Inflation Down to 5 years low-Modi Effect.

[HariPrasad]

India’s August inflation rate falls to five-year low
New Delhi, Sep 15 :

India’s annual rate of inflation, based on the wholesale price index, fell to a near-five-year low of 3.74 percent for August, raising expectations of a rate cut when at Reserve Bank’s scheduled policy meet on Sep 30.

According to data released by the commerce and industry ministry Monday, the annual inflation rate stood at 5.19 percent for the previous month and 6.99 percent for August of 2013.

Notably, the annual inflation rate for food articles in August fell to 5.15 percent from 19.17 percent in the like month of the previous year.

The decline was the sharpest for onions — from 272.54 percent in August of last year to (-)44.70 percent. The fall was also quite sharp, for vegetables — from 80.96 percent in to (-)4.88 percent.

The wholesale price index numbers also suggested a drop in the inflation rate for eggs, meat and fish from 20.15 percent to (-)5.87 percent. While for rice the drop was from 21.33 percent to 5.44 percent, for wheat it was 9.38 percent to 0.67 percent.

Manufactured products, however, showed an increase from 2.31 percent to 3.45 percent.

Fuel prices also fell sharply with the rates of the Indian basket of crude oil falling almost $3 a barrel in a week after international prices dropped last month below the psychological barrier of $100. Petrol rates were cut thrice in August, helping bring down fuel inflation to 4.54 percent in August against 7.40 percent in July.

After the third rate cut last month on Aug 31, petrol sells at Rs.68.51 a litre in Delhi, Rs.76.41 in Mumbai, Rs.76.14 in Kolkata and Rs.71.55 in Chennai.

What is fuelling expectations of further rapid petrol rate cuts is that the country is on the doorsteps of market pricing of diesel since under-recoveries, or losses, incurred by state-run oil marketers like Indian Oil on selling the fuel below cost, have almost been wiped out by the monthly diesel hikes.

Diesel prices are being raised monthly by 50 paise a litre in line with the government’s January 2013 decision, and this month is expected to be the last of the regulation era.

Expectations of a rate cut by the RBI due to inflation cooling are, however, tempered by the fact that it uses the consumer price inflation to set interest rates.

India’s retail inflation slowed down to 7.8 percent in August from 7.96 percent in the previous month.

Reserve Bank Governor Raghuram Rajan, known for giving primacy to inflation control, has said he wants CPI to slow to 8 percent by January, and then to 6 percent within 12 months.

Meanwhile, Rajan Monday said the country required investment to boost growth.

“Recovery is still uneven. We need investment to pick up,” Rajan told a bankers conference in Mumbai.

While inflation abated mildly in August, data released Friday showed industrial output was flat in July.

Industrial activity, measured in terms of the Index of Industrial Production (IIP), grew 0.5 percent in the month of July over the same month of the previous year.

Commenting on the wholesale price numbers, the Confederation of Indian Industry said: “CII welcomes the precipitous decline in inflation to a five year low on the back of a sharp drop in food and fuel prices,” said Chandrajit Banerjee, director general, CII, in a statement.

“Prices of manufacturing products have also moderated indicating that core inflation is within range. Coming shortly before the monetary policy, this should also provide the necessary maneuvering space to the RBI,” he added.

(IANS)


India's August inflation rate falls to five-year low - OdishaSunTimes.com

 

[SrNair]

Not only Modi effect but also the combined work of officials of GoI.

 

[kaykay]

Very good signs. Good time ahead

 

[HariPrasad]

Not only Modi effect but also the combined work of officials of GoI.

Same Government officials were there in MM's time also.

Now I tell you what will this result into.

Interest rate will go down and loan and investment will become very cheap resulting in boost in GDP. Those who have flexible loan for housing may expect 1 to 2 percentage decrease in loan rate resulting into either term or value of EMIE.

 

[madooxno9]

I just wish it was Modi effect . LOL

Even a guy from U,KG would be able to tell you why inflation is down . Though there are good measures taken by RBI but the recent downgrade of inflation is mostly from decrease of OIL prices.

Please go and have a look at at OIL prices.

 

[HariPrasad]

I just wish it was Modi effect . LOL

Even a guy from U,KG would be able to tell you why inflation is down . Though there are good measures taken by RBI but the recent downgrade of inflation is mostly from decrease of OIL prices.

Please go and have a look at at OIL prices.

Who prevented RBI to take same measures in last 10 years?

How it reduce inflation? Diesel prises are not reduced, Petrol price down by 4 rupees. Do you expect inflation to reduce so drastically if petrol price reduced marginally?

