The rationalisation process in the pricing of petroleum products was still to be completed and this may have an impact on price levels in the coming months, the former RBI governor said. Factoring all these, the headline WPI inflation would remain high till December this year, he added
Kochi: Prime Minister's Economic Advisory Council chairman C Rangarajan on Tuesday said inflation, a matter of concern, may come down to 7% by March 2012, reports PTI.
There could be a significant easing of inflation in the last quarter of the fiscal and inflation may come down to 7% in March 2012, he said speaking at a function here.
Managing inflationary pressures was the biggest challenge, he added
The rationalisation process in the pricing of petroleum products was still to be completed and this may have an impact on price levels in the coming months, the former RBI governor said. Factoring all these, the headline WPI inflation would remain high till December this year, he added.
Headline inflation was 9.7% in September.
Food inflation rose to 12.21% for the week ended 22nd October.
The high inflation seen in the last two years is due to certain severe supply constraints, particularly of farm products, Mr Rangarajan said.
Noting that the industrial production has remained ‘subdued’ in the last few months, he said it was important for the monetary authorities to focus primarily on ‘taming’ inflation which has remained above 9% continuously for more than 10 months.
The regime of tightening can come to an end as inflation shows definite signs of decline, he said.
Pointing that there was need to remain committed to maintain inflation at low levels, he said high growth does not warrant a higher level of inflation.
“We must use all our policy instruments interventions in the foodgrain market, monetary policy and fiscal policy to bring down the current inflation and re-anchor inflationary expectations to the 5% comfort zone,” he said.
Mr Rangarajan said fiscal deficit is projected to fall to 4.6% in the current year. In 2010-11, the fiscal deficit came down to 4.7% of GDP.
“There are concerns whether we will achieve this. To gain credibility, it is important that fiscal deficit remains close to this level. Over the medium, we should aim to reach the target of 3% of GDP,” he said.
Some policy decisions will have to be made. Some of them may be controversial like the petrol price hike, he said.
Stressing the need to focus on agriculture, he said this was necessary not only for ensuring food security, but also in making a dent on poverty.
“Without a strong growth, we will not be able to provide employment to the growing number of young people who will join the labour force,” he said.
“In exchange rate policy, the rupee is a floating currency. It remains that the exchange rate is market determined and there is no intent to intervene with a particular exchange rate in mind,” RBI deputy governor Subir Gokarn said
Mumbai: The Reserve Bank of India (RBI) on Tuesday said it does not intend to interfere with the exchange rate and its monetary policy stance in the coming months would be determined by movement in inflation, reports PTI.
“In exchange rate policy, the rupee is a floating currency.
It remains that the exchange rate is market determined and there is no intent to intervene with a particular exchange rate in mind,” RBI deputy governor Subir Gokarn said here.
Mr Gokaran said the rupee, which is a partially convertible currency, has depreciated because of global conditions.
“...capital reallocation around the world has impacted many currencies, and we have stayed with our policy,” he said.
The rupee has depreciated against the US dollar by about 9% this year.
The rupee on Tuesday weakened by 37 paise to trade at Rs49.48 against the dollar as the US currency strengthened in the overseas markets.
On the possibility of halting the policy rate hike in its next policy review due on 16th December, he said it would depend upon inflation rate.
“We gave the guidance two weeks ago (in mid-year monetary policy)...Unless there is something dramatic that happens to change it, that guidance remains. So let us say, the guidance remains the same until further notice at this stage,” Mr Gokarn said.
RBI had since March 2010 raised key rates 13 times with a view to calm down the inflation which was still hovering near the double-digit mark.
The deputy governor further said that RBI’s projection on inflation has take into account international crude oil prices.
Since the time deregulation of petrol prices, “we assume that the pass through will be more or less full. The new element in this calculation (on inflation projection) is exchange rate movement”.
On the rate of price rise, he said the structural drivers of inflation are still strong and the RBI expects it to remain high through October and November.
Headline inflation stood at 9.72% in September.
The government is yet to announce the inflation data for October.
The investment by Mukesh Ambani-owned Infotel will enable Extramarks to pursue its aggressive growth plans in further developing services and deepening market penetration. The move that will help Reliance Industries strengthen its content pipeline as it looks to launch its broadband services soon
New Delhi: Mukesh Ambani-owned Infotel Broadband Services has acquired 38.5% stake in digital learning solutions firm Extramarks Education, a move that will help Reliance Industries (RIL) strengthen its content pipeline as it looks to launch its broadband services soon, reports PTI.
Infotel Broadband Services has acquired 38.5% stake in Extramarks Education and the investment has been made through an affiliate company Reliance Strategic Investments for an undisclosed amount.
According to sources, there will be no dilution of equity in Extramarks and RIL will infuse fresh capital.
The investment by Infotel will enable Extramarks to pursue its aggressive growth plans in further developing services and deepening market penetration.
The funds will be used for executing computer-aided learning projects and new technologies.
Extramarks’ digital distribution model provides students with education support and study help at affordable prices.
“The relationship with Reliance is the start of an exciting phase for Extramarks. Over the last two years, we have progressed on our journey of revolutionising the domestic education sector through technology enabled smart solutions and active participation in infrastructure development,” Extramarks chairman Atul Kulshreshta told PTI.
“The alliance with Reliance will accelerate the mass penetration of our offerings benefiting thousands of Indians who will have the advantage of quality education and study help at their doorstep,” he added.
Last year, Reliance Industries had acquired 95% stake in Infotel Broadband for Rs4,800 crore, making it a subsidiary of Reliance Industries.
Infotel Broadband is the only company which won broadband spectrum in all 22 circles in India, paying Rs12,848 crore for the spectrum.
Infotel is expected to launch its high-speed Internet services or broadband wireless access services (BWA) by the end of this year or early next year.
The acquisition of stake in Extramarks is expected to strengthen the Infotel’s content portfolio and help grow its business, especially in the education sector, which is focusing strongly on delivering content using information and communication technologies (ICT).