Inflation and filter kapi

The newspapers are buzz with news that inflation in India is at a 'five year' low. The wholesale price index is around 3.45% and its such a wonderful thing that it is under control. Should'nt we be happy about it? Its time to celebrate....things are not as expensive as they were a few months back (when inflation was around 5%). I can buy more stuff, I can eat a lot more and pay less !!!...Hurray....Wait a minute...Is it really true?

I don't think so. Ive got facts to prove it. I went home for a 2 week winter break. What was the one thing that I missed during those 2 weeks? No prizes for guessing the right answer...Its the tiffanys filter coffee. I easily gulp down atleast 3 glasses a day (strong) and if there is a 3 o clock lecture, I have one before and one after the class. At times I ask him for a 'strong double'. Thats how important the tiffanys coffee, (or should I say kapi) is for me. It was nicely priced at Rs 5/- a glass, which I felt was reasonable.

On my return, the first thing I did after checking into my room, was to head to Tiff, to have my cuppa. I took out a 5 rupee coin as usual and said ' ore kapi'. He looked at me and said, 'Saar, six rupees'. I was shocked. A 20% hike in filter coffee prices. I asked him why did they increase the prices and went to ask about the revised prices of the other items as well. To my surprise all of them had been increased by 20 to 30%. Now that might not seem too much for a working professional, but for students like me, its a sizable increase. And considering the fact that I eat here almost everyday (snacks for sure and in most of the cases lunch as well) !!.


I had read a lot of articles stating that WPI is never a true indicator of inflation as most of the items in that basket are something that we dont purchase. The government should be using the Consumer Price Index (CPI), which reflects the true picture. Can't agree with that argument more...And in my case the basket would have a significant weight allocated to filter coffee prices !!

Till the next price hike...happy coffee drinking.....

P.S I also noticed that the prices of the special items like 'podi masala dosa' and 'paneer masala dosa', the premium products (which were priced in Rs 30 range) are still the same. Has he used some economics funda, analyzed how much each of the customers buy and from what range before deciding the price hikes...I dont know, but would be interesting to find out.