However, economists opine that food inflation would continue to remain in double digits for sometime now as the impact of fuel price increase would be seen going ahead
Agriculture minister Sharad Pawar today said the decline in prices of most agricultural commodities in coming weeks will bring down the food inflation, which is 12.63% now, reports PTI.
"Prices of most agricultural commodities are coming down.
It is great relief to consumers. The trend of food inflation will continue to come down in the coming weeks," Pawar told reporters on the sidelines of a sugar conference in New Delhi.
Food inflation declined for the second consecutive week to stand at 12.63% for the week ended 26th June.
"Food inflation is coming down day by day," Pawar said.
However, economists believe that food inflation would continue to remain in double digits for sometime now as the impact of fuel price increase would be seen going ahead.
The government on 25th June raised the prices of petrol and diesel by up to Rs3.50 a litre, while that of liquefied petroleum gas (LPG) and kerosene were hiked by 35% and Rs3 a litre, respectively.
Finance minister Pranab Mukherjee had said earlier this week that the decision would push up overall inflation by less than a percentage point. The overall inflation, which includes food and fuel inflation, was 10.16% in May.
The higher indirect tax collection has been attributed to the partial withdrawal of the stimulus measures in the budget, besides economic recovery witnessed in the current fiscal
Indirect tax collection soared by a whopping 43% to Rs56,930 crore in the first quarter of the current fiscal on the back of an upswing in industrial activity, reports PTI.
Revenue from customs, excise and service tax, which make up the indirect taxes, during the April-June quarter of the current fiscal stood at Rs56,930.15 crore, up from Rs39,693.78 crore in the year-ago period, a finance ministry official told PTI.
Out of the total indirect tax collections, realisation from customs zoomed by 60% to Rs 28,135 crore and excise by 55% to Rs 19,536 crore. service tax collection, however, declined by 3% to Rs 9,258 crore during the reporting quarter.
The government has budgeted an overall tax mop-up of Rs7.46 lakh crore during this fiscal. While Rs3.16 lakh crore of this are expected to be realised from the indirect taxes front, Rs4.3 lakh are expected to be collected from direct taxes, which mainly consist of corporate tax and personal income tax.
Sources attributed the higher indirect tax collection to partial withdrawal of the stimulus measures in the budget, besides economic recovery witnessed in the current fiscal.
Rising prices of crude oil in the international market also contributed to higher realisation from customs.
Finance minister Pranab Mukherjee in the budget raised excise duty from 8% to 10% and also increased duties on crude oil and petroleum products. The minister, however, did not raise the service tax rate retaining it at 10%.
The overall economic growth in the current fiscal is estimated at 8.5%, up from 7.4% in the previous fiscal. As per the latest figures, industrial production in April, the first month of the fiscal, jumped to 17.6%.
Reflecting the overall economic buoyancy, direct tax collection, which includes corporate tax and personal income tax, rose by 15% to Rs 68,675 crore. Corporate tax collection soared by 21.65% to Rs43,439 crore during the first quarter.
While most retailers favour fortnightly revisions in retail rates to reflect changes in cost of crude oil, the nation's largest oil firm IOC is at variance, wanting rates not to be revised too often
State-owned oil firms may opt to revise petrol prices every fortnight to reflect changes in the global oil market in the free pricing regime that kicks in from next week, reports PTI.
Petrol prices were freed from government control last month resulting in a Rs3.50 per litre hike in rates in Delhi, but modalities of subsequent retail price adjustments were left to the industry to deliberate and decide.
Sources said Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) on Thursday began consultations on modalities like the frequency or interval at which prices will be revised and if the PSUs should have uniform rate that would change on same date.
Private firms Reliance Industries (RIL), Essar Oil and Royal Dutch/Shell too are being consulted in the exercise.
Sources said most retailers favour fortnightly revisions in retail rates to reflect changes in cost of raw material (crude oil), but the nation's largest oil firm IOC was at variance, wanting rates not to be revised too often.
Those in favour of a 15-day cycle for price adjustment argue that oil firms already have a mechanism of calculating the desired fuel prices on 1st and 16th of every month. Also, rates of aviation turbine fuel (ATF), which was freed from government control in 2002, change with cost every fortnight.
But IOC does not want frequent price changes, saying a fixed date for revision may lead to hoarding at pump end.
The BJP-led National Democratic Alliance (NDA) government had in 2002 decontrolled petrol and diesel prices and rates from 1 April, 2002, which were revised every fortnight for almost 21 months. The practice was stopped a few months before the May general elections in 2004, and controls were back when the when United Progressive Alliance (UPA) came to power.
Sources said modalities are likely to be finalised by next week and pump rates would be revised accordingly.
An Empowered Group of Ministers (EGoM) headed by finance minister Pranab Mukherjee had on 25th June decided to free petrol and diesel prices from government control. While petrol was being decontrolled with immediate effect, the implementation of the same in diesel was put on hold for the time being.
Freeing of petrol price resulted in a Rs3.50 per litre hike in petrol price while diesel rates were raised by an ad-hoc Rs2 per litre instead of Rs3.80 per litre increase required to align them with international market.
Also, domestic liquefied petroleum gas (LPG) prices were increased by Rs35 per 14.2 kg cylinder and kerosene rates hiked by Rs3 per litre to cut government's fuel subsidy.