New Delhi: The government approved a proposal to release wholesale prices-based inflation data on a monthly basis, instead of every week now, and changed the base year to 2004-05 from 1993-94.
However, data on primary and fuel items would continue to be released on weekly basis.
"The new series of WPI (Wholesale Price Index) inflation with 2004-05 as base year would be launched soon," Commerce and Industry Minister Anand Sharma said after a meeting of the Cabinet Committee on Economic Affairs.
The government intends to release the new series after November 14, he said.
Thus, on a consolidated basis, WPI data would come on a monthly basis.
Dr.B.Mohammad Rafee M.A.M.Phil.,Ph.D. Researcher, Pedagogue Ph:+918951163373,9159615573 Email:basharafee@gmail.com Web:www.mohammad-rafee.blogspot.com
Thursday, October 22, 2009
Inflation rises to 1.21 pct on Oct 10
New Delhi: India's wholesale price index rose 1.21 per cent in the 12 months to Oct. 10, higher than previous week's annual rise of 0.92 per cent, government data showed on Thursday.
It compared with a median forecast of a 1.13 per cent rise in a Reuters poll.
The annual inflation rate was 11.30 per cent during the corresponding week of 2008.
On Wednesday, the prime minister's economic advisory council forecast inflation at around 6 per cent by the end of March, higher than the central bank's estimate of 5 per cent, but lower than 8 per cent pegged by some private analysts.
The panel's chairman C. Rangarajan said the Reserve Bank of India is expected to leave interest rates unchanged when it reviews policy at its quarterly meeting on Oct. 27, and the easy monetary stance could continue until end of March.
The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly.
On Monday, the Indian cabinet approved the launch of a new monthly inflation data series with 2004 as the base year.
It compared with a median forecast of a 1.13 per cent rise in a Reuters poll.
The annual inflation rate was 11.30 per cent during the corresponding week of 2008.
On Wednesday, the prime minister's economic advisory council forecast inflation at around 6 per cent by the end of March, higher than the central bank's estimate of 5 per cent, but lower than 8 per cent pegged by some private analysts.
The panel's chairman C. Rangarajan said the Reserve Bank of India is expected to leave interest rates unchanged when it reviews policy at its quarterly meeting on Oct. 27, and the easy monetary stance could continue until end of March.
The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly.
On Monday, the Indian cabinet approved the launch of a new monthly inflation data series with 2004 as the base year.
Tuesday, October 20, 2009
Inflation may rise to 6 pct by end-March: D&B
Mumbai: Inflation may touch the 6 per cent mark by end-March 2010 led by surging food prices and decline in agricultural output because of poor rainfall, business information provider, Dun & Bradstreet, said.
Echoing the words of Reserve Bank Governor, D Subbarao, D&B said India's wholesale price index (WPI) inflation entered positive territory sooner than expected.
"Given the high prices of primary food articles and waning base effect and an expected decline in agriculture production, the WPI inflation might surge to around 6 per cent by end of the current fiscal," Dun & Bradstreet India, Chief Operating Officer, Kaushal Sampat, said.
He said inflation in primary food articles stood at 13.3 per cent, a figure last seen in December 1998.
India's inflation stood at 0.70 per cent for the week ending September 26. However, the rate of price rise fell from 0.83 per cent in the previous week on slight easing of food prices over the week.
The drought-hit kharif crop, which accounts for over 50 per cent of total agriculture output, will impact rural consumption and industrial sector subsequently, Sampat said.
"Lower agriculture growth might have a negative impact on the rural consumption demand and subsequently on the industrial sector. Expected lower agriculture production might also put downward pressure on agriculture exports, which accounts for around 11.3 per cent of total exports," he said.
India faced its worst drought in over 40 years, followed by record floods in Andhra Pradesh and Karnataka in south India, triggering fears of a food shortage.
"The drought is also expected to exert an upward pressure on an already high fiscal deficit, on account of the likely increase in expenditure on food subsidy and relief measures for distressed farmers," Sampat said.
