-

Subject:- Research Methodology-1

Course Code:- QTTM 509
CA:-02
Instructor:-Dr. Tushinder Preet kaur
Section:- Q2154

Mittal School of Business

Lovely Professional University
Phagwara, Punjab
 ANNEXURE-V-COVER PAGE FOR ACEDEMIC TASK

Course Code: QTTM 509 Course Title:- Research Methodology 1

Course Instructor: Dr. Tusshinder Preet Section:- Q2154
Kaur
Academic Task No: 2 Academic Task Title: Assignment

Date of Allotment: Date of submission: 17.10.2021

Student Roll no: Student Registration no: 12101786, 12101824,
12102190, 12110909
A07, A08, A11,
A24

Learning Outcomes: Learned to frame a Perfomance Appraisal Policy creatively and

innovatively.

Declaration:

I declare that this Assignment is our group work. I have not copied it from any other
student’s work or from any other source except where due acknowledgement is made
explicitly in the text, nor has any part been written for me by any other person.
Student’s Signature:

Evaluator’s Comments (For Instructor’s use only)

General Observations Suggestions for Improvement Best Part of Assignment

Evaluator’s Signature and Date:

Marks Obtained: Max. Marks:

 Peer Rating

Name Registration Roll Rating Signature

No No
Karthikeyan P 12101786 07 10

Diksha Pal 12101824 08 08

Priyansh Prasad 12102190 11 07

Gupta
Robiul Islam Akash 12110909 24 10
 “A Study on Daily Essential Products Price Hike and its Impact
on India’s GDP”

1. Introduction:-

Hike leads to 5% increase in average monthly household spend

________says report
Prices of daily essentials and groceries in India have risen by up to 40 per cent. Consequently,
monthly average household spend on essentials and groceries has gone up by 5 per cent since
the April-June quarter of 2020. Hit by price inflation, consumers are shelling out more to buy
products of daily needs. The prices of essential products such as rice, atta, oil has climbed
substantially in the last 12 months. prices of daily essentials and grocery products including
edible oils, essentials, personal care, and home care products have risen by up to 40 percent
in India in the last one year. The price increases have been largely for categories such as atta,
sugar, and other loose items due to increases in agricultural costs, while packaged goods have
been able to avoid the price hikes by revamping their packaging in terms of net weight and
other comparable variables. Rice has witnessed an 8-10 percent price hike across all markets,
while the local brand of atta has seen 8-15 percent hike. Edible oils, however, have been most
impacted and their prices have risen 40-50 percent across the country. Tea, too, has been
majorly impacted and the prices of the category are up by 15-20 percent.
https://www.moneycontrol.com/news/business/companies/price-of-daily-essentials-up-40-in-
the-last-12-months-shows-report-7127741.html

1.1 What is Daily Commoditie’s Price Hike?

The increase of price of essentials rapidly and continuously is called inflation. The increase
of prices of products and services is a regular and inevitable event of every economy whether
it is developed or developing. The supply of money increases the demands of the products
and services that result in increases of prices of products and services. It influences every
country, negatively as well as positively. But in the most of the cases inflation is an important
factor leading to social and economic instability and disorder. India is big nation with a huge
population. In spite of its utmost efforts and growth prospects india is yet to reach to the
stream of the middle income countries and to improve effectively the quality of life of its
people because of its age old poverty, structural weakness of its economy and lack of
productive capacities for development. Inflation can be caused by the sudden disruption in
supply of products by flood, draught, shortage of power, raw materials etc. It can also be
caused by increases of aggregate demand than supply. Impact of global price hike is one of
the most important causes of price hikes in India.

Inflation means a continued increase in the aggregate or general price level in an economy.
Inflation means there is an increase in the cost of living. On the other hand a price hike is the
increase of any single product or service price. If inflation is not compensated by nominal
increases of income, people become poorer. Low, medium and high rate of price hike attract
the daily attention of households and decision maker differently. The income of people is
another determining factor in reaction of households in different levels of price hikes.
Standard of living is maintained by certain level of wealth, comfort, material goods and
necessities available to a certain socioeconomic class in a certain geographic area. The
socioeconomic classes are determined mainly by the income levels of population. Middle
income people stands in the middle of high income who are enjoying high standard of living
and the low income people who are maintaining very low standard of living. They have the
financial security to make both ends meet and have a little margin of safety. They have some
economic security with health insurance and a retirement plan, or some savings in the bank
to meet any emergency, send their kids to school, or even provide small loan to a family
member who wants to start up a business. Middle class is essential to maintain the demand of
the products. The reducing capacity of middle
class in inflation results in reduction of
demand in the market that ultimately reduce
the production of firms and become the cause
of job loss that brings disaster in the economy.

