The InflatPhysics
By Professor Kotcherlakota Lakshmi Narayana
Dated: 12th June 2008 Posted at Time: 8.00 P.M.
Key words: Peramma Action Constant, nutritional rads, nrads, Entropy,
Telugu names, NVP, Inflation Dangers, Physics of Inflation
http://trusciencetrutechnology.blogspot.com/
Summary:
A new theory of Physics of Inflation has been presented giving the details of a socio-economic Entropy model. The Peramma Action Constant of 3.51 cal/kg has been found out. A new law of socio-economic entropy has been enunciated. The logarithm nature of the entropy expression has been worked out.
A Net Value Product/Produce (NVP) expression is defined, involving global Inflation index. The K-factor, the sum of premiums due to various partitions ,such as Bribes, Black-Marketing, Diesel, & fuel hikes and less fodder input etc, asserts the cost escalate of the NVP.
A tabulated analysis of these premiums is also suggested as an alternative to get NVP, pertaining to the period of inflation.
Four new formulae have been defined that outline the weigthages preference of a poor man strategy to fight the soaring prices of essential commodities. The disorder /or a chaotic state of the socio-economic system, hints at increase of Entropy that signifies the low-caloric nutritional compromise by a common man in India. The inflation is widening the nutrition gap between the haves and the have-nots. This is an unfortunate challenge facing all the developing nations. The measures taken, suggestions made and the food security achieved by the Indian Nation have been explicitly stated. This study should serve as a guideline for the WTO and WFP global efforts.
Introduction:A new subject of the Physics of Inflation has been proposed. The study of it would help to gauge the parameters underlying Inflation phenomenon. The significance of such a study would reveal the salient features (good or bad) of Financial Management, Agricultural Productivity, and business statistics and market strategies. Not only at National level, has the InflatPhysics hinted at a rational behind a global enterprise. A silent hunger tsunami is gripping the world due sky rocketing cost of food commodities coupled with the soaring fuel and oil prices.
Some pundits think that, Inflation is largely driven by International Market. Education and strategic partnerships at all levels have led to corrisable practices and some of these outweigh efforts being made for the progress of the nation.
America, Caribbean, Africa and Asia nations tend to hate China and India for their phenomenal demands of volume of consumption
WTO ordered the 27-nation EU to end 80 year preferential trade ties with former colonies, since they are unfair to nations excluded from the arrangement. But 15 Caribbean rich nations did sign up to a phased-in free-trade pact, including the opening up of services and investment markets that make them more prosperous.
It seems rice price doubled in about five weeks’ time in some nations WFP projected that food prices increased by 83% in three years time. The diesel price zoomed from $39 a barrel to &140 in about four years from 2004 to 2008. A WFP meeting was held at Rome that was amazed at Indian’s effort to grapple with the food crisis.
Govt.of India activity:
Government of India activity includes 1) Chief ministers conference on issue of price rise ii) Abhijeet Sen committee report iii)Blamed global food scenario for the unprecedented price rise in month’s of April/May 2008.iv) Scenario in India is much better as their prices are the lowest in the world, of course, i.e. at an unacceptable level. v) National Rural Employment guarantee scheme (RES) ,though might have benefited only the dominant communities living in rural areas, and the Old age pension scheme had enhanced purchase power of those until now were living below poverty line. vi) No magic wand to control inflation unless India produces more. Measures are only of temporary nature. Vii0.Since 1990 Agricultural sector was neglected and only recently there is enhanced public spending on agriculture to boost production. Viii) Government lifted the surplus stacks of potatoes and onions as requested by some states. Ix) Government procured more than targeted stock of wheat and rice assuring food security of the Nation. Bihar topped the list for wheat procurement.
GOI Measures:
a).Banning future trading in four essential commodities that hasn’t helped price control. b) Cuts denied in centers quota to states under Public Distribution Scheme (PDS). c) Rules out any hike in the Minimum support price (MSP) of wheat and Paddy. d) Appealed to states to contribute the central kitty. e) Banning of rice (except Basmati) wheat and reduced import duty on edible oils, ghee, butter to bring down prices. f) To promote intermix, intercrops and hybrid short-term growth of paddy varities, to boost productivity. g). each district would have an agricultural trade and service sector sensitive to inflation. h).RBI hiked cash reserve ratio that sucked out more than Rs.27000 crores from the business system.