The Central Government has proposed a huge market borrowing programme of roughly Rs 4-lakh-crore as part of increased expenditure.
"The huge borrowing programme of the Central Government is a serious concern. The total debt servicing for FY 10 is estimated to be 36.7 per cent of total revenue receipts in FY 10, which leaves less funds for expenditure on critical sectors like health, education and infrastructure," he said.
A high debt servicing will exert further pressure on fiscal deficit, Sampat added.
A high fiscal deficit may also go against the Reserve Bank's intention of lowering interest rates in the banking system.
Echoing the words of Reserve Bank Governor, D Subbarao, D&B said India's wholesale price index (WPI) inflation entered positive territory sooner than expected.
"Given the high prices of primary food articles and waning base effect and an expected decline in agriculture production, the WPI inflation might surge to around 6 per cent by end of the current fiscal," Dun & Bradstreet India, Chief Operating Officer, Kaushal Sampat, said.
He said inflation in primary food articles stood at 13.3 per cent, a figure last seen in December 1998.
India's inflation stood at 0.70 per cent for the week ending September 26. However, the rate of price rise fell from 0.83 per cent in the previous week on slight easing of food prices over the week.
The drought-hit kharif crop, which accounts for over 50 per cent of total agriculture output, will impact rural consumption and industrial sector subsequently, Sampat said.
"Lower agriculture growth might have a negative impact on the rural consumption demand and subsequently on the industrial sector. Expected lower agriculture production might also put downward pressure on agriculture exports, which accounts for around 11.3 per cent of total exports," he said.
India faced its worst drought in over 40 years, followed by record floods in Andhra Pradesh and Karnataka in south India, triggering fears of a food shortage.
"The drought is also expected to exert an upward pressure on an already high fiscal deficit, on account of the likely increase in expenditure on food subsidy and relief measures for distressed farmers," Sampat said.
The Central Government has proposed a huge market borrowing programme of roughly Rs 4-lakh-crore as part of increased expenditure.
"The huge borrowing programme of the Central Government is a serious concern. The total debt servicing for FY 10 is estimated to be 36.7 per cent of total revenue receipts in FY 10, which leaves less funds for expenditure on critical sectors like health, education and infrastructure," he said.
A high debt servicing will exert further pressure on fiscal deficit, Sampat added.
A high fiscal deficit may also go against the Reserve Bank's intention of lowering interest rates in the banking system.
Montek pitches for monthly release of inflation data
New Delhi: Planning Commission Deputy Chairman Montek Singh Ahluwalia today pitched for monthly release of inflation data as it is more sensible than the current practice of coming out with weekly figures.
“We have been arguing for the past one year to get rate of monthly inflation. You know weekly is just not sensible,” Ahluwalia told reporters here.
No where in the world there is weekly release of inflation data, he added.
Earlier Finance Minister Pranab Mukherjee had said, information on weekly prices of manufactured products is highly meagre.
“In the absence of legal backing for a dedicated data collection system, the data is received on a voluntary basis from Government Ministries and attached offices, commodity boards, oil companies, individual industrial units, leading manufacturers, business houses, chambers of commerce and trade associations,” Mukherjee had said.
Asked when could one expect the monthly release, he said, “they (government) have been working on it.
May be it will come out actually I mean from the professional point of view this will be done, and obviously timing of it is always a matter of some concern because people always think that you are making the change for motivated reason.”
The government is planning to introduce the new base year for calculation of wholesale price index series. The WPI series is being upgraded with base year 2004-05 in lieu of the existing one with base year 1993-94.
“We have been arguing for the past one year to get rate of monthly inflation. You know weekly is just not sensible,” Ahluwalia told reporters here.
No where in the world there is weekly release of inflation data, he added.
Earlier Finance Minister Pranab Mukherjee had said, information on weekly prices of manufactured products is highly meagre.
