Inflation has a tendency to pass on from one sector to the other depending upon the prevailing conditions. In developing countries like India, inflation often begins in primary commodities like food and fuel. Price rise may be appearing in one sector or in the case of a few commodities. But it always has the tendency to spread all over the economy-into different goods and services. Some essential commodities with wide use have the capacity to generate price rise in other areas. Price rise in basic goods spreading to other commodities is called price spiraling effect.
