Economy
RBI unlikely to cut rates in policy review on Tuesday: Experts
Ahead of RBI's monetary policy review on Tuesday, that will be the first by the newly-set up Monetary Policy Committee as well as by new Governor Urjit Patel, experts said it is unlikely to lower rates at its maiden review as it awaits more data on inflation.
 
"RBI may choose to wait for some more time before wielding the knife as inflationary trends may accelerate going forward," Indian rating agency Crisil said in a recent research note.
 
"Risks to inflation could emanate from high protein inflation, which has recorded double-digit growth for 14 consecutive months, services inflation, especially in rural areas, which is keeping core inflation high and sticky and surprise pick up in oil prices," it said.
 
American agency Fitch group company India Rating (Ind-Ra) said the sharp fall in retail inflation in August has accentuated the rate cut proposition in the next quarter itself, although it has made achievable the RBI's target of bringing retail price inflation down to 5 per cent by March 2017.
 
"But it may be early to rejoice given the baffling behaviour of retail inflation in the past. The cyclical components either aggravate or soften it as is evident from the movement in wholesale prices," Ind-Ra said. 
 
Wholesale food price inflation was 5.3 per cent during financial years 1996 to 2005 but increased to 9.2 per cent between financial years 2006 and 2016, it said.
 
"Clearly, the fight on the inflation front, particularly food inflation, is far from over," it added.
 
India's annual rate of inflation based on wholesale prices touched a two-year high in August at 3.74 per cent from 3.55 per cent in the month before, official data showed in September.
 
After rising for the first time in April following 17 straight months of contraction, the WPI has cumulatively risen by 4.45 per cent in the current fiscal up to August, as against 0.23 per cent for the corresponding period in 2015.
 
Food articles inflation in August increased by 8.23 per cent on year-on-year basis.
 
Earlier data on the consumer price index had showed that the annual retail inflation had eased by 100 basis points to 5.05 per cent in August.
 
Japanese brokerage Nomura expects a 25 basis points cut in repo, or the RBI's short term lending, rate in December, followed by an extended pause in 2017, given upside risks to inflation and sticky underlying factors.
 
The six-member MPC, headed by Patel, has three members nominated by the union government. If it is divided on its decision, the Governor can use his veto.
 
The MPC will meet on Monday and Tuesday for the review, the RBI said.
 
"The Monetary Policy Committee will meet on October 3 and 4, 2016, for the fourth bi-monthly monetary policy review for 2016-17," a statement here said. 
 
The government last week named three academics from the country's top institutions as its nominees. They are Chetan Ghate, Professor at the Indian Statistical Institute; Pami Dua, Director at Delhi School of Economics; and Ravindra Dholakia, Professor at the Indian Institute of Management, Ahmedabad.
 
The elevation of Patel has raised expectations among those who were critical of Rajan for not easing enough the monetary policy by cutting rates, though his moorings are as monetarist as his predecessor and he is considered to attach the same importance to inflation control.
 
His views on monetary policy were expressed at the time Rajan held rates in the February 2015 review after making an unexpected rate cut a month earlier -- the first in nearly two years -- as he elaborated on the "important backdrop" to the move, citing the trend of accommodative monetary policies being adopted by developed economies.
 
Under Rajan, RBI has reduced interest rate by 150 basis points since January 2015.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  

 

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Indian GDP to grow 7.9% this fiscal, agriculture at 4%: Crisil
With agriculture income growth "at an above-trend 4 per cent", India's real gross domestic product (GDP) is expected to grow this fiscal at 7.9 per cent, while annual retail inflation would remain contained at 5 per cent, Indian rating agency Crisil said on Sunday.
 
"Net-net, Crisil expects real GDP to grow 7.9 per cent this fiscal and agriculture GDP at an above-trend 4 per cent, while CPI inflation would remain contained at 5 per cent (10 basis points) up year-on-year," Crisil said in a research note here ahead of the Reserve Bank of India's RBI) maiden monteray review on Tuesday under a newly constituted Monetary Policy Committee
 
"As for the road ahead, copious reservoirs augur well for the rabi season that starts this month," it added. 
 
