Inflation reducing?

For the past few weeks, Tata Coffee’s Coorg filter coffee was not available in the Calcutta market. Since I’ve been a long term addict and my morning is incomplete without a strong cup of coffee, I fretted and kept enquiring at local stores and supermarkets. ‘No supply’, ‘Not available’ was the standard response.

As the last 200gm packet (that cost Rs 42) dwindled, I panicked and bought a packet of something called ‘Fresh & Honest’. The only problem was that it had 30% chicory mixed with the coffee and tasted pretty awful. The stock market gloom was adding to my morning coffee doom.

Finally, the local grocer informed that a fresh supply had arrived. As I gleefully picked up 4 packets and handed over Rs 200, I was taken aback when the grocer requested a further Rs 8! The 200 gm packet now cost Rs 52 – nearly a 25% price increase.

My weekly visits to the market has confirmed that the prices of fruits have remained unchanged. So have meat and fish. Same with pulses and rice and spices. Only a slight downward movement in the price of vegetables. The price of petrol and diesel at the pumps have remained unchanged as well.

As far as the “aam aadmi” is concerned, there is no change in inflation. So why are the figures announced by the government going down? My guess is what they call the ‘base effect’. That means the rate is lower than the previous week’s because a year ago the same week’s rate may have been higher than the earlier week’s rate. There seems to be no other explanation.