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What works, and doesn’t, in Maharashtra’s districts

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In an exercise to help determine how reports of the MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act or Nrega) can inform us, I have used the records of what the programme calls ‘outcomes’ in the form of ‘physical assets’ created for the community (or conditional use by groups of individuals, depending on the kind of asset) over a financial year.

RG_nrega_MAH_dists_G1_201607The year is 2015-16 and the districts are those of Maharashtra (34, Mumbai excluded). There are at present 17 categories of physical assets and these are: rural connectivity, flood control and protection, water conservation and water harvesting, drought proofing, micro irrigation works, provision of irrigation, renovation of traditional water bodies, land development, any other activity approved, sewa kendra, coastal areas, rural drinking water, fisheries, rural sanitation, anganwadi, playground, food grain.

RG_nrega_MAH_dists_G2_201607‘Works’ are recorded under each kind of physical asset, with these classified as having been ‘approved’, ‘taken up’ and ‘completed’ (with ‘taken up’ presumably meaning commenced but incomplete at the end of the financial year). What matters therefore is to study those that have been completed, as the kind of community asset created and certified as being completed would serve to indicate what the community has decided it needs as a priority.

RG_nrega_MAH_dists_G3_201607When so filtered, the number of completed physical assets in the 34 districts of Maharashtra for the year 2015-16 totalled 71,554 – a large number that helps describe why the Nrega records are so very voluminous: 1,376 ‘works’ completed every week in 34 districts, with tens of thousands of Nrega beneficiary individuals and households working to build, repair, revive, create them, and with a complex inventory of raw materials being required to be transported and paid for so that these works may take shape.

RG_nrega_MAH_dists_G4_201607What the list of completed works – type and number – describe is very instructive. Of the 17 categories, four (fisheries, anganwadi, playground and food grain) were recorded with not a single instance of having become a ‘work completed’ in any district. On the other hand, four kinds of physical assets accounted for a full 85% of the 71,554 works completed in Maharashtra’s 34 districts for 2015-16 and these were, in ascending order: drought proofing (8,110 and 11% of the total works), rural sanitation (12,234 and 17%), water conservation and water harvesting (14,384 and 20%), and provision of irrigation (26,496 and 37%).

RG_nrega_MAH_dists_G5_201607The popularity of the latter four can be well understood, as much for how they are all linked as for the precarious living conditions that every taluka in Maharashtra’s semi-arid districts face when the winter months end. These biases towards certain works but not others still do however need to be read with conditions, and keeping in mind that these are the works for but one financial year out of the last ten (albeit the definition of what constitutes an asset under Nrega has been altered and added to several times).

RG_nrega_MAH_dists_G6_201607The question that remains is: Maharashtra’s districts and blocks and villages occupy varying agro-ecological, hydrological and meteorological regions. Do their geographic and environmental circumstances not have a role to play in the decisions taken about what Nrega works should be taken up (and completed) as a priority over other kinds?

The charts presented here in groups of districts arranged according to their location amongst the six agro-ecological regions that Maharashtra occupies, indicate whether the Nrega ‘works’ process takes cognisance of the fundamental environmental factors upon which the village (and so panchayat, taluka, district) rest. The charts have been constrained to 200 on the vertical axis in order to preserve readability – values are given for each ‘work’ recorded by each district. The abbreviations for the ‘works’ (horizontal axis) are for the full forms found in the second paragraph.

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Written by makanaka

July 12, 2016 at 22:28

The worth of an agricultural wage day

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Being unorganised, rural and particularly agricultural labour constitutes a relatively vulnerable segment of the work force. Rural and agricultural labour is generally deprived of the benefits of collective bargaining and lacks the protection of labour enactments which their counterparts in the organised sectors of the economy can fall back upon during times of work uncertainty, or calculated mismanagement. Agricultural labourers however have to live with casual employment, frequent changes of employers as well as places and wide fluctuations in the pay.