 

[WishLivePak]

How many times modi can be PM?

@levina @nair @Nair saab

 

[HariPrasad]

How many times modi can be PM?

@levina @nair @Nair saab

Modi said that who so ever wants to become prime minister should prepare for 2024 only. So he is fix for atleast 2 terms.

 

[kaykay]

Inflation is 5 years low, Growth is 2 years high. Anyway next step should be to work on interest rates.

 

[Bang Galore]

How many times modi can be PM?

As many times as he is elected with a majority. No term restrictions in India.

 

[WishLivePak]

As many times as he is elected with a majority. No term restrictions in India.

I wish to see him in power for long time

He's really uplifting the poor and middle AND business class. Creating jobs, reducing inflation, making businessman think more positive etc. This is poor of democracy, which I hope continues in Pakistan. So we can have a chai wala as PM, a barber or whoever it is.

You guys are super lucky to have him, congraulations folks. He doesn't even do anything and things start to look better. What happens when he actually does something lol

edit: lol i got more rating than the article post itself

 

[possumlot]

I just wish it was Modi effect . LOL

Even a guy from U,KG would be able to tell you why inflation is down . Though there are good measures taken by RBI but the recent downgrade of inflation is mostly from decrease of OIL prices.

Please go and have a look at at OIL prices.

I wish to see him in power for long time

He's really uplifting the poor and middle AND business class. Creating jobs, reducing inflation, making businessman think more positive etc. This is poor of democracy, which I hope continues in Pakistan. So we can have a chai wala as PM, a barber or whoever it is.

You guys are super lucky to have him, congraulations folks. He doesn't even do anything and things start to look better. What happens when he actually does something lol

You are wrong in saying he has not done anything.

EVERYTHING happens for a reason. It happens because someone has worked hard for it. Just because people cannot see it or understand it, it does not mean it did not happen.

India's Modi government takes steps to control inflation| Reuters

India's new government on Tuesday imposed export restrictions on certain farm commodities and ordered a crackdown on hoarding to control rising food prices, a day after wholesale price inflation hit a five-month high.

A jump in prices of potatoes and onions last month drove inflation to 6.01 percent from 5.20 percent in April, contributing to a sell-off in financial markets.

Prime Minister Narendra Modi, who was elected last month amid widespread anger over rising prices, has made tackling inflation his top priority.

Forecasts of weak monsoon rains that irrigate much of India's food production have added to inflation fears, and volatile vegetable prices have risen by double digits.

Finance Minister Arun Jaitley, who held a meeting on Tuesday to decide steps to control food inflation, said the government was keeping a close watch on the price movements of 22 commodities and would offload additional rice stocks in the market to prevent a build-up in inflationary expectations. The government is planning to release 5 million tonnes of rice from state stockpiles to curb inflation, Food Minister Ram Vilas Paswan told reporters.

"The government would be releasing additional rice stocks from government warehouses for supplies to the state governments," Paswan told reporters.

The government also imposed a minimum export price on onions of $300 per tonne from $150 per tonne to discourage overseas shipments and Jaitley said a similar curb would be imposed on exports of potatoes.

"Even though the increase (in food prices) has only been marginal, we don't want anybody to exploit the situation," he told reporters after the meeting. "And therefore, in anticipation of any further market reaction, a series of steps have been decided and they are being put into place."

The weather department predicts below-average rainfall between June-September this year, which could hit summer crops such as rice, corn, soybean and cotton.

In addition to fears of food inflation, lower grain production could reduce the volume of rice exports from India, the world's top supplier.

"There are not many new contracts being signed for Indian rice as Thailand is selling rice at much cheaper prices," said one Singapore-based trader. "They have food inflation now and if there is El Nino, India might be forced to keep its rice at home."

A decline in rice exports from India could underpin global prices, although gains will be capped by plentiful world supplies, traders said. <RICE/ASIA1>

Summer monsoon rains are vital for 55 percent of India's farmlands that lack irrigation facilities. In 2009, patchy rains led to the worst drought in nearly four decades and drove annual food inflation up to more than 21 percent.

India has stockpiles of staples like rice, wheat and sugar that can be released, but the government has limited means to control surges in the cost of fruit and vegetables, which have the largest impact on food inflation.

Jaitley asked Indian states to amend their laws to crack down on speculative hoarding in anticipation of a weak monsoon and boost the supply of fruit and vegetables in open markets.

New Delhi will also extend a line of credit to state governments to import pulses and edible oil to bridge the shortfall in the domestic market, he said.

 

[Levina]

How many times modi can be PM?

