Inflation Relents, RBI May Not

Chennai: Food price inflation eased for a second consecutive week, data released on Thursday showed, but it still remains high enough to provoke another interest rate increase by the Reserve Bank of India (RBI) next week.

Food inflation decelerated to 15.52% in the week ended 8 January, from 16.91% in the previous week. Onion prices continued to rise at 14.83 % whereas potato and vegetables saw a marginal fall

The increase on an annualized basis is considered serious enough for the RBI, which meets for its next monetary policy review on 25 January, to raise key policy rates as it attempts to lower inflation from stubbornly high levels, although some economists have warned that it risked stifling economic growth estimated by the government to reach 8.75% in the fiscal year ending 31 March.



"The build-up of food inflation will take two months to dissipate. So, it will moderate in January and February and we expect food inflation at 10% to 12% by March," said Abheek Barua, chief economist at HDFC Bank.

The Reserve Bank raised interest rates six times last year in its battle against inflation.

Year-on-year onion price inflation remained at 98.15 %; Prices of pulses, wheat and potato declined by 14.92%, 6.11% and 2.94 %, respectively.

Vegetable and fruit prices remained firm, increasing 65.39% and 15.19%, respectively, over the same period last year. Demand for protein-based foods has been rising steadily over the last few years although there has been no increase in their supply.

Some government policy makers do not favour monetary tightening to douse inflation amid concern that it would slow the pace of economic growth as borrowing costs rise.

“The high inflation in primary articles, particularly vegetables, is more on account of supply side constraints and monetary policy may not be the most suitable intervention to deal with the situation,” commerce minister Anand Sharma said in an open letter to finance minister Pranab Mukherjee this week.

Maintaining that the surge in inflation was “unacceptable,” Mukherjee has promised to meet state finance ministers to discuss the situation.

Bankers have argued against another rate hike. They have instead favoured a reduction in the cash reserve ratio (CRR), or the percentage of deposits that commercial banks have to maintain with the RBI, and the statutory liquidity ratio (SLR), or the percentage of deposits they must invest in government securities.

“Liquidity is very tight now,” said Housing and Development Finance Corp. Ltd chairman Deepak Parekh told reporters early this month. “Currently, banks are borrowing Rs70,000 crore to Rs80,000 crore from the RBI on a daily basis.”

While the market will await the central bank’s policy announcement on Tuesday, it is quite evident that RBI is hard-pressed for choice. For inflation driven by supply-side constraints, just monetary policy will not be enough. As long as the government falls short of formulating long-term reforms in agriculture to meet growing demand, curbing inflation will be a tough task.

“For the Reserve Bank, the challenge is to calibrate monetary policy, taking into account the demands of inflation management and the demand of supportive recovery,” RBI governor Duvvuri Subbarao said addressing students at the Indira Gandhi Institute of Development Research on Monday.

The Erectionman-A Review

The Erectionman, a Dutch documentary directed by Michael Schaap is, according to the synopsis of the movie, a story on “how one little pill changed the course of sexual evolution.” The documentary also touches upon important subjects like marketing techniques, societal changes, male sexual insecurity, and pornography. However, it doesn’t do justice to anyone of them.

Both, the animation and the portrayal of what one dose of Viagra does to a man’s libido is vulgar and certainly not one of the documentary’s essential requirements. In an attempt to make his documentary funny, the director, very insidiously puts in a dose of sex and titillation. 

Semi-clad girls, gyrating in parties, tell him how they carried Viagra for their partners, heavily-busted women argue that breast implants should not be compared with Viagra. The director is seemingly amused by all this and nowhere in the movie does he look particularly serious in his pursuit to find out the truth about Viagra, which he proposed to do at the outset.

Schaap talks to an upcoming author who has written a book on sex, which turns out to be totally futile. He meets an anthropologist also, who explains, very briefly though, how male sexuality has evolved over a period of time. There is no attempt to meet a reputed expert on the subject of sexual evolution.