All-India average daily wage rates in agricultural occupations during 2014-2015 for children, women and men. Based on data compiled by the Labour Bureau, Ministry of Labour, Government of India

All-India average daily wage rates in agricultural occupations during 2014-2015 for children, women and men. Based on data compiled by the Labour Bureau, Ministry of Labour, Government of India

Farming remains at the centre of rural Indian life, even as more men and women today seek out non-farm work. Using data from the MGNREGA records, the proportion of men aged 15–59 working solely in agriculture fell from 41% in 2004–05 to 31% in 2011–12. The decline for women was smaller, from 40% to 35%. Many men and women combine farm work with non-farm labour, whether or not they participate in MGNREGA.

The labour scenario in a rural area is influenced by a number of factors such as its topography, natural resources, population growth, pressure on land, level of economic development, level of utilisation of resources and the institutional factors, namely, land tenure systems and inheritance laws.

Rural wages are considered to have risen steadily between 2004–05 and 2011–12, but the increase has been greater at higher wage levels compared with lower levels. MGNREGA records show that men’s daily wages for agricultural work grew by 50% between 2004–05 and 2011–12, women’s by 47%. Overall, growth in rural wages is higher in states and districts whose populations have greater participation in MGNREGA but it is important to note that MGNREGA plays only a modest role in wage increases.

Taking national averages, about a quarter of rural households participate in the programme, about 60% of these would like to work more days but are can’t get MGNREGA work. This widespread ‘rationing’ of work affects about 29% of all rural households, but percentages vary between regions. Households in the lowest income quintile worked only 23 days a year when they were allocated work.

The information base on the working and living conditions of this segment of labour market is scanty. The only major source of reliable information on socio-economic conditions of the rural labour is the Rural Labour Enquiry conducted by the National Sample Survey Organisation (NSSO) every five years. Consumer Price Index Numbers for Agricultural and Rural Labourers, released by the Bureau every month, provides a basis for minimum wages in agriculture under the Minimum Wages Act,1948.

Written by makanaka

December 31, 2015 at 23:50

May Day 2015

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Garment workers take part in a protest calling on the government to raise wages during a march to mark Labour Day in Phnom Penh, Cambodia.

Garment workers take part in a protest calling on the government to raise wages during a march to mark Labour Day in Phnom Penh, Cambodia.

All the substantial issues confronting the working class today — the rapid growth of social inequality, a tattered veneer of ‘democracy’ behind which ever more rapacious forms of neo-liberal economics rule over peoples and the environment, the explosion of police violence within countries (as in the USA) and of armed conflict between countries and regions — all these are bound up with the struggle against new forms of dominance.

The dangers of war loom more menacing today than they did in 1914 and in 1939. But for many workers in many countries on this May Day in 2015, war has never gone away. It persists because of the division of the world into what are called competing economies (as if ‘country’ and ‘economy’ are synonymous: they are nothing of the kind). On May Day, the subordination of the productive forces of households, families, communities and villages to the corporate and financial elite is protested and revoked.

Workers carry banners with messages in support of workers' rights during a march to mark Labour Day in Yangon, Burma (left). Members of the Group of the National Confederation of Trade Unions, raise their fists and shout slogans during their annual May Day rally in Tokyo.

Workers carry banners with messages in support of workers’ rights during a march to mark Labour Day in Yangon, Burma (left). Members of the Group of the National Confederation of Trade Unions, raise their fists and shout slogans during their annual May Day rally in Tokyo.

The world of work has been reshaped by globalisation. Today, much of global trade involves global buyers and suppliers, which has implications for workers’ welfare. Multinational enterprises source from a network of suppliers, who, in turn, compete with one another to obtain business. The task of providing compensation is therefore left to the supplier of the product or service, who is under considerable pressure with regard to the wages and conditions they can offer workers.

There are no mechanisms within the political system (there are scant differences between political systems installed today, for their methods are so similar) through which any of the grievances of the vast majority of the population can find expression. These democratic demands should be linked to programmes that advances the social rights of the working class. Chief amongst these must be a massive redistribution of wealth, which has been snatched away by what is mockingly called the ‘market’, itself a ghastly amalgam of banks, technocrats, commodity speculators, global finance capital, lobbyists and consultants, the multi-lateral lending organisations (like the World Bank and the Asian Development Bank), and all their cronies and cabals fostered by politicians.

