TAMING THE BIG FAT FOOD INFLATION

INDIA'S headline inflation-the average increase in retail prices over the year-ago levels-has fallen to 6.83 percent for the month of August 2023 from 7.44 percent the month before. This is still above the upper limit of two-to-six percent band of tolerance the Reserve Bank of India is tasked to keep it within.

- TULSI JAYAKUMAR

It is an important tool that can influence elections, especially because food inflation, which is a significant component of poorer households' monthly expenses, can have a direct bearing on political fortunes. In the past, soaring onion prices have brought tears to the eyes of politicians, dethroned governments, and left such a lasting impression that political parties take the humble bulb seriously.

Indira Gandhi had used rising onion prices to highlight the incompetence of the Charan Singh government, describing the hustings in 1980 as the 'Onion elections'. In 1998, the fate of the ruling Bharatiya Janata Party (BJP) and of the newly-appointed Delhi chief minister Sushma Swaraj was sealed by the pungency of the prevailing onion prices. A popular campaign jingle coined at the time was, "Bijli, paani, aloo, piyaz, sapnon mein aate hain aaj (Electricity, water, potatoes, and onions are available only in dreams today)." In 2019, when the Union finance minister was questioned about the problems of onion farmers and the rising prices across the country, she tried to deflect the issue by saying that her own consumption of onions was low-a comment that attracted sharp criticism.

It's a worry this time too. While the overall inflation rate, which is based on the Consumer Price Index (CPI), has dipped, food inflation, which is measured as the average price rise in twelve sub-groups within the CPI basket, is still high at 9.19 percent.