bank account to another. Without the IFSC, you cannot make online transfers. The IFSC ensures that the money being transferred reaches the right destination bank without any mishap during the transaction process. It also helps the RBI keep track of all digital banking transactions.

Where to find the IFSC?

The IFSC of a bank’s branch can be found in the cheque book. Besides, it can be found on the first page of the passbook. Another simple way to find out the IFSC is to refer to the official website of the RBI or the bank’s website.

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Money cannot buy happiness, goes the adage. If you were living in Zimbabwe in the early 2000s, there were a lot more things that money could not buy. In fact, the currency was so worthless at one point that using it to make crafts or as toilet paper was cheaper than using it to buy goods with it. This was the era of hyperinflation in Zimbabwe. Many countries have suffered from hyperinflation in the past, pushing their citizens to the brink of starvation. What caused the hyperinflation in Zimbabwe?

Excess money can be a bad thing!

Governments decide how much money they can print based on complex calculations. One of the important factors they consider during this process is the Gross Domestic Product (GDP). In simple terms. GDP means the monetary value of all finished goods and services within a country. When a country is producing more. Its GDP goes up and vice versa.

Zimbabwe was under the control of an authoritarian leader called Robert Mugabe between 1980 and 2017. In the early 2000s, the country was spending more than it was earning as revenue Mugabe’s money managers came up with the not-so-brilliant idea of printing more currency to overcome the money shortage. This backfired.

How money works

The real wealth of a nation is not the money they print but the goods they produce and the services they offer- aka the GDP. Money is only an indicator of that wealth. So, when a country prints more money and distributes it to people, it drives up purchasing power-or the demand- while the amount of goods produced- or the supply-remains the same. Ergo, the cost of goods goes up, leading to massive price rise.

People in Zimbabwe, therefore, had a lot of money which could not buy them what they wanted. The government responded by injecting more money into the country. The consequence was so drastic that the prices were doubling every 24 hours. The rate of inflation reached an astronomical level- to 89.7 sextillion per cent per month! The government had still not leamt its lesson. It kept issuing higher denominator bank notes.

In July 2008, inflation hit its crescendo when the government issued a one hundred trillion dollar note (Zimbabwean Dollar). Its value. however, was just equal to 0.40 US dollars. In fact, the only time it fetched more was when it was sold as a novelty item on the internet. When inflation hit 230,000,000% in 2009, the country’s reserve bank declared the U.S. dollar as its official currency.

Savings vaporised

Hyperinflation had devastating consequences for the people of Zimbabwe. Life became a daily struggle. as prices of essentials such food, medicine, and fuel became higher than the bills being printed. Within weeks and months, the cost of a loaf of bread went from hundreds of Zimbabwean dollars (2$) to millions At one point, it touched Z$550,000,000 in the regular market and Z$10 billion in the black market. With people being unable to afford consumption. businesses started failing. Unemployment soared. The money that people had saved in their bank accounts vaporised due to devaluation and in buying essentials.

The bubble bust

Unable to contain the inflation. Zimbabwe decided to abandon its own currency and began using foreign currencies for everyday transactions, including the US dollar, the South African rand, and the Indian rupee. This, along with government reforms. helped the country stabilise its economy to a large extent. The inflation came down to 0%, but it did not last long.

In 2019, the Central Bank of Zimbabwe abolished the multiple-currency system and replaced it with the new Zimbabwe dollar, restarting the old problem once again. Earlier this year, inflation spiked to 175% before coming down to 77% in August. Zimbabwe’s real problems are not just with the currency, but with its low economic output, social indicators, and constant conflict in the region. The African nation’s experience is a good example to understand why printing more money is not the answer.

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