Economic Theories of Indian Politicos:

1.    Economic Theories of Indian Politicos:

This morning’s newspaper quotes a World Economic Outlook Report of World Bank released on the 13^th Jan, that the Indian economy would expand at a faster rate than China’s in 2012. In the process, India could emerge as the world’s fastest growing big economy.

Let’s see what the helmsman of this great economy – the Indian Finance Minister, Pranab Mukherjee, has to say, as quoted in the same newspaper and several TV channels, on the galloping food inflation in the country which has led to a couple of emergency cabinet meetings. Assuring the nation on the 13^th Jan “we have analysed the situation. We have also indicated that there should not be any panic”, the brilliant Finance Minister explained to the effect that the high inflation is only on account of high prices of a couple of items in the food basket which “have a higher weightage in the price index”.

A highly innovative and creative economic theory to explain away the failure of the government machinery to control food prices.

But then, lowering the weightage of these items must be the easiest way to keep inflation under control—figuratively ?

Will someone ask the brilliant Finance Minister to explain as to why certain items included in the price index are given higher weightage than others?

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