Dosanomics then? Fnie-images.s3.amazonaws.com/gall_content/2020/2/... · The elaborate thali...
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06 A woman with a book and a pen has the power to move nations. A woman with a mind and a voice has the power to change worlds Sasha Temerte KNOWLEDGEPEDIA Famous for rich, buttery flavours along with the extensive vegetarian and meat dishes, the thali comprises sarson ka saag, makke ki roti, tandoori roti peeli dal, rice and various meat dishes The thali is loaded with hot and spicy lentils, vegetables, sidu, which is a kind of bread and meetha bhaat (sweet rice mixed with nuts). The thali blends in both sour and sweet flavours The elaborate thali comprises dal baati churma, missi roti, gatte ki sabji, panchmela dal, laal maas, bajra roti, buttermilk and desserts like malpuas and moong ka halwa DECODING Thalinomics simply means economics of a meal in India The Economic Survey of India for the first time introduced the term Thalinomics — the economics of a plate of food in India — in an attempt to figure out how much a meal costs. The 2019-20 Economic Survey has found that veg thalis became 29% more affordable compared to 2006-07, while non-veg thalis became 18% more affordable A vegetarian thali includes a serving of cereals, lentils and veg- etables; a non-vegetari- an thali includes a serv- ing of cereals, lentils and meat The Govt has tried to calculate if the cost of a thali for both vegetarians and non-vegetarians has increased For this, price date from the consumer price index for industrial workers for around 80 centres in 25 states/UTs from April 2006 to Oct 2019 was used The government claims that the cost per thali during this period has actually decreased But a non- vegetarian thali gained `11,787 on an average per year The govt also claims that an average house- hold of five individuals that eats two vegetari- an thalis a day gained around `10,887 on an average per year What is Dosanomics then? F ormer governor of RBI Raghuram Ra- jan used dosa to elu- cidate complex eco- nomic theories. When Rajan became Governor, banks in India were offering a high rate of interest (about 10%) but the inflation rate was also very high (about 10%). EXAMPLE: Let us suppose that a retiree has a total saving of `1,00,000. He wishes to use this money to buy a dosa. Now, the cost of a dosa today is `50. So, today he can buy 2,000 dosas with his saved money. But the retiree knows that he can in- vest this money in a term de- posit and the next year he will have more money to buy dosas. But, quite often, we don’t account for inflation. Let us explain further... SCENARIO 1 High-interest rate, High inflation 10% ➤ The retiree knows that if he puts his money in a bank’s fixed deposit at 10% p.a. for one year, he will be able to buy 10% more dosas next year. ➤ So, by the end of the year, he gets back his principle of `1,00,000 and an interest of `10,000. So, he can buy 220 dosas for `50 each. Right? ➤ What’s the catch here? Inflation! ➤ As the economy is experiencing 10% inflation this year, the price of dosa increased from `50 to `55. So, with his `1,10,000, he can still buy only 2,000 dosas. So, the net gain of investing in a term deposit was zero. ➤ His purchase power is still the same: 2,000 dosas. SCENARIO 2 Low-Interest rate, Low inflation 5.5% ➤ Now, let’s say the economy was experiencing a 5.5% inflation rate. With an 8% interest rate, the retiree would have ` `1,08,000 in his account. The rate of a dosa now is ` `52.75 (because of a 5.5% interest rate). ➤ This would allow the retiree to buy approximately 2,048 dosas. ➤ High inflation; High-interest rate — 2,000 dosas ➤ Low Inflation; Low-interest rate — 2,048 dosas ➤ Dosanomics tells us that the retirees are earning (48/2000) 2.5% more dosas even with lower interest rates! When a student asked Rajan Even with inflation rates lowering, why are dosa prices continuing to rise? R ajan responded, “You have hit on an- other issue in eco- nomics, which is called the Balassa-Samuel- son effect.” BALASSA-SAMUELSON EFFECT states that countries with high growth in produc- tivity also have high wage growth. Rajan explained that the technology for making dosas hasn’t improved much. But, staff wages are constantly in- creasing. While workers in factories