The primary and immediate impact of a depreciating rupee is on the importers who will have to shell out more for the same quantity and price. However, it is a boon for the exporters as they receive more rupees in exchange for dollars. The rupee depreciation has wiped away some of the gains that would have accrued to India from international oil and fuel prices dropping to pre-Ukraine war levels.
Young investors could allocate in the proportion of 70:20:10 to equity, debt and gold.
Inflation print for food articles, as a basket, remained nearly flat at 7.47 per cent during the month.
Spiralling prices pinched the pocket of consumer as edible oil, fuel and many other commodities turned dearer this year amid pandemic-induced disruptions but the inflationary pressure is anticipated to ease, though marginally, in the coming months. As consumers, at retail as well as wholesale levels, are willy-nilly learning to live with the new normal of curbs to contain the spread of coronavirus infections, experts are of the view that elevated inflation is likely to stay longer. After dealing with the devastating blows from the second COVID wave, especially during the April-June period, the economy is well on the revival path but the emergence of Omicron might unsettle the recovery trajectory in the short term.
WPI inflation, which was in the negative zone from November 2014 to March 2016, has been on an upward trend for the seventh straight month
The panel has also decided to increase the weight of manufactured items and the fuel group in the new index. Accordingly, the new WPI series, with a revised base year of 2004-05, will see the weight of manufactured items go up to around 65 per cent from 63.75 per cent in the present series.
According to the final recommendations of an expert committee, the weight of primary (unprocessed) food items will go down by 0.5-1.0 percentage points in the new series compared to the current one
Costlier vegetables slowly pushed retail inflation, which had remained well within the Reserve Bank's comfortable level of 4 per cent during most part of 2019, peaked to more than three-year high of 5.54 per cent in November.
'The finance ministry and the RBI will never admit to the difficulties in the economy because if they do so, it will adversely impact the financial markets, etc.' 'They like to present a rosy picture that everything is fine and under control.'
International Monetary Fund (IMF) chief economist Gita Gopinath has made a strong case for regulating cryptocurrencies, saying it will always be a challenge to ban them as they operate from offshore exchanges. Gopinath also suggested a global policy and co-ordinated action for regulating cryptocurrencies. "I think cryptocurrencies are a particular challenge for emerging markets. "It seems to be more attractive to adopt cryptocurrencies and assets in emerging economies than in advanced economies," she said while addressing an event organised by the National Council of Applied Economic Research (NCAER) on Wednesday.
As India looks to mend its Covid-battered economy, one thing that will grab the attention of all concerned is the path that both wholesale and retail inflation will follow. Even the Reserve Bank of India in its latest policy statement said, "Going forward, the inflation trajectory is likely to be shaped by uncertainties impinging on the upside and the downside.
The new IIP series based on the new base year, is expected to lead to better capturing of ground data
Hardening prices of manufactured items during the month may refrain the Reserve Bank of India from cutting rates in its policy review on February 8.
The US Fed's rate cycle is set to turn later this year, but India is in a much better position than it was in 2013.
Tech Mahindra was the top laggard in the Sensex pack, cracking over 5 per cent, followed by Infosys, HDFC, IndusInd Bank, Reliance Industries and NTPC. On the other hand, Hero MotoCorp, L&T, Maruti, UltraTech Cement and Sun Pharma led the gainers' chart.
Over the years, NHAI's expenses have spiraled due to sharp increase in land acquisition costs, while budgetary support has shrunk, leading it to fall back on internal resources and market borrowings
Price of potato, a daily consumable vegetable, rose 58.78 per cent during the month
The Commerce and Industry Ministry will soon seek Cabinet nod to give out inflation data every month instead of the present practice of weekly release.
The industry has stepped up its demand for a rate cut
Stock market barometers Sensex and Nifty ended marginally higher on Monday as rise in wholesale inflation capped early gains despite a positive trend in global markets. The 30-share index settled 32.02 points or 0.05 per cent higher at 60,718.71 with half of its constituents ending in green. The broad based Nifty edged up 6.70 points or 0.04 per cent to close at 18,109.45.
