ExpertDabbler

My mom came home from the nearby annachi store, shocked with the information that tomato is being sold for Rs. 40 per kg. Onion costs Rs. 38 per kg. In all probability, tomato should’ve been sold for Rs. 20 six months back. In percentage terms, that is a hundred percent price rice. Its likely that tomato would get a weightage of some 3% in some Inflation index based on some market price somewhere in India, and that inflation index would’ve gone up from 11.15% to 11.25% - As far from accurate as we are from Uganda.

I don’t think any small Annachi store owner in his right mind will file Income Tax returns. As far as I am acquainted with their scheme of things, they should be filing a largely fictional sales tax returns, the degree of imagination depends on the degree of corruptness of the assessing sales tax officer. Let’s ignore the legality part for the moment. If this is the state of affairs, how relevant are these GDP numbers and inflation numbers to us?

Agreed, every country including the US has an underground economy. But I read elsewhere that only 10% of India’s population come under the organized sector. The rest 90% are more or less underground I think. Please correct me if I am wrong. It goes without saying that India is a much much bigger economy than our numbers suggest. Given this ground realities, all this number based analysis about Indian economic scenario seem as odd as a Raymond coat suit guy carrying gunny bag in his back.

I now think there are many little Indias within a greater India, and each has its own economic cycle, not necessarily in synch with the ‘official’ Indian economy.

‘Pana puzhakkam illai’ was told as the main reason why the DMK lost power in 2001. Those days I thought the theory was largely unfounded. Not so sure any more. This, if true either means low inflation or low black money. Maybe we need to dig deeper into those years and see if there were any local, underground, unofficial economic reason for that.

I have lot of questions but no answers. But the more I see this, the less convinced I am about the barometers we use for measuring our economic health.

This entry was posted on Sunday, October 19th, 2008 at 1:04 am and is filed under Daily Life. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.