The most ridiculous part, however, comes when he joins a group of men which had no connection, whatsoever, with either erectile dysfunction or Viagra. Only Schaap can probably explain the relevance of this scene in the documentary. 

It’s quite amusing to see Schaap ask a doctor to explain penetration. One wonders where the curiosity about erectile dysfunction vanished. What puts the documentary really down however is to see that Schaap did not make any serious attempt to get someone from Pfizer or a rival pharmaceutical firm to talk about the created need for Viagra, about Pfizer’s strategies to market the wonder-pill.

When Pfizer does not respond to his requests for a meeting, he writes to them by email of-his take on the side-effects of Viagra on men. What are these side effects?-Dependency and loss of self confidence! Whereas, there is no attempt to point out the real side-effects like headache, facial flushing, and upset stomach, bluish vision, blurred vision, or sensitivity to light. 

The director does not feel the need to relate exploitation of men’s sexuality through these pills with the larger context of the sexual exploitation and branding in today’s world by companies who benefit from it. That erectile dysfunction is closely linked to love and emotion, does not figure anywhere either.

The documentary is a very frivolous attempt at trivializing some serious issues.  There is an attempt to hop on to too many things in fifty minutes. After ranting about its side effects, Schaap gulps a blue pill down in the last shot, leaving the audience as confused as he himself probably was, while directing the documentary.

Consumption Patterns in Inflation Numbers

India and most other developing economies in the world are grappling with the issue of rising inflation and soaring food prices. India’s food inflation fell to 16.91% for the week ended January 1, 2011 after rising to 18.3 percent, the preceding week.  As economists and analysts gear up to debate whether the RBI will raise rates by fifty basis points or twenty five basis points, a silver lining can be seen in the spiralling inflation numbers if one gauges through them carefully. 

A closer look at the components of the food inflation index points towards a change in the consumption pattern of the Indian consumer. What have fuelled the price rise are components like vegetables, onions and protein based items 

The Planning Commission Chairman Montek Singh Ahluwalia said to NDTV Profit, “The high inflation number points towards people eating healthier food, better lifestyles.”

Individual items in the food inflation index, egg, meat and fish became costly by 16.70 per cent, fruits by 17.71 and milk by 13.20 per cent per cent annually. The unexpected shoot-up in onion prices due to bad crop also added to the inflationary woes significantly

However, prices of staples like pulses declined by 14.84 per cent, wheat by 4.87 per cent, potatoes by 1.67 per cent and cereals by 0.12 per cent on an annual basis. These commodities are essential in the average Indian’s consumption basket. 

Apart from the fact that there is a significant demand-supply mismatch, it is becoming increasingly important to recognize that India is growing from a developing to a middle income economy. As such it’s imperative that its growth rate and income levels are high, which eventually lead to increase in demand of high-end consumption of both food and non food articles. The Indian consumer is now able to afford healthier lifestyle which raises demand for high-calorie and high-protein food.

The observation calls for concern, however as inflation is a real problem and needs to be tackled with long term structural solutions. Fiscal and monetary steps in themselves are just half-measures. 

Supply side needs to be strengthened to meet the growing demand. 

Women in Anantapur

Profile- Women in Anantapur
Varsha Dugar


The condition of women is the best reflection of the condition of society. Any aspect – poverty, education, caste, employment - proves that India is still a patriarchal society and women are still the lesser sex. It is more so in the interior parts of Andhra, especially in Anantapur. 


Anantapur is known for being the second driest district in India. Women walking miles to fetch drinking water for their families, bear the brunt of this fact. Dr. Imam of Telugu magazine, Kadalika says “women spend a lot of time in fetching water and even fight for it. Also, most houses use fuel-wood for cooking and hence, women suffer from respiratory problems.” 


