If ground reality indicates anything on rising prices it can be encapsulated like this: The inflation numbers are grossly deflated. The wholesale price index (WPI) — the statistical tool primarily used by the government to take stock of inflation — proves to be entirely worthless when one looks at the increase in food prices.

A survey of grocery stores done by this newspaper throws up some astonishing numbers. A comparison of the prices of food items provided by the government for May and the prevailing retail prices show that prices of essential food items have gone up by up to 40 per cent. Experts tracking commodity prices blamed lower stock inventory, delayed monsoon, global rise in food prices and hoarding for the price rise.

The price of Kolam rice (Nagpur variety) in Mumbai has gone up by 25 per cent since May while the price of Arhar dal has gone up by 46 per cent in the last 2 months. Arhar dal was available for Rs 58-Rs 60 in May but today it is priced at Rs 86 per kg. Some retailers are also hoarding the stock anticipating the price to go up further. Pulses have been most affected by this surge as prices of Moong and Masur dal have gone up by 20 to 25 per cent. Sugar prices have gone up by 18 per cent in the last 2 months while tea prices have gone up by Rs 40 per kg.

While the common man has been grappling with this rise in prices, the government published WPI data on Thursday indicated inflation to be negative in annual terms in mid-July. The WPI fell 1.54 per cent in the 12 months to July 18, its seventh successive fall, compared with a 1.17 per cent drop in the prior week. “The WPI is not a correct indicator for inflation. In the present scenario it is the base effect of last year which is still showing inflation as negative. Since prices were too high in the corresponding week of the last year the rise in food prices is not being reflected correctly in the WPI,” said Naveen Mathur, head of commodities at Angel Broking, .

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