Some other suggestions:
1.) no excuses be made to contain inflation.2) strengthen PDS for oil.3) to restructure ad valorem duty on oil and taxes on diesel. 4).stringent measures to check hoarding and blackmarketing.5) to create food security.6). MNCs such as Wal-Mart controls in retail business and agriculture prices to be stopped. 7) Why 32 more essential commodities were included from March 13th, 2008 for future trading?
Upsetting Ventures:
Promotion of Cricket game extragavenza for 44 days that only boosted sale of cheap foreign drinks (with high caffeine content), cultural stuff that made an imbalance of traditional and national wealth promotion. Youth became lazy and their skill power wasn’t tamed. Game money was not spent at least partly for the uplift of downtrodden but helped International media coverage, advertisements lucrative and seductive non-traditional talent exhibits. Also Pubs became fashionable at call centers and MNCs who pay fat salaries. The employees are showing-off the higher purchase power as a pawn shop broker grieved. Alcoholism is gripping the public that directly demands unsocialistic practices contributing to raise the Inflation.
The Caloric Food of a common man : Refer Table 1:
item 68-69 69-70 70-71 71-72 2008
cerels 539 561.8 588.8 597 462
potato etc 421.2 475.2 496.8 486 600
sugar 48 64 80 72 120
pulses/nuts 215.6 224.4 220 207 459
fruits/veg 37.8 32.17 31.54 29.7 128
milk&prod 41.24 38.4 24.53 24.9 92
meat,fish etc 15.36 23.04 26.88 25 120
edible oil etc 81 90 108 90 450
Totals 1399 1509 1577 1532 2432
Table 1: The caloric food of a common man during 1968-72 in india.
The supportive supplemented food by generous sharing by rich families
,charitable trusts,and free availability of fruits,nuts etc gave a boost of
40% in caloric values per capita per day during 1968-1972.
The weather during the years 68-72 was very conducive since lot of vegetation was existing in many towns and cities. Later people from rural setup migrated to urban areas and the unattended rural forest wealth and vegetation gradually dwindled due to exploitation by unscrupulous agencies. In the urban area the cement jungles started sprouting up with the municipal laws unable to implement to preserve greenery and granary around massive constructs including that of Government buildings. The mid-day meals, there is a criticism that it makes the boys lazy and irresponsible with guaranteed bright future. Parents need to be educated to imbibe moral responsibilities in the children.
The work culture has been disturbed due to heavy machinery that has been imported. The denial of work, led to social welfare schemes and abuse of these led to a population boom. Abuse is mainly to get financial benefits from the welfare schemes.
The idea of caloric value, for a healthy intelligent growth has replaced by a lazy luxurious financially beneficial life. No wonder other countries are demanding the abolishment of subsidiaries and let people work hard, earn and prosper.
Refer Table II:
The Prices, Caloric Values (ci) and the Weightages for the Years 2006 and 2008:
The symbols p0i,w0i refer to year 2006 and the symbols p1i and w1i refer to 2008.
commodity Ci p0i w0i p1i w1i Group
Bread/bun etc 400 5 6 10 10 I
sugar 280 1.5 2 4 2 I
potato etc 1600 3.5 10 14 5 I
rice 640 7 10 15 10 I
wheat etc 249 3 10 6 10 I
ravva etc 249 3 10 6 10 I
jaggery 120 0.5 6 1.5 6 I
flours 300 2.5 8 7 8 I
Pulses 1010 6.5 9 10.5 9 II
coconut 250 4 7 10 10 II
peanuts 160 2 5 3 7 II
pepper 32 0.25 2 2 2 II
other spices 50 0.75 2 3 2 II
milk & prod 500 6.5 9 10.5 9 III
liquor/drinks 330 5 6 18 7 III
yoghurt etc 280 3 8 9 2 III
cookin oils 450 4.5 10 13.5 5 IV
edible oils 450 4.5 10 13.5 5 IV
Banana 300 1.5 8 4.5 2 V
tomato 130 1.5 7 4.5 2 V
onion 150 1.5 7 4.5 2 V
brinjal 200 2.5 3 7.5 2 V
other veg 300 2.5 3 7.5 2 V
leafy veg. 0 0.5 4 1.5 4 V
Gauva fruit 180 1 4 3 8 V
Table II: The prices p0i, p1i and weightage preferences
w0i,w1i for 2006 and 2008 respectively
Inflation Dangers:
The Hindu Newspaper dated 24th April 08 reported the plight of weavers. Nearly 300 power loom workers at Sircilla, since 1977 have died due to inflation costs. Work of12hrs on a loom (borrowed) only allows Rs.80/100 a day to earn depending on the production of cloth. Power cuts, advent of jet and auto looms in Maharahstra and Tamil Nadu, left no source of assured income for the weavers. On Rs.2.0 kg rice (of poor quality) the common man was depending, while earlier he was paying Rs.3.0 Kg and about 35kg a month was sufficient. Loans burdened the common man to work as a slave to the mercy of power loom owners and the builders etc. The RES paid for about 100 days an amount of Rs.130/150 depending on the work done by a farm worker. Due to protests it was increased from Rs.80/100 to the present wage of Rs.130/150. Use of Hi-Tech machinery was objected by villagers, so farm workers got the benefit of RES.
