Monetary policy and Food inflation.

The whole sale price index-based (WPI) inflation has come back to positive line at + 0.12 percent for the week ending on 5 September, mainly on the wake of surging prices of essential commodities.

What is the real significance of this inflation number? It only means that the prices of articles have gone up by 0.12% compared to its prices last year when the year on year inflation stood at 12.42 percent (September 2008). Similarly if we compare the current prices with the prices in 2007, then the price has gone up by 12.54%.

Already discussions have begun in the media on the response of the monetary policy towards positive inflation. On this backdrop it is worthwhile to look at the impact of monetary policy on the current food inflation (positive or negative).

The food inflation today stands around 8% year on year. Though the WPI based inflation was on the negative side over the past several weeks, the food inflation per se was very much on the positive side. With quite erratic monsoons this year, the food inflation is only going to rise over the next few months. Our country needs to address this on top priority. We are still by and large a poor country with crores of people having no sustained access to food, water and sanitation.

With the WPI inflation crossing on to the positive side, there is already a talk on rolling back soft monetary policy in order to stem inflationary pressures. Will hardening of monetary policy stem the surge in prices of food articles?

We must understand here that, the current inflation in food articles is mainly on account of poor supply and not on excessive demand. Though the demand has gone up, the supply of food articles have come down drastically. The situation will only worsen on account of bad monsoon. Monetary policy per se cannot do much to augment the supply. Increasing or decreasing the key interest rates will not get down the food inflation. On the fiscal side, the short term solution is to import food at affordable prices and to distribute this food at affordable prices. Monetary policy can help in doing this in the short run.

In the short run, contrary to conventional theory, following a softer monetary policy will help in stemming the food inflation. A softer monetary policy can act positively in three ways vis-à-vis food inflation:

1. Lower interest rates owning to softer monetary policy will push spending on food and non food articles. Obviously more money will be spent on non-food articles. There will be more credit flow and more economic activity. In this scenario, more money will be at the hands of more people. More unorganized people are likely to get employment and there will be some trickle down if not complete. Under the inflationary condition caused by supply constraints, more economic activity will at least make food articles more affordable thereby controlling the net impact of surge in food prices. Though food inflation will not be controlled a great deal, at least the net impact of surge in food prices can be controlled by increased affordability. On the other, in the short run, a harder monetary policy will stem economic activity and render people with lower or no wages and make food unaffordable and at the same time push the food prices since the food prices are controlled by supply factors and not by monetary policy.
2. Softer monetary policy will give incentives for import of food articles. Again, in the short run, it can help in reducing the impact of food inflation.
3. Since the current food inflation is not controlled by demand and supply of money inside the economy, a softer monetary policy will help in boosting revenue to afford food import.

On the long run, monetary policy will not help in making food more affordable. The government must come up with concrete plans to boost the farm economy, moving into a greener economy will yield rich dividends. Government must come up with clear renewable energy policy, must encourage spending on greener technology and get the energy prices lower and make it affordable. Watershed development and sustainable sanitation programmes must be given an unprecedented fillip.

In conclusion, at the current scenario, hardening the interest rates will only worsen the situation with food inflation and the current monetary policy must not be rolled back. On the long run, protecting the environment and boosting farm economy are the only way ahead if we are seriously thinking about a hunger free nation.

Rainwater harvesting at accept society.

I have already written about the good work being done by ACCEPT society. You can read in detail about accept on here .

ACCEPT is located off Hennur road in Bangalore where the water situation is pathetic. As a matter of fact the land given to ACCEPT by government of karnataka was a landfill land. So the land was virtually given for free to ACCEPT and few more NGOs around them.

ACCEPT is run by a gentleman by name Raju matthew. He left his booming business in USA to start this NGO to rehabilitate and care for HIV patients, particularly children. To reduce the water problem faced by ACCEPT and to contribute his bit for the environment, Raju Matthew decided to install a rainwater harvesting system at the NGO. For funding, he contacted KPMG, a leading audit firm.Thankfully KPMG agreed to fund the project through their CSR arm. Today the campus of ACCEPT society captures and uses directly for domestic purposes about 6,75,000 liters of water annually and puts about 10,00000 liters of water into the water table. every year. This is a fantastic example of how precious water falling on one's head can be used effectively using very simple technologies.

