Finance ministry Pranab Mukherjee, addressing a meeting of Indian and American corporate leaders, think-tank members and policymakers in Washington said, “We do not believe, one is to be dispensed for the other. Yes, we can have a moderate rate of inflation and at the same time, reasonable developed growth. The monetary and fiscal policy must move in tandem. In India, we are doing so”
Washington: Finance minister Pranab Mukherjee on Monday said inflation poses a major challenge to the Indian economy and projected that the rate of inflation is going to be more than 6.5% this year, reports PTI.
“There are problems (with the Indian economy) and one of the major problems is inflation,” Mr Mukherjee said, addressing a meeting of Indian and American corporate leaders, think-tank members and policymakers at a conference on the ‘US-India Economic and Financial Partnership’ jointly organised by the Confederation of Indian Industry (CII) and Brookings Institute, a Washington-based think-tank.
“Inflationary pressure is putting a serious constraint,” said the finance minister, who arrived in Washington on Monday leading a high-powered Indian delegation for the second India-US Economic and Financial Partnership discussions being held here.
“We do not believe, in theory, one is to be dispensed for the other. Yes, we can have a moderate rate of inflation and at the same time, reasonable developed growth. The monetary and fiscal policy must move in tandem. In India, we are doing so,” he said.
“Therefore, in the short term, I would like to emphasis that in India, the growth potential is there. The rate of saving and rate of investment is reasonably high. The various structural reforms which we have undertaken and which will come in course of time, that will ensure that investment-friendly environment which can attract investment from various parts of the world,” he said.
Referring to concerns expressed by various quarters about undesirable blips in economic data from time to time, Mr Mukherjee said, “Sometimes questions have been raised, particularly looking at a figure in a short campus of time.
(For example) Whether foreign institutional investment (FII) in the current financial year is slowing down. Every year, the first quarter FII investment slows down, particularly in equity. But in the later part of the year, it makes up. This is not in one year, but year after year. Therefore, we need not be unnecessarily overly worried.”
Inflation, Mr Mukherjee reiterated, is an important constraint to India’s economic growth, which the government has to tackle.
“To be very frank, what shall be acceptable and what can be a tolerable level of inflation is very difficult to define.
But in our economy, we feel that if we can keep the inflationary pressure within 5% to 6%, it could be ideal, but we can live with 6% to 6.5%,” he said.
“This year I do hope it will be a little more, not because of near supply constraints on the agricultural front, which was one of the major reasons for inflationary pressure of the previous and current year, which we have substantially addressed by taking appropriate measures,” he said.
“But international commodity prices, including food and fuel, is causing severe constraints,” he said.
“The food prices have started coming down. We have taken steps very recently. And have reduced subsidy burden by adjusting the price of oil and also providing relief to the consumers by doing away with central taxes and appealing to provincial governments to reduce their taxes on petroleum and petroleum products. I do have hope that it will have some impact. But this is going to be a major problem and it would have its impact on the overall growth scenario,” Mr Mukherjee said.
What was required was some extremely tastefully done advertising, as if the car was a classic wine or a master writer’s book. The promise of status is a given, the ad had to go many levels beyond that
Renault has come to India. And it's a bloody expensive car. I don't even want to know the price; I might end up in a cardiac ICU. But it's safe to assume the brand is meant only for the richie rich of the country. And amongst them, the very educated, world travelled, auto aware bada sahibs. A farmer from Sangli may have the money to buy a Renault, but surely it's not targeted at him, as the man may not be in the know of, or in a position to appreciate the brand's glorious heritage.
Keeping this context in mind, I watched Renault Fluence's advert with great expectation. That one will enjoy a really classy ad, an ad that will leave you craving for more. My theory was that since the buyer of this brand would be very aware of what Renault stands for and what it brings to the table, there would be no need to do the standard car advertising; that here was a chance to do really rich creative work. And I must say I am left disappointed and saddened, because the commercial is ordinary and run-of-the-mill stuff.
The television commercial opens with a young, hip couple leaving some kind of a la-di-da party. The host, a pompous middle-aged gent, walks them to their car. Along the way, the chap boasts of his many assets-his pricey paintings, sculptures, carpets, and his vintage cars. And each time he throws the age of the artifact at the couple. Finally, they reach the Renault Fluence. And the boaster is left stunned and tongue-tied. This time it's the turn of the young couple to puff their chests up, as they zip off in the gaadi.
