Thali Economics

GS Paper III Indian Economy

Context:

The sharp increase in vegetable prices, particularly tomatoes and various food products, has placed a burden on the financial budget of Indian households.

More about the news:

As per a report from rating firm Crisil, the cost of a vegetarian thali rose 24.26 per cent to Rs 33.8, while that of a non-vegetarian thali increased by 12.54 per cent to Rs 67.3 in August 2023, when compared to the same period of last year.
- This means a family of five would be incurring an additional cost of Rs 33 for preparing vegetarian thali and Rs 37.5 for non-vegetarian thali for lunch or dinner a day.

Thali meal economics:

As per Crisil, the average cost of preparing a thali at home is calculated based on input prices prevailing in north, south, east and west India.
The monthly change reflects the impact on the common man’s expenditure.

Headline Inflation: Headline Inflation is a measure of the total inflation within an economy,including commodities such as food and energy prices (e.g., oil and gas), which tend to be much more volatile and prone to inflationary spikes.
Core Inflation: Core inflation is the change in the costs of goods and services, but it does not include those from the food and energy sectors. It excludes these items because their prices are much more volatile.

The ingredients (cereals, pulses, broilers, vegetables, spices, edible oil, cooking gas) drive changes in the cost of a thali.

Impact of tomato and onion:

Tomato, onion and potato together contribute nearly 50% to the variance in headline inflation.
The usual drivers of such spikes are – deficient or excess rainfall, heatwaves or strikes in mandi, speculation and hoarding.

News Source: Indian Express