PMEAC advises RBI to look at manufactured goods inflation before reducing rates

“The Reserve Bank, while framing its monetary policy, will have to take into account not only the decline in food inflation and the headline inflation, but also factor in the manufactured inflation,” chairman of the Prime Minister’s Economic Advisory Council, C Rangarajan said

New Delhi: Sounding a note of caution, the prime minister’s economic advisory panel today said the Reserve Bank of India (RBI) should take into account inflation of manufactured goods, which has shown only marginal decline, while deciding to lower policy rates at its monetary review next week, reports PTI.

“The Reserve Bank, while framing its monetary policy, will have to take into account not only the decline in food inflation and the headline inflation, but also factor in the manufactured inflation,” chairman of the Prime Minister’s Economic Advisory Council, C Rangarajan, told PTI.

His comments came after headline inflation, as measured by Wholesale Price Index (WPI), fell to a two-year low of 7.47% in December, from 9.11% in the previous month.

Mr Rangarajan said more steps are required to further moderate the inflation.

“The decline in headline inflation is mainly on account of the fall in food inflation. However, the decline is very small ... Further steps will be required (to control inflation),” he said, without giving more details.

As per the official data, prices of food items rose at a lower rate of 0.74% in December, compared to 8.54% expansion in the previous month.

However, inflationary pressure continued in manufactured items, which have a weight of around 65% in the WPI basket.

Prices of manufactured products went up by 7.41% year-on-year in December, as against 7.70% in the previous month.

Earlier in the day, finance minister Pranab Mukherjee also said that inflation of manufactured goods continued to be a matter of concern but hoped that overall inflation would come down to 6%-7% by March end.

“The manufactured inflation and inflation in the power group of items have also declined though only marginally, therefore, continued to be a cause of concern,” Mr Mukherjee said.

RBI is scheduled to announce its third quarterly economic policy review on 24 January.

Barring December 2011, headline inflation had been above the 8% mark since January 2010, while it was above 9% since December of the same year.

The apex bank has already hiked key policy rates 13 times since March 2010 to tame inflation. However, it went for a pause in rate hikes in November and hinted at loosening the tight monetary policy in future if inflation moderates.

India Inc has said the string of rate hikes, which have raised the cost of borrowing, has acted as a dampener to fresh investment and hindered growth.

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No plan to decontrol urea price or hike rate by 40%: Fertiliser ministry

“As of now, the fertiliser ministry is not working on decontrolling the urea sector and there is no such proposal to increase urea prices sharply by 40%,” fertiliser secretary Ajay Bhattacharya clarified

New Delhi: The fertiliser ministry today rejected reports that it plans to decontrol the urea sector and effect a steep 40% hike in retail prices of the product over the prevailing rate of Rs5,310 per tonne, reports PTI.

Urea is the only fertiliser product that remains under full price control of the government. The government had partially freed phosphatic and potassium fertiliser prices last fiscal by announcing the Nutrient-Based Subsidy (NBS) Policy.

“As of now, the fertiliser ministry is not working on decontrolling the urea sector and there is no such proposal to increase urea prices sharply by 40%,” fertiliser secretary Ajay Bhattacharya told PTI.

His statement came in response to media reports that the government is mulling an increase in retail prices of urea by as much as 40%.

At present, the fertiliser ministry is seeking inter-ministerial comments on the draft NBS policy prepared by the Committee of Secretaries (CoS), which suggested partial freeing of the retail price of urea.

Mr Bhattacharya said, “Our minister has gone on record against any decontrol of the urea sector.”

“There are various views from different ministries on the proposed NBS policy in urea, but the final decision will be taken at the Cabinet level,” he noted.

According to sources, inter-ministerial differences persist over decontrol of the urea sector, with strong opposition to the move from the ministries of agriculture and fertiliser.

Last year, minister of state for fertiliser Srikant Jena had said: “The government is apprehensive about the NBS policy on urea. Parliament members, people and farmers are complaining about rising prices of phosphatic and potassium fertilisers (decontrolled fertilisers).”