Different types of inflations can have widely

different determinants, effects and remedies.
There is no strictly binding definition of
ranges of intensity in price increase. The
hyperinflation is the extreme level with
increases of prices of commodities by three
digit percentage points. Uncompensated
inflation reduces incomes, thus consumption
and savings, both in aggregate and with particular reference to certain social groups (e.g.
Middle Income People, as surveyed here). Inflation hits the poor harder than the rich
because of high expenditure- income ratio, low purchase due to price rise, essentials
becoming unaffordable, deeper dissatisfaction of needs due to inability in purchasing,
weaker bargaining power in compensating the price hike. The suffering of middle class is
almost similar as the poor.

Day to day increase in prices of commodities snatch money from savings of consumers and
uncertainty of prices, both food and non-food items, generate tension among middle income
people and search the alternatives toward earn more and more. The study is to identify the
alternatives selected by the middle class in different levels of price hike in their essentials
like food, accommodation, education etc.

1.2 What Factors Affect The Price Of Commodities?

Mother Nature:- Weather and natural disasters around the world often have an effect on the
price of materials. Whether that be a bush fire in Australia, Hurricane in the United States or
an Earthquake in Chile An example of this was in 2010 a 8.8 magnitude earthquake in Chile
caused production at four major mines to be suspended - affecting about 20% of the country's
capacity.
Supply and Demand:- Supply and demand are the most important factors in the
determination of the path of least resistance for commodity prices, knowledge of production
data from major producing nations is an essential ingredient in assessing total output and
supplies, e.g Chile for Copper and Russia for Nickel. Public and private sources of data are
available form trade organisation, research companies and government. In addition to this,
new alternative data is available such as satellite imagery, looking at points of interests along
the supply chain.

Storage levels & transportation constraints:- Transportation constraints of the physical

commodity that occur or storage may be required along the supply chain, this is very much
dependent on the type of commodity and the conditions required for transportation and
storage. High-level stock levels can be determined by looking at exchange warehouse stocks
such as the LME, COMEX & SHFE and to an extent, Satellite data and AIS shipping data
can be used to gain further insight into the transportation and storage of commodities around
the world.

Geopolitics:- As commodities are extracted from specific areas around the globe, political
issues in those regions can affect the price of that commodity. The Iranian’s attack on Saudi
Arabia in September 2019 forced the shutdown of the facilities, cutting the country's oil
production from 9.8 to about 4.1 million barrels of oil a day, losing 5.7 million barrels of oil a
day or about 5% of global production, causing a 20% price rise, the largest since Saddam
invaded Kuwait 30 years ago.

Market information:- There are a number of indicators of economic performance which are
closely monitored as can influence the price of commodities. These include economic
outputs, unemployment rates, inflation and availability and attractiveness of substitute goods
(e.g replacing Copper with Aluminium).

Seasonality:- It is important to look at seasonality for patterns in the day of the week, week
of month and month of the year. For instance, Oil goes up a statistically significant amount
on a Friday. There is greater demand for Oil during the driving season in the US which runs
from April through September and hurricane season can have an impact on the price of
multiple commodities.
1.3 Impact of commodity prices on economy
The recovery of the global economy following the shock of the pandemic, in a context of
abundant financial liquidity and a highly expansionary fiscal policy in the major developed
countries, has favoured rising commodity prices. In the first two quarters of the year,
Bloomberg’s general commodity price index rallied more than 20%, largely driven by the rise
in energy prices (44.5%), followed by the less pronounced but nevertheless important
increase in agricultural goods (20.5%) and industrial metals (17.6%). In advanced economies,
the relative weight of the food and energy components in the consumer price index is usually
relatively contained.2 However, movements in energy and food prices are more erratic than
in the other components, so they are generally excluded when measuring the underlying
trends in prices in these economies. Further surge in global commodity prices will have
serious implications for India's economy which is still struggling to come out of the Covid-19
impact, a higher retail inflation not accompanied by a commensurate increase in wage growth
will adversely impact the consumption demand and in turn investment revival in the
economy. Though a spike in global agricultural commodity prices could benefit India, it may
not move the needle favourably because India, despite the world's biggest exporter of
Basmati rice, exported just $6.59 billion worth of cereals and imported vegetable oil and
pulses worth $9.66 billion and $1.44 billion, respectively, in FY20.""On the other hand,
India's import bill on oil, coal and nonferrous metals was $129.86 billion, $22.45 billion and
$13.14 billion, respectively." Consequently, energy commodity prices over the past six
months have increased by 55.4 per cent, the increase in non-energy commodity prices is 19.3
per cent.Among the major non-energy subgroups, agricultural commodities rose by 16 per
cent, fertilisers 30.2 per cent and metals and minerals by 25.1 per cent.