It is not the technology but the far sightedness of Mr Matthew that has to be appreciated. Though rainwater harvesting is doing its rounds in the academic circles for quite some time now, it is yet to get wide scale acceptance and appreciation in the society. Only now government is contemplating seriously about bringing a law to make rainwater harvesting mandatory. Mr Matthew had confidence on the technology and took great personal interest in executing the project.
In the grip of a very tight financial rope walk, Matthew persuaded a firm to fund his venture. In fact he always wanted to do this. He had collected all the articles written by colleague in the Hindu on the subject of rainwater harvesting. Moment he got the funding, he immediately got the ball rolling.

I was involved with this project in capacity of a consultant for KPMG. Below is a small write up on the technical aspects of the project at ACCEPT.

ACCEPT Society runs a charitable care and support home for HIV patients in Dodda Gubbi off Hennur Road on about 3.5 acres of land. There is a main building housing about 35 patients. There is also a children's home for about 24 children. About 20+staff is also present on campus. There is also a small dairy,poultry and piggery on campus. Some agriculture is also done on the premises. There are totally 3 tube-wells out of which one has completely dried up and the yields from the other two are quite low. Currently water is sourced from 2 tube-wells for all domestic purposes apart from private water supply through tankers . At present Accept society is not connected by BWSSB (municipal) piped water supply or underground sewerage. Approximately 10KL of water is required per day for domestic use

There is a large open perennial well outside of this campus. Water from this well is also used for irrigation. ACCEPT Society wants to secure its water sources (ensure that tube-wells do not run dry). In this context Accept society invested on roof top rainwater harvesting and ground water recharge with financial assistance from KPMG foundation.

Rooftop rainwater harvesting:

Rooftop rainwater harvesting is done for the main building, the conference room and the cowshed. 10” PVC gutters are fixed on two sides and rear side of the building. After first rain separation, the water is filtered by overground filters. Totally 6 filters of different capacities are installed at various positions to filter the water. All the filtered water flows into a 25KL underground sump through underground piping. (The sump roof is also serving as a training area and a good platform for drying utensils)

Submersible sump is installed in this sump to pump the water to the main sump. The main sump is about 13 KL capacity. The water from this sump is pumped to overhead tanks.

Provision is made to either pump the harvested water to the main sump or to take the water for gardening through a valve mechanism.

Details of the catchment, storage and cost are given in the table.

Parameter	Measure
Total roof Area (terrace area)	760 m2
Estimated Daily demand	10 KL
Size of rainwater sump constructed	25 KL
Recharge Well	One recharge well of size 5 feet dia and 20 feet deep and another 7 feet dia and 30 feet deep
Cost of system	Rs 4,10,000

Ground water Recharge:

Apart from this, two recharge wells are dug to recharge the aquifer. The surface runoff from the field and large open areas is channeled into a drain. 5 silt traps are constructed at appropraite places to hold the silt. The relatively clear water which flows over the silt trap is filtered through an in-drain filter and then the water flows into the recharge well. One well is 5 feet in diameter and 20 feet deep and the other 7 feet in diameter and 30 feet deep. Both the wells are yielding water. The 5 feet dia well started yielding at around 18 feet and the 7 feet dia well around 25 feet. The last 5 feet was dug by continuous dewatering using a dewatering pump.

Temple at "Soorya"

Last Sunday and Monday, me and couple of my friends went driving for a pilgrimage to a couple of temples in western ghats; Dharmastala and Kukke Subramanya. Enroute to these places, we visited a small wind farm and the historic temple of Belur.

I shall write in detail about the trip some other time. But here i am writing about an unique place we visited on the second day of the trip. This was a temple in the town of Ujire in Dakshin Kannada district, about 15 Km north of Dharmastala.

On sunday evening at Dharmastala, my dear friend Kiran gets a call from his mother asking him to visit the "Soorya" (sun) temple near Ujire. Apparently his mother had made a wish (ಹರಿಕೆ) that if gets a job in UK, she would ask him to visit this place. Thank god, he did get a Job in UK. So since we were anyway very close to this place, his mother asked him to visit the place.