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Paid News: How corruption in the Indian media undermines democracy

Sections of the media in India have willy-nilly become participants and players in practices that contribute to the growing use of money power in politics, which undermines democratic processes and norms— while hypocritically pretending to occupy a high moral ground, says the report released by Press Council of India

The Press Council of India’s once suppressed report on paid news, which indicted many publishers and broadcasters of taking money for reporting on state assembly elections in 2004 and 2009; praising one candidate while maligning others; which had a significant effect on the voting results is finally out.

The recommendation of the Press Council report were withheld from the public until an right to information (RTI) application from journalist Manu Moudgil forced to Press Council to come out with all the relevant details by 10 October 2011 after an order from the Chief Information Commissioner (CIC).

The report says, "It is widely believed that many media companies, irrespective of the volume of their businesses and their profitability, were 'selling' news space after arriving at an 'understanding' with politicians and representatives of corporate entities that were advertisers. Space in publications and airtime were occupied by advertisements that were disguised as 'news'."

After the ‘paid news' scandal surfaced, the Press Council, on 3 June 2009, under Justice GN Ray set up a subcommittee to inquire into the racket. The committee comprising Paranjoy Guha Thakurta, senior journalist, and Sreenivas Reddy, produced an explosive 71-page report which clearly mentioned the names (and details) of the personalities who were involved in this racket.

Here are the reports, main report of the Press Council…

 
 And report of the sub-committee…
 

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COMMENTS

P M Ravindran

5 years ago

It would be kidding to believe that paid news gains ground only during election times. It is a continuous activity and I have come across what I believe to be paid editorials even! And one source of this malaise is the money spent by governments on advertisement. Give me one good reason why the the tax payers' money should be spent on advertisements? In a democratic society isn't it the responsibility of the media to be the bridge between the government and the public? Shouldn't media which neglects this responsibility be allowed to die its own natural death?

REPLY

Java

In Reply to P M Ravindran 5 years ago

Most of the vernacular papers survive on govt ads (narcissistic full page colour ads) and even TV channels thrive on these (e.g. Mayawati's interminably long paean to herself recently). Obviously there is an expectation of quid pro quo. So the politicians and the media keep helping each other, with the people's money. It is a brazen racket and there's no one to do anything about it.

P M Ravindran

In Reply to Java 5 years ago

It is not that there is no one to do anything about it. Just recollect the two cases: one, the apex court tells the govt that instead of letting food rot in godowns they should be distributed amoung the poor. To it, even our 'meek' PM retorted by saying that the court had no business to intervene in matters purely in the domain of the executive! But then look at what the court ordered when Maya's splurge of tax payers' money on her notorious statues was challenged in the court- they said it was approved by the govt! Suffice to say that every meaningful effort by any and every responsible citizen gets thwarted by the thugs, scoundrels and traitors in offices of authority.

vikas

5 years ago

After reading the full report I can only say that people who claim that they show mirror to society, should see the mirror themselves.

Alex

5 years ago

Good thing this doesn't happen in the states - oh wait..

Java

5 years ago

What more can one say - the sub committee's report has too many disgusting details about the prostitution of Indian journalism and hoodwinking of public by smug criminals. In the US radio jockeys got jail sentences for payola: promoting music records surreptitiously against illegal payments or gifts. Here these people are subverting an entire democracy and cheating the markets by getting paid for favourable reporting, thus betraying the trust of the unwary citizens and the trusting public.

The government and politicians will do nothing to stop them, because they are directly benefited by this arrangement that gives them favourable coverage on cash payment - which is specially useful at election time.
Journalists, at least most of them, won't do anything, because they know which side their bread is buttered.

Indian democracy is being publicly trampled upon and humiliated by this brazen misuse of money power and there is no one to do anything about it. What a shame!

REPLY

Prakash Bhate

In Reply to Java 5 years ago

It is high time FDI is allowed in the press. While it may not completely prevent the phenomenon of ‘paid news’, competing with new entrants will perhaps bring in some professionalism. However, just suggest this and see how the Indian press starts howling.

P M Ravindran

In Reply to Prakash Bhate 5 years ago

I am sorry the impression that competition from foreigners will bring relief to the ordinary citizens is misplaced. Whether it is Coca Cola, baby products or even white goods manufacturers they have all proved beyond doubt that they have different standards for different regions- the developed countries, middle east, africa and the worst exclusively for India where we have the most corrupt and most treacherous people in offices of governance!

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