Now that the economy is growing at a higher-than-expected rate, it is time to accelerate the pace of fiscal consolidation, and the Budget could be a good starting point, argues Rajesh Kumar.
More rate cut by RBI unlikely this fiscal, say Ind-Ra
The states that witnessed high CPI-based inflation rates were Lakshadweep, Tripura, Odisha, Uttar Pradesh, Kerala, Madhya Pradesh, Puducherry, Tamil Nadu, Rajasthan, Manipur and Mizoram.
The impact of fiscal measures announced by the government to contain inflation will be seen in the next few months because of the base effect, reports Indivjal Dhasmana.
This is the case even though the benchmark index is only 5 per cent below its all-time high. The list of stocks trading at a discount primarily consists companies in the automotive, banking, oil and gas, insurance, healthcare, and metal sectors.
The WPI inflation stood at negative 2.4% in May 2015, compared with a negative 2.65% in April 2015.
The government on Monday ruled out making public the RBI report detailing the reasons why the central bank could not keep inflation within the targeted 6 per cent upper limit for the three consecutive quarters. "Yes sir, RBI has furnished a report to the central government, as mandated under Section 45ZN of the RBI Act, 1934 and Regulation 7 of RBI Monetary Policy Committee and Monetary Policy process Regulations, 2016," minister of state for finance Pankaj Chaudhary said in a written reply. The said provisions of the RBI Act, 1934, and regulations therein does not provide for making the report public, he said.
The Reserve Bank of India (RBI) on Wednesday raised the benchmark lending rate by 35 basis points to 6.25 per cent in a bid to tame inflation, which has remained above its tolerance level for the past 11 months. With the latest hike, the repo rate or the short-term lending rate at which banks borrow from the central bank now has crossed 6 per cent. This is the fifth consecutive rate hike after a 40 basis points increase in May and 50 basis points hike each in June, August and September.
The consumer price index has been in double digits for much of the past year, and was 9.8 per cent in September.
The HSBC/Markit Purchasing Managers Index for the services industry inched up to 47.2 in November from 47.1 in October, the fifth sub-50.0 reading and indicated an output contraction across the Indian service economy.
The country had imported 5.5 million tonnes of pulses last year.
The Reserve Bank's rate setting panel on Thursday met to finalise a report for the government on why it failed to keep retail inflation below the target of 6 per cent for three consecutive quarters since January this year, said sources. The report will be presented to the government as per the Reserve Bank of India Act, they added. The six-member Monetary Policy Committee (MPC) is headed by Governor Shaktikanta Das.
The finance ministry expects a broad-based moderation in inflationary pressures on the back of an anticipated reduction in food prices as a result of the uptick in summer sowing. The retail inflation rate remained stubbornly clung to the 5 per cent mark in seven of the past eight months. "Core inflation is trending downwards, indicating a broad-based moderation in price pressures... Driven by strong domestic growth and benign global commodity prices, core inflation is declining continuously.
Costlier fruits and vegetables such as onions and tomatoes pushed retail inflation to a nine-month high of 11.24 per cent in November, making it harder for the Reserve Bank to lower interest rates.
According to a statement available on the Ministry of Statistics and Programme Implementation website, gross domestic product, consumer price index and index of industrial production will now be released at 5.30 in the evening.
Inflation moderates, but a rate cut is unlikely.
Hitting back at former prime minister Manmohan Singh for his criticism of the Modi government's handling of the economy, Finance Minister Nirmala Sitharaman on Thursday said he is more remembered for having brought India to "fragile five" and rampant inflation during his term.
The industrial production grew by two per cent in September, mainly on account of better performance by power and mining sectors.
US economic growth slowed sharply in the fourth quarter.
The index is currently trading at 149 per cent of its historical P/B valuation, surpassing its previous peak of 125 per cent made in 2020-21.
The market believes there will soon be another offer to buy the bonds.
India's manufacturing sector activity contracted for the third straight month in October amid falling levels of production and new orders, as the business climate within the country remained tough, an HSBC survey said on Friday.
Vegetable, fruit prices to be on the rise over weak supply, crop damage
There are seven potential buyers, ranging from the Port Talbot steelworks' management to the UK steel industry investors Liberty House
India's industrial production grew by 1 per cent in December, official data showed on Friday. According to the Index of Industrial Production (IIP) data, the manufacturing sector output grew by 1.6 per cent in December 2020.
It would be a miracle indeed if we grow at 7/8 per cent a year over the current and next few years, says A V Rajwade
Retail inflation slowed to 4.29 per cent in April from 5.52 per cent in March, mainly due to easing food prices, government data showed on Wednesday. The Reserve Bank mainly factors in the retail inflation based on Consumer Price Index (CPI) while arriving at its monetary policy. As per the data released by Ministry of Statistics and Programme Implementation, inflation in the food basket was 2.02 per cent in April, down from 4.87 per cent in the preceding month.
Global trends, macroeconomic data announcements and the start of the earnings season would be the major drivers for the equity markets in a holiday-shortened week, analysts said. Equity markets will remain closed on Thursday for Eid-Ul-Fitr. Trading activity of foreign investors, rupee-dollar trends and crude oil prices would also guide trends in markets.
Both across India and the four regions - north, south, east and west - it is found that the absolute prices of a vegetarian thali have decreased significantly since 2015-16 though the price has increased in 2019.
Pulses cropping has jumped to 39.4 per cent above 2015 levels.
India is likely to grow by 7.5 per cent in the first quarter of the current financial year, driven by rising aggregate demand and non-food spending in the rural economy, according to an article in the RBI's May Bulletin released on Tuesday. The Indian economy has demonstrated marked resilience in the face of geopolitical headwinds impacting the supply chain, said an article on the state of the economy published in the May Bulletin.
Fourth quarter earnings of blue-chips such as Infosys, TCS, Wipro, RIL and inflation data for March will dictate the trend on the bourses in a holiday-shortened week ahead, experts said.
In August, wholesale prices rose 3.74 per cent year-on-year.
Enthused by higher than expected GDP numbers in the fourth quarter of 2022-23, Chief Economic Adviser (CEA) V Anantha Nageswaran on Wednesday said India's economic growth may exceed the initial estimate of 6.5 per cent in the current fiscal and the country can look for another year of solid economic performance.
The overall consumer food inflation in August fell to 5.91 per cent as against 8.35 per cent in July
Currently, the retail inflation is well below the RBI's comfort level. The government has asked the central bank to keep inflation in the range of 4 per cent.
Terming the rise in October retail inflation despite a bumper crop as "disturbing", India Inc said the government must immediately address supply side bottlenecks to bring down the consumer price inflation.
The HSBC India Manufacturing Purchasing Managers' Index for the manufacturing industry climbed from 49.6 in October to 51.3 in November on the back of a rebound in new orders and output.
Inflation in the 'fuel and power' basket in December slumped to 8.38 per cent, nearly half of 16.28 per cent.
The fast-moving consumer goods (FMCG) sector has underperformed the Nifty over the past year as its 20 per cent return is trumped by 29 per cent of the benchmark index. The FMCG index saw a 2.2 per cent drop in the last session, while the Nifty lost 1 per cent. FMCG is seen as a defensive segment. The demand for staples like personal care products, groceries and snacks tend to be stable. FMCG companies are consistent dividend-payers.
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