New Delhi, March 14:

Alpana Singh, a housewife in north Delhi, should be rejoicing that India’s annual rate of inflation has fallen to a six-year low. Instead, she is ruing that her household budget has hit the roof.

As if the galloping prices of groceries were not enough, she is having to face a double whammy — the fee charged by her daughter’s school has been hiked by Rs 8,000 per quarter, and with the freeze on her husband’s salary, thanks to the general economic slowdown and drop in corporate earnings, she is left with no money for that weekly outing with her family, let alone for savings.

“I was spending IRs 800 or so a week on groceries a year ago. Now, it’s touched IRs 1,000. So this hype about inflation rate touching a six-year low means nothing to me,” said Singh. “We have stopped eating out and postponed our vacation.” The number of those in this plight is legion. The lower inflation rate — which fell to 2.43 percent for the week that ended on February 28, based on official wholesale price index — has not translated into a respite for the average citizen. Economists explain the reason — lower inflation rate only means the rate of rise in prices has come down, not the actual prices.

The ground reality is that if onions cost IRs 15 a kg a year ago, they cost IRs 18 now. Even the official data point out that prices of fruits and vegetables have risen by two per cent in the past week alone.

Economists say wholesale indices are not fair representations of a prevailing price situation and that a more realistic picture is presented by retail prices that are taken into account while compiling the various consumer price indices.

“The consumer price index is not falling. This is a cause of concern for our economy. Actually, this is a bad sign for the economy,” said Siddharth Shankar, economist with the New Delhi-based financial services company Kassa. In fact, the inflation rate as measured by consumer price index for industrial workers, which seeks to represent the impact of retail prices on the country’s workforce, had risen to 10.45 percent in January, compared to the 9.7 percent the previous month.

Similarly, consumer price index for urban non-manual employees suggests that the annual rate of inflation in 59 Indian cities was 9.8 percent in December, the latest month for which data is available.

In fact, the segregated data further suggests that the inflation in food and beverages was 13.4 percent — sharply higher than the single-digit inflation as reflected by data on the wholesale price index.

Dalip Kumar, head of projects at the National Council of Applied Economics Research (NCAER), a Delhi-based think tank, said the wholesale inflation rate is down due to lower prices of non-food commodities and manufactured products. “Going by the inflation data, it seems we could go below zero. However, I still have some reservations about the present rate as food commodities continue to remain on the higher side,” said Kumar.

D K Joshi, principal economist at the credit rating agency Crisil, shared the viewpoint and said that since the wholesale price index had risen comparatively faster last year, the low rate now was more of a statistical effect.

“The base effect is very strong. Inflation could fall further. It can even reach zero,” he said and added: “But don’t count on actual prices falling.”

This explains why onions continue to cost more than what they did a year ago, and more and more households find that their grocery budgets are persistently going up — unmindful of official statistics.