"The trend is encouraging so far as the domestic sector is concerned. But we do not have total control over international issues, international commodity prices, fuel prices, and the influence of the external inflationary pressure could have some adverse impact on our domestic front," finance minister Pranab Mukherjee said
New Delhi: Encouraged by moderation in food inflation to 7.58% for the week ended 9th July, finance minister Pranab Mukherjee on Thursday expressed hope that the price situation would improve in the days ahead, reports PTI.
"If this declining trend continues, I do hope it will have a moderating influence on the price front," Mr Mukherjee told reporters here.
His comments came after food inflation fell to a three-week low of 7.58% for the week ended 9th July on the back of cheaper pulse prices and a high base last year.
Food inflation, as measured by the Wholesale Price Index (WPI) stood at 8.31% in the previous week. It was as high as 19.52% in the corresponding week of July 2010, suggesting a high base.
During the week under review, prices of pulses went down by 7.67% on a year-on-year basis. However, prices of other food items continued to rise.
Inflation of overall primary articles stood at 11.13% during the week under review, down from 11.58% in the previous week. Non-food articles reported an inflation of 15.50% for the week ended 9th July, compared to 15.20% in the previous week.
Mr Mukherjee said the domestic situation on the price front was improving, though concerns remain over international issues.
"The trend is encouraging so far as the domestic sector is concerned. But we do not have total control over international issues, international commodity prices, fuel prices, and the influence of the external inflationary pressure could have some adverse impact on our domestic front," he said.
The government had on Wednesday said that inflation will continue to remain high till December on account of "seasonal effects and upward movement in crude oil, manufactured and administered fuel prices..."
Headline inflation stood at 9.44% in June. It has remained consistently above the 9% mark since December 2010.
Pune-based NGO believes this will enable the better use of natural gas instead of oil and enhance energy security and revenues
Natural gas should be used for transport and cooking rather than for base-load power generation, which would allow gas pricing to be freed and help reduce subsidies, while improving energy security, according to Prayas Energy Group. The Pune-based non-governmental group says, however, that before freeing prices it is necessary to create a competitive shippers market, unbundle operations and set up a nationwide gas grid.
Gas supply in India is dominated by the Oil and Natural Gas Corporation (ONGC), Reliance Industries Limited (RIL) and the Gas Authority of India (GAIL). These companies are involved in production, transmission and distribution activities. There is no independent gas marketer in India and a concentrated and integrated gas market is not conducive to freezing gas prices.
Prayas has listed various areas that require change for the improvement of the gas sector.
It says that the gas market in India is not very competitive and is characterised by a few players and significant vertical integration. Therefore, there is a need to develop a competitive market for shippers (or marketers/aggregators). This should be accompanied by ensuring that gas pipeline capacities are freely open to access to all shippers.
Prayas says that the development of a nationwide gas pipeline grid and distribution infrastructure must be expedited to create a nationwide gas market. 'Unbundling', or vertical disintegration, must be implemented effectively in the gas market to prevent transporters or producers dominating the market.
Once such a competitive gas market, with associated infrastructure, is in place (in say five years), gas prices should be completely market determined. Gas should not be allocated at controlled prices to any new gas-based power plant, while existing gas-based power plants can be allocated gas at controlled prices, but for only (say) 40% PLF, so that they can function not as base-load plants but as intermediate load plants. This may require addressing some issues with respect to existing power purchase contracts.
If the option of establishing fertiliser plants outside is feasible, no new gas-based fertiliser plants should be allowed in India as long as the fertiliser imports do not pose a food security threat, or imported fertilisers contribute, say 20%, of total consumption.
Limited quantities of gas at controlled prices (say, 25%-30% PLF) may be allocated to combined heat and power (CHP) applicants in commercial buildings with connected load greater than, say 5MW, so that they can use efficient CHP technology. Even 5 mmscmd allocation for this can help reduce pressure on urban power distribution, particularly at peak hours. This decision can be reviewed when a competitive gas market is established.
Prayas believes that piped gas should replace LPG in urban India. The government should divert subsidised LPG (not used by urban households who shift to piped gas) to rural households, thus significantly improving public health and quality of life
Although Prayas recommends using coal for base-load power generation, it goes without saying that this should not be at the cost of the local environment and livelihood, and appropriate safeguards and compensation mechanisms must be devised to address this.
The organisation believes that these steps would result in gas replacing oil as a fuel, which will enhance energy security and increase government revenues. The government can use such increased revenues (and reduce subsidies) to subsidise rural LPG, some fertiliser imports and power generation (if required).
On a consolidated basis, JSW Energy net profit fell to Rs136.31 crore from Rs298.64 crore in the year-ago quarter
JSW Energy Ltd standalone net profit for the quarter ended 30 June 2011 declined to Rs190.26 crore from Rs327.20 crore in the corresponding quarter last year. Total revenue increased to Rs1,198.85 crore from Rs922.18 crore in the corresponding quarter of the preceding year.
On a consolidated basis, its net profit fell to Rs136.31 crore from Rs298.64 crore in the year-ago quarter. Total revenue rose to Rs1,294.48 crore from Rs962.87 crore in Q1FY11.
On Thursday, JSW Energy ended 6.64% down at Rs71 on the Bombay Stock Exchange, while the benchmark Sensex declined 0.36% to 18,436.19.