Noting that the distribution of monsoon this season has been the best in the last three years, with only a third of the districts seeing deficiency compared with almost half in fiscal 2015 and 46 per cent in 2014, Crisil said it expects nominal agricultural GDP to rise by Rs 1.49 trillion this fiscal, compared with Rs 978 billion in fiscal 2016. 
 
"So this time around, India'sconsumption story will have two legs instead of just the urban engine on which it has duked out the past two years," the report said.
 
"We see private consumption rising 90 basis points to 8.3 per cent this fiscal compared with 7.4 per cent in fiscal 2016," it said. 
 
"Crisil's state-wise Deficient Rainfall Impact Parameter, or DRIP, scores show all states barring Gujarat, Tamil Nadu and Odisha are above-trend," it added.
 
With ample rainfall this monsoon, the reservoir storage situation has improved. 
 
"Data till September 22 indicates reservoir storage was 17 per cent higher on-year. This should support agricultural production this season and the next," Crisil said.
 
The agency expects good agricultural output help ease pressure on food prices. 
 
"On the inflation front, we expect ample kharif production to boost supply and bring down food inflation, especially for pulses where inflation has remained in double digits for 14 months on the trot now," it said 
 
On the other hand, recent data shows global food prices are skyrocketing. Where inflation settles will depend on the interplay of good monsoons, tending to lower domestic food inflation, and rising global prices exerting an upward pressure," the report said. 
 
"Sugar and confectionary prices have risen 17.7 per cent on-year since the beginning of fiscal 2017 and this continues to be a stress point for food inflation in the months ahead," it added. 
 
India's annual rate of inflation based on wholesale prices touched a two-year high in August at 3.74 per cent from 3.55 per cent in the month before, official data showed in September.
 
After rising for the first time in April following 17 straight months of contraction, the WPI has cumulatively risen by 4.45 per cent in the current fiscal up to August, as against 0.23 per cent for the corresponding period in 2015.
 
Food articles inflation in August increased by 8.23 per cent on year-on-year basis.
 
Earlier data on the consumer price index had showed that the annual retail inflation had eased by 100 basis points to 5.05 per cent in August.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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Anti-Corruption Bureau: How it functions and how you can file bribe, corruption complaint
"The problem of corruption is overwhelming and it cannot be curbed with a one shot solution. Preventive measures and strengthening grievance redressal system will be effective in reducing corruption," says Dr Pradnya Saravade (IPS), the Additional Director General of Police for Administration in Maharashtra. She was speaking at the valedictory session under the "Police & You" series.
 
Moneylife Foundation with Police Reforms Watch and support from Saraswat Bank have had launched the 12-week program (every Wednesday) that aimed to spread knowledge about protecting yourself, your rights, the Indian Penal Code (IPC), cybercrime and economic offences. This was the last session in this series.
 

Dr Saravade, who during her long career had handled everything from traffic, to human trafficking and crime to cybercrime, says, "At CIDCO, we took some measures to reduce the rampant corruption. This includes making processes simple, fixing timelines for delivery, creating a vigilance website that was used to publish verified complaints by masking names of complainant and giving an exit option to the accused. We also focussed on supply side corruption by signing an integrity pact with Transparency International and made it a part of tenders and other processes. On demand side, we focussed on education and preventive measures."
 
The final session of the 12-week series on "The Police & You- Anti-Corruption Bureau (ACB): Learn how it functions" was conducted Dr Saravade and Mr Vilas Tupe, former Assistant Commissioner of Police (ACOP) and two-time President's police medal awardee. Both the speakers provided guidance on functioning of ACB and how citizens can report bribe demand and corruption cases to the Bureau.  
 
