Mumbai: Reserve Bank of India (RBI) deputy governor, KC Chakrabarty today said that inflation is a difficult situation but "manageable".
"Inflation-wise, it is a difficult situation, but then manageable," Mr Chakrabarty told reporters at a banking event here.
Earlier this week, RBI governor D Subbarao had said that the monetary policy management has become difficult because of a surging inflation and the demand for supporting growth.
The central bank is set to announce its monetary policy on 25th January and is expected to hike the rates to arrest high inflation.
New Delhi: Worried over rising food inflation, finance minister Pranab Mukherjee today asked the states to remove local levies like octroi and mandi tax to bridge the gap between farm gate and retail prices, reports PTI.
"I would urge you to review all local levies like mandi tax and octroi duty which add to prices of food articles and impede smooth movement of essential commodities," Mr Mukherjee said in his address to state finance ministers during pre-budget deliberations here.
Asking state governments to play their part in controlling inflation, he said, "There is a need for you to urgently look into supply management of items that are driving the current round of food inflation, in particular local factors that are widening the gap between wholesale and retail prices."
Bottlenecks in supply chain have to be removed. States have to take steps to ensure agriculture grows and create efficient distribution and marketing infrastructure, he said.
There is also a need to cut down on the wastage of foodgrains, he added.
Indeed, Mr Mukherjee said, "There is a strong case to review and reform the Agriculture Produce and Marketing Act (APMC) in states where it has not been addressed so far."
The government regulated markets are not only imposing taxes and facilitating large commission and fees for the middleman, but also preventing retailers to integrate their enterprise directly with the farmers, he said.
This leaves no incentive for the farmers to upgrade and inhibits private investment in the agriculture sector. Farmers and consumer both lose in the process, he added.
Talking about efforts taken by the central government, he said, it has taken measures to facilitate imports and, when required restrict exports to ensure supply of essential commodities.
During the last week of December, food inflation touched as high as 18.3% mainly driven by primary articles like vegetables.
Food inflation has remained high and volatile due to significant increase in the prices of few primary items like fruit and vegetables, milk, meat, poultry, eggs and fish even as the prices of cereals and pulses declined sharply in the current year, Mr Mukherjee said.
He also said that there are some weather induced supply constraints on some of the items currently exhibiting high inflation, as a large part of price rise is due to widening gap between the wholesale and retail prices. The growing demand for these products is due to rising income level, he said.
This new policy is not quite different from the old schemes we saw before 1st September
ULIPs for children have long played on the anxiety of parents to ensure financial security for their kids in their absence. Now, Aegon Religare Life Insurance has launched 'Rising Star Plan'.
Like most other child plans, it offers typical features including premium waiver and income benefit. In the premium-waiver rider, the company continues to pay the premium in the event of the parent's demise. Income benefit pays an amount equal to the annualised premium to the beneficiary, at the start of every policy year following the date of death, till the end of the policy term.
But this comes at a cost and increases the mortality charges in the plan which is ultimately paid by the policyholder. The brochure does not specify the mortality charges for different ages, though it is a very important aspect especially for child ULIPs. Be sure to understand its impact, as the higher mortality charges will reduce the funds that get into investments.
Child ULIPs are not necessarily the best way to secure your child's future. The charges in the plan are in line with other new ULIPs. The new ULIP charges are equal or more than that of the old ULIPs over a period and hence there is no real reduction of charges. Which is why a term insurance cover coupled with SIPs in a diversified equity mutual fund is likely to do the job better.
One of the investment options is called 'Invest Protect', in which premiums are invested heavily in equities in the initial years of the policy and partially switched to debt funds systematically in the last three years of the policy. There is no true 'investment protection' possible with this strategy.
Premium allocation charge: This is a percentage of the premium appropriated towards charges from the premium received. Year 1: 4.40%, Year 2-5: 3%, Year 6-10: 2% Year 11 onwards: 1%. The top-up premium allocation charge is 3%.
Policy administration charge: At the start of every policy month, from the first policy year, Rs60 will be deducted monthly through cancellation of units. This charge escalates at 3% per annum at the start of every policy year, from the second policy year. This formula remains fixed throughout the policy term.
Minimum annual premium: Rs20,000 per annum in annual mode, Rs30,000 per annum for other modes.
Policy term: 25 years minus the age of the child at entry.
Premium pay term: Equal to the policy term.
Minimum sum assured: (for age less than 45 years) is higher of 10 times of regular annualised premium or (0.5 x policy term x annualised premium); (for age greater than or equal to 45 years) higher of seven times of regular annualised premium or (0.25 x policy term x annualised premium).
Maximum sum assured: 30 times regular annualised premium.
Entry Age: Parent (life assured), minimum - 18 years, maximum - 60 years.
Child (nominee), minimum one day, maximum - 15 years.
Maturity age: (maximum) 75 years.
Premium payment frequency: Yearly, half-yearly, monthly.