WPI aside, ground realities paint a different economic picture

NEW DELHI: Statistics can be misleading depending on what you are browsing. While the Wholesale Price Index (WPI) figures show you a modest inflation rate of just 4.72%, for the week ended June 3, that is not the full story.

Prices of daily food items like wheat have risen by 9.4%, while pulses have shot a whopping 33.1% in the six months of this year. Vegetables, too, have burnt a hole in the home budget, going up by 14%.

How has this happened? The WPI-based inflation is a weighted average of the price movement of a large number of commodities. So the shooting up of prices of individual commodities that feature in your shopping basket, get flattened out when they are averaged with a large number of other commodities ranging from zinc ingots to metal alloys in a humungous list.

In the WPI, the primary articles group have a weight of only 22.03%. The manufacturing sector has instead a weightage of 63.75%, so any price rise in this sector has a bigger impact on the total price rise. Since the price rise in the manufacturing sector have not crossed 3% this year, overall, the WPI has not risen much.

But as any housewife visiting the market for her daily necessities will agree, her weekly purchase basket has been severely affected. As the table shows, the inflation trends that emerge for some common household items using an end of the month, year on year comparison table, is disconcerting.

The figures for wheat in the January to June time-period show the extent of rise in prices. For instance, the year started with wheat prices moving up to 6.5%, when WPI was only 4.3%.

The prices peaked at 12% in end-March and are even now showing a 9.4% rise over that of prices from last year. The bugbear of politicians, onion prices have also shot up by over 12% and if you thought a cup of tea was sorely needed to soften the blow, it has also risen by 24.48% for the latest reported week.