“In the absence of legal backing for a dedicated data collection system, the data is received on a voluntary basis from Government Ministries and attached offices, commodity boards, oil companies, individual industrial units, leading manufacturers, business houses, chambers of commerce and trade associations,” Mukherjee had said.
Asked when could one expect the monthly release, he said, “they (government) have been working on it.
May be it will come out actually I mean from the professional point of view this will be done, and obviously timing of it is always a matter of some concern because people always think that you are making the change for motivated reason.”
The government is planning to introduce the new base year for calculation of wholesale price index series. The WPI series is being upgraded with base year 2004-05 in lieu of the existing one with base year 1993-94.
Govt plans edu model for rural healthcare
New Delhi: In order to bridge the rural-urban healthcare access divide, the government is planning to create a scheme wherein it could impart medical training to selected candidates from rural areas on the condition that they have to serve a certain prescribed tenure in rural areas.
The Union health minister Ghulam Nabi Azad mooted an alternative model for medical education on Friday primarily aimed towards generation of the rural health manpower. “In the proposed system, admissions would be given to those, who qualify their examination from the schools located in rural areas with an average population of less than 10,000. Upon procuring the qualification they will be asked to serve in rural areas for a prescribed period,” said Azad. The minister added that due to concentration of healthcare professional in urban and semi-urban areas there is a huge gap of availability of manpower at grass-root level. A vast majority of India’s population, over 70%, still resides in rural areas where access to basic healthcare is a challenge even today. The extent of disparity can be assessed by the startling piece of statistics that 80% of our doctors cater to only around 30% of population, living in urban areas. 75% of the country’s total dispensaries and 60% of the total number of hospitals also serve only urban population. This leaves 20% of doctors to attend to 70% of the population living in the countryside. Industry experts also point out that there is a question mark on the quality of doctors and services available in the rural areas. The details of the scheme are being worked out by the Medical Council of India, which has on its agenda-not only mitigating the requirements of rural health manpower, but also ‘capacity building’ for health professionals in the country.”
The National Health Policy 2002 also lists equitable access to healthcare as its overriding goal. These concerned measures involve not only rationalising the existing rules & regulations, at the same time we are also accommodating new ideas required for sustained development, said Azad. The government is contemplating the Public Private
Partnership (PPP) model to set up medical educational institutes, especially in select areas of the country where there is an urgent need to have more medical institutions. The health ministry is evolving a plan to partner with the corporate sector so that they can set up medical colleges in the neglected areas. Azad also touched upon measures such as... relaxation of land requirement for setting up medical colleges, concessions for North- Eastern states and relaxation in teacher-student ratio norms for increasing specialists in the country. “Operationally, these initiatives would definitely bridge the identified ‘crucial gaps’ in the domain of the requirement of the trained health manpower as against the prescribed ratio for health care delivery system. But under no circumstances the desired quality of teaching and training would be compromised” concluded the minister....
The Union health minister Ghulam Nabi Azad mooted an alternative model for medical education on Friday primarily aimed towards generation of the rural health manpower. “In the proposed system, admissions would be given to those, who qualify their examination from the schools located in rural areas with an average population of less than 10,000. Upon procuring the qualification they will be asked to serve in rural areas for a prescribed period,” said Azad. The minister added that due to concentration of healthcare professional in urban and semi-urban areas there is a huge gap of availability of manpower at grass-root level. A vast majority of India’s population, over 70%, still resides in rural areas where access to basic healthcare is a challenge even today. The extent of disparity can be assessed by the startling piece of statistics that 80% of our doctors cater to only around 30% of population, living in urban areas. 75% of the country’s total dispensaries and 60% of the total number of hospitals also serve only urban population. This leaves 20% of doctors to attend to 70% of the population living in the countryside. Industry experts also point out that there is a question mark on the quality of doctors and services available in the rural areas. The details of the scheme are being worked out by the Medical Council of India, which has on its agenda-not only mitigating the requirements of rural health manpower, but also ‘capacity building’ for health professionals in the country.”
