Inflation - missing the count..

 
There are multiple sets of inflation numbers, all official, none true. One of them is the Cost Inflation Index, used by the IT authorities for the purpose of capital gains calculations etc.


Cost inflation index (CII)as notified by Central Government is as under:

Financial Year (CII) Financial Year (CII)

1981-82 100 1993-94 244

1982-83 109 1994-95 259

1983-84 116 1995-96 281

1984-85 125 1996-97 305

1985-86 133 1997-98 331

1986-87 140 1998-99 351

1987-88 150 1999-2000 389

1988-89 161 2000-2001 406

1989-90 172 2001-2002 426

1990-91 182 2002-2003 447

1991-92 199 2003-2004 463

1992-93 223 2004-2005 480

2005-2006 497

2006-2007 519

2007-2008 551

2008-2009 582
Above table is the government numbers on Consumer Price Index. Today, the numbers for the week indicate that the pace of price increase has fallen down. My yesterday’s visit to the grocery shop indicated otherwise. Sugar, Dals, etc posting taxi meter like price rises. FMCG companies resorting to reducing packaging to absurd sizes like 782 gms etc for detergents, as they keep the price steady and the cartons empty. There should be a law stating that all prices should be given in Rs. Per kilo. That would make more people notice.
Mr Montek Singh had, a couple of weeks ago claimed to have inside information that inflation would come off. Not visible on the streets. So, he now has to fiddle with the numbers or what?

Heard that index composition is again going to be changed. They are going to stuff the index with obscure stuff like ‘roses’, ‘football’ etc. Anything to bring the numbers lower. Only guys who believe the numbers are the FII investors and the research analysts and economist. Read a nice line about economists:
But economists don't work for 'everybody.' They work for the government...or Wall Street. Both sectors have a keen interest in making people believe in what isn't so. 'We live in the greatest, most flexible, most dynamic economy the world has ever seen,' said the politicians. 'Yeah...and it will only get better,' added Wall Street.
True. It does not bother anyone that after the data is published, the governments keep revising them quietly a few times. No one keeps score.
Maybe I will start to keep a consumer price index that is based on day to day living. No newspaper or publication or agency wants to do this. Is anyone game enough to sponsor this ‘real cost of living index’?

True Lies - Inflation and all that

The media faithfully plays up the government statistics saying that inflation has touched a seven year low. What the media does not tell you in so many words is that this inflation number is of use only to equity analysts, economists and the likes. This has no reference to day to day living.
In day to day life, you will see inflation going up sharply. Food prices are rising at record levels (rice, sugar etc). The fall in petrol price or in price of steel and cement is of no relevance. Or if a "budget" hotel room rate (The Economic Times believes that a 3K to 8K per room night is budget) drops down. In fact on seeing the ET report about the range of the room rates for budget hotels, my son asked me whether 8K as 'budget' hotel rate means that it refers to the 'budget' of Bill Gates!!
The media is mindless and parrots views of vested interests.
Inflation in day to day living is going to shoot higher. And according to me, India is already in a recession. My count is that we will probably see a contraction in GDP by around five percent in the year 2009-10. I hope I am wrong, but street signs point to a deep and long lasting recession in India.