Technological advancements and the expansion of the internet have caused temporal and physical distances to vanish. They have accelerated sweeping and damaging changes in the organisation of production and work. There has been a growth in the number of hours that enterprises operate (24 by 7 has become a household term) and therefore in the times when workers at all levels of service and production must be available to work. If they are not they are summarily sacked, fired, dismissed.

Protesters from the trade union PAME hold red flags during the May Day rally in front of the parliament building in Athens, Greece (left). People march in Moscow marking Labour Day.

Protesters from the trade union PAME hold red flags during the May Day rally in front of the parliament building in Athens, Greece (left). People march in Moscow marking Labour Day.

Since the 1980s, but especially in the 2010s, under the pressures of ‘competition’ but in fact as a strategy to create an ever-greater pool of consumers who are otherwise disenfranchised, companies and corporations run by the financial puppeteers have demanded greater flexibility in production and organisation. This has abandoned the traditional employment relationship which, for all its faults, has been one that has survived the Modern Era. It was the basis for labour protection measures. No longer. Non-standard employment arrangements have become common features in what are now cynically called labour markets, no matter where they are – Argentina, Micronesia, Scandinavia, sub-Saharan Africa. Work has become unstable and frighteningly insecure for families. Work has in fact been deliberately caused to become chronically unpredictable.

A concerted assault on the domination of our societies by this putrid but dangerous financial aristocracy is needed. For this enemy is determined to maintain its stranglehold through violence and through the punishment of poverty. This grip over our economic and political lives must be broken, for only when our societies are based on public ownership and democratic control of the forces of production and the means with which to safeguard ecology, natural resources and cultural values can genuine ‘development’ (a grossly abused term) take place.

What we know and don’t about the true price of dal

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If you look at only the official account (left), the price of dal has been comfortable, but the consumer experience (right) tells a quite different story.

If you look at only the official account (left), the price of dal has been comfortable, but the consumer experience (right) tells a quite different story.

How urgently our national food price measuring methods need a complete overhaul is best shown with the example of a staple everyone is familiar with: arhar or tur dal.

Price indexes or indices are useful because they help us view the change in the price of a particular food staple over time, not the price itself, but change in price when taken from a base year or month. Price records are useful because they log the price (per kilo for retail consumption) of a food staple in a week or month.

The three ministries concerned with food prices update their indices or actual price reports every month or week. These are: the Department of Consumer Affairs of the Ministry of Food and Consumer Affairs, the Directorate of Economics and Statistics of the Department of Agriculture and Cooperation of the Ministry of Agriculture, and the Labour Bureau of the Ministry of Labour. In addition, there is the wholesale price index prepared by the Office of the Economic Adviser, Ministry of Commerce.

arhar_true_price_chart_sm1Usually, movements and trends in these indices and price logs are examined by themselves, and conclusions are drawn about whether the price of a food staple has been held steady or is rising steadily or is rising seasonally and also annually (we never see prices and trends going downwards).

But this is not enough. We need also to examine whether these indices and price logs are describing what they are designed to in the same manner and – very much more important – whether their descriptions are reasonable or not.

In the two chart panels, I have plotted the descriptions for arhar/tur dal from several sources together. The left chart has solid coloured price lines from the Department of Consumer Affairs and from the Directorate of Economics and Statistics. Each has two lines, the higher at the 90th percentile and the lower at the 10th percentile of all monthly prices logged from 2009 January until 2014 June. The two dashed lines are indices – the wholesale price index for arhar/tur and the Labour Bureau’s retail price index for arhar/tur over the same period. The price logs are plotted against the left index and the price indices are plotted against the right index.

