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.