The National Health Policy 2002 also lists equitable access to healthcare as its overriding goal. These concerned measures involve not only rationalising the existing rules & regulations, at the same time we are also accommodating new ideas required for sustained development, said Azad. The government is contemplating the Public Private
Partnership (PPP) model to set up medical educational institutes, especially in select areas of the country where there is an urgent need to have more medical institutions. The health ministry is evolving a plan to partner with the corporate sector so that they can set up medical colleges in the neglected areas. Azad also touched upon measures such as... relaxation of land requirement for setting up medical colleges, concessions for North- Eastern states and relaxation in teacher-student ratio norms for increasing specialists in the country. “Operationally, these initiatives would definitely bridge the identified ‘crucial gaps’ in the domain of the requirement of the trained health manpower as against the prescribed ratio for health care delivery system. But under no circumstances the desired quality of teaching and training would be compromised” concluded the minister....
Forex reserves up $1.52 billion
Mumbai: The country’s forex reserves rose by $1.52 billion to $281.9 billion in the week ended October 9, the Reserve Bank of India (RBI) said in its weekly statistical supplement released on Friday.
While foreign currency assets climbed $1.48 billion to $264.9 billion, gold reserves were unchanged at $10.3 billion, the RBI said. Special drawing rights with the International Monetary Fund (IMF) increased by $35 million to $5.24 billion, while reserves with the IMF rose by $9 million to $1.37 billion. The rupee has advanced 0.2% this week to 46.31 against the dollar close, on Friday, as against 46.23 on Thursday. It had touched an intraday high of 45.75 on Thursday. Going forward, there are expectations of rupee appreciation against the dollar, say analysts.
Traders noted that going forward; the rupee may weaken against the dollar if the latter stays firm against the euro. Dollar demand from oil companies and other importers may also weigh on the rupee. At the same time, rupee will also take cues form the domestic share market. Abheek Barua, chief economist with HDFC Bank believes that the appreciation bias in the rupee will continue.
“ECB flows, FDI, trade credit and other debt flows will also play a critical role in determining the currency’s direction and momentum. Debt inflows in particular could pick up given the emergence of the differential monetary policy stance adopted by central banks in the developing world as against the advanced countries,” he said.
Barua expects the rupee to trade in the range of 46-47.20 in the near-term and move to a trading range of 45-46 by December 2009.
“As long as the dollar is weakening against other currencies, the rupee is bound to strengthen,” said S Srinivasa Raghavan, vice president and head of treasury with IDBI Gilts. Raghavan expects rupee to trade at 45-45.50 levels in the near term.
J Moses Harding, head of global markets group with IndusInd Bank said, “The dollar is definitely under pressure against major currencies with no sign of reversal, even on profit-booking and euro looks good for extending its gains against dollar. The stock market too is looking at highs, which were last seen in May-June 2008 and looks set for move into 17,350-17,500 ahead of another crucial resistance zone of 17,600-17,750. With RBI arresting rupee gains, the NDF arbitrage will further widen to provide better opportunity to arbitrage... play.”
He added that given the current rupee bull run, it would be in order to look for near term range-play within 45.75-46.25 and further into 45.25-45.75. However, he noted that RBI would not allow this move in a hurry. “We now stay tuned to range of 45.50-46.50 in the near term within 45.25-46.75 in the short term and await a decent reversal from 45.25-45.50 back into 48 and will give up on break below 45,” said Harding.
Meanwhile, the call money rate was seen in the range of 3.15-3.35%. Banks parked Rs 76,500 crore with the RBI.
The auctions in the government securities, held on Friday, saw devolvement on primary dealers under one security out of three. The cut-off yield for the new 5-year security was set at 7.32%, while the cut-off for auction of 6.35% bond maturing 2020 was set at 7.92%. The cut-off for auction of 7.35% bond maturing 2024 was set at 8.35%. An amount of Rs 210.30 crore was devolved on primary dealers under this security.
Traders noted that the yields hardened tracking devolvement of security on primary dealers at the auction....