Superb commercial, for Toyota Innova. Or Volkswagen Vento. Or Hyundai Verna. Or Maruti Baleno. Or any sedan/SUV for that matter. Where was the need to try soooo hard to convince the audience on the 'status' of owning a Renault? The target buyers already know it, else they would not be the consumers of the brand! In short, the advertiser is preaching to the converted. And in the process, has put out a very tired car ad, one that will only degrade the cult status of the car.
What was required was some extremely tastefully done advertising, as if the car was a classic wine or a master writer's book. The promise of status is a given, the ad had to go many levels beyond that.
A great opportunity lost. This sort of an ad might just appeal to the loaded Sangli farmer. Maybe he's the one Renault is targeting. Sad.
Policymakers opine that the oil duty cuts will have a ‘negative impact’ on fiscal deficit’
The local market is likely to open with marginal gains, tracking positive global cues. However, the expiry of the June futures and options contract might lead to some volatility.
The US market closed higher on Monday hopes that the Greek parliament will support the austerity plan, a condition needed to receive the next bailout package. Also, financial stocks settled higher as the Basel Committee on Banking Supervision announced capital rules that were less burdensome than expected. Riding on the optimism from Greece and overnight gains in the US markets, the Asian pack was mostly in the green in early trade on Tuesday. The SGX Nifty was up 21 points at 5,557.50 compared to its previous close of 5,536.50.
Adding to the surge on Friday, the market headed further northwards yesterday, after overcoming initial hiccups. The gains were largely attributed to the oil & gas sector after the government raised retail fuel prices after the market closed on Friday. The Nifty resumed trade at 5,441, down 30 points and the Sensex started the day 108 points lower at 18,133. At the day's lows, the Nifty dipped to 5,434 while the Sensex dropped back to its opening level.
Overcoming initial weakness, the market was pushed to a higher trajectory on support from the oil & gas sector. The market continued to be range-bound till the noon session. Support from key European indices, which pared initial losses, led the domestic benchmarks to their day's highs. At the intra-day highs, the Nifty was up 82 points at 5,553 and the Sensex climbed 253 points to 18,494.
Subsequently, the market came off the day's high, but closed trade with decent gains. The Nifty finished 55 points higher at 5,527 and the Sensex closed at 18,412, up 172 points. The Nifty closed in the positive for the fifty day in a row and the Sensex notched its third consecutive day of gains.
The market has been quick in correcting its recent downward move. The total loss on the Nifty of 391 points in 10 out of 13 trading sessions, starting 2nd June, has been covered up to the extent of 269 points in five trading days. We had mentioned in our closing report on Friday that the market may go up to 5,556. Today's intra-day high was around this level. We now expect the Nifty to move sideways, in the range of 5,450 and 5,650.
Markets in the US snapped their three-day losing streak to close higher overnight as hopes that the Greek parliament will support the five-year austerity plan, a condition needed to secure the next bailout package. The Basel Committee on Banking Supervision said on 25th June that banks deemed too big to fail must hold as much as 2.5 percentage points in additional capital as part of efforts to prevent another financial crisis. This is less than the 3% requirement that was originally thought of. Bank of America Corporation, US Bancorp, Huntington Bancshares Incorporated rose nearly 2.7% and JP Morgan Chase gained 1%.
In economic news, consumer spending was largely unchanged in May for the first time in almost a year, according to the Commerce Department.
The Dow surged 108.98 points (0.91%) to 12,043.56. The S&P 500 gained 11.65 points (0.92%) to 1,280.10 and the Nasdaq rose 35.39 points (1.33%) to 2,688.28.
Markets in Asia, with the exception of the Shanghai Composite, were trading with gains in early trade on optimism from the US and hopes that Greek government will be able to garner support for its austerity plan.
Meanwhile, Japanese retail sales rose for a second straight month in May, signalling that consumers are more willing to spend as sentiment gradually recovers from the devastating earthquake in March. Retail sales rose 2.4% in May from the 4.1% increase in April.
The Hang Seng gained 0.33%, the Jakarta Composite rose 0.40%, the KLSE Composite was up 0.14%, the Nikkei 225 surged 1.08%, the Straits Times added 0.10%, the Seoul Composite climbed 0.97% and the Taiwan Weighted was up 0.57%. On the other hand, the Shanghai Composite lost 0.29% in early trade.
Back home, Tata Motors on Monday said it will move the Supreme Court against distribution of land which the West Bengal government had taken back from the company through an Act passed in the Assembly. “As per the country’s legal procedures, the company will agitate the matter before the Supreme Court,” a late night statement by Tata Motors said.