2. Objective of the study:-

Broad Objective:-

To measure the impact of price hike on the standard of living of middle income people and its
impact on India’s GDP.

Specific Objectives:-

➢ Reasons for price hike in view of respondents.

➢ Ways of coping up with price hike of people.
➢ To identifying the specific consumption areas mostly affected by the price hike.
➢ To identifying the changing pattern of bargaining of consumers while shopping.
➢ To identify the crises of lower middle class.
 3. Research Method:-
Research methodology is the path through which researchers need to conduct their research. It shows
the path through which these researchers formulate their problem and objective and present their
result from the data obtained during the study period. It is the specific procedures or techniques used
to identify, select, process, and analyze information about a topic. In a research paper, the
methodology section allows the reader to critically evaluate a study’s overall validity and reliability.
The methodology section answers two main questions: How was the data collected or generated?
How was it analyzed?

3.1 Research
Research is a systematic and scientific procedure of data collection, compilation, analysis,
interpretation, and implication pertaining to any business problem. It provides scientific
information to the decision makers of the organization. It either substantiates the intuitive
knowledge of the decision maker or opens the doors of new acquired knowledge in scientific
manner.

3.2 Target population

Target population refers to the entire group of individuals or objects to which researchers are
interested in generalizing the conclusion. It is the entire set of units for which the survey data are to
be used to make inferences. It must be specifically defined, as the definition determines whether
sampled cases are eligible or ineligible for the survey. Defining the target population should be
second step after establishing study objectives. Here in our research our target population will be the
middle class family of India.
3.3 Sample size
The sample size is an important feature of any empirical study in which the goal is to make
inferences about a population from a sample. It is an act of choosing the number of observation or
replicates to include in a statistical sample. By sample size, we understand a group of subjects that
are selected from the general population and is considered a representative of the real population for
that specific study. Here in this research our sample size will be 100.

3.4 Sampling frame

Sampling frame is a listing of all the elements of a population. It generally includes the respondents
name and appropriate contact details, but may also include other significant known information that
may be drawn upon in the analysis stage of the research such as age, location, etc. Here in this
research, families Adhar card will be the sampling frame.

3.5 Sampling technique

Selecting a sampling technique is a crucial decision for a researcher. A researcher has to decide
between the traditional sampling approach, sampling with or without replacement, and whether to use
probability or non-probability sampling techniques. Here in this research we will use convenience
sampling technique. Convenience sampling technique is non probability sampling technique where
subjects are selected because of their convenient accessibility and proximity to the researchers.
 Advantages of convenience sampling:
• It’s relatively easy to get a sample.
• It’s inexpensive, compared to other methods.
• Participants are readily available.

Disadvantages

• An inability to generalize the results of the survey to the population as a whole.

• The possibility of under-or-over-representation of the population.
• Biased results, due to the reasons why some people choose to take part and some do
not.

3.6 Research Design

This study is a descriptive analytical research done on the basis of thinking of the respondents
regarding the steps to be taken in the face of price hike of essentials. The research is designed
to carry out by questionnaire method to give the respondents sufficient time of thinking
before answer the questions. The questionnaire contained dichotomous, close-ended and
open-ended questions.

3.7 Data Collection

The middle class families of India have been considering as the sampling frame. This frame
was based on the claim of people rather than original income range because the researchers’
viewpoint on the expenses habit of people. They (researcher) opined that expenditure pattern
depends on the perception of people about their income status the data were collected from
the respondents of 18 years age and above regardless of sex and of the middle income family.
The researchers have tried to collect the data from 1500 respondents and were able to collect
from 100.
3.8 Questionnaires
A structured technique for data collection consisting of a series of questions, written to which
a respondent replies comprise with both close and open-ended questions.

