What if its much more than what we are told.

Most people are content to leave inflation, output gap and monetary policy in the hands of experts, wrote M Chakravarty. But, "In the seventies, one school of thought believed that inflation was a consequence of class conflict, or at least conflict between different sections of society for a share of the economic pie." Inflation is a result of various sections of society claiming a share of the economic pie, said James Tobin. "The major economic groups are claiming pieces of pie that together exceed the whole pie. Inflation is the way that their claims, so far as they are expressed in nominal terms, are temporarily reconciled." Tobin recommended a tax on short term international financial transactions to be used for redistribution to the poor. Unfortunately, politicians tend to twist these suggestions for their own purposes. India has a Securities Transaction Tax on sales of shares and mutual funds within Indian markets. During the Congress government from 2009 to 2014 "the competing claims of various sections of the population were all accommodated by the government in a please-all policy. The result was a steep rise in prices." Though crude oil prices were high, "neither fiscal nor monetary policies were tightened in response, nor were subsidies pruned. On the contrary, the government stepped up expenditure, but lacked the guts to tax the rich to pay for the extra spending." Is inflation good or bad? Rising prices mean a falling value of the currency and since the rich have more wealth they would lose more, while the poor gain through higher wages. But food and beverages have the highest weight in India's consumer price index, or CPI, and the poor spend a greater proportion of their earnings on food. That maybe why the Congress lost so heavily in 2014. Retail inflation increased to 5% in June but core inflation, which discounts food and fuel, grew by 6.4%. The rupee has depreciated against the dollar this year and may fall to 71 against the greenback. The rupee was equal to the dollar in 1947 and has fallen to 71 in 71 years of independence, which is a devaluation of around 6% per year. During this period the average inflation in the US has been in excess of 4%, so in exchange terms our inflation has been in excess of 10% per year, much, much higher than we are told. This is important because manufacturing constitutes a mere 17% of GDP and so we have to import virtually everything we use. Which means a the weaker the rupee the higher the prices we pay. We have to import 80% of our oil needs even though with 7517 km of coastline we have explored less than 25% of sedimentary basins. Inflation maybe class conflict. Politicians are the winners.