Mr Tupe, who spent almost 10 years in the ACB in different capacities, informed the audience about government departments in Maharashtra that have maximum numbers of corruption complaints. According to the data from the ACB, in the state, Revenues, Land Survey, Registration, Home (Police) and Rural Development department are the top five in terms of corruption.
 
"Corruption acts as a stumbling block in the path of development and affects the image of the country adversely. Corruption also arises due to unnecessary procedural formalities. A public servant is said to commit an offence of criminal misconduct in the discharge of his duty if he, by corrupt illegal means, or by otherwise abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage," he said.
 
The former ACP also explained various sections of the Prevention of Corruption (PC) Act, along with what is considered as offence and the penalties stated in the law for it.
 

He explicitly cited three things followed by the ACB, laying a trap and catching the accused red-handed while accepting the bribe, cases under the disproportionate assets and criminal misconduct by a public servant. "Laying a trap is the most effective way of catching an offender in the very act of commission of the crime. It no doubt is a dramatic and thrilling operation. Laying of trap therefore is one of the steps in investigation, and it has the approval of the courts as convictions in trap cases have been repeatedly confirmed up to the Supreme Court," Mr Tupe said, while citing several traps he laid to caught the accused. 
 
As per the law, criminal misconduct by a public servant, who habitually accepts gratification, dishonestly misappropriates public property, illegally obtains advantage of  his position, abuses his position as a public servant, or has property disproportionate to his known source of income is punishable with imprisonment up to 10 years.   
 
According to the former ACP, the offence of disproportionate assets is the nightmare of corrupt public servant whose love of filthy lucre deeply affects public. "Buildings and bridges that collapse, licences and permits, which are issued against the rules and often result in outflow of crores of rupees worth foreign exchange, purchases made at exorbitant costs, public sector undertakings that run at huge losses, contracts that are entered into at unduly high costs to the government, people dying due to adulteration of food and drugs, criminals who thrive unchecked; in all these the corrupt public servant has a large role to play," he added.
 
Section 13(1)(d) of PC Act deals with cased related with disproportionate assets, especially of public servants. Mr Tupe informed the audience that if the information about such assets is provided by any citizen, then the ACB give cash rewards to the informants.
 
Mr Tupe said, the common citizens, who face such instanced of demand of bribe from a public servant, need to come forward and report it to the ACB. The Bureau has a toll free telephone number 1800 22 2021, a WhatsApp number +91-9930997700 and email ID acbwebmail@mahapolice.gov.in , where citizens can report corruption cases, he added.
 
 
The event was held in the well-appointed auditorium of Saraswat Bank headquarters, Eknath Thakur Bhavan. Sucheta Dalal, Founder-Trustee of Moneylife Foundation made a special mention about the support received by Mr Thakur, Ms Kavita Bendre and the entire team, including security, housekeeping and reception of Saraswat Bank. She said, "Each one of us has been struck by the unfailing politeness, help and smiling faces of every one we have dealt with at Saraswat Bank starting from the security officers at the entrance."
 
Ms Dalal also mentioned help provided by Dr Saravade and Nandkumar Saravade (IPS), the Officer on Special Duty (OSD), who heads the new IT subsidiary of  Reserve Bank of India (RBI), in helping Moneylife Foundation to connect with the most upright, knowledgeable and well-regarded speakers from the police department. 

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COMMENTS

Abhijit Gosavi

8 months ago

The harassment of people by police has not abated. While the middle class (and the rich) folks may not think much of this, and may be accept it as a part of life, life becomes very difficult for the poor when these cops demand "haftas" from them. Unless and until the poor break away from the cycle of poverty, India is not likely to emerge as a strong economy. For years, there were no opportunities for the poor, but that has changed now. When the poor break out of that circle, a lot of good should follow, including strong metrics for business and GDP. Not saying police are perfect anywhere, but in developed nations, it is very rare to have to complain about a cop taking a bribe.

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