Between the two indices the WPI for arhar appears lower than the Labour Bureau index, but that has only to do with a difference base period. The overall pattern they describe is the same. The two sets of price logs shows the two different levels for the 90th and 10th percentiles – in both cases the prices recorded by the Directorate of Economics and Statistics are higher than those recorded by the Department of Consumer Affairs. However they all follow a similar pattern over the 66 months illustrated here.

arhar_true_price_chart_sm2And so to the question: how true is what these indices and price logs are describing?

The answer is in the right chart. Here, two more lines are seen. These are both ascending relatively evenly over the 66 months, one at a slightly steeper rate. These I have called the ‘real retail’ price lines, one low and the other high. They describe the prices paid by urban consumers for a kilogram of arhar/tur dal based on what has been charged by ordinary retail outlets in towns and cities, with the price readings collected informally. They have also been ‘straightened’ by applying a 12%-14% true inflation that has been experienced by urban food consumers over these 66 months.

The effect, as you can see, is startling. The ‘real retail’ price lines explain why the consumption of pulses has been dropping and continues to drop especially amongst urban households whose livelihoods depend on multiple informal jobs. At Rs 90 to Rs 110 per kilogram, this dal (like other pulses) is almost beyond reach. At Rs 120 to Rs 130 per kilogram – these are levels that began to be recorded by consumers, but not consistently by the government price monitoring agencies, even two years ago – the dal can be consumed only by the upper strata of the urban middle class.

The question that immediately arises is: why is the real food price inflation being experienced by consumers not reflected in the official food price logs and indices? I will take up this question in the next posting.

Time to halt the anti-labour pro-FDI momentum

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The new NDA government has within six weeks of its formation made its direction clear. It will seek the steady weakening of laws that have protected labour and will encourage foreign direct investment (FDI) into as many sectors of the economy as possible.

RG_socialist_fist_201406Such unilateral dismantling of workers’ rights and of self-reliance cannot be tolerated. Prime minister Narendra Modi, finance minister (and defence) Arun Jaitley, commerce minister Nirmala Seetharaman, home minister Rajnath Singh, rural development (and transport) minister Nitin Gadkari, urban development minister Venkaiah Naidu, agriculture minister Radhamohan Singh, labour minister Narendra Singh Tomar and their cabinet and ministerial colleagues are not in office as representatives of Indian companies and industry associations, nor are they in office as representatives of multi-national corporations and the finance industry.

But judging from their statements in so short a time, they need a strong reminder that it is the people – worker and kisan, householder and elderly – whom they serve. Where will that strong reminder come from?

The first such reminder has already been issued, forcefully, during a meeting between the central trade unions and labour minister Tomar on 2014 June 24. The minister of state for labour Vishnudeo Sai, the labour secretary, chief labour commissioner, Central Provident Fund Commissioner, finance commissioner, ESIC and other labour department officials also heard the demands and points of view of the central trade unions.

What has been asked for is what the central unions call “a directional change in approach and policy so that the legitimate interests of working people who produce wealth for the nation, resources for the exchequer and also profit for the employers are protected and taken care of and also the interests of the national economy and the national assets and resources are harnessed for the benefit of the majority of the populace”. This has become all the more urgent and necessary as the central govt (which is urging state governments to follow suit) is attempting to hurry major amendments to a number of principal labour statutes including the Factories Act, the Minimum Wages Act and the Child Labour Act.

RG_socialist_fist_201406_HThat it is necessary for such a change to be demanded (yet again, these have been central to successive sessions of the last few Indian Labour Conferences, the 42nd, 43rd, 44th and 45th) demonstrates how strong a hold Indian industry and their foreign collaborators have on the political class, regardless of the public persuasion of the members of that political class.