But it’s not clear why scores of Agricultural University Professors, Researchers and several National and MOU International Institutes of food crops and biotechnology firms are very mute on the Inflation rate hike in India. They haven’t spelt out what varieties would boost the produce in India. Narendra Institute did much better job. Crores of Rupees, Government is financing these educational and technological endeavors. Are they fruitless?
How much staff of these white collared Institute actually partake “in-field” farming and cultivation with the farmers? Guidelines for district agricultural trade and service sector need to be streamlined so that the staff would become market and field farm sensitive. University and college both teaching and the non-teaching should also be farm and cultivation sensitive. Number of days they work on the fields during June-November of every year must be specified and like the Japanese staff they should be found working on the fields with the farmers.
Increased Rate of Inflation:
In the year April 2008 second week rate of Inflation was 6.34%, in the second week it rose to 7.14%, in the third week it became 7.33%. Month of May second and third weeks registered 8.1% and 8.24%. Governments controlled the cement price at Rs.200/ while it shot up to Rs.250-Rs.270 a bag. Rural schemes now would receive cement at the rate of Rs.145 to Rs. 160 depending on transport distances as per a decision made on April 25th, 2008.
NGRI scientists were not involved to fix the price, quality and mining stages of control of the rich lime soil reserves in A.P. Some mines owners of land haven’t opened up the fields for production of cement.
Palm trees, Bio-fuel (Jastrophe etc) plantations etc. (subsidized heavily) have threatened dwindling of fertile hectares of land in Agricultural bowl of produce in India, buffering increase of inflation rate. Procurement of produce from farmers by private companies, MNC firms and traders does influnces the increase of rate of Inflation. Value of money goes down with price rise and inflation. Workers and salaried people are not interested in real wages, but they now ask how much their income /wage/salary can buy?
It is imminent the inflation rate goes up by about Rs. 2 to 5% every summer season, but at 8.1% and 8.24% were a bit alarming.
Price Index Formulae:
The ideal Index of Fisher involves geometric mean of Lespeyers and Paasche indices. It satisfies time reversal and factor reversal tests. But others contend that these formulae give no meaningful values.
My Theory and Model Formulation:
Below given are the details of my theory and model formulation.
(I) The New Expression:
The standard formulae quoted above don’t reflect the Inflation! So a new concept of” Net Value of Product/Produce” (NVP) has been defined by the present author. The new expression takes into account the inflation in revenues, costs and transport etc.
This expression involves the premium values k1, k2, k3, k4, k5, k6, K and several indices given by the symbols ip etc. They are explained in the Fig.2.
We adopt a Hypothesis: It’s only global index, a major factor that resulted in the May/April 2008 inflation phenomenon in India.How best we can adopt the new expression (NVP), the formulae suggested below for the commodity market strategy? The method of analysis and concepts introduced in this paper make the predictions to move inline with the Inflation. The NVP expression allows the commodity market to be gauged with a futuristic outlook.
[See the Image up loaded: Fig 2.]
In this expression (of NVP) the values of “x” are 0.598, 1.026, 1.455, 1.888, 2.313, 2.743 and 3.172 respectively, for Jan.06, April 06, Jan. 07, Dec 07, April 08 and May 2008.. This index shows the enormous impact of global inflation on the price of half liter milk packet sold in A.P. India.
(II) An analysis by Tabulation Approach:
The present paper also projects a tabulated analysis of item-wise premium factors to estimate the value of K-factor. In this approach, the iglobal becomes redundant and may be dropped. I leave it as an exercise for readers to get a meaningful tabulation method of their own i.e. an easy one to be adopted by GOI.
