Inflation , Prices and the life of Retirees and common masses

No Doubt Dr Rajan is a renowned economist and a champion of Inflation but his dosa economics to illustrate that the retirees are far better off today in the background of lower CPI at 5.5% does not carry conviction in Indian situation is the ground reality. The inflation component to arrive at 5.5% and the prices the compiler collects sitting in some office in Delhi do not really reflect the retail prices the Retirees pay for their day to day living is What Dr Rajan has to experience if not experienced so far. One visit to a doctor for a fever costs not less than Rs 1000 these days is a fact and where it reflects in the 5.5% inflation the retirees do not know.  The fact that  the Tur dal , ulund dal are selling between 180 Rs and 220 Rs a Kg where as vegetable oils are selling at  between Rs 150 and 200 a liter  which the retirees pay ,out of their reduced income of interest rate after income tax  may not be known to Dr Rajan perhaps.. The dosa is priced at Rs 50 and 65 in hotels and it carries a service tax of 14.5 % and Dr Rajan's calculations do not hold good at least for metropolitan centers..The conveyance charges incurred by the Retirees to visit some places even by bus these days carry a cost and where  and how it reflects in the 5.5% inflation is  not known to retirees.Their  take home incomes by way of interest have drastically come down and the expenses incurred by way of rent / maintenance Charges for their accommodation,  living expenses involving water,  milk, vegetables, provisions, medical , transportation  electricity charges , news paper /TV Charges , servant maid's wages, etc  have gone up by leaps and bounds because of increases in the prices coupled with the  compounding effect of Service Charges. Dosa Economics cannot be a convincing answer to the retirees and this is not expected from an eminent economist. who have been moving through out the world. Such statements from politicians are understandable but definitely  not from professionals of such high caliber even in lighter vein..Masses are suffering from high prices but may not be suffering  from high inflation is the fact of life.Price levels and Inflation are totally two different things for Indian Masses.

Dr T V Gopalakrishnan

(This comment is a knee Jerk reaction to Dr Rajan's speech "Retirees are better off " that appeared in Business Standard dated 7/2/16).