23/05/2026
Gossip, Illusions, and Statistics
Government statements on inflation often claim that everything is “under control.” Statistics are then used to prove it.
Bahadur Singh Deon
After hearing the separate statements of Dr. Surjit Bhalla and Arvind Panagariya, anyone who has spent years around economics can immediately detect the deception hidden inside these numbers. Around 70% of Indian women suffer from anemia, and nearly 40% of children are seriously malnourished, yet we are constantly told that “All is Well.” These figures themselves can be debated, but if you visit anganwadis, schools, MGNREGA worksites, brick kilns, factories, slums, bus stands, railway stations, crossroads, and hospitals, this reality is visibly carved onto the naked body of society. One only needs eyes willing to see.
It is similar to the time when Montek Singh Ahluwalia, then Vice Chairman of India’s Planning Commission, declared that a person spending 27 rupees a day in villages and 33 rupees a day in cities could no longer be considered poor. Overnight, millions of people statistically escaped poverty.
A similar illusion exists within India’s inflation system. The poorest people in the country spend almost their entire income simply to survive — on food, cooking gas, transport, and medicines. Yet the way inflation is officially measured steadily reduces the importance of food itself. As a result, inflation appears “under control” in government statistics, while millions of poor families continue living between hunger, debt, and deprivation.
For wealthy and upper-middle-class families, food forms only a small part of their expenses. How much of their income do people like Ambani or Adani really spend on food? Their money goes into investments, travel, electronics, restaurants, online services, cars, and luxury lifestyles. But for laborers, small farmers, daily wage workers, and unemployed households, nearly the entire family budget is spent on basic necessities. They do not buy televisions, smartphones, air tickets, or luxury products every month. Their economy is essentially a “kitchen economy.”
Yet India’s Consumer Price Index (CPI), on the basis of which the Reserve Bank of India and the government measure inflation, assumes one “average consumer” by combining all classes together. Earlier, food and beverages carried a weight of 45.86% in the inflation basket. But in the revised 2026 series, this was reduced to around 36.75%. At the same time, categories such as OTT subscriptions, online services, telecom expenses, and urban consumption were given greater importance.
Government economists justify this by arguing that India is becoming a service-driven economy and that people’s consumption habits are changing. But this logic mainly reflects the lifestyle of the urban middle class, not the reality of poor India. When hundreds of millions of people still depend on subsidized ration schemes, food is not just another category for them — it is survival itself.
To understand this simply, imagine milk becoming 15% more expensive, vegetables 20%, cooking oil 18%, LPG cylinders 12%, and school fees 10%. Poor families immediately feel the pain because these are everyday essentials. But if electronics, mobile data, or household appliances remain cheap at the same time, the overall CPI may still stay around 4% or 5%. Official inflation will therefore appear “moderate,” even while the poor are being crushed under rising costs.
In reality, inflation itself is class-based. A wealthy family can postpone holidays or luxury shopping during inflationary periods. A poor family, however, must reduce food consumption, borrow money, delay medical treatment, or pull children out of school. The same inflation rate does not affect all classes equally.
This contradiction becomes even more serious when we consider that nearly 800 million people in India receive subsidized grain through government ration schemes. Even if all of them are not officially below the poverty line, this number itself reveals how economically fragile a huge section of the population still is. If so many people require state food support simply to survive, then reducing the weight of food in inflation measurement creates a massive gap between statistical reality and human reality.
The issue is not that the CPI is fake. The issue is that it measures the “average economy” of a country where inequality is enormous. And when poor people spend almost all their income on food, while the importance of food is reduced inside the inflation index, the cries of millions are mathematically diluted within national averages.