and banks can now serve a larger audience be- cause of technological ad- vances, the dosa business has- n’t been scaled yet. Balassa- Samuelson Effect states that in a fast-growing economy like India, the sectors that aren’t improving their tech- nology will see higher price inflation than others. Thus, the overall effect is that citizens of developing countries have to endure high inflation. Often gov- ernments keep interest rates high to relieve the inflation pressure from the lowest in- come group. By CHAITANYA BAWEJA, Machine Learning Engineer CONCLUSION: Rajan claimed that the only way is to holistically lower inflation. SIZE OF THE THALI A vegetarian thali has been defined as one that consists of 300g of cereals (rice and wheat), 150g vegetables (pota- to, onion, tomato, brinjal, cabbage, cauli- flower and okra) and pulses (arhar, gram, moong, masoor and urad). For a non-veg- etarian thali, dal has been replaced by egg, fish and goat meat. THE TERM T aking a cue from his predecessor Raghuram G. Rajan’s DOSANOMICS, chief economic adviser K Subramanian unveiled Thalinomics in the Economic Survey for 2019-20. PRICE FLUCTUATIONS The chapter ‘Thalinomics: The Economics of a Plate of Food in India’ states the absolute prices of a veg- etarian thali have decreased signif- icantly since 2015-16, across India. However, the price of a vegetarian thali has increased in 2019 (April-October), mainly due to the increase in prices of vegetables and dal. “…the increase in the rate of inflation in the thali during 2019-20 is a temporary phenomenon that should revert as has happened in earlier years,” the survey states. PUNJABI THALI HIMACHALI THALI RAJASTHANI THALI The Nagaland thali brims with vegetables, chillies and a variety of meat and fish, which are often smoked, dried or fermented NAGA THALI The MP thali comprises poha (rice flakes cooked with spices), rogan josh, saboodana khichdi, korma, seekh kebab, achari gosht etc; rounded off with the famous Bhopali paan MADHYA PRADESH THALI The thali is simple, less spicy and oily, yet intricately flavoured. No Odia cuisine is complete without rice, fish, seafood, saag and yogurt ODISHA THALI The state’s thali is a mix of steamed and fried goodies including dishes such as Dal bhat (boiled rice and lentil soup), Thukpa, the noodle-based soup, momos, Phagshapa etc SIKKIM THALI The state’s thali has mouth-watering dishes such as chhilka, dhuska, kurthi daal, red rice, lal saag, dehati chicken, dudh peetha, sattu ka parantha, ghugni, litti- chokha, balushahi etc JHARKHAND THALI Rice dishes along with meat preparations such as rogan josh, yakhini, harissa etc form the delicious Kashmiri thali, accompanied with the favourite beverages – noon chai and kahwah JAMMU AND KASHMIR THALI An amalgamation of flavours ranging from spicy to sweet, the thali comprises sambar, avial, pineapple/mango pachadi, kichadi, olan and for non-veg, there is seafood KERALA THALI THE SURVEY INDICATES ... that the reforms undertaken a year ago to enhance agricultural productivity as well as efficiency and effectiveness of agricul- tural markets for better and more transparent price discov- ery led to change in prices of thali. Simplifying further, an individual who would have spent around 70 per cent of his/her daily wage on two vegetarian thalis for a household of five in 2006-07 is able to afford the same number of thalis with around 50% of his/her daily wage in 2019 (April-October). QUESTIONS RAISED H as a thali become affordable? Has inflation in the price of a thali increased or decreased? Is the infla- tion the same for a vegetarian thali as for a non-vegetarian one? Is the inflation in the price of a thali differ- ent across states and regions in India? Which components account for the changes in the price of a thali – the cereals, vegetables, pulses or the cost of fuel required for its preparation? asked the Economic Survey. THE ORIGIN OF ECONOMIC COMPAR- ISON WITH FOOD T halinomics may just evolve into India’s very own Big Mac Index, which informally measures the purchasing power parity of currencies of dif- ferent countries through a price comparison of McDonald’s hamburger in the stated geographies.
Transcript of Dosanomics then? Fnie-images.s3.amazonaws.com/gall_content/2020/2/... · The elaborate thali...