While foreign currency assets climbed $1.48 billion to $264.9 billion, gold reserves were unchanged at $10.3 billion, the RBI said. Special drawing rights with the International Monetary Fund (IMF) increased by $35 million to $5.24 billion, while reserves with the IMF rose by $9 million to $1.37 billion. The rupee has advanced 0.2% this week to 46.31 against the dollar close, on Friday, as against 46.23 on Thursday. It had touched an intraday high of 45.75 on Thursday. Going forward, there are expectations of rupee appreciation against the dollar, say analysts.
Traders noted that going forward; the rupee may weaken against the dollar if the latter stays firm against the euro. Dollar demand from oil companies and other importers may also weigh on the rupee. At the same time, rupee will also take cues form the domestic share market. Abheek Barua, chief economist with HDFC Bank believes that the appreciation bias in the rupee will continue.
“ECB flows, FDI, trade credit and other debt flows will also play a critical role in determining the currency’s direction and momentum. Debt inflows in particular could pick up given the emergence of the differential monetary policy stance adopted by central banks in the developing world as against the advanced countries,” he said.
Barua expects the rupee to trade in the range of 46-47.20 in the near-term and move to a trading range of 45-46 by December 2009.
“As long as the dollar is weakening against other currencies, the rupee is bound to strengthen,” said S Srinivasa Raghavan, vice president and head of treasury with IDBI Gilts. Raghavan expects rupee to trade at 45-45.50 levels in the near term.
J Moses Harding, head of global markets group with IndusInd Bank said, “The dollar is definitely under pressure against major currencies with no sign of reversal, even on profit-booking and euro looks good for extending its gains against dollar. The stock market too is looking at highs, which were last seen in May-June 2008 and looks set for move into 17,350-17,500 ahead of another crucial resistance zone of 17,600-17,750. With RBI arresting rupee gains, the NDF arbitrage will further widen to provide better opportunity to arbitrage... play.”
He added that given the current rupee bull run, it would be in order to look for near term range-play within 45.75-46.25 and further into 45.25-45.75. However, he noted that RBI would not allow this move in a hurry. “We now stay tuned to range of 45.50-46.50 in the near term within 45.25-46.75 in the short term and await a decent reversal from 45.25-45.50 back into 48 and will give up on break below 45,” said Harding.
Meanwhile, the call money rate was seen in the range of 3.15-3.35%. Banks parked Rs 76,500 crore with the RBI.
The auctions in the government securities, held on Friday, saw devolvement on primary dealers under one security out of three. The cut-off yield for the new 5-year security was set at 7.32%, while the cut-off for auction of 6.35% bond maturing 2020 was set at 7.92%. The cut-off for auction of 7.35% bond maturing 2024 was set at 8.35%. An amount of Rs 210.30 crore was devolved on primary dealers under this security.
Traders noted that the yields hardened tracking devolvement of security on primary dealers at the auction....
Inflation close to 1%, RBI may hold rates
New Delhi: The wholesale price index rose at a slower-than-expected pace at the start of October, easing pressure on the central bank to tighten its monetary stance at its policy review later this month.
The widely watched wholesale price index rose by 0.92 per cent in the 12 months to Oct 3, well below market forecasts but above the previous week's 0.7 per cent annual rise.
"Over the last couple of weeks this data has been coming in below consensus, and this reassures us that inflationary expectations, which were building up, may now be assuaged," said Atsi Sheth, chief economist at Reliance Equities in Mumbai.
"We still expect inflation to continue rising, however we don't believe the rise will be worrying enough for the RBI to tighten aggressively over the next 12-month period," she said.
Prices of food, fuel and manufactured products fell on a weekly basis, which will give comfort to policy makers ahead of the Reserve Bank of India's (RBI) monetary policy on October 27.
"The headline inflation is lower than expected. While some moderation was anticipated in line with lower prices of energy-related products, the decline in food article prices is welcome," said Gunjan Gulati, economist at JPMorgan Chase in Mumbai.
