oppn parties Inflation: No Sign Of Relief

News Snippets

  • The Indian envoy in Bangladesh was summoned by the country's government over the breach in the Bangladesh mission in Agartala
  • Bank account to soon have 4 nominees each
  • TMC and SP stayed away from the INDIA bloc protest over the Adani issue in the Lok Sabha
  • Delhi HC stops the police from arresting Nadeem Khan over a viral video which the police claimed promoted 'enmity'. Court says 'India's harmony not so fragile'
  • Trafiksol asked to refund IPO money by Sebi on account of alleged fraud
  • Re goes down to 84.76 against the USD but ends flat after RBI intervenes
  • Sin goods like tobacco, cigarettes and soft drinks likely to face 35% GST in the post-compensation cess era
  • Bank credit growth slows to 11% (20.6% last year) with retail oans also showing a slowdown
  • Stock markets continue their winning streak on Tuesday: Sensex jumps 597 points to 80845 and Nifty gains 181 points to 24457
  • Asian junior hockey: Defending champions India enter the finals by beating Malaysia 3-1, to play Pakistan for the title
  • Chess World title match: Ding Liren salvages a sraw in the 7th game which he almost lost
  • Experts speculate whether Ding Liren wants the world title match against D Gukesh to go into tie-break after he let off Gukesh easily in the 5th game
  • Tata Memorial Hospital and AIIMS have severely criticized former cricketer and Congress leader Navjot Singh Sidhu for claiming that his wife fought back cancer with home remedies like haldi, garlic and neem. The hospitals warned the public for not going for such unproven remedies and not delaying treatment as it could prove fatal
  • 3 persons died and scores of policemen wer injured when a survey of a mosque in Sambhal near Bareilly in UP turned violent
  • Bangladesh to review power pacts with Indian companies, including those of the Adani group
Devendra Fadnavis to be the next chief minister of Maharashtra after Eknath Shinde agrees to join the government as deputy CM
oppn parties
Inflation: No Sign Of Relief

By Ashwini Agarwal
First publised on 2022-01-14 06:08:17

Retail inflation in India, as measured by the consumer price index (CPI), was 5.6 percent in December 2021, the highest in six months. But as the wholesale price index had witnessed a record high of 14.2 per cent in November, this was bound to happen. Faced with rising input costs, manufacturers are passing on the burden to end consumers by raising product prices. Food inflation is breaking the back of the middle class consumers as prices of vegetables, cereals, edible oil, milk and bread have been upwardly revised many times in the last couple of months. For example, white bread was selling Rs 20 for a loaf of 400 gms in Kolkata a couple of months back. Now it is selling at Rs 28, after two price revisions of Rs 4 each. Similar increases have also been made to the price of milk. Prices of clothing, footwear and household goods and services are also elevated.

With the Omicron-led third wave in India excepted to infect a huge number of people and continue till February, a whole new set of restrictions will further disrupt supply chains and fuel inflation. Although the MPC of RBI had said the there was inflationary pressure and it predicted inflation to touch 5.7% before a dip, this figure is too close to the upper threshold of the RBI's inflation targeting threshold. But inflation in these troubled times has become a worldwide phenomenon with the US grappling with record inflation. In India, private consumption remains muted and is not expected to rise substantially in the last quarter. If inflation were to rise further and cross the inflation targeting threshold it would prompt the RBI, as part of its fiscal policy, to squeeze out cash from the economy in order to control it. That will crush demand further and add to the woes of the economy.