Myth of Inflation Control-Essential Commodities Worst Affected

Myth of Inflation Control Essential Commodities Worst Affected EPW Research Foundation THE most disquieting aspect of the current economic scene is the persistence of inflation. Apart from the rise in the general wholesale price index, what stand out are the especially sharp increases in the prices of basic consumption goods and consequently in the cost of living indices, particularly those relevant to vulnerable sections like agricultural labourers and industrial workers. The latest provisional general index of wholesale prices (base: 1981-82 = 100) for December 17, 1994 shows a rise of 10 per cent over the final index for the corresponding week of December 1993. Based on past experience it is to be expected that when the final index number is known, the annual price increase would work out to anywhere around 10.5 to 11 per cent against about 8.8 per cent in the preceding 12-month period. The weekly average of the general index for the past 12-month period gives an accelerated price rise of 10.3 percent against 7.7 percent in the previous 12-month period. Likewise, the weekly average of the WPI for the current fiscal'year so far shows an increase of 10.5 per cent against 7.8 per cent in the corresponding period of.the previous year, though on a point-to-point basis the rise this year so far at 7.2 percent has been somewhat lower than that last year (8 per cent). On a point-to-point basis, over the 12-month period, every major of commodity group has shown an accelerated rate of increase. In the fiscal year so far, the sharpest increase has occurred in 'food articles' (12.9 per cent) and in the specially computed 'food index' (10.9 per cent) consisting of 'food articles' from among primary articles and 'food products' from among manufactured products.