While headline and core WPI are stuck in a disinflationary phase, the retail measure is inching north.
If international crude oil prices zoom past the current level of about $90 per barrel and move towards $100 and beyond, middle-class consumers are not going to keep quiet about their discomfort, points out Arun Balakrishnan, former chairman and managing director, Hindustan Petroleum.
Inflation moderates, but government can and must do more.
Central pool of onions to be set up; offences under Essential Commodities Act to be made non-bailable.
His comments poured cold water on hopes that the central bank may have a rethink on rates after the wholesale price index, the main inflation gauge, rose a lower-than-expected annual 7.25 per cent in June, its slowest rise since January, helped by moderation in fuel prices.
Retail tomato prices are ruling at Rs 80 per kg in most cities across India but the rates have shot up to as high as Rs 120 per kg in few southern states because of widespread rains, according to government data. In Chennai, retail price of tomato was at Rs 100 per kg, Puducherry Rs 90 per kg, Bengalure Rs 88 per kg and Hyderabad Rs 65 per kg. In Kerala, retail prices of tomato are ruling at Rs 120 per kg in Kottayam, Rs 110 per kg in Ernakulam, Rs 103 per kg in Tiruvananthapuram, Rs 100 per kg in Palakkad, Rs 97 per kg in Trissure, and Rs 90 per kg in Wayanad and Kozikode.
From the Sensex basket, Tata Motors, State Bank of India, Tata Steel, Power Grid, NTPC, Bajaj Finserv, Bajaj Finance and Asian Paints were the major laggards.
India has built up buffers against cyclical difficulties and has ample foreign exchange reserves to withstand pressure on credit worthiness, S&P Global Ratings said on Thursday. Speaking at the India Credit Spotlight 2022 webinar, S&P Sovereign & International Public Finance Ratings director Andrew Wood said the country has a strong external balance sheet and limited external debt, making debt servicing not so expensive. "The country has built up buffers against cyclical difficulties like those, which we are experiencing right now," Wood said.
Experts said onion prices, which are seeing deflation, are also headed to high-inflation territory in the coming months.
Unabated buying by domestic institutional investors and wholesale price inflation falling to 2.60 per cent in September, helped both the key indices to scale new highs.
The wholesale price of apple grown in Himachal Pradesh has declined to Rs 1,000-1,100 a box of 20 kg this year, against Rs 1,600-1,700 a box last year.
As per official data released on Wednesday, WPI inflation in the food articles category rose to double digits at 11.91 per cent, driven mainly by price rise in onion, cereals and rice.
RBI says food supply constraints to taper off only over time.
Onion prices crashed to Rs 5-20 a kg in wholesale markets of the national capital on Tuesday on the back of improved supply, but retail prices of the vegetable remain high at Rs 40 per kg.
Work in mandis across UP and in northern India which till Tuesday, witnessed heavy arrivals of newly harvested paddy, saw a steep decline.
The stock of the country's largest passenger vehicle maker, Maruti Suzuki India (MSIL), has been hitting successive all-time highs over the past three trading sessions. The rally in the scrip has helped it notch over a 21 per cent gain since the start of February, outperforming the National Stock Exchange Nifty Auto Index. The gains for the leader of small passenger cars have been more recent, as the company still trails the Nifty Auto over one- and two-year periods.
Inflation based on the wholesale price index rose to 4.24% during the week ended October 1 from 3.97 per cent a week ago
Though it eased slightly, prices of food items like rice, wheat pulses and potato showed a rise.
Wholesale prices, India's main inflation measure, had risen 6.1 per cent in August.
The study was conducted along with its research partner -- Nielsen Company in the last quarter of 2013.
The wholesale price-based inflation hovered over seven per cent through 2012, down from 10 per cent inflation seen in the previous year, reflecting the impact of tight money policy of the Reserve Bank of India.
The reading for March WPI inflation was revised to 6% from 5.7% earlier.
Equity benchmarks Sensex and Nifty halted their five-day rally on Tuesday and settled deep in the red, mirroring weak global markets, with decline in index heavyweights Reliance Industries, Infosys and HDFC Bank. Despite opening with gains of over 200 points, the 30-share Sensex turned highly volatile and tumbled 709.17 points or 1.26 per cent to close at 55,776.85. During the day, the benchmark index plunged 1,067.07 points or 1.88 per cent to 55,418.95. The broader NSE Nifty also declined 208.30 points or 1.23 per cent to close at 16,663.
Retail prices of tomato had touched almost Rs 80 per kg in major cities owing to short supply and transportation cost over the past few weeks following heavy downpour.
Food inflation, as measured by Wholesale Price Index, stood at 10.60 per cent in the previous week.
Inflation dipped to a five-month low of 5.19 per cent in July mainly on account of decline in prices of some food articles, vegetables and protein rich items.
The Wholesale Price Index-based inflation fell to 4.7 per cent in May, driven mainly by decline in prices of manufactured items, even as prices of food articles inched up.
The country had imported 5.5 million tonnes of pulses last year.
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.
Inflation declined to 5.30 per cent for the week ended November 25 from 5.45 per cent in the previous week, mainly because of fall in the prices of food items.
'There are occasions when the prices of individual items like food raise inflation; then supply-side measures must be taken.' 'But if there is continued inflation, it means liquidity is aggravating the situation.'
Rangarajan, who was answering questions on onion prices touching Rs 100 per kg in some cities, said the impact on inflation would not last long.
Inflation in food articles basket was 6.99 per cent In May, 2019, down from 7.37 per cent in April. However, onion prices spiked in May with inflation at 15.89 per cent, as against (-) 3.43 per cent in April.
'Rhetoric and chest-thumping are running high on India's recent growth record.'
'But will the giant waves developing elsewhere allow us to sail smoothly into fair winds?' asks Debashis Basu.
Tomato farmers from Haryana to Tamil Nadu have been forced to abandon their crop in the field or dump the harvest.
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Food prices for consumers also eased to an annual 11.06 percent in August from 11.24 per cent in July.
As gold prices turn prohibitive, traders fear a drop of as much as 50% in sales over the previous season.
The RBI's idiosyncratic focus on wholesale price inflation at the expense of retail inflation is a serious policy error.
Food prices fell for the second consecutive week as food inflation remained in the negative zone at (-)2.90 per cent for the week ended December 31, 2011.
'India's economy is growing faster compared to the developed economies of the world.' 'More importantly, it is growing faster compared to most of the developing economies.' 'The monsoon is not the only thing that drives the rural economy and certainly not the national economy.' 'It is too simplistic to reduce everything to the monsoon.'
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