“The environment appears to be in favour of the Reserve Bank of India reversing its monetary policy stance,” PMEAC C Rangarajan said while commenting on food inflation which has turned negative to (-) 3.36% for the week ended 24th December
New Delhi: With food inflation turning negative in the week ended 24th December, the Prime Minister’s Economic Advisory Council (PMEAC) today made a case for reduction of interest rates by the Reserve Bank of India (RBI) in its monetary policy review later in the month, reports PTI.
“The environment appears to be in favour of the Reserve Bank of India reversing its monetary policy stance,” PMEAC C Rangarajan said while commenting on food inflation which has turned negative to (-) 3.36% for the week ended 24th December.
The RBI, which has raised interest rates for 13 times since March 2010 to contain inflation, has already paused rate hike in its December mid-quarter policy review. The central bank is scheduled to announce the next policy review on 24th January.
This is the first time in almost six years, for which data with base year 2004-05 is available that food inflation has shown a decline on an annual basis.
Terming the decline in food inflation as expected, he said the rate of price rise may remain negative till March.
“This (decline) was expected as the seasonal trend has caused vegetable prices to come down in the recent months. I see food inflation negative in January and negative or close to zero by March,” the PMEAC chief said.
He said the decline in food inflation will also bring down headline inflation to below 7% by March.
“We had predicted headline inflation to be 7% by March. However, it will be below 7%,” Mr Rangarajan said.
Under the proposed amendments, non compliance with the order of the consumer forums could attract a penalty. It also has a provision facilitating online filing of complaints
In order to facilitate quick disposal of consumer cases, the government has proposed amendments to the Consumer Protection Act, 1986. Under the proposed amendments, non compliance with the order of the consumer forums could attract a penalty. It also has a provision facilitating online filing of complaints.
The ministry of consumer affairs, food and public distribution, on 16th December had introduced Consumer Protection (Amendment) Bill, 2011, in Lok Sabha.
The proposed amendments include a provision where the order of the consumer courts—district, state and national will be enforced as a decree of a civil court.
Accordingly, to ensure compliance of the orders of consumer courts, it has a proposed an amendment to make a provision where a person not complying with the order of district forum, state commission and national commission could be fined with Rs500 or 1.5% of the penalty amount. The ministry says, “This modification is considered essential in view of the experiences gained during implementation of the amended Act and is intended to deter wilful offenders and also to ensure speedy and proper execution of the orders of the consumer forums, so that justice to the aggrieved consumers is not frustrated.”
The amendments also include a provision where consumer can register a complaint online and pay the fees using the online platform to make the consumer move towards e-governance and time-bound redressal.
The proposed amendments also call for maintaining periodical reports of pending cases of consumer courts to monitor the functions of the forums. It has a provision to increase the minimum age for appointment as a member to improve the quality of persons applying for these posts. In the case of state commissions, it would be 45 years from 35 years and in case of national commission, it would be increased from 35 to 55 years. It has also proposed to increase the period of experience for appointment as member of a state commission from 10 years to 20 years, and 10 to 30 years in case of National Commission.
The proposed amendments seek to give additional powers to the district forum. It says that the state commission should allow the district forum to function in places other than its headquarters. To deal with the non-functionality of district forums due to vacancy of president/members, neighbouring districts forum could be clubbed and additional charge to president/members can be given to hear cases in more than one district forum.
It also gives powers to the national and state commission to direct any expert of organization to assist it in the in the cases of large consumer interest.
This is the first time in almost six years, for which data with base year 2004-05 is available, that food inflation has shown a decline on an annual basis. Commenting on the decline, finance minister Pranab Mukherjee said, “There has been substantial improvement. Food inflation has turned negative for the first time in recent memory”
New Delhi: India’s food inflation entered the negative zone at (-) 3.36% for the week ended 24th December as prices of essential items like vegetables, onion, potato and wheat declined, reports PTI.
“There has been substantial improvement. Food inflation has turned negative for the first time in recent memory,” finance minister Pranab Mukherjee told reporters here.
This is the first time in almost six years, for which data with base year 2004-05 is available, that food inflation has shown a decline on an annual basis.
Food inflation, as measured by Wholesale Price Index (WPI), stood at 0.42% in the previous week. It was almost 21% in the corresponding week of 2010.
According to the official data released on Thursday, onions became cheaper by 73.74% year-on-year during the week under review, while potato prices were down by 34.01%.
Prices of wheat also fell by 3.41%.
Overall, vegetables became 50.22% cheaper during the week ended 24th December.
The fall in the rate of price rise of food items has been substantial since the first week of November, when it stood at double-digit.
Experts feel that the decline in food inflation will be a major incentive for the Reserve Bank of India (RBI) to look at the option of key interest rate cuts at its next quarterly monetary policy review later this month.
However, other food products became more expensive on an annual basis, led by protein-based items.
Pulses were 13.85% costlier during the week under review, while milk turned dearer by 9.49%. Eggs, meat and fish prices were up 13.82% year-on-year.
Fruits also became 10.87% more expensive on an annual basis, while cereal prices were up 1.97%.
Inflation in the overall primary articles category stood at 0.1% during the week ended 24th December against 2.7% in the previous week. Primary articles have a weightage of over 20% in the wholesale price index.
Inflation in the non-food segment, which includes fibres and oilseeds, was recorded at 0.85% during the week under review against 0.28% in the week ended 17th December. Fuel and power inflation stood at 14.60% (14.37%).
Headline inflation, which also factors in manufactured items, has been above the 9% mark since December 2010. It stood at 9.11% in November this year.
The RBI has hiked interest rates 13 times since March 2010 to tame demand and curb inflation.
In its second quarterly review of the monetary policy last month, the central bank had said it expects inflation to remain elevated till December on account of the demand-supply mismatch before moderating to 7% by March 2012.