Know your onions before pontificating.

"India's retail inflation accelerated to 7.35% in December on the back of rising food prices." It was 5.54% in November and 4.62% in October. However, core inflation, which takes out volatile food and fuel prices, increased slightly to 3.7%. Wholesale prices rose 2.59% in December compared to just 0.58% in November, again due to a jump in food prices. India is overestimating inflation because households are spending less on food, wrote S Shukla. "This is reflected in a sharp fall in the share of food items by about 10.8 and 9.6 percentile points (pp) to 48.6% and 38.5% in rural and urban areas, respectively, over the last decade." This is based on Consumer Expenditure Survey (CES) of 1999-2000 and 2011-12. The government hid the result of the 2018-19 CES probably because, "India's grocery consumption basket shrank by an average of 5 kg per household in the 12 months ended September from the year earlier, although they spent slightly more overall." "In the current bout of inflation, it is the food prices, especially onions, that have caused the trouble and it is not spread across the spectrum and there is unlikely to be second order effect like a spillover," wrote MCG Rangan. Which means that the Monetary Policy Committee (MPC) of the Reserve Bank (RBI) was wrong not to cut interest rate in its meeting in December, after having cut it by 135 basis points in 2019. Not just onions, wrote Prof Himanshu. There has been a sharp rise in prices of "almost all vegetables along with cereals (along with wheat and coarse cereals), pulses and personal care items". Onions "have a weight of only 0.64% in the CPI and 0.16% in the WPI". Why are wheat prices so high despite record production? Because, "Government policy has created an artificial scarcity in the market." To give higher returns to farmers in the run up to the general election in May the government bought up 34 million tonnes of wheat. "As of January, total stocks with Food Corporation of India (FCI) stand at 75 million tonnes, 33 million tonnes of it wheat..." when it is required to maintain a buffer stock of 21.4 million tonnes. Because of lack of storage space thousands of tonnes of grains rot every year. Purchasing Managers' Index (PMI) for manufacturing rose to 52.7 in December, the highest in 10 months, while the PMI for services reached a 5-month high of 53.3 in December. Exports fell by 1.8 while imports fell by 8.8% in December, so that the trade deficit fell to $11.3 billion. "India's eight infrastructure sectors shrank for the fourth straight month in November at 1.5%, though the magnitude of contraction slowed from 5.8% the previous month." Prices rising despite fall in demand and a slowing economy. Clearly, economists don't know their onions. Or they have been told.