The wholesale price-based inflation eased to 10.66 per cent in September, helped by moderating food prices even as crude petroleum witnessed a spike. WPI inflation remained in double-digit for the sixth consecutive month. In August, it was 11.39 per cent. In September 2020, inflation was 1.32 per cent. "The high rate of inflation in September 2021 is primarily due to rise in prices of mineral oils, basic metals, non-food articles, food products, crude petroleum & natural gas, chemicals and chemical products etc. as compared the corresponding month of the previous year," the commerce and industry ministry said in a statement.
A freebie once granted can hardly be discontinued. All that can happen is to substitute it with a bigger freebie, notes A K Bhattacharya.
The Reserve Bank of India's dilemma over rates is its alone.
The wholesale price-based inflation in February rose to 13.11 per cent on hardening of prices of crude oil and non-food items, even though food articles softened. After two months of mild easing, WPI inflation accelerated in February and remained in double digits for the 11th consecutive month, beginning April 2021. WPI inflation last month was 12.96 per cent, while in February last year, it was 4.83 per cent. The rise in crude oil and natural gas prices after the Russian invasion of Ukraine, beginning February 24, has put pressure on the wholesale price index, even though food articles saw softening across categories of vegetables to pulses to protein-rich items.
The Reserve Bank of India said on Tuesday it would accord highest priority to contain inflation within 5 to 5.5 per cent, while keeping its projection for economic growth during 2006-07 unchanged at 7.5 to 8 per cent.
Headed by Urjit Patel, MPC for the fourth straight time kept the repo rate unchanged, at which it lends to the banks, at 6.25 per cent. The reverse repo, at which RBI borrows, will be 6 per cent.
Shaktikanta Das is a master of the finest balancing act who listens to all but takes his own decisions, discovers Tamal Bandyopadhyay.
There is a narrow chance that the central bank may cut rates in the future, according to a poll of 15 economists and treasurers.
With the stock markets scaling new heights, Finance Minister P Chidambaram on Friday sounded a note of caution and asked investors to guard against excessive exuberance.
Reversal in the declining economic growth trajectory is clearly the need of the hour and all steps should be taken to bring about this change.
Equity markets rallied after softer-than-expected inflation data in the US and UK rekindled hopes of the end of the rate-hiking cycle by major central banks. The soft inflation reading drove down bond yields and the US dollar, whetting the appetite for risky assets. The 10-year US bond yield fell below 4.5 per cent after topping 5 per cent less than a month ago.
S&P is the only of the three major credit agencies with a 'negative' outlook on India.
Defuses worries on global currency war.
'More than investors, fund houses, and advisors have raised caution and limited flows on small-and mid-caps.'
RBI has asked banks to 'allow self-certification; accept a certified copy of the document by mail/post' for account opening.
These are the highlights of RBI Governor Shaktikanta Das's statement and resolution of the Monetary Policy Committee (MPC):
However, WPI inflation remained in double digit for the third consecutive month in July, mainly due to a low base of last year. WPI inflation was (-) 0.25 per cent, in July 2020. "The high rate of inflation in July 2021 is primarily due to low base effect and rise in prices of crude petroleum and natural gas; mineral oils; manufactured products like basic metals; food products; textiles; chemicals and chemical products etc as compared the corresponding month of the previous year," the commerce and industry ministry said in a statement.
Fed is still concerned about weak export growth.
The statement indicated that RBI might further increase policy rates to tame inflation, which was still at an uncomfortably high level.
Indian rupee is likely to test 76-76.50 levels as a relatively strong greenback, boiling crude prices and COVID headwinds deepen the depreciation bias for the domestic currency, according to experts. One of the significantly-hit Asian currency in recent months amid uncertain economic times, rupee is expected to see a consolidation in the vicinity of the current level before being pulled towards the depreciation bias. While the equity market has been surging with occasional blips, the rupee has mostly been weak against the US dollar in recent months.
The Indian equity market is likely to remain under pressure and rangebound over the next few months. This comes as global central banks, led by the US Federal Reserve look at a possibility of hiking rates aggressively to tame inflation. Back home, the Reserve Bank of India, too, remains data dependent in its endeavour to keep inflation in check and pursue an aggressive monetary policy stance.
