As chief economic adviser, or the brain behind India’s economic policies, Kaushik Basu’s brief is not exactly to help the aam aadmi understand why petrol prices rose or if vegetables would become more affordable.
On Thursday, the former Cornell professor, however, slipped back into his teaching role. He had a few political-economy journalists for students, many of who routinely throw inflation figures at readers, but may understand little of the numbers themselves.
Cutting through gibberish financial jargon — like GDP deflation — Basu explained issues that impact a range of Indians — from truck drivers to managers.
“It’s important to understand inflation numbers, so that the people know what to make of them,” the Amartya Sen acolyte said. Basu had completed his doctoral thesis under Sen
If somebody said March inflation figures were too high, it is possible that he may have pulled a fast one on you, unless he also told you that it was “high compared to inflation levels last March”, which may have been very low.
Sometimes, food inflation may seem high because of this low base effect,” Basu said.
However, food prices were indeed very high, he said. His Kolkata relatives would often call him up right from Lake Market, a bazaar frequented by Bengali housewives, to complain.
“Fortunately, inflation is now on a scripted path,” he said, meaning policies have been so tweaked that it should remain within desired levels.
Basu also broke some good news, which had journalists rippling with excitement. High food inflation would peter out by July. Don’t let it come back, one of them said.