High prices rule 2009 shattering myth of negative inflation

High prices rule 2009 shattering myth of negative inflation

New Delhi, Dec 13: India may boast of a negative or near zero inflation for most part of 2009, but cascading price rise, including doubling of even potato, made the year arguably the worst for Aam Admi in over a decade.

And, for the first time, the government saw the fallacy of inflation measured through Wholesale Price Index (WPI) and introduced a new mechanism, wherein food price movement was released on a weekly basis, giving a first-hand account of the impact that essential food articles, fruits and vegetables leave on common man. Although the WPI-based inflation fell to (-)1.74 per cent on August 1, a new mechanism adopted by the government in October to measure inflation revealed that food prices were up almost 20 per cent, the highest witnessed during the past decade. The Congress-led UPA, which returned to power for the second term this year on the plank of “Aam Admi”, was naturally cornered by political parties both inside and outside Parliament for the rising cost of living.