3.9 Analysis Procedure

The information was processed through Microsoft Excel 07 and SPSS 19 to get the
outputs in the form of frequency distribution, Co-relation & regression.
4. Sample Questionnaire:-
1. What is your Name?
2. What is your Mobile No?
3. What is your Gender?
• Male
• Female
• Others
4. What is your Age?
• Less then 18
• 18-25
• 26-35
• More then 35
5. What is your Occupation?
6. How Many Family members Do you have?
• Less then 4
• 4-6
• 6-9
• More then 9
7. What is your Monthly Income?
• Below 10000
• 11000-20000
• 21000-30000
• More Then 30000
•
8. Now thinking back 5 years, would you say that you (and your family living there) are better
off or worse off financially now than you were 5 years ago?
• BETTER NOW
• SAME
• WORSE
• DON’T KNOW
9. Would you say that at the present time business conditions are better or worse than they were
a year ago?
• Better
• Average
• Worse
10. How about a year from now, do you expect that in the country as a whole commodities
conditions will be better, or worse than they are at present, or just about the same?
• Better
• Will remain same
• Worse the previous
11. How satisfied are you with the price of daily essential commodities?
• Very satisfied
• Satisfied
• Neutral
• Moderately Dissatisfy
• Very Dissatisfy
 12. Rate your satisfaction level towards the Essential Commodity Act which is
responsible for the control of Daily essential commodities price?

[Rate out of 10, Where 1 is low satisfaction level & 10 is high satisfaction level]

13. Do you think government has been taken all the necessary steps to control daily
commodities price?
• Yes
• No
• Maybe

14. During the next year or two, do you expect that your (family) income will go up more than
prices of daily commodities?
• Yes
• No
• Maybe

5. Data Analysis and Findings:-

Regression:

Name of the Price Price Price

Commodity per Kg per Kg per Kg Inflation
2021(X1) 2020(X2) 2019(X3) Y
Rice 58 53 46 1.09
Wheat 53 47 35 1.12
Ragi 72 68 45 1.05
Barley 85 79 69 1.07
Sugar 48 43 32 1.11
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.998640401
R Square 0.99728265
Adjusted R Square 0.9945653
Standard Error 0.002111031
Observations 5

ANOVA
df SS MS F Significance F
Regression 2 0.003271087 0.001635544 367.0056239 0.00271735
Residual 2 8.91291E-06 4.45645E-06
Total 4 0.00328

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 1.083643484 0.007769553 139.4730732 5.14027E-05 1.050213794 1.117073174 1.050213794 1.117073174
X Variable 1 0.018571429 0.001261583 14.72073965 0.004582972 0.013143277 0.02399958 0.013143277 0.02399958
X Variable 2 -0.020161341 0.001263518 -15.95651602 0.003904581 -0.025597819 -0.014724863 -0.025597819 -0.014724863

Multiple R - Correlation Coefficient Y - Dependant Variable

R Square - Correlation change/Variation on Yon X X – Independent Variable
Y= a0 + b1X1 +b2X2
= 1.0836 + 0.01857 X1 + (-0.02016)X2

R square = 0.99
99% Change / Variation on Dependent variable

As P value is less than 0.05 (P=0.0027)

P is Low
H0- gets Rejected
There is no significant impact of the Y on X

Calculation of Aggregate Price Index :

Price per Price per

Name of the Commodity Kg Kg
 2021(P1) 2020(P0)
Rice 58 53
Wheat 53 47
Ragi 72 68
Barley 85 79
Sugar 48 43

Total 316 290

➢ Recent price hikes responsible for up growing

𝑠𝑢𝑚𝑚𝑎𝑡𝑖𝑜𝑛 𝑝1 social crises.
P01 = 𝑠𝑢𝑚𝑚𝑎𝑡𝑖𝑜𝑛 𝑝0 ∗ 100
➢ Price Hikes increase social & economic
discrimination as well as creates various social
classes.
= (316/290)*100 = 108.96 ➢ More than 66% people of lower middle class
(Income below RS 10000/-) are failing to meet
fundamental needs.
➢ 54 %( Approx) people (Income below RS
10000/-) are failing to get proper treatment or
suggestion of a specialist physician.
Calculation of Index using AM:

Name of the Price Price Price

Commodity per Kg per Kg Relative
2021(P0) 2020(P1) (P1/P0)*100
Rice 58 53 91.37
Wheat 53 47 88.67
Ragi 72 68 94.44
Barley 85 79 92.94
Sugar 48 43 89.58