@levina @nair @Nair saab

That will be decided by the end of his term.
Seriously I would like him to be winning atleast next 2 elections.
But you know what?
This cooling of inflation is gonna hurt me big time.From last few years i was getting a good excahnge rate for rupee but now it has started to hurt my pockets.
Seriously i dont care!!!
I hope my country's progress rate touches new highs.

Modi said that who so evr want to become prime minister should prepare for 2024 only. So he is fix for atleast 2 terms.

Whoa!! now thats interesting!!

 

[WishLivePak]

View attachment 51892



You are wrong in saying he has not done anything.

EVERYTHING happens for a reason. It happens because someone has worked hard for it. Just because people cannot see it or understand it, it does not mean it did not happen.

India's Modi government takes steps to control inflation| Reuters

India's new government on Tuesday imposed export restrictions on certain farm commodities and ordered a crackdown on hoarding to control rising food prices, a day after wholesale price inflation hit a five-month high.

A jump in prices of potatoes and onions last month drove inflation to 6.01 percent from 5.20 percent in April, contributing to a sell-off in financial markets.

Prime Minister Narendra Modi, who was elected last month amid widespread anger over rising prices, has made tackling inflation his top priority.

Forecasts of weak monsoon rains that irrigate much of India's food production have added to inflation fears, and volatile vegetable prices have risen by double digits.

Finance Minister Arun Jaitley, who held a meeting on Tuesday to decide steps to control food inflation, said the government was keeping a close watch on the price movements of 22 commodities and would offload additional rice stocks in the market to prevent a build-up in inflationary expectations. The government is planning to release 5 million tonnes of rice from state stockpiles to curb inflation, Food Minister Ram Vilas Paswan told reporters.

"The government would be releasing additional rice stocks from government warehouses for supplies to the state governments," Paswan told reporters.

The government also imposed a minimum export price on onions of $300 per tonne from $150 per tonne to discourage overseas shipments and Jaitley said a similar curb would be imposed on exports of potatoes.

"Even though the increase (in food prices) has only been marginal, we don't want anybody to exploit the situation," he told reporters after the meeting. "And therefore, in anticipation of any further market reaction, a series of steps have been decided and they are being put into place."

The weather department predicts below-average rainfall between June-September this year, which could hit summer crops such as rice, corn, soybean and cotton.

In addition to fears of food inflation, lower grain production could reduce the volume of rice exports from India, the world's top supplier.

"There are not many new contracts being signed for Indian rice as Thailand is selling rice at much cheaper prices," said one Singapore-based trader. "They have food inflation now and if there is El Nino, India might be forced to keep its rice at home."

A decline in rice exports from India could underpin global prices, although gains will be capped by plentiful world supplies, traders said. <RICE/ASIA1>

Summer monsoon rains are vital for 55 percent of India's farmlands that lack irrigation facilities. In 2009, patchy rains led to the worst drought in nearly four decades and drove annual food inflation up to more than 21 percent.

India has stockpiles of staples like rice, wheat and sugar that can be released, but the government has limited means to control surges in the cost of fruit and vegetables, which have the largest impact on food inflation.

Jaitley asked Indian states to amend their laws to crack down on speculative hoarding in anticipation of a weak monsoon and boost the supply of fruit and vegetables in open markets.

New Delhi will also extend a line of credit to state governments to import pulses and edible oil to bridge the shortfall in the domestic market, he said.

I meant hypothetically that he hasn't done anything. One cannot bring in new policies within first few months. It takes time to implement and whatnot. Budgets are created once a year etc.

Anyway, I was praisinf your leader nonetheless.

 

[HariPrasad]

I wish to see him in power for long time

He's really uplifting the poor and middle AND business class. Creating jobs, reducing inflation, making businessman think more positive etc. This is poor of democracy, which I hope continues in Pakistan. So we can have a chai wala as PM, a barber or whoever it is.

You guys are super lucky to have him, congraulations folks. He doesn't even do anything and things start to look better. What happens when he actually does something

You are exactly right. Each and every community in Gujarat is happy and prosperous today. He made economical development irrespective of cast or community. His good work made him so popular that these pseudo Secular could not prevent him from being PM is spite of their best effort. He ensure full clean chloride free water to most part of Gujarat. He ensured 24*7 electricity, He created lots of Jobs. Now look, Inflation is down to 5 years low within 100 days (Since they are August figures). Petrol price reduced 4 time in continuously which is unthinkable. Diesel price is going to get reduced first time since 2006.Coal based Power plant's generation improved by 22%. We can feel that good days are coming.