K-factor k1 k2 k3 k4 k5 k6 NVP
0.75 0.18 0 0.018 0.122 0.11 0.21 10.52
0.723 0.18 0 0.012 0.101 0.12 0.2 9.5
0.691 0.18 0 0.011 0.09 0.06 0.21 8.51
0.646 0.18 0 0 0.106 0.06 0.2 7.43
0.553 0.115 0 0 0 0.05 0.2 5.88
0.485 0.115 0 0 0 0.08 0.2 5.107
Table III: A Tabular Approach of analysis of inflation premiums and
NVP value determination.For the meaning of symbols see image 1
uploaded.
Group Table 12 Table 13 Table 14 Table 15 2006 2008
I 82 89.4 71.08 78.1 43.5 46
II 7 5.16 6.38 3.4 12.5 18.5
III 5 1.22 7.43 2.03 14.5 14.5
IV 3 1.95 6.54 3.26 26 18.8
V 2 2.27 8.5 4.22 3.5 2.2
TableIV: Percentage caloric values by Dr.P.K.Bose[ref 3] Tables 12-15 &
present author's data for the years 2006 and 2008
(II) Inflation Reversal and Switch Reversal Tests:
The third approach of analysis is by different formulae given as L. P, M and F. It is essential to note that these new formulae involve weightages as set by the uncommon sense of a common man to fight the Inflation costs. He struggles hard to feed the belly of his family. All the four formulae may be subjected to what I termed as “Inflation Reversal Tests”. The object is to get meaningful results of analysis.
New Formulae of Price Index:
Formula 1: what is the change in aggregate value of the base period price of goods when inflation affects cost of essential items? L= sum [p1i*w0i]/sum [p1i*w0i]. The value has been found from the Table 2 data as 2.726.
Formula 2: what would be the Inflation weighted value of the given period price of goods when value weighted for the new prices?
P= sum [p1i*w1i]/sum [p0i*w1i]. Found equal to 1.9618.
Formula 3: Mean of L and P; M=[L+P]/2.0=2.3439 which signifies the influence of inflation on the nerve of the common man purchases.
Formula 4: the opposing base preferences and the weighted choices due to inflation are crossed geometrically. The result is common man strategy to reverse the inflation trend, to meet his living ends for survival.
Note: Not quality or quantity that matters the common man. It is his finances, rupee value and filling the belly of family that matters him most.
Switch reversal of food habits is that what guides him, to live eating even the “grass root foods” of rural India in spite he might be staying in a slum area of an urban colony or a Cosmopolitan city.
My Model of Entropy:
The theory of Entropy presented below gives a best description of disorder or chaotic state of a socio-economic system. The disciplined scientific approach would help India in its cultural and patriotic National developmental endeavor.
Common man sense of adjusting to the purchase of food is the underlying law of socio-economic entropy increase. The weightages he gives (throws) are the values (physical quantities) that guide his survival during inflation. The entropy, of course, has the dimensions of cal/kg, depicting the value of per capita per day of a poor individual. Many facets of my theory could easily evolved by readers of this article; if they do I shall be very happy.
Entropy of a system is a measure of disorder or of chaotic state of the system. Most probable stat of an economic condition corresponding to given conditions of inflation is attained through the weighted preferences of purchase of essential commodities. The entropy therefore should characterize this state. The manner in which the weighted preferences are made dictates the increase or decrease of entropy. This law states that the entropy of an economic situation is determined by the logarithm of sum of products of price, potential calories and the weightage preferences of purchase of commodities, i.e. averaged over the total price of the essential commodities purchased by a common man. For the logarithm to be a dimensionless quantity I have defined an action constant, in the units of cal/kg. Such a constant has been found by me, to have a magnitude equal 3.51 cal/kg.
(See the comment on it, in the notes, given in the section of references.)
The enhanced prices due to the inflation make the entropy to increase and so formula should involve a negative sign. The less negative more the increase in entropy. The chaotic or disorderliness is due to preferential weightage given in purchases. In times of inflation the purchaser has to sacrifice the caloric content of food.