Analysts expect no change in interest rates at an Oct. 27 policy review although some expect the central bank to take steps to mop up excess liquidity in the financial system.
Top government officials have repeatedly outlined the need to continue with fiscal stimulus and an accommodative monetary stance to encourage a recovery in the pace of growth.
RBI Governor Duvvuri Subbarao has said there was broad agreement that India needs to retreat from its easy monetary stance, but warned of the risks in mistiming such a move.
India's worst monsoon since 1972, followed by floods in parts of the country have hurt crops, pushing up prices of food items by an annual 13.34 per cent by early October and denting the broader economic recovery.
Faster industrial expansion, reflecting rising consumer demand, is also expected to fan inflation in the coming months.
Analysts expect inflation to rise at an accelerating pace and many predict it will surpass the central bank's comfort level of 5 per cent well before the end of the fiscal year on Mach 31.
The WPI has already risen close to 6 per cent from March 28, the last reading of the 2008/09 fiscal year, and annual consumer price inflation in August stood at... The central bank left its key policy rate unchanged at its last quarterly review after cutting it by 425 basis points to 4.75 per cent between October 2008 and April to support recovery in Asia's third-largest economy.
The RBI expects the economy to grow about 6 per cent in the 2009/10 fiscal year, compared with 6.7 per cent last year and 9 per cent or more in between 2005/06 and 2007/08.
The finance ministry's chief economic adviser, however, expects 7 per cent expansion in 2009/10 on the back of a robust factory output and receding global uncertainties....
The widely watched wholesale price index rose by 0.92 per cent in the 12 months to Oct 3, well below market forecasts but above the previous week's 0.7 per cent annual rise.
"Over the last couple of weeks this data has been coming in below consensus, and this reassures us that inflationary expectations, which were building up, may now be assuaged," said Atsi Sheth, chief economist at Reliance Equities in Mumbai.
"We still expect inflation to continue rising, however we don't believe the rise will be worrying enough for the RBI to tighten aggressively over the next 12-month period," she said.
Prices of food, fuel and manufactured products fell on a weekly basis, which will give comfort to policy makers ahead of the Reserve Bank of India's (RBI) monetary policy on October 27.
"The headline inflation is lower than expected. While some moderation was anticipated in line with lower prices of energy-related products, the decline in food article prices is welcome," said Gunjan Gulati, economist at JPMorgan Chase in Mumbai.
Analysts expect no change in interest rates at an Oct. 27 policy review although some expect the central bank to take steps to mop up excess liquidity in the financial system.
Top government officials have repeatedly outlined the need to continue with fiscal stimulus and an accommodative monetary stance to encourage a recovery in the pace of growth.
RBI Governor Duvvuri Subbarao has said there was broad agreement that India needs to retreat from its easy monetary stance, but warned of the risks in mistiming such a move.
India's worst monsoon since 1972, followed by floods in parts of the country have hurt crops, pushing up prices of food items by an annual 13.34 per cent by early October and denting the broader economic recovery.
Faster industrial expansion, reflecting rising consumer demand, is also expected to fan inflation in the coming months.
Analysts expect inflation to rise at an accelerating pace and many predict it will surpass the central bank's comfort level of 5 per cent well before the end of the fiscal year on Mach 31.
The WPI has already risen close to 6 per cent from March 28, the last reading of the 2008/09 fiscal year, and annual consumer price inflation in August stood at... The central bank left its key policy rate unchanged at its last quarterly review after cutting it by 425 basis points to 4.75 per cent between October 2008 and April to support recovery in Asia's third-largest economy.
The RBI expects the economy to grow about 6 per cent in the 2009/10 fiscal year, compared with 6.7 per cent last year and 9 per cent or more in between 2005/06 and 2007/08.
The finance ministry's chief economic adviser, however, expects 7 per cent expansion in 2009/10 on the back of a robust factory output and receding global uncertainties....
Subscribe to:
Posts (Atom)