• Inflation is down, but producer prices buck the trend

    Inflation for the month of July shows a slight dip to 9.22%, compared to the 9.44% seen in the previous month. One could argue if a drop of one-fifth of a percentage point is significant, but lower inflation, however small the actual decline, is a good thing.

    The government releases overall inflation data monthly, while primary inflation data (food and non-food) and fuel price behaviour is released on a weekly basis.

  • Oh bother, food prices on the move again!

    Is this a blip or something more? India’s primary inflation data –includes food and non-food articles or basic inputs- shows inflation for the week ended July 30 at 12.22%, marking a sharp upturn from 10.99% in the previous week.

  • Subbarao is RBI governor till 2013

    Speculation that the government may want a more pliant governor at the helm of the central bank proved to be bunkum. The government announced that D Subbarao would be the governor of the Reserve Bank of India, for two more years, providing continuity on the monetary policy front. He will now retire as the RBI governor on September 4, 2013.

  • Rail Budget: no fare hikes, poor finances and some clever accounting

    It was a foregone conclusion that the railway minister Mamata Banerjee would keep fares unchanged in the current railway budget. Even if it was needed to get the railway’s finances back on track.

    The railway minister is seeking to cultivate a people-friendly image, the outcome of which is a zero-fare hike policy. With elections due in her home state of West Bengal, despite the railway’s flagging financials, there was no way she would want to hike fares.

  • RBI lowers liquidity but leaves rates unchanged

    The Reserve Bank of India announced its quarterly monetary policy today. It left benchmark rates unchanged, like the repo rate (the rate at which banks borrow from the RBI) and the reverse repo rate (the rate at which banks park their surpluses with the RBI. What it did was to hike the cash reserve ratio by a good 75 basis points, taking out Rs 36,000 crore from the banking system. Cash reserve ratio is the proportion of deposits that banks must set aside as a reserve. Apart from this, the RBI has not made any changes and the Annual Policy will be announced on April 20.

  • Inflation at 1.34% in October; may touch 3% in November

    The base effect that held inflation to near zero levels has ended. Higher inflation also coincides with a period when the government has changed the frequency of inflation reporting from weekly to monthly. Now, only the primary articles (fuel and agricultural products) are reported on a weekly basis. Manufactured products' inflation will be available only on a monthly basis. October 2009 is the first month after the reporting frequency changed. Till now, inflation rates have been hovering around the zero mark and even turning negative, due to a high base effect in the previous year.

  • India's factory output grows by 7.3% in June 2009

    Industrial output for June 2009 is a bright spot amidst the gloom, caused by a near certain drought and a swine flu outbreak in the country. The index of industrial production (IIP) for June 2009 has increased by 7.8% over the same period last year. There was a partial base effect, as mining grew by 15% compared to a 0.1% growth in June 2008 and electricity grew by 8% compared to 2.6%.
     

  • Indian government to issue C-bills

    Short term borrowings are a part of any company’s life. These are needed to tide over temporary cash shortages or even to meet normal working capital needs. Since the needs are temporary, companies do not mind paying a slightly higher rate of interest. But when governments start dipping into the till to meet short term requirements, the consequences can be interesting, if not disruptive.
     

  • Railways carry 10% more goods in June 2009

    In June 2009, the Indian Railways carried 9.6% more cargo at 71.5mn tonnes, compared to June 2008. That is the highest so far in the current fiscal and also much higher than the growth in full year 2008-09. Railway freight volumes give an inkling of how the basic industries are performing in an economy.
     

  • India's Union Budget 2009-10: First Impressions

    Overall Impact
    The Union Budget 2009-10, as Pranab Mukherjee mentioned, is one of continuity. No major new schemes. No major tax changes. No change in the thinking of the government with respect to the fiscal deficit. No major reforms announced in the Budget, either. The initial impression one gets is that the government is hoping that the external environment will improve, domestic demand will pick up and lift the economy out the trough.
     

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