Sometimes a visit to the neighbourhood grocery can be a more illuminating experience than visiting the library. The grocery doesn’t merely represent a collection of people trying to buy articles. It tells us how the man/woman on the street deals with economic terms like ‘inflation’, ‘supply side issue’, ‘expenditure’, etc.

Apart from potato, onion and tomatoes — prices of most commonly used vegetables ruling above Rs 20 per kg. For the typical housewife, managing a family of three in a metro such as Kolkata, the grocery bill has increased by over Rs 150 per week to Rs 950. “Mustard oil has gone up by Rs 15 per kilo to Rs 75 in a matter of just one month. What to do? We cannot do anything when prices rise!” says a hapless mother, Mrs Dutta. In financial terms, these figures represent over 20 per cent rise. That is the real question. Can we fight back?

For most of us who rely on financial data, the price index that is circulated is based on wholesale prices. The retail side is captured with over a month delay through consumer price numbers. Naturally, voices are heard, with a delay. Not everywhere though. “Prices are on fire. Shopkeepers are saying that since the harvesting season has come to an end in most places, the middle men who have hoarded up items are hiking prices,” laments Mr. Alagappan, who has been doing the daily shopping ever since his wife has been down with fever. While big bankers and economists talk about supply-side issues and use more fashionable terms to explain inflation, the situation is getting from bad to worse on the street.

And just if you thought, vegetarians were the ones hit most…wait before you hear this. Chicken prices, which were at Rs 65-70 per kilo a few months ago, touched Rs 100 just a few days ago. “I know what you will say. Bird flu. But they have hiked mutton prices too. From Rs 180 per kilo, we now have to shell out Rs 240 for the same thing. Its all going beyond our calculations,” complains Pammi, a newly married Punjabi, who is just coming to terms with the vagaries of shopping amongst rising prices. So, what does one do? Convert to a veggie, at for the time being?

Fruits too have not been spared. I just read a news story on the Internet. Renowned farm scientist M. S. Swaminathan has reportedly said that ideally there should not be much difference in prices of food items across metros. But what is going on in our country? Those in the metros are suffering more pain. Some are shedding more, some less. “Swati, the bottom line is everybody is hit badly. For statisticians, 30, 35, 40 per cent increase maybe interesting but not to the common man. Where is all the extra money going to come from? Vegetarians will cut milk and fruit intake. Non-vegetarians will shift to eggs. We are helpless,” says Mr Dharmadhikary, a close friend and employed in an accountancy firm.

Parents of small children are also up against government policies. Milk prices have increased by Rs 2-3 a litre in various locations in Tamil Nadu itself. Procurement prices have been increased, that is the official explanation. They represent 20-30 per cent increase on the lower side.

“All this is adding up. Some people are making profit while we are complaining. Salary hikes have happened but now it seems the rate of inflation will beat the hikes,” notes Mr Shrikanth Muralidharan, an IT worker employed in Bangalore. Rice being a staple food has seen prices shooting up by 30-40 per cent. Farmers in neighbouring Andhra Pradesh are producing more grain but none of that seems to follow simple laws of economics. Supply and demand ratios are always skewed to harm the one at the end of the cycle, the consumer.

Are villages, mostly inhabited by farmers, responsible? “No. Who told you all this? Farmers are in a mess. It is getting more and more difficult to continue farming and remaining profitable at the same time. Some up North may be making money, but that is not the overall picture,” clarifies Mr Senthil Raman, running NGOs promoting self-help groups in villages across Western and South India.

Life in a Metro! No, I am not referring to the Hindi film. Living in metros is becoming costlier by the day. Maybe purchasing power is more, that is why prices are going up. At each level, buyers are doing what they are known for — buying. But should the government not intervene? Shouldn’t they have a price limit for commodities?

“Otherwise prices will just keep going up. If the farmers are not benefiting and neither is the consumer, why should these blood sucking middlemen be allowed to go scot-free? They are merely brokers. We all know brokers add their commission, but now they are adding 50-70 per cent margins. Something should be done and fast!” Ms Sheela Rawat, a schoolteacher, said. She may be right. This middleman business has been going on for long. They are the ones who might be behind these tricks.

“But Swati, the government is also importing lots of goods. Our country is exporting too. Don’t you think the exporters are also upping the prices? Why allow them to export, when our domestic needs are not met?” asks Ratan, a student. All the warnings of lower food production have culminated in this. For long, the government has talked about agricultural production. Maybe now, things will be taken with more seriousness.

Politics has a role too. Some 5-10 commodities being blamed for price rise or inflation is clearly not going to help anymore. Commodities trading and futures have been banned earlier. The aam aadmi is not impressed with such moves. He wants solutions and not moves to please the gallery.

Housewives are demanding more from their husbands to run families. Bachelors, who have moved places to better their careers, have silently agreed to the new (read increased) local eatery rates. This across the board price rise has prompted the media to focus on plausible reasons. But the man on the street wants to know how things can get costly within such a short span of time. Explanations like, ‘too much money chasing too few goods’ are only for the academically inclined.

“Short-term measures such as further cuts in import duties and banning more food items from exports are initiatives that the Government will take. All the longer-term solutions such as raising production will hardly help quickly.

“We need inflation arresters. All talk of economy on a roll will not cut ice. When people start paying more, it can never be good for the government,” confesses a leader of a political party’s labour union. Maybe he is right.

For people, who were expecting early elections, I guess you have to wait longer. There is no way any coalition will ask for people’s mandate now. The vote-bank is clearly not ready to cast his/her votes. They are battling prices and as always, it’s a losing battle.

Question: Is there a way you think, we (the consumers) can deal with inflation?

Mail your answers mentioning names along with addresses to swatilistening@gmail.com .

Responses to Episode-180 on the issue: ‘Why are eyebrows raised when Govt hikes the salaries of its employees?’ (Business Line, March 31, 2008).

As far as Performance Related Incentive (PRI) is concerned, I doubt how far this idea is going to work. Only those who are loyal, obedient or the ‘Yes-Boss-type’ will benefit!

So far, government employees who worked sincerely needn’t have to worry. But now, they will have to see their fellow colleagues, who are the ‘Yes-Boss-type’, getting paid more. The PRI will become an additional tool in the hands of the ‘boss’ to annually reward their ‘most obedient’ juniors!

K. L. N. Rao