For the data of the year 2006 let I= sum [p0i*ci*w0i]/ {sum [p0i*175}, where p0i is the ith commodity price, ci is its caloric value and w0i is the weightage given by the consumer. The factor 175 relates to the family size of 3.5 people and an average weight of 50kg. The entropy for the year S0=-I*ln (I/3.51) where 3.51cal/kg is the Peramma Action constant found by me.
The Peramma action constant equals 83.87 the nutrition rads, signifying the growth potential of a human organism.
For the data of the inflation year 2008 we have
II= sum [p1i*ci*w1i]/ {sum [p1i]*175} with entropy formula S1=-II*ln (II/3.51). Here p1i, w1i refer to the ith commodity price and consumer weightage value for the year 2008.
The obtained values are S0=-162.15cal/kg and S1=- 121.35 cal/kg. The negative sign indicates that entropy has increased in the year 2008 due to the inflation. The calculations are made taking into account the 23 essential commodities with the liquors/drinks included usually consumed by a common man.
RESULTS:
Four different formulae for the Price Indiex are given that describe the effects of theInflation. The concepts of Inflation Reversal Test and Switch Reversal Tests have been outlined. A new expression to take into account the global inflation index to fix the Net Value of a Product/Produce is presented. As opposed to this a tabulation approach analysis of the soaring price line of a commodity (like the cost of half-liter milk packet) is explained, in terms of appropriate values of certain premiums. The sum total of premiums plays an important role to fix the NVP. Most significantly, the theory and Model formulation that characterizes a socio-economic system (affected by the inflation) is gifted to the economics and the Business management scientists.
A “Peramma Action Constant” i.e. equal to 3.51cal/kg has been found out. This allows dimensionless logarithm expression to be specified in an Entropy characterization of a socio-economic system.
The uncommon sense of a common man in India, has been found to have
requisite intelligence, caliber, cultural heritage and patriotic spiritualism to switch reversal the inflation and help the Nation to sustain in its economic endeavor of National development.
Acknowledgements:
I am deeply indebted and express my sense of gratitude to (Late) Professor K. Rangadhama Rao D.Sc(Madras) D.Sc(London) for his inspiration and guidance in my research endeavors.
References:
1. Nutrition and national Development;p.1-22 Dr.P.N.Sen Gupta
Everyman’s Science X,No.1.Feb/March 1975
2. Nutrition research from labs to home, p.6-9, Mrs.Yogini Pathak
Everyman’s Science XXIX, No.1 Feb/March 1994
3. Population-Food equation in India; Editor Dr.P.K.Bose
Eveyman’s Science XII, No.1 Feb/March 1977, p.17-36 (Tables 12-15)
4. The Maximum Entropy Principle ;Prof J.N.Kapur ,p.78-82
Everyman’s Science XXVI, No.3 June/July 1991; {Gives stress on
Mathematical constraints approach rather than rational science}
5. The tale of poverty in the land of plenty; Dr.P.G.Adyakar,p.75-80
Everyman’s Science, XXXI, No.3, 1996
6. Food Science & Nutrition; Vijaya Kaushik
Book pub. Knowledge Plus, Delhi, year 2001.
Note 1.
The Telugu names have very apt description for the essential commodities and spices of India, including Liquors and Drinks. The word “Pappu” implies the protein content of pulses. The difference in words such as Jonnalu, ragi, cholu, bajra, kandulu, pesalu, veru sanga etc imply not only biophysical characteristics but also possible genetic and family of the species to which they belong. The English names like red gram, yellow gram etc don’t imply or carry any scientific content, except of the visual identity by color. They were invented by traders, looters and pirates of the 15th-18th centuries visiting India for selfish reasons. Hence the valuable ancient knowledge about plants, food stuffs, spices and ayurvedic science was lost by modern onslaught of cultural treachery. My research students could undertake research on Telugu Language and these bio-names of plants and spices to ascertain genetics and immunological characteristics.
Note 2:
I termed it as Peramma Action Constant(PAC) ,for an aesthetic beauty of respect to the Lady, so christened by the temple elder priests, who have performed a Vedic yagnam, before her birth in the beginning of 20th century, at a place called Vaddadi village, near to Upmaka Venketeswara Temple(Nakkapalli) and Chodavaram town in Andhra Pradesh, India. The PAC equals about 83.87 nrads. The physical rads (1J/kg=100rads) damage the tissue while nrads (nutrition rads) energies the growth of tissue. Essentially it is the latent nutritional potency heat that sustains the growth of the human organism. ***************************************************************8********