06 A woman with a book and a pen has the power to move nations. Awoman with a mind and a voice has the power to change worlds
Sasha Temerte KNOWLEDGEPEDIA
Famous for rich, buttery flavours along with the extensivevegetarian and meat dishes, the thali comprises sarson kasaag, makke ki roti, tandoori roti peeli dal, rice and variousmeat dishes
The thali is loaded with hot and spicy lentils, vegetables, sidu, which is a kind of bread and meetha bhaat (sweet rice mixed with nuts). The thaliblends in both sour and sweet flavours
The elaborate thali comprises dal baati churma, missi roti,gatte ki sabji, panchmela dal, laal maas, bajra roti,buttermilk and desserts like malpuas and moong ka halwa
DECODING
Thalinomicssimply means
economics of ameal in India
The Economic Survey of India for the first time introduced the term Thalinomics — theeconomics of a plate of food in India — in an attempt to figure out how much a mealcosts. The 2019-20 Economic Survey has found that veg thalis became 29% more
affordable compared to 2006-07, while non-veg thalis became 18% more affordable
A vegetarian thaliincludes a serving of
cereals, lentils and veg-etables; a non-vegetari-an thali includes a serv-
ing of cereals, lentilsand meat
The Govt has tried tocalculate if the costof a thali for bothvegetarians and
non-vegetarians hasincreased
For this, price datefrom the consumer price
index for industrialworkers for around 80
centres in 25 states/UTsfrom April 2006 to Oct
2019 was used
The governmentclaims that thecost per thali
during this periodhas actuallydecreased
But a non-vegetarian thaligained `11,787on an average
per year
The govt also claimsthat an average house-hold of five individualsthat eats two vegetari-an thalis a day gainedaround `10,887 on an
average per year
What isDosanomics then?
Former governor ofRBI Raghuram Ra-jan used dosa to elu-cidate complex eco-
nomic theories. When Rajanbecame Governor, banks inIndia were offering a high rateof interest (about 10%) butthe inflation rate was alsovery high (about 10%).EXAMPLE: Let us suppose thata retiree has a total saving of
`1,00,000. He wishes to use thismoney to buy a dosa. Now, thecost of a dosa today is ̀ 50. So,today he can buy 2,000 dosaswith his saved money. But theretiree knows that he can in-vest this money in a term de-posit and the next year he willhave more money to buydosas. But, quite often, wedon’t account for inflation. Letus explain further...
SCENARIO 1High-interest rate, High inflation 10%➤ The retiree knows that if he puts his money in abank’s fixed deposit at 10% p.a. for one year, he will beable to buy 10% more dosas next year.➤ So, by the end of the year, he gets back his principleof `1,00,000 and an interest of `10,000. So, he can buy220 dosas for `50 each. Right?➤ What’s the catch here? Inflation!➤ As the economy is experiencing 10% inflation thisyear, the price of dosa increased from `50 to `55. So,with his `1,10,000, he can still buy only 2,000 dosas. So,the net gain of investing in a term deposit was zero.➤ His purchase power is still the same: 2,000 dosas.
SCENARIO 2Low-Interest rate, Low inflation 5.5%➤ Now, let’s say the economy was experiencing a 5.5%inflation rate. With an 8% interest rate, the retireewould have `̀ 1,08,000 in his account. The rate of a dosa now is `̀ 52.75 (because of a 5.5% interest rate).➤ This would allow the retiree to buy approximately2,048 dosas.➤ High inflation; High-interest rate — 2,000 dosas➤ Low Inflation; Low-interest rate — 2,048 dosas➤ Dosanomics tells us that the retirees are earning(48/2000) 2.5% more dosas even with lower interest rates!
When a studentasked
Rajan
Even with inflation rates lowering, why aredosa prices continuing to rise?
Rajan responded,“You have hit on an-other issue in eco-
nomics, which is calledthe Balassa-Samuel-
son effect.”BALASSA-SAMUELSON
EFFECT states that countrieswith high growth in produc-tivity also have high wagegrowth.
Rajan explained that thetechnology for making dosashasn’t improved much. But,staff wages are constantly in-creasing. While workers infactories and banks can nowserve a larger audience be-cause of technological ad-
vances, the dosa business has-n’t been scaled yet. Balassa-Samuelson Effect states thatin a fast-growing economylike India, the sectors thataren’t improving their tech-nology will see higher priceinflation than others.
Thus, the overall effect isthat citizens of developingcountries have to endurehigh inflation. Often gov-ernments keep interest rateshigh to relieve the inflationpressure from the lowest in-come group.
By CHAITANYA BAWEJA,
Machine Learning Engineer
CONCLUSION: Rajan claimed that the only way is to holistically lower inflation.
