Ananda Sangbad 2018 Q1

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Ananda Mandir 269 Cedar Grove Lane Somerset, NJ 08873

Ananda Sangbad

NON-PROFIT ORG US POSTAGE PAID NEW BRUNSWICK, NJ PERMIT NO. 1215

January 2018 A Quarterly Publication of Ananda Mandir, New Jersey

InflatIon In InDIa A recent burst of reports from Indian newspapers caught my attention. On the occasion of the 67th Foundation Day of IIT-Kharagpur, Kewal Kumar Sharma, a senior official of the Union Ministry of Education in India, announced a new scholarship scheme for researchers working on their PhDs in the IIT system or at the Indian Institute of Science, Bangalore. The scheme will grant monthly scholarships of 70,000 Indian rupees (INR) to 2000 meritorious students in scientific and engineering disciplines. For the selected students, the central government will pay this monthly stipend for a maximum period of five years. Subsequent reports indicated that the amount may be increased to 75,000 INR per month. Currently the monthly stipend for PhD students at these institutions is 24,000 INR. That figure of 70,000 INR monthly stipend for PhD students simply stunned me. As a lowly undergraduate student at IIT-Kharagpur in the 1960s. I was fortunate to receive a monthly scholarship of 120 INR from the Government of India. That sum was enough to cover about 85% of my expenses, including room and board. At that time the PhD students received monthly stipends of 350 INR. From 350 INR to 70,000 INR per month is a huge 200-fold increase! Granted that more than 50 years have passed since my IIT days but a 200-fold jump in that period? Has inflation in India been that high over the last five decades, I wondered? Before digging into the question of inflation in India, I decided to reflect on my experience in America with wage and price increases over the last 50 years. Back in 1967, research assistants working on their PhDs received a monthly stipend of $250 ($3000 annually) at Purdue Uni-

By Debajyoti Chatterji versity in West Lafayette, Indiana, my American alma mater. In 2016 the average figure at the same university was around $24,000 per year. That’s only an 8-fold increase, a far cry from the 200-fold increase in India for the same 50-year period. In 1973, when I joined GE’s R & D Center in Schenectady, NY, as a research scientist with two years of post-PhD experience, my starting salary was $18,000 per year. Now the average figure for a similarly educated and experienced PhD in industry is about $125,000. That’s a 7-fold increase, not too far from the 8time jump in stipend for research assistants at a major American university. How about the increase in the price of a first-class postage stamp in the US over the same period? It was 5 cents in 1967, and now it stands at 49 cents. The price increased by a factor of 9.8, in the same league as the increase in salaries for highly educated students and professionals. Clearly, inflation has played a much bigger role in India than in the US during the last fifty years. At this point, an economist may interject and point out that I am mixing “wage inflation” with the more commonly used “price inflation” (meaning change in the Consumer Price Index). I admit being guilty of that sin. However, this article attempts to present a simplified overview on both forms of inflation in India to an average reader. And I am hopeful that the average reader will be interested in the general picture emerging from the article and will forgive me for not always differentiating between wage and price inflation. Inflation in India vs the US

Saraswati Puja-2018 Hatekhori Monday, January 22 8:30 am – 11:30 am

In India, inflation rate for the 43-year period from 1969 to 2012 averaged around 7.7% per year, quite a hefty rate. Inflation rate in the country peaked during this period in September, 1974, at the painfully high level of 34%. In sharp contrast, the Indian economy suffered a deep recession during 1975-1976, and the inflation rate dropped to (-) 11%. Recently, inflation in India has come down to a more manageable level of 3.5%. The US has also experienced significant fluctuations in inflation rate during the comparable period but the annual averages have been much lower and the year-to-year changes more moderate. For the 40-year period from 1977 to 2017, inflationary increase in the Consumer Price Index in the US averaged 3.2% per year. Inflation reached double digits twice during this period: 14.8% in 1980 and 12.3% in 1974. Even during the Great Recession of 2009, inflation rate dropped to a low of only (-) 2.0%. How much of a difference does a few percentage points in inflation rate make to a wage earner? Let us compare the effects in India for 50 years of inflation at 7.7% average with the effects in the US at 3.2% per year. With that kind of inflation in India, a monthly stipend of 350 INR in 1967 would rise almost 64 times to 22,400 INR by 2017. And that is close to what the PhD students currently get in India (the increase to 70,000 INR per month is a planned increase, not yet implemented). According to the USInflationCalculator.com, the Consumer Price Index in the US has jumped 7.39-fold in the same 50-year period (confirming our earlier discussions on increases in PhD stipends in this country from $250/month in 1967 to about $2,000/month now). Compare that with the 64-fold increase seen in India over roughly similar time frame, and you will appreciate the effect of a few percentage point difference in inflation compounded over a long period