The trade unions had systematically arrayed before these government worthies the reasons for their opposition to the policy of opening up all sectors to FDI, to the reckless deregulation of strategic sectors and natural resources of the economy including the financial sector, to the aggressive disinvestment of public sector units and the privatisation of crucial public utility services. There were representatives from Bharatiya Mazdoor Sangh, Indian National Trade Union Congress, All India Trade Union Congress, Hind Mazdoor Sabha, Centre for Indian Trade Unions, All India United Trade Union Centre, Trade Union Coordination Committee, All India Central Council of Trade Unions, United Trade Union Congress, Labour Progressive Federation and Self-Employed Women’s Association (BMS, INTUC, AITUC, HMS, CITU, AIUTUC, TUCC, AICCTU, UTUC, LPF, SEWA).

RG_socialist_fist_201406_VThe trade union representatives presented the incontrovertible evidence – a presentation of great import but largely ignored by the urban-centric broadcast and television media – of the anti-labour and anti-people policies that have been the hallmark of UPA1 and UPA2, and which given their current orientation, will continue to be a primary characteristic of the new NDA government. These are:
* patronisation of deliberate default in tax payment by companies
* the violation of all basic labour laws on (1) minimum wages (2) social security (3) trade union rights (4) safety in workplaces (5) contractual work
* reckless opening of strategic and sensitive sectors of the national economies including public utilities for exploitation by foreign companies and speculators
The same destructive set of policies has been followed by the previous Congress-led government in the name of promoting employment, generating investment from the private sector (both domestic and foreign), all of which has combined to condemn the working class, rural and urban labour, farmers and the informal sector alike to impoverishment as India is wracked by an ever-deepening economic crisis.

The fitful pulse of an Indian food staple

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RG_pulses_prices_201405

The history of consumer price indices for pulses in India’s ordinary shops and bazaars since 2006 January is one of five periods. The first, from 2006 January to 2008 June, is of a rise in some pulse foods, a decline in a few, and little movement in others. The second period is one of a rise in concert from 2008 June to 2010 January, some pulse foods rising very steeply and not others – whole moong did but not whole urad, masur dal did but peas did not, horse gram did but not rajmah.

The third period, from 2010 February to 2011 August, is an overall lowering of the price indices for almost all pulse foods. This happened when the general food price index rose quickly and stayed high – but pulses remained relatively unaffected. That insulation, the fourth period, didn’t last long, from 2011 September till around 2012 May (even shorter for some pulse foods).

The fifth period began around 2011 July for some pulses, and two months later for others, and is continuing. This is a period of volatility in the price indices of the pulses group to an extent not seen in the previous seven years – peas rises but not gram, horse gram and rajmah shot up but raungi and white gram dipped, whole masur and whole moong soared while besan fell and papad remained flat.

The data I have taken from the monthly itemised retail consumer price indices, weighed to be all-India, for industrial workers with their base of 100 being in 2001, and compiled by the Labour Bureau, Ministry of Labour and Employment, Government of India.

At the end of the second quarter of 2014, the spread of price index values for the pulses group of our staple foods is wider than at any time in the last eight years. It is this food group that provides the nutritional balance and is a culturally rich source of protein in everyday meals and popular home-made snacks. The overall price rise these charts graphically illustrate, and the uncertainty about their availability (which is what the recent volatility of the individual index lines show) are evidence of the threat to the nutritional security of many millions of rural and urban households in India.

Written by makanaka

May 23, 2014 at 20:39

Finding the income gap in factories

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Soon after the liberalisation of India's economy in 1991 the rise in the average annual salary of the non-worker employee rose faster than that of the worker. From 1998-99, the difference became more pronounced and further from 2006-07 became very much more so.

Soon after the liberalisation of India’s economy in 1991 the rise in the average annual salary of the non-worker employee rose faster than that of the worker. From 1998-99, the difference became more pronounced and further from 2006-07 became very much more so.

When did the income gap between worker and white collar employee widen? The Central Statistics Office of the Ministry of Statistics and Programme Implementation has released its Annual Survey of Industries 2011-2012 for the factory sector. This small but significant compilation helps trace the evolution and trend of the gap in incomes from 1981-82 to 2011-12.

