Independence from Inflation - Consumer Price Index exposes reality

Independence from Inflation

- Consumer Price Index exposes reality -

Food security is the first thing which any citizen expects from the elected government. Food security is Fundamental Human Right. Nothing else is more important than food security for existence of any living creature. 

Every Government in power claims that they have improved food security, but the facts remain that large percentage of common men suffer from serious malnutrition and nutrition related health problems. 

This growing number clearly a tangible evidence that governments failed in achieving minimum, food security for the citizens of the country. 

The arguments are many, why food is not reaching the masses.  One important parameter is that affordability of food, this is linked to Consumer Price Index. 

Let us analyse what is Consumer Price Index in India:

60% of Consumer Price Index is food items for rural population and 37% is for urban population.

Rural areas are producer of food and it is true that food prices are comparatively low in rural India compare to urban India but when rural population is also suffering from inflation, it means the rest of the economy is also under stress. The remaining 40% non-food component are hurting rural population as well. This is not a good sign for economic welfare of India where 60% population lives in rural India.

Urban India has to suffer from all including food and non-food items. The way education, real estate and medical expenses have gone up on urban areas are matter of concern.

High share of Medical care in Consumer price index, it means percentage of money spend on health  related issues are more than total of education and recreation. 

The growing medical cost is a matter for serious concern in India. It is not only hurting family budgets  but also family happiness and adding to inflation. This is also an indicator that food consumption in household is not as per recommendation. People are compromising health to save money due to growing inflation.

The bottom line if any government wants to control inflation food, housing, health and education should be the core area of their national policy. 

The current policy regime is spending time on how to improve growth in the country is a welcome sign, but if fundamental issues like food, housing, health and education are ignored of this is leading social and economic imbalance. This is not not good sign because this will lead to crime and social unrest. 

I hope on this Independence Day of this great nation, we will be able to address these fundamental issues with renewed vigour and on priority.

Happy Independence day to all of you.