of time! Inflation Effects in India on Wages and Prices High rate of inflation has affected every aspect of the Indian economy, some to a greater extent than others. Here are some anecdotal facts and figures I have collected from my friends on this subject. food Items • Cost of food items increased on the average by about 200 times during the period of 1975 to 2017. For example, mutton/goat meat used to sell for 3.00 INR/Kg in 1975, and now sells for 600 INR/Kg. Bengali's favorite fish, pabda, now sells for 600 -700 INR/kg but used to sell for 2.50 to 3.00 INR/kg back then. Another delicacy, hilsha fish, now sells at 1200 - 1500/Kg, an increase by a factor of 400 on the average, from its price in 1975. • Interestingly, price of one class of beverage has behaved quite differently: alcoholic products like beer, wine and spirits. A bottle of beer cost about 3 INR in 1961 and 6 INR in 1975, and now sells at 125 INR, a measly 20 to 40 times increase over 50odd years. This modest increase probably reflects the huge increase in consumption of alcoholic products during this period. This has driven a very large increase in production, and that, in turn, has driven down the unit production cost. Similar effects have been also seen in prices of dairy and poultry products, much to the benefit of the common man. Real Estate • Back in 1975, a nice-sized (2 or 3 bedrooms), new apartment in a good locality in Kolkata sold for 1.25 lakh INR. That apartment would now sell for 3.75 to 4.00 crore INR, a 300fold increase. • In the property market, price inflation in Kolkata has been much lower than in Delhi, Bombay or Bangalore. During this period of 40 years, price of real estate has increased by factors of 500 to 800 in these cities, with Bombay leading the pack. • The biggest inflation in property price occurred in the 20year period between 1992 and 2012. For example, a 3 katha Continued to page 6

THE PUBLICATION OF THIS ISSUE HAS BEEN MADE POSSIBLE SOLELY BY A GRANT FROM ANDY BOSE, C.P.A.

ananda Mandir Calendar of Events (Dates are subject to Change) Please check our website frequently

www.anandamandir.org tel: 732-873-9821 NOTE: If a particular Puja time is not listed, please contact temple or visit our ebsite: anandamandir.org

JanUaRy (*) new year Darshan Monday, 01, 9:00 am – 9:00 pm Satyanarayan Puja Monday, 01, 6:00 pm – 8:00 pm Ratanti Kali Puja Monday, 15, 6:00 pm – 8:30 pm Shyama Puja Tuesday, 16, 6:00 pm – 8:00 pm Ganesh Chaturthi Sunday, 21, 9:30 am – 10:30 am Saraswati Puja & Hatekhori Monday, 22, 8:30 am – 11:30 am Bani Bandana Sunday, 28, 10:00 am – 11:30 am Satyanarayan Puja Sunday, 28, 5:30 pm – 7:30 pm Sahitya o alochana Friday, 19, 8:00 pm Cultural Program (*) fEBRUaRy (*) Shiva Ratri Wednesday, 14, 9:00 am – 9:30 pm Shyama Puja Thursday, 15, 6:00 pm – 8:00 pm Sahitya o alochana Friday, 16, 8:00 pm Cultural Program (*) MaRCH (*) Dol Purnima & Satyanarayan Puja Thursday, 01, 6:00 pm – 8:00 pm Shyama Puja Friday, 16, 6:00 pm – 8:00 pm Sahitya o alochana Friday, 16, 8:00 pm Cultural Program (*) (*) See www.anandamandir.org or Call Mandir for details

Special Religious Services: Upon request, the priest of Ananda Mandir offers services such as inhouse Shraddhas, Rituals associated with Cremations (Antyesti Kriya), Shraddha Anniversaries, Pre-wedding rituals (Naandimukh, Ashirwad, etc), Upanayan (Paitey), Annaprasan, Wedding Ceremonies & Wedding Anniversaries, Griha Prabesh (Bhumi Puja), Consecrations of new cars (New Car Pujas) and others. If you have needs for any of the above or more, please feel free to contact Biswabhai @ 732-873-9821


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