Using the figures given for wages and number of workers, the annual wages per worker (at current rates for that year) becomes available, so does the annual salary for non-worker employees. From 1981-82, when average wages per worker in the factory sector was Rs 7,197 it took 23 years for the wages to cross Rs 50,000. The rise was faster in the annual salary for non-worker employees which began at an average of Rs 13,325 in 1981-82 and crossed Rs 50,000 in 13 years.

In 1993-94, when the annual salary for non-worker employees crossed Rs 50,000 it was about 1.9 times the annual wages of the worker. In 2003-04 when the annual average wages of the worker crossed Rs 50,000 the annual average salary of the non-worker employee was about 3.1 times more. That gap continued to grow – 3.8 times more in 2007-08 and 4 times more in 2011-12.

While the next Rs 50,000 rise in the annual average wages of the worker took another nine years (from Rs 50,000 to Rs 100,000), over the same period (2003-04 to 2012-13) the annual average salary of the non-worker employee rose from Rs 156,000 to Rs 422,000 (adding the last year as a continuation of the trend, for this MoSPI series halts at 2011-12).

Written by makanaka

April 8, 2014 at 00:31

Workers in their districts

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What has changed in the numbers of Maharashtra’s workers over ten years, over the period marked by the recordings of two censuses, 2001 and 2011?

This experimental chart shows us the flow and accumulation in Maharashtra of what the Census calls ‘total workers’, and by this the Census enumerators mean those who said they have employment (or have worked for themselves) for more than six months, and those who have had work (or wages) for less than six months. These two divisions are called ‘main’ and ‘marginal’.

RG_MAH_workers_2001-11_Dashboard

Click for an interactive chart

The difference between these two descriptors of working status may be more grey than black-and-white, for the Census records how much time is spent working and not how much is earned (and saved and spent) as payment for that time spent. Hence, a ‘main’ worker who has been employed for 7 to 8 months of the year may have earned through wages, salaries or commissions just as much as a ‘marginal’ worker did by working for 5 months.

This is only to show that ‘workers’ as counted by a Census can be interpreted in a variety of ways, and for those wanting to get a fuller and richer view of the matter, it is best to read the Census data as a layer above or below one or two other sources of data, such as the NSSO and the results of a field study for example in a district.

What then do the districts of Maharashtra tell us? First, that the number of workers increased between 2001 and 2011 in most but not all districts, and that those districts with the largest increases in numbers were Thane (1.312 million more, 41.28% more), Pune (1.094 million more, 37.05% more), Mumbai Suburban (0.582 million more, 18.48% more), Nashik (0.577 million more, 26.43% more), and Aurangabad (0.398 million more, 33.84% more). There are also Beed with 31.12% more workers and Jalna with 29.85% more workers.

Next, that Mumbai and Mumbai Suburban, together with Thane and Pune, have 13.56 million total workers which is 27% of all Maharashtra’s workers! That is a concentration of numbers, but it tells us nothing about the conditions they work in, whether they are paid adequately to support a family and household (the major unions have been asking for a national minimum floor wage of Rs 10,000 for two years now) and whether these earners receive as is their right workers’ benefits. That is why we try as much as is possible to read the invaluable account of India and its districts and villages as described by the Census together with other sources and studies.

Still too few jobs, still paltry wages, says ILO

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ILO-employment_trends_2014_key_factsAlthough the Global Employment Trends 2014 report has adopted a mild turn of phrase to describe the vicious and sustained attack on workers and labour around the world, the message from one of the key reports from the International Labour Organisation is that economic ‘recovery’ has done nothing to create jobs, in fact the reverse.

The report has called for “an urgent switch to more employment-friendly policies” – that is, in contrast to the policies that encourage criminalising workers who organise themselves, and policies that drive – in a race to the deadly bottom – wages ever lower in the face of rampaging inflation. The weak global economic recovery has “failed to lead to an improvement in global labour markets”, the ILO report has said, with global unemployment in 2013 reaching almost 202 million.

While this is a very large number, we should remember that the ILO, a United Nations agency, relies on official statistics given it by the countries themselves. Even with allowances made for the true nature and scale of unemployment and under-employment, recommended to the ILO by trade unionists and researchers who study labour trends and conditions, the numbers available in the report will be a fairly large under-estimate of actual conditions.

