By end-February / early March 2008, fine quality rice newly harvested and brought to market for sale to consumers, was sold at about Rs.15-16 in my locality (formerly a suburban area of Hyderabad, presently part of Greater Hyderabad). I couldn't buy at that time since I did not have money. I bought it around the second week of March 2008 for Rs.17 a kilo.
Presently the price has gone upto Rs.20 a kilo for the same variety. Old rice (one year old) is sold at Rs.22-23 a kilo.
My arithmetic says that a rise of price from Rs.16 to Rs.20 in one month corresponds to an increase of 25% in a month and will translate to 300% when annualised.
However, we always here about inflation index being 5 or 6 or 7%, year on year!
The example of rice price given by me is neither stray nor unique to one locality, one time. Prices of refined oil have gone up from about Rs.53 to Rs.84 per litre in less than 3 months. Prices of milk, vegetables, petrol have all gone up.
Another interesting aspect of price rise is that whenever they shoot up even on seasonal basis, they never retrace their original level, but continuously shift to a higher level. For example, when in short supply, tomato price goes up from Rs.4 to Rs.25 a kilo, when it climbs down, it doesn't come to Rs.4 but stabilises at Rs.6.
In the backdrop of such ground realities faced by real people like us in real places and real time, the inflation index published by Govt seems always to be fiction or dream!
