Chief statistician Pronab Sen has said that with overall inflation hovering over 10% and food inflation at 16.9% for the week ended 12th June, the finance ministry and the RBI are going to take strong measures to ease pressure on price
The fuel price hike will further stoke inflation and prompt the government and the Reserve Bank of India (RBI) to take strong measures to ease pressure on prices soon, said the country's chief statistician Pronab Sen, reports PTI.
"You (are) already in inflationary process. The non-food inflation is accelerating. In that situation, this (fuel price hike) can actually trigger off stronger inflation process," he told reporters on the sidelines of a function to mark the Statistics Day.
The government, last Friday, increased the prices of petrol by Rs3.73, diesel by Rs2 a litre and cooking gas by Rs35 a cylinder.
While, overall inflation is hovering over 10%, food inflation was 16.9% for the week ended 12th June.
Noting that neither the finance ministry nor the RBI has taken any strong anti-inflationary measure, Mr Sen said, "sooner or later they are going to come."
On the possibility of RBI taking steps to tighten monetary supply before its scheduled policy review on 27th July, Mr Sen said, "that is up to the RBI."
Mr Sen, however, pointed out that the need for a huge sum of money by telcos for mobile spectrum has sucked out liquidity to a large extent from the system.
"Spectrum sale ... (has) sucked out huge liquidity, equivalent to 50 basis points increase in CRR (Cash Reserve Ratio)," he added.
The CRR is the portion of deposits that banks are required to keep with the RBI.
Elaborating on the impact of the hike in fuel prices, Mr Sen said that the "increase generally tends to have a depressing effect on the economy. It has a very low elasticity of demand."
Moreover, he added, "when fuel price is increased, it generally pulls resources from other forms of expenditure.
So it normally (has) a depressing impact (the on economy).”
Of the 70 blocks offered in NELP-VIII, only 36 attracted bids from interested companies. ONGC and its partners won 17 areas out of their bidding for a maximum of 25 blocks
State-owned Oil and Natural Gas Corporation (ONGC) and its partners will sign contracts on Wednesday for half of the 34 oil and gas blocks awarded in the latest round of auction under the New Exploration Licensing Policy (NELP), reports PTI.
Production Sharing Contracts (PSCs) for 34 out of the 36 exploration areas that were bid for in the eighth edition of NELP will be signed tomorrow, official sources said.
Of the 70 blocks offered in NELP-VIII, only 36 attracted bids from interested companies. ONGC and its partners won 17 areas out of their bidding for a maximum of 25 blocks.
Among the 24 deep water blocks that the government had put on offer, only eight received bids, all of which were single bids. ONGC and partners bagged seven, while Cairn Energy Plc of UK was the winner of the other such block, they said.
Of the 28 shallow water blocks on offer, 13 received bids. BHP Billiton Petroleum won three while ONGC got five of these as lead partner and one where Oil India Ltd (OIL) was the operator. Cairn Energy got a KG basin offshore block.
As regards 18 onland blocks, bids were received for 15, four of which went to ONGC. Other winners include Jubilant, Oil India, NTPC and Esveegee Steel.
Sources said the Cabinet Committee on Economic Affairs (CCEA) had in March rejected Deep Energy's offer for two onland blocks in view of "very low percentage share of profit to the government."
ONGC won seven deep-sea blocks—five as the sole operator, one as a joint operator with OIL and one with the BG Group of UK as the operator.
Its other partners in deep-water blocks included Gujarat State Petroleum Corporation (GSPC), GAIL India, NTPC and Andhra Pradesh Gas Infrastructure Corp. Shallow water blocks had Indian Oil Corp and Adani Welspun Exploration Ltd as additional partners.
In all, ONGC won 17 blocks—in 14 as operator and three as non-operator, they said. In the previous seven rounds too, ONGC had won almost half of the 203 blocks awarded.
Out of 70 oil and gas blocks and 10 CBM blocks offered, bids were received for only 44 areas.
Sources said PSC signing for CBM blocks would be taken up later as the CCEA approved award only this month.
However, analysts feel the new requirements will not have much implications as the securities lending market is not very mature in India
Market regulator Securities and Exchange Board of India (SEBI) today relaxed the reporting requirement on lending of securities by foreign institutional investors (FIIs) for the purpose of short selling, reports PTI.
FIIs now have to disclose the information on a weekly basis instead of daily.
However, FIIs issuing participatory notes (PNs) will have to immediately report their short position.
PNs are instruments through which unregistered entities in India invest in stock markets while short-selling means selling of borrowed shares at high prices with the intention of repurchasing them in the future when the prices fall.
"It has been decided to modify the periodicity of these reports from daily submissions to weekly submissions... The FIIs shall now be required to submit the reports every Friday," SEBI said in a circular.
The circular becomes effective from 2nd July.
However, analysts feel the new requirements will not have much implications as the securities lending market is not very mature in India. Securities lending means a brokerage lending securities owned by its clients to short-sellers.
As per the data available on the National Stock Exchange (NSE), daily data on the Securities Lending and Borrowing (SLB) segment shows little action.
"It really does not make any difference as to whether the data is submitted on a daily, weekly or quarterly basis as hardly any trade is executed in SLB segment in India," SMC Capitals equity head Jagannadham Thunuguntla said.
However, in other countries, such as the US, where the securities lending is a big market, the order would have made a difference, he said.
The market regulator said that public dissemination of the disclosure by FIIs will be made twice in a week—on Tuesday and Friday.