It is true that a happy economist is hard to find. Take the case of inflation. Grey heads were shaking just last year, stressing that inflation was too high. And now the same people are wrinkling their high foreheads about inflation that is too low. It is not just low, but items such as food have seen a price deflation — images of unsold tomatoes rotting popped up everywhere a few weeks ago. It is important for an economy to get the inflation number right because it impacts growth, wages, tax revenue collection, farmer incomes and gives signals on demand. An overheated engine needs water to cool it, and on a cold, winter morning, it needs a dhakka (push) start. Like a yoga posture, the inflation number needs to be perfectly balanced — too high or too low signals red.

The October inflation number, at 0.25%, means that prices this October are just a quarter of a percent higher than what they were in October last year. But this number hides the rest of the story, one of actual reduction in prices. We know that inflation is measured by the consumer price index (CPI). An index is made up of the most representative goods and services in our consumption basket. For historical reasons, gold is included under a category called “personal care and effects”. Gold, we can all agree, is an asset and is taxed as one by the government; gold holdings have to be declared in a net worth statement for incomes over ₹50 lakh. Gold is an asset and not........

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