Total 316 290 457

1 𝑠𝑢𝑚𝑚𝑎𝑡𝑖𝑜𝑛 𝑝1
P01 = 𝑛 ∗ 𝑠𝑢𝑚𝑚𝑎𝑡𝑖𝑜𝑛 𝑝0 ∗ 100

= 1/5 * (457)*100
= 91.4
 6. Recommendation

It is obvious nowadays that the price of everything ranging from essential daily commodities
to transportation, educational, medical and other expenses are increasing. According to the
study, as a consequence of the price hike, the majority (97.7 percent) of the people in Dhaka
metropolitan city and in other parts of the country are facing deep trouble in coping with the
situation. In Sylhet & Dhaka city 44.30 & 43.8 percent of the people think that because of
price increase of almost everything, they are encountering economic hardship.
To help people to overcome this economic crisis people from all walks of life should come
forward and take necessary steps against this price hikes. Following steps should be taken
quick action:
• To control price of commodity deposit rate and lending rate of Banks should control.
• Provide more importance to agriculture sector.
• Control Business syndicate as well as stockiest who create artificial crises in market.
• Provide micro credit facility by government. The interest rate of that disbursement
should not more than 6%.
• Import duties of fundamental goods have to deduct.
• Consider corporate tax rate.
• Established government regulated mega shop.
• Tax rate of medical instrument & medicine should minimum.
Long run Action:
• To remove unemployment problem seek different sources of sector.
• Utilize our natural gas directly by government.
• Growth rate of population control.
• Indifferent monetary policy provides both public & private sector.
• Overall control of malpractice.
 7. Conclusion:-
Inflation or increase in price level of essential products of households is occurred due to high
fiscal deficits, poor monetary policy, unsustainable public borrowing, volatile exchange rates,
demand push or supply push of products or services. There are many positive impact of
inflation in the economy along with negative impact on standard of living of poor and middle
class citizens. The middle income class people are most sufferer in the inflation as they are
tends to maintain their social status and standard of living with their minimum savings. It is
found that reaction from most of the respondents in the excessive increase in the prices brings
pathetic measures over the target population that ultimately influences their time of price
hike are not so visible in the time of minor price hikes. But the respondents are found to
search for different alternatives in medium to higher level of price hikes in food items,
accommodation and educational expenditures. The reactions of the respondents are
significantly different in the earning, food expenses and educational expenses. So the
entrepreneurs and the authorities have to take necessary measures to minimize the impact of
price hikes to facilitates to help the middle income people in maintaining their standards and
life styles as that class is the energy suppliers in the economy. The stagnation of economy is
inevitable if the middle class people are failed to afford their consumptions during inflation
period.

Managerial Implication: Large consumer class is essential to accelerate the economic

activities. Middle income people are the large consumer class in the economy. Management
should consider the result of such research in pointing out the alternatives of middle class
citizens in the face of different levels of price hikes to innovate new products or services to
maintain the standard of living of that class consistently with their income level. The
authority or management should also consider compensating that class in their income level
to maintain their affordability to consume the products or services. Otherwise the overall
demand of the products would fall and welcome a stagnation period in the economy.

Limitation of the Study: The sampling size and the area of research are not sufficient to
portrait the overall activities of middle class people in the face of inflation. The people of low
income group are also a great contributor in the economy. This research is failed to cover
them.

Further Research: There are scope to do more research by increasing the size of sample and
sampling frame to overall India. The other important items of livelihood may be considered
in further research. There are also scope to search the alternative course of actions of lower
middle and poor income group in the economy to provide some imperatives to the
management of enterprises and the policy makers.
8. References:-

• Barua, D. (2009). Price Spiraling and Economic Stagnation- The Direct Role of
Government in Market Control. Bangladesh Journal of Political Economy, 25 (1/2),
pp. 163- 175.
• Lokanathan, V. (1989). Principles of Economics, New Delhi: S. Chand and Company
Ltd.
• Joachim, von Braun (December 2008), “Food and Financial Crisis: Implications for
Agriculture and the Poor”, International Food Policy Research Institute (IFPRI), Food
Policy Report No. 20.
• Ivanic, Maros. & Martin, Will (April 2008), “Implications of higher global food
prices for poverty in low-income countries”, World Bank Policy Research Working
Paper No WPS4594.
• People’s right to know: The Daily Star Web Edition Vol.5 Num 601 (Sun. February
05, 2006). [Online] Available: www.thedailystar.net/2006/02/05/d6020501044.htm
• Haider, Raana (1995), “A perspective in development: gender focus”, Edition 2,
University Press, Original from the University of Virginia Digitized 26 Jul 2008,
ISBN 9840513168, 9789840513161.
• https://chaipredict.com/blog-2/2020/1/2-six-factors-affecting-commodity-price-
volatility
• https://tradingeconomics.com/india/consumer-price-index-cpi
• https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1754709
• Sadiquellah, A.M.M. (Wednesday, December 22, 2010) "Price hike and people's
attitude”, The Daily Star, Popular Daily English Newspaper of Bangladesh. [Online]
Available:
• www.slideshare.net/sadiqlueullah/price-hike-and-peoples-attitude.
• Wiggins, S. et al. (October 2010), “Food Price Crisis Frequently Asked questions”,
Discussion Papers, Overseas Development Institute (ODI).