While the CPI, according to the new series unveiled in January this year, has increased to 106 in March against the base of 100 in 2010, the exact inflation figures would only be released from next year, the ministry of statistics and programme implementation said
New Delhi: The new Consumer Price Index (CPI), introduced earlier this year, rose marginally by 1 point in March against 105 points in February this year, reports PTI.
While the CPI, according to the new series unveiled in January this year, has increased to 106 in March against the base of 100 in 2010, the exact inflation figures would only be released from next year.
As per the data released by the government today, the general indices for rural and urban stood at 107 and 104 points, respectively, in March.
In February, CPI overall had stood at 105, while the indices for rural and urban were reported at 107 and 104.
"The General Indices for rural, urban and combined...are more or less the same level of February 2011," the ministry of statistics and programme implementation said.
Meanwhile, the combined index for January has been maintained at 106 points.
The new CPI is intended to reflect the actual movement of prices at the micro-level and help policymakers like the Reserve Bank of India (RBI) in better framing of decisions.
Releasing the new series, the government had earlier said it would continue for one year the practice of giving figures in the present form without quoting the inflation rate "till the series gets stabilised" and adequate timely receipt of price data was achieved.
The new consumer indices cover five major groups-food, beverages and tobacco; fuel and light; housing; clothing, bedding and footwear; and miscellaneous items.
The IMF says growth and recovery is taking root in global markets, but it advises financial policymakers to be cautious as high unemployment, rising commodity prices, inflation and increasing oil prices could slow growth in the medium term
The International Monetary Fund (IMF) in its annual World Economic Outlook (WEO) report has asserted that the global economy is indeed on a path of recovery, but it has cautioned about the gathering clouds on the horizon that could likely dampen progress. The IMF expects an economic growth rate of 4.5% for both 2011 and 2012. While the developed economies are growing at 2.5%, it estimated that the developing world has picked up pace to reach an average rate of 6.5%.
However, there are many concerns that threaten the recovery -
Reserve Bank of India (RBI) governor Duvvuri Subbarao expressed just as much during his recent visit to Washington, for the spring meetings of IMF and World Bank. "The global recovery may be jeopardised by a sustained rise in oil prices," he said. "Speculative movements in commodity derivative markets are also causing volatility in prices." Whether the G-7 and OPEC heed his warning by addressing the supply-side economics remains to be seen, but the mood on the street remains far from optimistic.
Dalal Street is waiting to see the final quarter results from India Inc. before pushing up the sails. Infosys has set off disappointment in the market and much will be made out of the numbers that Tata Consultancy Services presents on 21st April. Equally important, if not more, will be the performance of the manufacturing industry, as they will be a more precise indicator of domestic economic health. Also, the impact of high oil and commodity prices will be captured in these performance numbers.
There are signs of concern in the just-released inflation estimate for March. Inflation rose to 8.98% from 8.31% in February, on the back of increasing manufacturing and fuel costs. With inflation rooted above 8% over the past 14 months, pricing pressures are ensuring that inflation remains high-recently car and garment manufacturers passed on price hikes to consumers, affirming this trend.
It is widely believed that revised inflation figures for March might edge into double figures after the rate for January was revised from 8.23% to 9.35%. With the RBI's efforts to fight inflation not yielding the desired results, markets are gearing up for a 0.5% increase in the inter-bank rate when the central bank issues its monetary guidance in the first week of May.
In a persistent bid to fight inflation, the RBI has already changed the rate eight times in the last 13 months, amounting to a 3.5% hike. "Underlying inflationary pressure is a concern and inflation is the most important problem in the short term," said the deputy chairman of the Planning Commission, Montek Singh Ahluwalia. "They (RBI) have all the flexibility and they should use all the flexibility to control inflation," he added, clearly suggesting that the bank ought to raise rates.
Monetary tightening is a pan Asia trend-China's inflation hit a 32-month high in March, ensuring that the People's Bank of China will continue to squeeze money supply. All of these actions are likely to slow down overall growth in the region as public policy battles rising prices. The IMF's outlook also acknowledged the role of foreign investment funds in the emerging Asian markets that is causing the overheating.
The delay in structural reforms has meant that most of the capital flows to the East have come in the form of portfolio investments, while FDI has declined. Inherently, this is a situation that lends itself to volatility. With oil likely to remain above $100 per barrel, markets may be dealing with more instability through the rest of 2011.
(The writer is a business consultant to large clients on financial processes, process re-engineering and improvement.)
The premiums are being revised after a gap of four years, the Insurance Regulatory and Development Authority said, adding that from now onwards the third-party motor insurance premium rates would be revised annually
New Delhi: Owning a vehicle would now pinch your pockets even more, with third-party motor insurance premiums set to rise by up to 65% for two-wheelers, private cars and heavy load carriers from 25th April, reports PTI.
The premiums are being revised after a gap of four years, the sector watchdog Insurance Regulatory and Development Authority (IRDA) said, adding, from now onwards the third-party motor insurance premium rates would be revised annually.
The IRDA has also fixed a formula for revising the motor insurance premium rates, which would be done after taking into account inflation and data on claim settlement. These rates are currently regulated by the Tariff Advisory Committee of the IRDA.
As such, owners having third-party cover for private cars of 1,000-cc capacity would now have to pay premiums of Rs740, those exceeding 1,000 cc but below 1,500 cc will attract premium of Rs880 and those above 1,500 cc at Rs2,750.
"If the premium rates get revised annually on specified parameters it will save a lot of time which gets wasted on account of negotiation with several associations," National Insurance Company CMD NSR Chandraprasad said.
The third-party cover for two-wheelers of up to 350 cc capacity would attract premium of Rs330 and those exceeding 350 cc would cost of Rs680.
Insurance companies had actually sought a 150% hike in premium rates as these companies are bleeding on account of high claim to premium cost.
However, IRDA in its exposure draft had suggested a 10% increase in premium for private cars and two-wheelers and up to 80% for goods carriers.
Though regulation of the tariffs in the non-life sector was withdrawn in 2007, third-party motor insurance continues to be regulated.
It is mandatory to for a vehicle owner to obtain third-party insurance to provide insurance cover to others in case of injury or loss of life.