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Economy

Food Inflation 15.4%, Revisions Still Scary!

Primary Articles Inflation – which is mostly food – is now up to 15.4% on August 28, 2010, with the index at an all time high of 314.

India Primary Articles WPI and Inflation, August 28, 2010

What’s still scary is the past revisions – data is revised about two months after the initial release. The primary articles inflation on July 3 has been revised to 17.31% from the earlier reported 16.25%.

While the amount of discrepancy has narrowed from 2% to 1% it still remains too high. We shouldn’t have more than a few basis points of difference, really – and what’s more of concern is, are we really at higher levels of inflation today?

India primary articles inflation, Revision Differences

Note: Good rainfall. Maybe too much. Still, should help supply problems. The Government of course is CREATING supply problems by buying up veggies and letting them rot.

Posts on Inflation:

  • Anonymous says:

    >Dear Deepak,

    How about a post on Plight of the Retirees to fight inflation.

    Today I did a small research on Debt Mutual Funds from various categories (Medium Term Income Funds, Gilts, Floating rate, Short term etc.). Took NAVS of these (so called 5 star and 4 star funds as Per Value Research)at exactly same date for the past 3 years. Did Indexation with Cost Inflation Index published by CBDT.

    I found all the funds except for one gave massive losses.

    This shows clearly that Debt funds managed by Reputed Fund houses are massive underperformers to even the offically published inflation.

    Imagine retirees who invest in Debt Funds including MIPs. They are mismanaged. Fund Managers have total liberty in some of the funds to choose and switch from various types of debt products depending on their view of the debt market. They have Gilts, Debentures, Structured Obligations, Pass Thro' Certificates, Certificates of Deposits, etc. etc. But it seems they have massively underperformed due to their poor judgements and calls.

    So the best bet for Retirees is not to go to any of these Debt Funds including MIPs and keep their money in PPFs, Bank Deposits, Post Office Schemes if they want to lose less to inflation. Debt Funds are a sucker. Very poor calls by fund managers and they should be sacked wholesale.

    MK