Inflation

We hear a lot in the newspapers about inflation. Last year we were told inflation has reached its peak and this year we are told it is 0%. On the pretext of low inflation RBI has directed Banks to reduce interest rates. But we do find only a negative correlation between inflation% and price of commodities and consumable items. Last year when inflation was at its peak, rice was available at Rs 30/kg, tur Dhal Rs.60/kg, til oil Rs 110/kg. , vegetables between Rs. 16 to 22/kg, orange Rs12 per dozen, apple Rs80/kg. Today, when inflation is supposed to be 0%, rice costs Rs40/kg, tur dhal Rs100/kg, til oil Rs 200/kg, vegetables between Rs 25 to 40 /kg, orange Rs 60 per dozen and Apple Rs 120/kg. Some analysts opined that inflation is based on price of whole sale price and it will take atleast 2 months before it reflects in retail price . But even after passage of 6 months, retail prices have not come down and on the contrary are increasing. The common man, particularly Senior citizens, who live on income interest from FD, suffer most by the inappropriate method of calculation of inflation. Interest rates are brought down citing low inflation. But on the contrary prices of day to day items are high and interest rates have also come down making life miserable for common man and Senior citizen. Inflation should therefore be estimated by retail price of consumables and not by whole sale price. Newspapers should highlight this aspect in their editorials.

Woes of senior Citizen

With steep increase prices of essential commodities like rice, wheat, Dal, edible oil, vegetables and fruits (by over 50%) and rapid decline in interest rates of Bank FD's (from 11% o 7.5%), Senior Citizens were expecting some relief from the budget. But except for a paltry increase in income tax exemption rates, their expectations were thoroughly belied. The least the government could do to mitigate the sufferings of elderly, is to raise the interest rates for Senior citizens in Bank deposits and Senior Citizens Saving Scheme and Post office Monthly income schemes by 1%. Presently 15H form has to be submitted to avoid TDS when the interest in Bank FD's exceed Rs. 10000 and that in Manufacturing companies exceed Rs. 5000. These limits should be increased to Rs 20000 and Rs 10000 for Bank FD's and manufacturing companie's FD's. Private hospitals should be directed to give 50% concessions on medical treatment to them. Concession should also be given in boarding and lodging charges in Government run and private hotels like Yatri Nivas and pilgrimage tours.
N.Balasubramanian