In 1789, the price of bread was one of numerous factors which urged the French people to storm the Bastille. In 1998, Madan Lal Khurana of the BJP lost Delhi to Sheila Dikshit because of skyrocketing onion prices, and it became a national issue in 2014. Onions have also influenced election outcomes in Madhya Pradesh, Rajasthan and Chhattisgarh. Attitudes to essentials may well signal political change, because they relate to the home and the hearth. But never before have biscuits, a completely discretionary purchase, flagged an economic downturn.
Last week Varun Berry, managing director of Britannia Industries, walked out of an annual general meeting where he reported slowing growth in sales, and mused that things have come to a pretty pass if people are thinking thrice before buying a Rs 5 pack of biscuits. And now Parle, Britannia’s competitor, threatens to lay off upto 10,000 workers. The only biscuits that are doing well are made of gold. Demand for precious metals has increased in response to a global recession signalled by the bond market, which produced the much-discussed inverted yield curve last week. One can almost hear the spirit of Marie Antoinette prescribing: “If they can’t buy Marie, let them eat gold.”
In 1986, the Economist launched its Big Mac Index, which tracks purchasing power parity across currencies via prices of a Big Mac hamburger in different countries. Now, perhaps the world is ready for a Marie index, a tracker of discretionary purchase which can detect the tightening of fists in real time, leaving bond yield curves to predict recessions which are still far away. In addition, since political turmoil is often associated with economic uncertainty, there is room for an onion index, tentatively named Vidalia, which would alert rulers to the rising frustration of people fed up with their economic policies.