Inflation : More to it than the 8%

May 25, 2008 

Lil’ General is 17 months old and still feeds on formula occasionally in the nights when he hasn’t had a good dinner. This evening while stocking on the monthly supplies of formula and cereal for LG, we did a quick mental calculation expecting the bill to be Rs. 345. Confidently, V presented Rs.350 on the counter. The chemist looked at the prices on the back of the cartons and pressed the numbers on  his calci before announcing it to be Rs.361. When you’ve been buying the same products for over an year month after month, there is little room for mistakes. Surprised, we checked the prices and shot silent glances at each other before we chorused “Up by 10 rupees. It’s the inflation.”

A visit to More earlier during the day left me exhausted. This was my third trip in a week’s time trying to procure the rice - the usual brand at the usual price I’m used to buying. The brand has been out of stock for over a fortnight now and the retailer has been waiting to get it replenished and the ones available at the store are a good Rs.11 more expensive for a Kg. Even the brand I’ve been buying all along is known to be in demand and the prices have shot up by over 15%.  And this is not even Basmati which recently made news for crossing the Rs.100 mark.  Same is with tur dal and udad dal. Which means now I have to visit over 2-3 stores before ticking off the items in my monthly grocery list. The bills have definitely shot up. I’m not a stickler for minute details and price of every item though I have a fair idea and maybe off a few ruppess. But the shortage over the past 2-3 months has made me aware of almost all the prices and how I really find them increasing month after month.  Even the king of fruits, mango has been acting pricey this year. Ofcourse, it has little to do with inflation and more with the untimely monsoon at the end of March this year which spoiled the crop.

The business channels have been non-stop harping about the rise in inflation rates for the past twelve weeks with no respite in sight. Different viewpoints have been presented from the inaccuracy of the wholesale price index (WPI) being measured to the ineffective measures by the government to cut rates across commodities to the rise in global oil prices because of supply-demand mismatch. This is economics! Barring the fundamentals, I can’t make much sense of the nitty-gritties involved. But all I know is this 8% is probably not reflective of the entire picture.

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