Respiratory problems however do not deter young girls from cooking. In SheikhShanipalli, young girls, hardly ten years old, struggle with the fuel-wood “chulha.”
Gulzar aged 16, studies in class X in the government school in Garikkapalli. A girl her age in the cities would expectedly be computer-savvy, participate in extra-curricular activities and even be in a relationship. Gulzar instead, helps her mother manage a chilly bhajji shop from their home. She knows nothing of computers, doesn’t speak English and is going to be married later this year. She does not have the options that her counterparts enjoy in the cities.


Srikrupa who is 17, from Raptadu is better off. She commutes daily to her college in Anantapur  and also pursues ISET. She plans to do MBA. She too cannot speak English but plans to enroll in spoken English classes. She knows computer-basics and TALLY. She however, cannot operate the internet. The only computer available is in the village school, else  she has to travel to Anantapur, which is at least 5-6 km away from her village. 


The extent of patriarchal domination in Anantapur is evident by the fact that a large number of women are abandoned by their husbands. For these women there is no option of re-marriage. Most of them stay back at their in-laws’ putting up with discrimination and humiliation. 22 year old Lakshmi from Raptadu is one such example. When asked if she would remarry, she just left the place without saying anything. Her answer did not require words as many other women had already voiced what she could not say.


Caste is a very pronounced and accepted reality in the villages of Anantapur. Anantapur district boasts of 80% backward classes, with the remaining 20% dominating. It is more psychological than physical. Reddys and Kammas have historically been more powerful than the other castes. Dr.Imam says, “Only Reddys were nominated for the post of Village Munsi, which was abolished in 1984.” They still enjoy the same authority over the lower castes although the post has become non-existent.  Women bear this difference more than men.


Indramma 22, is a resident of SheikhShanipally. She lost the use of her legs the day she got married two years ago. The reason for her disability is baffling. She belongs to a Scheduled Caste. She walked through the Other Castes’ colony in a customary ritual after marriage. Being a SC she should not have entered the OC area, she says. It is this sin, the price for which is the loss of her limbs. Here, SC women are not allowed to touch the common borewells. An upper caste woman pumps out the water and pours it into their utensils from a distance.


Women are on the receiving end even in access to health. Umadevi of Nigiddi is not sure about her age. She says she could be about 20 or 22. Last month she had a miscarriage in the seventh month. There is no resident doctor in her village and no Public Health Centre. The pucca road is 4 kms away from her village. 


Kalavati, aged 25, from Mudiguppa, was married off at 13 and abandoned by her husband two years later since she could not bear children. The ration card is in her husband’s name and she refuses to take help from him. She works as an agricultural labourer. 


Even as labourers, women do not get a fair share in terms of remuneration for work. Both men and women in several villages accept that women get ten to twenty rupees lesser than men for the same amount of work.  


The story of the women whose husbands committed suicide is even more painful. Their husbands have left behind a lifelong legacy of debts and unmarried daughters. Meenakshi Amma of Shekshampally is one such verbally impaired whose husband consumed pesticide two months ago. He has left her a debt of 1,50000 rupees with three daughters to fend for. 


The problem for women in rural India and especially in places like Anantapur is not necessarily poverty. It is more a problem of lack of access to modern amenities and all the progress that globalization has brought to their urban counterparts. They are deprived at every level although they are just like us.

Stories from Anantapur

While chatting with a teacher in Anantapur, I came to know that there were several people there who were receiving old age pensions, though they were not eligible to do so. Reports about discrepancies in the disbursement of old-age pensions in Anantapur have emerged in the media here and there.

Indira Gandhi National Old Age Pension Scheme (IGNOAPS) is one of the sub-schemes of National Social Assistance Program. The scheme came into existence with effect from 15th August 1995. It aims to provide social assistance to poor people above the age of 65 years as old-age pension. Every person covered under the scheme is eligible to get Rs. 200 per month from the Government. 

Though it looks like a case of clear cut corruption, it is not just that. It is tough to say what drives people to this action- ignorance, greed or simply lack of options? Sushila Amma of Lattavarm, is 42 years old according to her smart card. But she has been receiving pension under IGNOAPS for the last 5 years. Her husband is dead and she has one son. She wasn’t sure under which category she is getting the pension-widow or old age. When asked why she had applied for old age pension she had no answer. Inspite of repeatedly asking her to talk alone, her son refused to leave her alone and she was seemingly intimidated. She has also applied for widow pension. 

