Friday, September 17, 2010


The pink papers have been going ga ga over the spanking new Wholesale Price Index (WPI). First, the new index shows that the rate of inflation is 8.5% while the old index would have it at about 9.5%. Conjure and juggle numbers and voila, you have taken care of the aam aadmi! Second, the new index (admittedly) better reflects the changing structure of the Indian economy where citizens now consume a larger basket of products and services. More than 220 new product and service categories have been added to make the index more representative. That’s compelling logic no doubt.

But take a quick look at the kind of new product and service categories added and you will immediately realize how this government – thanks to a hopelessly ineffective opposition and a virtually supine and servile media – is getting away by fooling all the people almost all the time. Some of the new products that are part of this ‘more representative’ index are beer (a weight of 0.155), ice cream, mineral water (I am sure distressed farmers rush off to buy a bottle of Bisleri along with pesticides when they see suicide as the only option), blended liquor, gold (a weight of 0.364), computers, washing machines and refrigerators (a weight of 0.194). How many of the 500 odd million Indians who live in abject and degrading poverty drink beer & mineral water and go to swanky malls to buy computers and refrigerators?

Sure, some might argue that the presence of 500 million poor Indians does not mean that we don’t need a ‘better’ and ‘bigger’ WPI. After all, the consuming classes too are Indian citizens. Fair enough. But how about an honest attempt to create a new consumer price index that reflects the consumption patterns of the really poor and of families hovering on the edges of poverty? Of course, we have consumer price indices of various kinds – for industrial workers and even for agricultural workers. But when was the last time you heard about this government spending time, money and energy on committees to upgrade those indices? The point is simple: for the really poor, more than 80% of income is spent on food. And with rampaging food inflation, you can well imagine their plight. Nobody talks about it anymore because the vocal middle class which also consumes the media has been virtually insulated against inflation because of a rapid rise in family incomes – both in the private and the government sector. And yet, imagine the hungama that is created when the price of LPG cylinders is raised by a relatively meager amount. Really, this is unparalleled hypocrisy for a society that claims to be democratic and a government that claims to think mainly of the aam aadmi.

Food-grains rotting while the poor are starving? This government ticks off the Supreme Court for interfering in policy matters. Vocal and politically powerful groups demand more reservations? Give it to them: most of them will not go to a college anyway. The poor dying of malaria and tuberculosis by the tens of thousands and their families going bankrupt due to medical expenses? Give more ‘subsidised’ land for corporate hospitals.

By the way, the new index also has an entry called ‘rose’. Wonder what Jawaharlal Nehru would have thought of that.


1 comment:

  1. Dear Sir,

    Very thought provokating.But I mean are you for a new system of governance called communist government or a community oriented Democracy where Health Services are free. Or do you wish to propose that capitalism doesn't work.

    Then what kind of Democracy is India, where a few know how to get there basic rights and luxury and a major people can't even get their basic rights.

    But then is increasing population of the poor a boon or a bane. Should they be taught how to fish money for subsistence or paid charity.

    So is teach India best of policy. Will population control lead to automatic increase in Quality of Life and per Capita income of the nation, or the inflation on employment market created by the poor leads to better optimized economy and growth.

    So the wastage in the form of starvation and unattended medical deaths ominous to Human Resource oriented settlement on Earth.

    Rajeev Vashisht