SIZE OF THE THALI
Avegetarian thali has been defined asone that consists of 300g of cereals
(rice and wheat), 150g vegetables (pota-to, onion, tomato, brinjal, cabbage, cauli-flower and okra) and pulses (arhar, gram,moong, masoor and urad). For a non-veg-etarian thali, dal has been replaced byegg, fish and goat meat.
THE TERM
Taking a cue from his predecessor Raghuram G.
Rajan’s DOSANOMICS, chiefeconomic adviser KSubramanian unveiledThalinomics in the EconomicSurvey for 2019-20.
PRICE FLUCTUATIONSThe chapter ‘Thalinomics: TheEconomics of a Plate of Food in India’states the absolute prices of a veg-etarian thali have decreased signif-icantly since 2015-16, acrossIndia. However, the price of avegetarian thali has increased in2019 (April-October), mainlydue to the increase inprices of vegetablesand dal. “…theincrease in the rateof inflation in the thali
during 2019-20 is a temporaryphenomenon that should revert as
has happened in earlier years,”the survey states.
PUNJABI THALI
HIMACHALI THALI
RAJASTHANI THALI
The Nagaland thali brims with vegetables, chillies and a variety of meat and fish, which are often smoked, driedor fermented
NAGA THALI
The MP thali comprises poha (rice flakes cooked withspices), rogan josh, saboodana khichdi, korma, seekhkebab, achari gosht etc; rounded off with the famousBhopali paan
MADHYA PRADESH THALI
The thali is simple, less spicy and oily, yet intricatelyflavoured. No Odia cuisine is complete without rice, fish,seafood, saag and yogurt
ODISHA THALI
The state’s thali is a mix of steamed and fried goodiesincluding dishes such as Dal bhat (boiled rice and lentil soup),Thukpa, the noodle-based soup, momos, Phagshapa etc
SIKKIM THALI
The state’s thali has mouth-watering dishes such aschhilka, dhuska, kurthi daal, red rice, lal saag, dehatichicken, dudh peetha, sattu ka parantha, ghugni, litti-chokha, balushahi etc
JHARKHAND THALI
Rice dishes along with meat preparations such as rogan josh, yakhini, harissa etc form the delicious Kashmiri thali, accompanied with the favourite beverages – noon chai and kahwah
JAMMU AND KASHMIR THALI
An amalgamation of flavours ranging from spicy to sweet,the thali comprises sambar, avial, pineapple/mangopachadi, kichadi, olan and for non-veg, there is seafood
KERALA THALI
THESURVEY
INDICATES... that the reforms undertaken a
year ago to enhance agriculturalproductivity as well as efficiency
and effectiveness of agricul-tural markets for better and
more transparent price discov-ery led to change in prices of thali.
SSiimmpplliiffyyiinngg ffuurrtthheerr,, aann iinnddiivviidduuaall wwhhoo wwoouulldd hhaavveessppeenntt aarroouunndd 7700 ppeerr cceenntt ooff hhiiss//hheerr ddaaiillyy wwaaggeeoonn ttwwoo vveeggeettaarriiaann tthhaalliiss ffoorr aa hhoouusseehhoolldd ooff ffiivveeiinn 22000066-0077 iiss aabbllee ttoo aaffffoorrdd tthhee ssaammee nnuummbbeerr
ooff tthhaalliiss wwiitthh aarroouunndd 5500%% ooff hhiiss//hheerr ddaaiillyywwaaggee iinn 22001199 ((AApprriill-OOccttoobbeerr))..
QUESTIONS RAISED
Has a thali become affordable? Hasinflation in the price of a thali
increased or decreased? Is the infla-tion the same for a vegetarian thalias for a non-vegetarian one? Is theinflation in the price of a thali differ-ent across states and regions inIndia? Which components account forthe changes in the price of a thali –
the cereals, vegetables, pulses orthe cost of fuel required for its
preparation? asked theEconomic Survey.
THE ORIGIN OF ECONOMIC COMPAR-
ISON WITH FOOD
T halinomics may just evolveinto India’s very own Big
Mac Index, which informallymeasures the purchasing powerparity of currencies of dif-ferent countriesthrough a pricecomparison ofMcDonald’shamburgerin thestatedgeographies.