ILO-employment_trends_2014Nonetheless, the Global Employment Trends 2014 report said that employment growth remains weak, unemployment continues to rise as a trend in all the world’s geographic regions, and especially amongst young people, and that large numbers of discouraged potential workers are still outside the labour market. The report has also bluntly said that “profits are being made in many sectors, but those are mainly going into asset markets and not the real economy, damaging long-term employment prospects”.

In developing countries, informal employment remains widespread, and the pace of improvements in job quality is slowing down, the report said. That means fewer people are moving out of ‘working poverty’ – that is, those who have some work but that work is not enough to keep their households consistently above a given income and food calories poverty line. In 2013, the number of workers in extreme poverty – living on less than the (widely-criticised and altogether meaningless World Bank) US$ 1.25 a day – declined by only 2.7% globally, which is one of the lowest rates over the past decade, with the exception of the immediate crisis years.

Periods of unemployment for job seekers and those laid off have lengthened considerably, the report said; in some countries such as Spain and Greece, job seekers need twice as much time before landing a new job than before the crisis (with no assurance that the pay they will receive for the new job matching their last drawn salaries or wages). More and more of those potential workers are discouraged and remain outside the labour force, “leading to skills degradation and obsolescence, and rising long-term unemployment”.

Expanding India’s WPI, neglecting its CPI

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There are some 130 food items in the proposed WPI whereas the retail price collection basket with the most items has only 46.

There are some 130 food items in the proposed WPI whereas the retail price collection basket with the most items has only 46.

The Planning Commission is to agree by the end of 2014 March on the composition of an expanded set of items for the wholesale price index. The expanded index – with a few new categories and some reclassifications – is a proposal, formally, by the Office of the Economic Adviser, Ministry of Commerce and Industry.

But there are retail wheels within wholesale ones, and there are indications provided by the financial and business press that it is the Prime Minister’s Office that is backing the revision – which will also allow the Reserve Bank of India to make decisions about interest rates that could benefit industry.

My interest was drawn to the several additions that have been made to the category of ‘food articles’ (some of which has been covered by media reportage, which quite typically has ignored the changes proposed in the rest of the categories). More important than these few changes to the components of wholesale food price are the additions made under the ‘manufactured products – food products’ category.

This is a greater expansion of items (although the weightages for the new items have not yet been made public) and reflects the shift in what is being purchased by households – more packaged and processed food in place of raw cereals, pulses, fruit and vegetables. The expanded list also signals the dietary shift – a nutritional time-bomb whose effects can already be seen in the rising rates of youth becoming overweight – towards processed cereals, sugary drinks, edible oils, and snack foods.

The tall and narrow chart you see here shows the difference between the sets of items covered by the proposed new WPI and the current sets of items that are monitored for consumer retail prices. The three sets that do this are from: (1) the Ministry of Agriculture, Directorate of Economics and Statistics, (2) Ministry of Labour and Employment, Labour Bureau, and (3) Ministry of Consumer Affairs, Food and Public Distribution, Department of Consumer Affairs.

This is the second expansion in the number of items that make up the WPI in the last three years, whereas the relatively much smaller list of items that are used to monitor the prices of food for consumers has remained the same over the same period (the last revision was about five years ago in the Ministry of CAF&PD system).

As usual, there is little or no public discussion on the additions to the WPI and the continuing neglect of the items that are used to compute the consumer price index – some of those collection systems are 30 years old. The proposed expansion of the WPI food and food-related items will deepen the already very serious lack of correspondence between the WPI and CPI.

More troubling is the deepening meaninglessness of the CPI numbers – rural and urban for major states doesn’t help one bit if the list of items is not expanded to reflect more accurately what households actually buy, rather than ignore the growing list of items they do. Continuing to ignore this long overdue need for correction will short-change India’s salaried workers and wage earners, and very seriously under-report true inflation especially for food.