More rate cut by RBI unlikely this fiscal, say Ind-Ra
Inflation fell marginally to 6.13% for the week ended January 17, but public continued to pay higher prices for essential commodities with primary articles like fruits and vegetables, milk and many manufactured items becoming costlier.
CPI inflation is on the decline since July.
Financials declined amid profit taking while energy shares fell after the government hiked excise duty on transport fuels.
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India's year-on-year inflation rate as measured by the consumer price index rose to 3.43 per cent in January from 3.2 in December, a government statement said on Wednesday.
The party said its government has taken a number of initiatives since its formation including tough action against hoarders and limiting export prices of essential commodities like onion, rice and wheat.
Inflation dropped by 0.42 per cent to 7.38 per cent, for the second week in succession, in the week ended September 25, mainly due to fall in prices of vegetables and essential commodities.
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Reserve Bank will hold its first bi-monthly monetary policy review for 2016-17 on Tuesday.
The government regulates prices of all other medicines.
The central bank is widely expected to increase the repo rate by 25 basis points on Tuesday to 7.75 per cent to fight inflation even as it continues to unwind its rupee defense steps, a Reuters poll showed.
Inflation rose for the third consecutive week to 5.03 per cent for the week ended May 29 despite cheaper vegetables and fruits, eggs and several edible oils.
The inflation fell marginally to 4.40 per cent for the week ended April 3 despite a whopping 20 per cent rise in vegetable prices and a substantial hike in the prices of fruits, milk and fuels for industries.
The rupee bounced back by 26 paise to end at 59.93 against the American currency on Friday as exporters and some banks sold dollars.
Costlier foods, electricity and manufactured products pushed up inflation to 4.47 per cent for the week ended March 27, but 2003-04 ended on a positive note with the price level being contained at 4-4.5 per cent.
The consumer price index has been in double digits for much of the past year, and was 9.8 per cent in September.
The overall inflation went up marginally to 5.25 per cent for the week ended November 29 despite a sharp 9 per cent fall in vegetable prices.
The inflation rate slipped to 4.96 per cent during the week ended October 25 due to decline in prices of food items like wheat, jowar, bajra, maize, tea, vegetables and fruits.
Reversing a six month declining trend, WPI inflation moved up marginally to 0.11 per cent in December mainly because of increase in prices of food items.
The experience of direct cash transfer under PM-Kisan will be useful in designing a larger scheme of DBT for farmers combining all subsidies and support for the agriculture sector in the future, say Ramesh Chand & SK Srivastava.
The Central government is stuck between the devil and the deep blue sea as far as the runaway fuel prices are concerned.
The Reserve Bank had kept policy rate unchanged in its review on April 7.
WPI inflation fell to a 5-year low of 3.74 per cent while the retail inflation was at 7.8 per cent in August.
A rate cut could stimulate demand and help revive industrial activity, without much risk of sparking off inflation again.
But the 30-share Sensex rose by 141.52 points, or 0.41 per cent, to close at 34,297.47. The broader NSE Nifty gained 44.60- points, or 0.42 per cent, to end at 10,545.50 after touching a high of 10,618.10.
Slight recovery in growth is expected only in July-September.
The Reserve Bank of India unexpectedly raised its policy interest rate on Tuesday by 25 basis points (bps) but said that if consumer price inflation eases as projected, it does not foresee further near-term tightening.
RBI Governor Raghuram Rajan on Friday said keeping inflation low is the key task for sustainable economic growth of the country.
In the current fiscal so far, retail inflation stabilised around 5 per cent, while wholesale price-based inflation averaged around 2.9 per cent during April-December.
The RBI had lowered policy rates by 0.50 per cent between January-March to prop up economic growth.
The rise in May Wholesale Price Index based inflation has been mainly on account of 31.44 per cent increase in prices of potato, 19.40 per cent in fruits and 12.75 per cent in rice.
But it is likely that campaign spending resulted in some positive activity through this period.
The Nikkei India Manufacturing PMI dipped from 50.3 in November to 49.1 in December.
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