The figures for January are out – the inflation at the Wholesale Price Index (WPI) level is now 8.56%.

The RBI knows now that raising interest rates isn’t likely to help. But that’s all they can do really – the solution needs to be political. A number of things I’ve heard suggest the situation won’t get better very soon

NREGA is exacerbating it. Most harvest season hires are temporary workers, who now have permanent paying jobs with NREGA and therefore don’t want to bother harvesting. Farmers have reacted by reducing crop acreage; supply shortfalls will increase when the pattern applies country-wide.

Sharad Pawar talks his shop – people loyal to him take cues from what he says and raise prices when he suggests any commodity is under supply stress.

The middlemen in the food supply chain, politically very strong, have been hoarding; and the politicians are helping by not flooding the market with the FCI stored resources (of which 40% are wasted!)

There was a drought last year, which constrained supply. Not much of a drought, but it doesn’t take much to fuel a panic.

Food is a very small portion of our monthly expenses considering you dont own an apartment are living on a rental basis, about half of the rent we would normally pay if we dont own a house, so even a 30% increase isn’t going to kill you. But it hurts the poorest of the poor; while as a nation we don’t care about our poor, it is simply inhuman to let them starve while we consider stupid things like raising interest rates. Even if they don’t starve, the high prices of certain items makes them undernourished as they can’t afford what’s nutritious. It’s not yet too bad but it’s progressively getting worse. With oil prices set to increase this WPI looks like it’s only headed one way: UP

Winston Dsouza