The economic survey for 2020-21 has suggested revision in the weightage of food items to gauge the true picture of inflation in the country, and said new sources of price data also need to be incorporated in the wake of increasing retail e-commerce transactions. As per the survey, the current spike in consumer price-based retail inflation of food prices is mainly a supply-side phenomenon. The survey noted that the weights of all items in retail inflation are based on the NSO household consumption expenditure survey of 2011-12, adding the weight of food items in the index might have significantly decreased over the decade since then.
India's Gross Domestic Product (GDP) is expected to expand by 9.2 per cent in the current financial year, according to the Economic Survey 2021-22 tabled in the parliament on Monday. "Advance estimates suggest that the Indian economy is expected to witness real GDP expansion of 9.2 per cent in 2021-22 after contracting in 2020-21. "This implies that overall economic activity has recovered past the pre-pandemic levels," Economic Survey noted. Almost all indicators show that the economic impact of the "second wave" in Q1 was much smaller than that experienced during the full lockdown phase in 2020-21 even though the health impact was more severe, it said.
The RBI's idiosyncratic focus on wholesale price inflation at the expense of retail inflation is a serious policy error.
Food articles inflation dips to 8.14% from 9.50% last month.
The excise duty cut will translate into a reduction of Rs 9.5 a litre on petrol and Rs 7 a litre in diesel after taking into account its impact on other levies.
CARE Ratings, in a report, said it foresees an increase in the retail prices of petrol and diesel in the coming few days, depending on how the oil markets react in the reduction in supply from the cartel.
Wholesale price inflation stood at 4.78 per cent in November. The consumer price index for agricultural labourer and rural labourers were 13.73 per cent and 13.51 per cent in October.
'The signal is crude oil prices will rise, I am cutting my subsidy. Be prepared, prices will rise.'
A Kotak research report expects RBI to cuts rates by 50 basis points in the first half of 2019. RBI will announce its sixth bi-monthly monetary policy on February 7.
India's macroeconomic situation is certainly better than what it was a year ago, eminent economist Pinaki Chakraborty said on Monday, while expressing hope that the country will be back on the path of economic growth if there is no major third wave of the COVID-19 pandemic. In an interview with PTI, Chakraborty, who is the director of the National Institute of Public Finance and Policy (NIPFP), said that inflation may remain at an elevated level as there was a significant fiscal and monetary expansion in the last 18 months. "The current macroeconomic situation is certainly much better than what it was one year back. We are seeing recovery in most sectors," he said. Chakraborty noted that COVID-19 vaccination has been going on at a very fast rate in India.
While headline and core WPI are stuck in a disinflationary phase, the retail measure is inching north.
Potato, a daily consumable vegetable, witnessed maximum inflationary pressure at 60.58 per cent
Overall the inflation in vegetable segment was 8.57 per cent as compared to about 4 per cent in February.
The rate of price rise for food articles stood at 11.51 per cent during January as against 2.41 per cent a month earlier, while for non-food articles it rose nearly three-fold to 7.8 per cent from 2.32 per cent in December, the data released by the ministry of commerce and industry on Friday showed.
Wholesale inflation shot up to a 30-month high of 5.25 per cent in January as rising global crude oil prices spiked domestic fuel cost, even as food prices moderated.
With decline in number of fresh COVID-19 cases and easing of restrictions, the country's gross domestic product (GDP) will grow at 8.5 per cent in FY2021-22, according to credit rating agency Icra Ratings. It expects the gross value added (GVA) at basic prices (at constant 2011-12 prices) to grow at 7.3 per cent in FY2022. "The impact of the second wave of COVID-19 and the ensuing state-wise restrictions was seen across a variety of high frequency indicators in April-May 2021.
'The robust tax collections give the finance minister a fair amount of headroom for an expansionary fiscal policy.'
According to the global research firm, though a sharp fall in WPI inflation and negative growth in Industrial production is exerting pressure on the RBI to cut rates, the quantum of rate cut will be more important than the timing.
WPI inflation even breached psychological level of 0% in Nov.
Inflation for the month of August stood at 8.51 per cent, according to the new Wholesale Price Inflation (WPI) series.
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