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FM not worried about high capital inflows

New Delhi: Finance minister Pranab Mukherjee today said he would not press the panic button due to high capital inflows, including an over $38 billion by foreign institutional investors (FIIs) till November, though a higher level could be a constraint (rpt) constraint for the economy to absorb, reports PTI.

"We have the capacity to absorb these levels (of capital inflows). If this goes beyond a point, definitely that would be a matter of concern but that may be in a near future but not right now and therefore I am not pressing a panic button right now," he said.

Mr Mukherjee who was speaking at the Annual General Meeting of industry body PHD said he is not unduly perturbed about the FIIs inflows while foreign direct investment (FDI) inflows have moderated.

Overseas funds have infused a staggering $4.78 billion in the capital market in November, taking the total to $38.5 billion in the 11 months of 2010.

FDI during January-October stood at $17.37 billion, down 27% from $23.8 billion during the corresponding period of previous year.

The finance minister exuded confidence that government's fiscal policy and the Reserve Bank of India's (RBI) monetary actions are in tandem and will help the economy recover and than achieve higher growth trajectory.

RBI's actions to inject liquidity in the economy while refraining from hiking policy rates shows that the central bank is fully aware of the inflationary pressures but is also mindful of the requirements for higher growth.


Wholesale onion prices slide 20% in Lasalgaon

New Delhi: Wholesale onion prices slid by another 20% in the major producing regions of Lasalgaon and Manmad in Nashik today in the wake of steps taken by the government to boost domestic supply, reports PTI.

At Lasalgaon mandi, wholesale onion prices fell by 20% to Rs3,200 a quintal for best quality onions from Rs4,000 per quintal yesterday.

This was despite the fact that just 9,000 quintals of onions made their way into the Lasalgaon market today, compared to 12,000 quintals yesterday, according to data compiled by the National Horticulture Research and Development Foundation.

However, prices of best quality onions rose by 15% at Pimpalgaon, another major market in Maharashtra's Nashik district.

Earlier this week, the government imposed an indefinite ban on exports and permitted duty-free imports of onions to bring down soaring prices, which had gone up to as high as Rs85 per kg in some major cities.

State-owned trading agencies STC, MMTC and PEC have also been asked to step up imports of onions from all possible sources, taking cues from private traders, who had imported about 1,500 tonnes of the staple vegetable from Pakistan till yesterday since Monday this week.

In the last four days, onion prices have declined by nearly 50% at Lasalgaon to Rs3,200 from Rs6,299 per quintal on 20th December.

At Manmad, onion prices today fell to Rs2,899 from yesterday's Rs3,500 per quintal despite a slowdown in arrivals to 3,500 quintals from 7,500 quintals. The rates have fallen by nearly 50% in this market during the last four days, from Rs5,576 per quintal on 20th December to Rs2,899 per quintal yesterday.

However, in another key market, Pimpalgaon, wholesale prices of onion today rose to Rs3,500 per quintal from Rs3,031 a quintal yesterday. Nevertheless, prices of onions have gone down by 44% in Pimpalgaon during the last four days-from Rs6,273 per quintal on 20th December to Rs3,500 yesterday.

The average (modal) prices of onion in all the three markets fell and were ruling at Rs1,800-Rs2,000 per quintal.

The declining wholesale rates have started getting reflected in the retail markets of major metros, with onion prices softening by Rs10 per kg yesterday.

In order to provide relief to the common man, the government is selling onions at Rs40 per kg in Delhi through retail outlets of Mother Dairy (288 stores), Nafed (5), Kendriya Bhandar (85) and National Consumer Co-operative Federation (13 retail outlets).


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