THE INFLATION ANOMALY

Have you ever wondered why are the prices of commodities still soaring despite the much touted decrease in the rate of inflation? Why are will still paying exorbitant prices for the food articles despite the daily headlines in the newspapers about negative inflation? These are the questions which any layman, who is not concerned with the nitty-gritty of economics of the country and would rather trouble his mind about making the best use of his puny income in the troubled times, would have difficulty answering. I will try and clear some of the doubts here.

In pure economic terms, Inflation Rate is the percentage increase in the value of a particular price index over a period of time. In India, we calculate the Inflation Rate by taking into consideration the increase in the Wholesale Price Index (WPI) over its value a year ago. Wholesale Price Index is the average change in prices that the domestic producers receive for their products. On the other hand, Consumer Price Index (CPI) examines the weighted average of a basket of goods and services used by the consumers.

The present fall in the Inflation Rate is attributed to the base effect – that is, as the WPI had risen at a higher rate in the corresponding period of last year, a similar increase in the index this year will show lower inflation. Thus, what is happening is that although the prices of most of the food articles are increasing, inflation rate is showing a very low figure primarily due to the base effect. Even though the WPI inflation has gone below zero, the CPI inflation is higher than 8 per cent. Arguably, many economists propound that CPI be used as a measure of inflation, as it reflects a better estimate of the prices of commodities, food articles and services prevailing in the market.

Another lacuna in these indices is the base year that is used to calculate them and the basket of goods that is included. WPI is calculated using the base year 1993 and the CPI is even more archaic as it uses the base year as 1984-85. Also, the basket of 435 commodities used for calculating WPI includes many articles which are obsolete, and it does not include a lot many articles that consumers started using after 1993. Quite an anomaly, I must say!

The common man who voted for the UPA government in the recent parliamentary elections has a lot of expectations. The Union Budget, which will be presented in the Parliament on the 6th of July, will be an apt bellwether of the things to come. I sincerely hope that these anomalies in the calculation of the inflation rate of the country are given a sound thought by the Finance Minister Mr. Pranab Mukherjee and these amendments are accordingly reflected in the Budget ‘09.

The Invincible "King of Pop" Passes Away

"In the world of pop music, there is Michael Jackson and there is everybody else" – those were the words used by The New York Times in 1983 to describe the King of Pop, who passed away as a result of a heart failure on 25th June '09. Spanning a career with highs n lows, he was as widely known among the populace as the artist who "thrilled" the world, as he was for his acts of notoriety.

He had a tormented childhood with his strict father abusing him mentally as well as physically and his brothers bullying him for his "broad, flat" nose. May be that is the reason he came to detest his looks, later on in life. He started performing with his brothers as a band called "The Jackson 5", and although his brothers were good, he had exceptional talent since the very beginning.

He grew up to be rebellious, often alluding to it in his notorious acts of befriending a monkey or changing the colour of his skin by multiple surgeries. It was his way of breaking free from the shackles that he found himself in, during his childhood, as if to send across a lucid and loud message - "You cannot control me anymore!” As time passed, the media and the general public seemed more interested in his personal life, marred by ever-growing controversies, rather than his music. Allegedly, he always hated his looks, and over a period of time he changed his appearance from a handsome young black man to, as a tabloid described it disparagingly, a "white woman". The media came to notice the hefty rewards to be reaped by belittling him and eventually gifted him with the epithet that Jackson came to abhor later on - Jacko Wacko. During recent times, he was inundated with numerous arraignments and appearances in court for the various charges leveled against him. He was also in dire monetary straits. Sometimes it was hard to imagine how he stood up to all that.

He was at the zenith of his career in the early 1980s. He is estimated to have sold three quarters of a billion albums and has to his credit 13 number one singles in the Billboard Top 200 and 13 Grammy Awards. He became one of the very few artists to be inducted twice into the Rock and Roll Hall of Fame. The Guinness Book of World Records recognized Jackson as the Most Successful Entertainer of All Time and "Thriller", which sold more than 100 million copies, as the Best Selling Album of All Time. On May 14, 1984, Jackson was invited to the White House to receive an award presented by the then American President Ronald Regan for his magnanimous support to charities, that helped people overcome alcohol and drug abuse worldwide. He, along with other venerable figures like Muhammad Ali and Nelson Mandela, helped America, and the world, erase the barriers of race and colour to a great extent at a time when racism was rampant.

His career was at its acme at a time when I was still a toddler, so I would not say that I have grown up listening to the music of Michael Jackson, but his evergreen hits like “Billy Jean”, “Black or White” and “Thriller” continued to enthrall me throughout my childhood, inclined as I was towards music. I was surprised when the news of his demise hit me with a sudden pang of overwhelming sadness. He was a genius, an icon who, I sincerely hope, will be remembered for the music he made rather than for what he did in his personal life.

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"Why not just tell people I'm an alien from Mars. Tell them I eat live chickens and do a voodoo dance at midnight. They'll believe anything you say, because you're a reporter. But if I, Michael Jackson, were to say, 'I'm an alien from Mars and I eat live chickens and do a voodoo dance at midnight,' people would say, 'Oh, man, that Michael Jackson is nuts. He's cracked up. You can't believe a damn word that comes out of his mouth.'"
—Michael Jackson
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