The Consumer Confidence Index score for India decreased by six points to 128 in the April-June quarter of 2017, from a high of 136 from the last polled survey in Q4 of 2016, market insight first Nielsen has said in a statement.
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The food inflation in July softened to 11.24 per cent from 11.84 per cent in the previous month, according to the official data released on Monday.
Changes the base year and included more sectors.
Retail inflation fell to a five-month low of 4.35 per cent in September from 7.27 per cent in the year-ago period as prices of vegetables and other items declined, according to government data released on Tuesday. The moderation in Consumer Price Index-based inflation is in line with the assessment of Reserve Bank Governor Shaktikanta Das who recently projected substantial softening of retail inflation. The CPI inflation was at 5.3 per cent in August and at 7.27 per cent in September 2020.
A rise in petrol and diesel consumption can help the government cut cesses on the fuels by Rs 4.5 a litre without impacting revenue collections of FY21, and help cool off the pressure on inflation, domestic rating agency ICRA said on Friday. Petrol consumption is estimated to increase 14 per cent in 2021-22 and diesel by 10 per cent on the lower base, rise in mobility and economic recovery, ICRA said. The rating agency added that it will result in an additional Rs 40,000 crore in revenue for the government through higher collections of the cess.
An expected withdrawal of FIIs from the market likely to weaken the rupee against the dollar.
Metal and mining companies, such as Tata Steel, JSW Steel, Hindalco, and Coal India, have been among the top-performing sectors on the bourses in recent months. The S&P BSE Metal Index is up 13 per cent in the past three months, rallying 29 per cent in the past year, outperforming the broader market. For comparison, the benchmark S&P BSE Sensex has only seen a 1.7 per cent increase in the past three months, with a 15 per cent gain since the end of September last year.
If imputed inflation for April and May is used, then you have inflation of over 6 per cent for two consecutive quarters, which is a worrying signal for the RBI.
The fifth meeting of Monetary Policy Committee maintained the repo rate, at which it lends to the banks, at 6.25 per cent and the reverse repo, at which it borrows, will be 6 per cent.
Finance Minister Nirmala Sitharaman is likely to step up efforts to boost consumption and rural economy while keeping inflation under check when she presents her sixth straight Budget on February 1. Experts said one way to boost consumption is to put more money in the hands of people, and one of the possible ways of doing it is by reducing the tax burden through tinkering with tax slabs or increasing the standard deduction. Another proposal is related to increasing the funds under the rural employment guarantee scheme MGNREGA and higher payout for farmers.
'An eerie similarity with 2019 inflation trajectory could now mean that the RBI and market inflation estimates could go awry.'
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.
Declining vegetable prices brought down the retail inflation to a 15-month low of 4.59 per cent in December and within the comfort zone of the Reserve Bank, government data showed on Tuesday. It is for the first time during the current fiscal that the Consumer Price Index (CPI) based inflation print is below 6 per cent or in the RBI's target range of 2 to 6 per cent. The central bank factors in the CPI-based inflation while arriving at its monetary policy. The inflation in December 2020 came down from 6.93 per cent in November, mainly on account of 10.41 per cent decline in vegetable prices over the year-ago period.
The cooking oil national industry body -- Solvent Extractors' Association (SEA) of India has suggested immediate initiation of government to government (G2G) dialogue with Indonesia on the proposed palm oil export ban from April 28 by them as it would have an adverse repercussions in India. Indonesia, which is the world's largest producer of palm oil and meets nearly 50 per cent of the total palm oil requirement in India annually, had announced to ban exports till further notice apparently to contain edible oil prices in their domestic market. "We have suggested our government initiate dialogue with Indonesian counterparts at the highest diplomatic level on the cooking oil export ban.
However, worries on inadequate import and issues for the FTA pacts.
