Opinion Measure by measure
The new wholesale price index is a welcome improvement
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The new wholesale price index is a distinct improvement on its predecessor. But that everything is great in our brand new high-growth,high-tech world is a figment of feverish imaginations. Inflation or rising prices are like taxes,mothers-in-law and other inevitable,contentious things which touch raw nerves. Shooting the postman helps in alleviating the pain. Despite all experience,everybody thinks they can do better. The Met and the Central Statistical Organisation always get the short end of the straw. And so,incremental progress is no news and we dont really vote to raise the budget for substantial change.
Coverage going up from 435 articles to 676 is good. In a growing economy,the composition of output would increase. It happened earlier,but more is better. Quality problems are always there. As the iPod comes in,the old gramophone is bound to be replaced and anyway,you dont have the records. But the increase in durables is notable. Quality problems are important. Sukhwinder Singh at the Centre for Management in Agriculture at IIM (Ahmedabad) shows that higher quality cabbage in the Ahmedabad market yard,for example,is getting a 15 per cent plus price higher than the variety sold by arhtias (commission agents). This is actually not inflation. But we are far away from all this; 5482 quotes are again better than fewer.
The old complaint surfaces,that the quotes come from different markets. Some come from first-stage markets,others from those close to retail,even though farm gate prices have been given up. We dont have the Abhijit Sen report. It is extremely unlikely that he would only rely on procurement prices as some reports imply. He is much too qualified and experienced to give up a lot of real price data outside minimum support prices.
There is also the old reliable the fact that there is,in the Indian wholesale price system from the days of Sir Penderel Moon (the first economic adviser to the Government of India),the problem that our indices have a lot of double counting,with wheat,flour and bread counted again and again,rather than only final goods. Other countries,admittedly richer and more organised than us,have solved that problem and with VAT we should go there too. The expert committee may well have gone into it and given a phased plan,although there are no reports confirming this.
Now of course,everybody wants their own price index. When Gandhiji solved the great textile strike in the last century between Ambalal Sarabhai,the chief textile owner,and his sister Anusuya Sarabhai,the Majoor Mahajan chief,the Ahmedabad industrial labour index number was used as the dearness allowance formula. It lasted for decades,not because everybody liked it but nothing else was available and negotiated. Widowed pensioners want their own index and harassed middle-class housewives want theirs. They all say this index is wrong. There is nothing wrong with it. But if we have a lot of problems with one set of weights,you can imagine what will happen with all this. And anyway,consumer prices are another story. Abhijit Sen has pushed it from the farm gate to the mandi. Be patient. It will all come.
Meanwhile,please remember that my trade union,that of economist statisticians,also needs help. Be nice to the statistician or meteorologist in your neighbourhood. She is trying hard even though nobody likes her output. At least vote for some money for them.
A new idea is afoot: to set up independent statistical agencies,which coordinate the states,but also have the muscle and funds to push them. Its a good idea,and if it picks up,we may really understand what is going on in this lovely country and economy of ours. As they say,Satyameva Jayate.
The writer,a former Union minister,is chairman,Institute of Rural Management,Anand express@expressindia.com
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