In the same village I also found that there was complete ignorance amongst people regarding the schemes they were benefiting from. The YSR Abhaya Hastam (Helping Hand) Scheme is an insurance scheme under which a premium of Rs.365 in a year entitles one to get a pension of Rs.500 per month. Women in Lattavaram claimed that they had paid an amount of Rs.3650 a year back and they have yet not received the pension. They are not aware of the fact that they needed to be sixty years old before they got it. Those who are above sixty already, are not aware that the amount is Rs.365 and not Rs.3650. Gopal, the husband of the village Sarpanch confirmed that such an amount was paid by the women and blamed the delay on the government officials. “It takes time in such things sometimes,” he said.

S.Raju of Shekshampalli says his mother has been depositing Rs.1800 in State Bank of India, Uravakonda, as a premium for the Abhaya Hatam Scheme for last three years. When asked how much pension she will get in lieu of this, his reply was Rs.500 per month. In this case either he is not aware that the actual pension money that they are entitled to get will be much higher than Rs.500 as the premium is high or they are paying a wrong amount which probably is being pocketed by some officials. 

S.Raju says it is not too tough to apply for old age pension even though one is young. He says “you just need to chat the person up, give him things sometimes and you will be listed for the pension.” 

The consequence of this misrepresentation is that the rightful owners of the scheme sometimes become left-outs. Karappa of Shekshampalli is 68 years old. He had applied for the pension a few years back but does not receive any. He says “people in their thirties in my village are getting 200 rupees per month but I am not getting it.” 

The story is more prominent in Anantapur town. According to a source who was a former corporator in Anantapur and who requests to keep his identity secret, many people in Anantapur town have availed of the IGNOAPS scheme fraudulently and he has personally facilitated some of them. He says “many wrongs  happen around us, if this small wrong gives some people help, it’s not wrong.”

38 year old Lakshmi Narayan of Anantapur town, is disabled and cannot do any work. He and his wife have a kid. His father is paralytic and mother is suffering from acute menstrual problems. His wife works as a domestic help and is the only breadwinner for the family. They stay in a house given to them by the government under the Indramma scheme. For a family that earns five hundred rupees a month, the value of an added two hundred is imaginable.

Gangamma is a neighbor of Lakshmi Narayan. One can see from the entrance of her house, new boxes of mixer grinder and colour television. Her house seems full of belongings and hardly looks deprived. When asked how she could afford these luxuries, while she was taking the old age pension at the same time, she replied “ oh these things came in the dowry, my son got married last year.” She and her husband have two sons. The elder son is the only bread-winner of the family. She claims their monthly income is just twelve hundred rupees which is too less for a family of five; so with the help of the corporator, she applied for the old age pension scheme.

49 year old Qutubuddin, is also a resident of the same area. He has not been working for past 10 years. His wife works as a maid servant and his only son left his studies last year after completing the tenth grade to work in a shop so that the family would have some source of income. From the tattered house his mother says they are finding it tough to have full meals every day.

What looks like pure corruption is also a story of chronic poverty and deprivation. Both in Lattavaram and in Shekshampalli, the majority of the population is SC and ST. The level of incomes is very low. Children do not wear slippers to school as they don’t have one. Most of the families in Anantapur that I met were in dire need of help, however small it could have been. The Corporator who is godfather for these people, is not a corrupt man. He won the Corporator’s seat as an independent and lives in an equally dingy house as his voters do. He does this as a help for the people who are in need. At the same time he acknowledges that it’s not the right thing to do. 

Ashina, who belongs to the Mandal office and is responsible for the distribution of pensions in these two villages said that “such misrepresentations are hardly there and those that are there will be cancelled soon.”

It is tough to say what is responsible for this situation-corruption or deprivation.