Union Budget: Inflation remains principle concern, to fall next year, says FM

Finance minister Pranab Mukherjee in his Budget speech said that inflation, especially high food prices, continue to worry and also called for improvement of distribution and marketing systems to bridge the gap between wholesale and retail prices

New Delhi: The government today said inflation continues to remain a concern, but exuded confidence that the Reserve Bank of India's (RBI) monetary policy will lead to moderation in inflation numbers in the coming months, reports PTI.

"But it (inflation) clearly remains a concern... I expect the policy taken by RBI to further moderate inflation in coming months... Average inflation to be lower next year," finance minister Pranab Mukherjee said while presenting the Budget for 2011-12.

He, however, said that inflation, especially high food prices, continue to worry and also called for improvement of distribution and marketing systems to bridge the gap between wholesale and retail prices.

"... Difference in wholesale and retail prices is not acceptable," Mr Mukherjee said.

Regarding food inflation, he said: "The total food inflation declined from 20.4% in February 2010, to less than half, at 9.3% in January, 2011."

Mr Mukherjee also put emphasis on increasing agricultural productivity to curb food inflation.

The government and the RBI have been under pressure due to inflationary pressure, particularly of food products.

The RBI has hiked short-term lending and borrowing rates six times during the current fiscal, including a hike of 25 basis points in its third quarterly review in January.

The government had earlier said it expects inflation to fall to around 7% by March-end and dip to around 5%-6% by the middle of the year.

However, the Economic Survey released last week said the high growth rate would also affect inflation, which would be 1.5% more than what it, would have been otherwise.

The survey had also said that high global commodity prices, particularly crude prices, are going to be affected due to the turmoil in the Middle East and this may affect the domestic trend also.

Headline inflation has been above 8% since February 2010. It was 8.23% in January this year.

Food inflation has been in double digits for the most of the current fiscal. According to the latest data, food inflation stood at 11.49% for the week ended 12th February.

Skyrocketing prices of vegetables found in every Indian's kitchen, particularly onions, even forced the government to go for an export ban for some period earlier in the fiscal.


Facebook lottery ‘winner’ tracks delivery man in fraud; police plead inability to take action

Delivery point man assures to hand over prize of £35,000 and an iPad after receiving customs duty payment. Police say without any proof of wrong-doing they cannot arrest or detain anyone

Over and again, police and bank authorities warn about 'Nigerian email scams', which have successfully duped many people. But even if the crooks are located, can they be legally prosecuted? Perhaps, not.

Bharat Wagh, an IIM alumnus, decided to go ahead and meet the crooks who emailed him about a prize he had won. Though the agent was located at the airport and the listed bank account holder was identified, they were allowed to go scot-free due to lack of evidence confirming possible fraud.

It started with one of those emails most of us receive and delete daily. Mr Wagh, apparently, had won a Facebook lottery amounting to £35,000 and an iPad, and he could receive the prize from a courier at Mumbai airport after paying the customs duty of Rs12,500 to Jerry White, the delivery person. Aware of the nature of the fraud, Mr Wagh decided to play along and bring the crooks to book.

Mr Wagh, accompanied by a policeman, went to meet Mr White. Mr White tried to convince them that he had the money and the iPad with him, and that he would deliver the goods at Mr Wagh's residence on receiving the customs duty payable. However, the policeman said that it was not possible to arrest the fraudster, or even detain him, because he had not done anything wrong until then.

Mr Wagh told Moneylife, "Unless someone like me has paid and proved that he has been duped and makes a complaint in writing to that effect, police cannot even investigate further. If the embassy of that country gets involved, the policeman will be in trouble himself."

However, Mr Wagh decided to follow the trail. In a text message that he received about the lottery, he was asked to deposit the money in an ICICI Bank account. Mr Wagh immediately contacted the bank authorities, who found that a large number of cash entries and electronic transfers were being done from that savings account. The account holder was contacted, and he admitted that he was a collection agent for an overseas company and that he got a 20 % commission on the transactions routed through him.

The account was frozen, as such transactions are not allowed in a savings account. But even the bank understand that things will continue once the account holder escapes. Mr Wagh said, "No action can be taken due to lack of confirmed fraud and complaint thereof. By the time the complaints start coming in he would have cleaned off his account. For all you know he may have a godfather in ICICI Bank too."

Madhur Kotharay, moderator of the IIM Alumni Investor Group, told Moneylife,  "RBI has been issuing guidelines on Nigerian Lottery frauds for the attention of the aam aadmi and how people are liable for criminal prosecution if they send money to these crooks. But even after all that Mr Wagh did, and despite locating the crooks, the law cannot do anything about it."



Adi Daruwalla

6 years ago

I dont think its only a Nigerian scam and goes beyond just one country. It is more of a network of people from African countries, Taiwan, and some other S E Asian countries as well and having some of the network based in United Kingdom Great Britain, that is behind the scam. Like accountants these group of people have very clevarly found the loopholes, like the one mentioned in the article and avoid getting caught or punished. Its a very smart ploy, there is an attempt to fraud but they/he have not so goes scott free.

kishore jagtiani

6 years ago

In India only the law abiding citizen gets into trouble. All crooks escape, becauise we have a lousy govt & a lousy system, which encourages wrong doing. India is a school for scoundrels. The whole world sees the massive scam,s that have & are taking place. Now like EGYPT we also should have zero tolerance & the people should come together & DO. Dont depend on the utter failure & totally corrupt govt. & all corrupt authorities, WHEN IN FACT THE WRONG DOER SHOULD BE CAUGHT FOR SURE

Union Budget: Economy to grow by 9% in 2011-12, says PM

As per the Central Statistical Organisation (CSO) data released today, the country's gross domestic product (GDP) grew at 8.2% in the third quarter. Overall, the economy is expected to expand by 8.6% in the current fiscal

New Delhi: India's economy will revert to the pre-crisis growth level of 9% in the next financial year, reports PTI.

"The Indian economy is expected to grow at 9% with outside band of +/- 0.25% in 2011-12," finance minister Pranab Mukherjee said while unveiling the Budget proposals for 2011-12.

He said the Indian economy has regained the pre-crisis growth momentum, but there is a need for adjustment in the composition in demand and supply side.

"We have to ensure along with private consumption, revival in private investment is sustained and matches pre-crisis growth rates at the earliest," Mr Mukherjee said.

Indian economy has already reverted to the high growth path recorded by 8.9% in the first half of the current fiscal.

As per the Central Statistical Organisation (CSO) data released today, the country's gross domestic product (GDP) grew at 8.2% in the third quarter (October-December).

In the current fiscal, the economy is expected to expand by 8.6%.

Even the pre-budget Economic Survey tabled in Parliament last week expected the real GDP to grow by 9% (+/-0.25%) in 2011-12.

For the current fiscal, the economy is expected to grow at 8.6%, it said.

The Indian economy had grown at a rate above 9% for three consecutive years, starting 2005-06 before the global financial meltdown brought it down to 6.8% in 2008-09.


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