The RBI's Monetary Policy Committee brainstormed the impact of any future shocks on the inflation trajectory and stressed monitoring the cumulative effect of monetary policy actions over the past one year, which is still unfolding, revealed minutes of the rate-setting panel released on Thursday. The minutes of the meeting of the Monetary Policy Committee (MPC), headed by Reserve Bank Governor Shaktikanta Das, also indicated it would be premature to declare an end to the monetary tightening cycle, which started in May 2022 to check high inflation following the outbreak of the Russia-Ukraine war. The central bank, which effected six back-to-back hikes in the key short-term lending rate (repo) since May 2022 to check high inflation, decided to take a pause early this month.
Food inflation was 7.79 per cent last month, higher than a revised 7.47 per cent in May
The government on Wednesday asked the Reserve Bank to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for another five-year period ending March 2026. To control the price rise, the government in 2016 gave a mandate to the RBI to keep the retail inflation at 4 per cent with a margin of 2 per cent on either side for a five-year period ending March 31, 2021.
The Reserve Bank on Tuesday cautioned that continued uncertainty over monsoon could stoke food inflation, but expressed the hope that government policies will improve supplies in the coming months.
Zero inflation will pave way for rate cuts in the next RBI policy.
Global rating agency Moody's said India's economic growth remains weak and there is little chance of recovery next year.
Sensex may remain under pressure this week due to weak global factors.
The revised salaries of central government employees are likely to be paid from July 1, 2016.
The rapid deceleration in prices has ignited a debate in New Delhi whether Asia's third-largest economy is heading towards deflation.
The S&P BSE Midcap and S&P BSE Smallcap indices gained 0.4% and 1%, respectively
The Reserve Bank's rate-setting panel will start its 3-day deliberations on Wednesday amid expectations of yet another rate hike of 50 basis points to check high inflation, in line with similar actions taken by other major central banks, including the US Fed. Based on the recommendations of the Monetary Policy Committee (MPC), the RBI had effected 50 basis points increase in repo rate each in June and August after raising the short-term lending rate by 40 basis points in an off-cycle decision in May. The MPC, headed by RBI Governor Shaktikanta Das, is scheduled to meet during September 28-30.
In April, RBI had projected retail inflation to be around 5 per cent.
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The rupee is set to breach the Rs 60-a-dollar mark again this week as the Street expects foreign institutional investors to continue pulling out of domestic markets. According to the street, this would result in government bond yields rising.
At item level, rice, coconut oil, fish fresh, poultry, milk, onion, vegetables, fruits, sugar, cigarette, electricity charges etc. are responsible for increase in the index.
RBI's likely focus will shift back towards the resolution of non-performing loans in the banking system for reviving credit demand
Lower crude oil prices would impact India's inflation, CAD.
Senior citizens and others depending upon income from bank fixed deposit (FD) schemes will be at the receiving end with the retail inflation exceeding the interest rates. The Reserve Bank of India (RBI) in its latest monetary policy review has projected retail inflation at 5.3 per cent for the current financial year. Last week, the RBI said that the Consumer Price Index (CPI)-based inflation is now projected to be at 5.3 per cent for 2021-22 with risks evenly balanced.
From the Sensex pack, HCL Technologies, Infosys, Wipro, Bharti Airtel, Larsen & Toubro, Mahindra & Mahindra, Tata Consultancy Services and Asian Paints were the major gainers. Axis Bank, IndusInd Bank, Bajaj Finance, JSW Steel, State Bank of India and Tata Steel were among the major laggards.
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.
'The robust tax collections give the finance minister a fair amount of headroom for an expansionary fiscal policy.'
Oil, banks eneded the day in green while few in auto sector lost heavily.
It is the six per cent target RBI is more concerned about.
Rating agency Icra on Wednesday said while there is some evidence of the economic recovery becoming broad-based in the third quarter of fiscal 2022, it is yet to attain the durability being sought by the Monetary Policy Committee (MPC) as a precursor to policy transmission. The agency expects the real GDP to expand 6-6.5 per cent year-on-year in the third quarter of FY2022 (+8.4 per cent in Q2 FY2022). It also sees the RBI maintaining the status quo in the upcoming monetary policy review to be held in February.
Subdued prices of vegetables, cereals and dairy products pushed down retail inflation to a three-month low of 8.28 per cent in May.
Fall in both WPI and CPI inflation to pressure RBI, say analysts