I was surprised that there is a soorya (ಸೂರ್ಯ, sun) temple in Karnataka. I had only heard of a sun temple at Konark in Orissa. When enquired with kiran, he said, he has no idea and his job was just to visit the temple the next day as per his mother's instruction. Even i was eager to find out where and what was this temple.

After the darshan of lord shiva the Sunday evening and again on monday morning, we set out to this "Soorya" temple. We entered the Ujire town and enquired a few people for the road to the temple. Nobody knew where it was. Finally, we asked a taxi driver. Even he was surprised about a "Sun" temple in his town. Thankfully, kiran told him that people offer mud idols there if their wish (ಹರಕೆ) is granted. Then, the taxi driver smiled and told us that it is not the sun temple but the place is called "SOORYA"( ಸೂರ್ಯ). This was a Shiva/Rudra temple in the place called "SOORYA".

So we three "champions" set out on the muddy and bumpy ghat roads to the "SHIVA/RUDRA" temple at "SOORYA". Thanks to the wish kiran's mother made, we were blessed to see a beautiful place. Though the roads were bad and it was raining heavily, it was quite a sight. It was so beautiful. It was so good to be there.


We did manage to reach the temple. It was really pouring heavily when we reached there. After a little while, the rain stopped and we got out of the car with our umbrella and headed towards the temple. There were not many people out there.

The deity in the temple was "SOORYA SADASHIVA RUDRA DEVARU" (ಸೂರ್ಯ ಸದಾಶಿವ ರುದ್ರ ದೇವರು). It was very interesting for me. The village where the temple is situated is called "Nada grama" (ನಡ ಗ್ರಾಮ). But the name of the deity is derived from the place called "Soorya". The localites told me that "ಊರಿನ ಹೆಸರು ಸೂರ್ಯ ಹಾಗು ಗ್ರಾಮದ ಹೆಸರು ನಡ ಗ್ರಾಮ". It means the name of the place is "Soorya" in the village called "Nada grama". I am yet to figure out the difference between them. Anyways i dint have much time to enquire more about it.

More interesting was the temple. The main deity here is Shiva/Rudra. The people who perform pooja here are all Madhwas (They belong to the madhwa community, a sub caste of Brahmins who are Vaishnavites) . No doubt the deity is called Rudra devaru .(orthodox madhwas call shiva as Rudra devaru). It was a clean and pretty big temple built in traditional coastal architecture.


The belief here is that, you make a wish and if it comes true, you have to go to the temple in person and offer to the deity an associated idol(s) made of mud and go to the nearby kalyani(stepped well) and another small temple and offer prayers. There is a specific mud idol associated with every wish. Provided the wish is granted, one has to purchase the idol and offer it to the God there. The list of mud idols is exhaustive. They are very specific too. It starts from dogs, cats, to lorry,bus to computer,mobile phones to masonry and RRC roofs to even Beedi bundle.


It is quite strange that the list of offerings can be so specific and so exhaustive. One can imagine that there may be myriad wishes of people. But it beats me to imagine the list of offerings associated with such wishes. Obviously, the fields of wishes can be still far far greater than the associated list of offerings.

So as instructed by his mother, my friend Kiran purchased a small mud table and chair and offered it to the god. There is a small rite associated with the offering. One is supposed to keep it over some rice and offer it at a specific place.

From there we went to the Kalyani (stepped well) outside the temple. It is one of the most beautiful Kalyanis that i have seen in the recent past. It is covered by vegetation on all sides. There is a small paved path way leading to the kalyani. The kalyani is about 55 feet deep and the water is blue in colour. Yes, the water was blue in colour. It was really beautiful. I don't know exactly why it was blue in colour. But i think it is because of the thick vegetation all around and its depth.

We spent about 10 minutes near that kalyani and went to a small prayer place. It is basically a small temple like structure where people stand and pray.

We finished all that and returned to the main temple. After performing the sankalpa for Rudrabhisheka (ರುದ್ರಾಭಿಷೇಕ) there we left towards Kukke suramanya again in the beautiful but bumpy roads.

Without debating normative issues of beliefs here, i can say that we were really lucky to visit such a beautiful place in an obscure temple village.

(Few pictures of the trip : http://www.facebook.com/album.php?aid=20660&id=1020055458&l=2f04df83ca )