The Reserve Bank of India, in its Second Bi-Monthly Monetary Policy Statement for 2014-15, kept the key interest rate unchanged at 8 per cent.
The repo rate could be reduced by 50 bps in the current year.
The decisive election victory for the Narendra Modi-led National Democratic Alliance has created a conducive environment for policy actions and should help in economic recovery, Reserve Bank of India Governor Raghuram Rajan said on Tuesday.
Among the Sensex firms, Bajaj Finance emerged as the biggest gainer by climbing 2.95 per cent. Tata Motors, Bajaj Finserv, IndusInd Bank, Sun Pharma, Mahindra & Mahindra, State Bank of India, Larsen & Toubro, HDFC, HDFC Bank, Maruti, Reliance Industries and Bharti Airtel were the other major winners. HCL Technologies, Axis Bank, ICICI Bank, Tech Mahindra and Titan were among the laggards.
The task force will look at emerging markets, technology, regulatory and monetary policies, loss of trust in financial services, and financial inclusion.
Snapping the two-month easing trend, WPI inflation rose in August and remained in double-digit for the fifth consecutive month. In July 2021, WPI inflation stood at 11.16 per cent. In August 2020, WPI inflation was at 0.41 per cent. "The high rate of inflation in August 2021 is primarily due to rise in prices of non-food articles, mineral oils; crude petroleum and natural gas; manufactured products like basic metals; food products; textiles; chemicals and chemical products etc as compared the corresponding month of the previous year," the commerce and industry ministry said in a statement.
In a bid to check fraud, the Reserve Bank on Friday decided to permit all banks to introduce card-less cash withdrawal through ATMs.
India says it gives equal treatment to foreign companies on tax matters, not special consideration.
He will be the eighth Deputy Governor to be made Governor at RBI
Rationalisation of income tax slabs, infrastructure status for digital services and incentives to hydrogen storage as well as fuel cell development were some of the suggestions made by various stakeholders at the pre-Budget consultation meeting convened by Finance Minister Nirmala Sitharaman. The customary pre-Budget consultation meetings were held with the finance minister virtually between December 15 and December 22, as per the finance ministry statement. More than 120 invitees representing seven stakeholder groups participated in eight meetings, scheduled during this period, it said.
The Union government could target a fiscal deficit of 5.8-6 per cent of nominal GDP for 2023-24, and it should continue its capital expenditure push and look to simplify the personal income tax regime, economists recommended Finance Minister Nirmala Sitharaman and her team during their pre-Budget interaction on Monday. Starting last week, Sitharaman had eight pre-Budget consultations this time. More than 110 invitees representing seven stakeholder groups participated in these meetings, the finance ministry said in a statement. The stakeholder groups included representatives and experts from agriculture and agro-processing industry; industry, infrastructure & climate change; financial sector and capital markets; services and trade; social sector; trade unions and labour organisations; and economists.
Bankers and the markets on Monday read signals that the Reserve Bank of India was likely to continue its tight money policy in Governor YV Reddy's statement that India is vulnerable to oil and foodgrain price shocks.
Asserting that retail inflation excluding food and fuel is still at an elevated level, the Reserve Bank of India on Tuesday said it would endeavour to curb price increases.
'Pump prices of petrol and diesel have reached historical highs. An unwinding of taxes on petroleum products by both the Centre and the states could ease the cost-push pressures,' the Monetary Policy Committee (MPC) has said.
"He (RBI governor Duvvuri Subbarao) has explained the position. I think the governor's statement is very balanced, very appropriate as far as I could understand," Reddy said.
The RBI must first deal with the adverse turn of events in the CPI.
Given the pressure from India Inc and the banking fraternity, it is surmised that the portfolio rejig will take place before April.
State Bank of India does not levy any charge for non-maintenance of a minimum balance in basic savings account.
A V Rajwade wonders if the Modi sarkar is pursuing price stability at the cost of potential social instability in both rural and urban India.
