New Delhi: After the hamburger and dosa, economists have now turned to the thali to try and illustrate the impact of inflation on a nation’s life. Make that the nation’s dinner table.
It’s not quite a north-south divide in economic policymaking, but taking a cue from his predecessor and teacher Raghuram G. Rajan’s “Dosanomics", chief economic adviser Krishnamurthy Subramanian on Friday unveiled what he called “Thalinomics" in the Economic Survey for 2019-20.
Rajan’s view was simple: keeping inflation down matters more than low interest rates in deciding how many dosas end up on your dining table every year.
Arguably, Subramanian takes a slightly broader peek at the nation’s kitchen.
“What better way to make economics relate to the common person than something that (s)he encounters every day—a plate of food? Enter ‘Thalinomics: The economics of a plate of food in India’—an attempt to quantify what a common person pays for a Thali across India," says the Economic Survey 2019-20.
Indeed, Thalinomics may just evolve into India’s very own Big Mac Index, which informally measures the purchasing power parity of currencies of different countries through a price comparison of McDonald’s hamburger in the stated geographies.
“Has a Thali become more or less affordable? Has inflation in the price of a Thali increased or decreased? Is the inflation the same for a vegetarian Thali as for a non-vegetarian one? Is the inflation in the price of a Thali different across different states and regions in India? Which components account for the changes in the price of a Thali—the cereals, vegetables, pulses or the cost of fuel required for its preparation?" asked the Economic Survey presented in Parliament on Friday.
The short answer is that the price of a vegetarian thali—usually made up of staples, dal (pulses), a vegetable curry and dahi (curd)—increased last year after falling “significantly" for five years. Non-vegetarian savings were far less.
“Questions that can engage a dinner-table conversation in Lutyens Delhi or in a road-side Dhaba in the hinterland can now be answered and positions taken on either side of a ‘healthy’ debate. Using the dietary guidelines for Indians (National Institute of Nutrition, 2011), the price of Thalis are constructed.
“Price data from the Consumer Price Index for Industrial Workers for around 80 centres in 25 States/UTs from April 2006 to October 2019 is used. Both across India and the four regions—North, South, East and West—it is found that the absolute prices of a vegetarian Thali have decreased significantly since 2015-16 though the price has increased in 2019," the CEA’s report card said.
“As a result, an average household of five individuals that eats two vegetarian Thalis a day gained around ₹10,887 on average per year while a non-vegetarian household gained ₹11,787, on average, per year. Using the annual earnings of an average industrial worker, it is found that affordability of vegetarian Thalis improved 29% from 2006-07 to 2019-20 while that for non-vegetarian Thalis improved by 18%," the Economic Survey added.
A quick comparison between India’ consumer price index (CPI) and wholesale price index (WPI) data is in order.
Mint columnist Himanshu, associate professor at Jawaharlal Nehru University recently wrote: “The consumer price index (CPI) rose 7.35% in December, hitting the highest since 2014 and crossing the threshold limit set by the Reserve Bank of India. Price pressures were high in both rural and urban areas, driven by food prices.
“Food price inflation surged to 14%, led by vegetables (60%), pulses (15%), meat and fish (9.6%), and eggs (8.8%). A similar picture emerged from the wholesale price index (WPI) data. While overall inflation, at 2.6%, is not very high, inflation in food articles at 13.2% is close to the CPI rate. The culprit again is food inflation, driven by vegetables (70%), cereals (7.7%), pulses (13.1%), and egg, meat and fish (6.2%)."