Tag: CPI

Govt aims to adopt new base year for IIP, CPI by 2026-27

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government is aiming to adopt a revised base year for both the Consumer Price Index (CPI) and the Index of Industrial Production (IIP) in two years, a senior government official said on condition of anonymity.

“The government will shift to the new base year for IIP and CPI in two years, by 2026-27. This has been delayed due to the pandemic and the delayed consumer expenditure survey,” the official told Moneycontrol.

The Advisory Committee on National Accounts (ACNAS), which will deliberate upon the methodology for the base year change, will soon be reconstituted.

Currently both the CPI and IIP use 2011-12 as the base year.

The consumer expenditure survey was delayed due to the pandemic, and its initial findings were released in February 2024.

Why update the base year?

Comparison over time: it allows for meaningful comparisons of price levels, inflation rates, and industrial output over different periods. The base year serves as a reference point against which changes in subsequent years are measured.

Also Read: India must increase share in global manufacturing, says FM Nirmala Sitharaman at CII event

Policy formulation: governments, central banks, and policymakers use data to formulate and adjust monetary and fiscal policies, industrial policies, investment strategies, and economic development plans based on these indices. By understanding how prices are changing relative to the base year, policymakers can make informed decisions to stabilise the economy, control inflation, and ensure economic growth.

Indexation: many financial contracts, wages, pensions, and social benefits are indexed to inflation using CPI data. The choice of base year directly affects the calculation of these index-linked payments and adjustments. Therefore, updating the base year ensures that indexation remains relevant and accurate over time.

Resource allocation: Businesses, investors, and consumers use CPI data to make decisions about resource allocation, investment strategies, pricing, and consumption patterns. An up-to-date base year provides more accurate information for these decisions, leading to more efficient resource allocation in the economy.

International comparability: Updating the base year ensures that CPI data remains comparable with international standards and practices. This comparability is essential for assessing a country’s economic performance relative to other nations, and for international trade and investment decisions.

Sectoral analysis: The IIP covers various sectors of industrial activity, including manufacturing, mining, and electricity generation. Updating the base year ensures that the weightage assigned to each sector reflects its current importance in the economy. This allows for more accurate sectoral analysis and identification of emerging trends and challenges.

Also Read: India’s spike in trade with Russia not a ‘temporary phenomenon’, Foreign Minister S. Jaishankar says

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CPI announces candidates for 11 assembly segments, 1 LS seat in Odisha

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The CPI on Monday nominated Ramesh Chandra Sethi for the Jagatsinghpur Lok Sabha constituency and announced candidates for 11 assembly segments in Odisha.

Trade union leader Gurunath Pradhan has been fielded from the Chhatrapur assembly segment in Ganjam district from where CPI candidates have won eight times since 1951, party’s state general secretary Abhay Sahu said at a press conference here. Rajendra Nayak will try his luck from Sundargarh on a CPI ticket, while Abhijit Sahu will contest the Balikuda-Ersaa assembly segment.

The party reposed faith in Ramesh Chandra Tripathy from Brajrajnagar, Jinmayee Sahani from Paradip and Prabin Das from Kabisuryanagar. The CPI fielded Ajay Patnaik from Nilagiri, Sankarsan Barik from Bhubaneswar North, Manoj Parida from Nimapara, Kumar Jani from Laxmipur and Pandav Bhoi from Kantabanji.

The CPI(M) had already named its state secretary Suresh Panigrahi as the party candidate from the Bhubaneswar Lok Sabha seat. The Lok Sabha and assembly elections will be held simultaneously in Odisha between May 13 and June 1.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ed Yardeni sees potential for a 10% S&P 500 correction from March peak

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ed Yardeni of Yardeni Research sees the possibility of a full 10% correction in the S&P 500 from its March 28 peak, noting that the index has already shed around 5.5%.

In an interaction with CNBC-TV18, Yardeni said, “I think that we could go lower. Just last week, we broke below the 50-day moving average. And the next stop might be around 4,800, where it might find support at the previous all-time record high made way back on January 3, 2022. And if that doesn’t hold, it’ll be more like 4,700, which is the 200-day moving average. And that would be a full 10% correction.”

He believes the market hasn’t completely discounted the fact that there will probably be no interest rate cuts by the US Federal Reserve this year.

Yardeni does not see the Fed cutting rates this year as it is currently worried about the higher-than-expected inflation shown by the Consumer Price Index (CPI) from January to March.

“They probably won’t do anything until after the election, which would put them at the November and December meetings, but the economy is going to continue to do well,” he said.

US inflation in March was higher than estimated, dashing hopes of a rate cut.

The consumer price index (CPI) rose by 3.5% compared to the same time last year and by 0.4% compared to the previous month.

Economists surveyed by Dow Jones expected it to rise by 0.3% from the previous month and by 3.4% from the same time last year.

Also Read | Dollar firms, yen skids as US Fed cut wagers crumble

The core CPI, excluding food and energy prices, also expanded by 0.4% over the previous month and 3.8% over last year, exceeding estimates.

Also Read | CLSA India expects first US Fed rate cut in November

For the entire interview, watch the accompanying video

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s retail inflation eases to 10-month low of 4.85% in March

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Retail inflation in India eased to a 10-month low of 4.85% in March 2024 on an annual basis, according to data released by the Ministry of Statistics & Programme Implementation on Friday (April 12).

According to the CNBC-TV18 Poll of economists, the March 2024 CPI was pegged at 4.85%. Inflation based on the Consumer Price Index (CPI) was at 5.09% in February 2023 and 5.66% in March 2023.

Previously, CPI-based inflation was the lowest at 4.87 per cent in October 2023. The inflation in the food basket was at 8.52% in March, down from 8.66% in February.

Also Read: India’s forex reserves surge to record high of $648.562 billion

Aditi Nayar, Chief Economist, Head Research and Outreach, ICRA Ltd, said, “The CPI inflation moderated to 4.85% in March 2024, but exceeded our forecast of 4.7%, with food inflation softening only marginally as compared to the previous month and core inflation steady at 3.5%.

ICRA estimates the food & beverages inflation to remain above the 7.0% mark in April 2024. An intensification of the impending heatwave may worsen the seasonal uptick in prices of perishables, heightening the criticality of a favourable monsoon in 2024 to keep food inflation in check and inflationary expectations well-anchored.”

The Reserve Bank of India (RBI) has been tasked by the government to ensure retail inflation remains at 4% with a margin of 2% on either side. The CPI data is mainly factored in by the RBI while making its bi-monthly monetary policy.
The RBI projected inflation at 4.9% in the April-June quarter and at 3.8% for the September quarter.

Also Read: Asian Development Bank raises India’s GDP growth forecast to 7% for FY25

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Lok Sabha elections 2024: Inner Manipur to Arunachal West, key seats in North-East India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India will go to the 2024 Lok Sabha polls across all 543 parliamentary constituencies in seven phases from April 19 to June 1. The counting of votes will take place on June 4. The Northeastern belt of India has seen the dominance of regional parties in the past general elections. For the Lok Sabha elections 2024, in the northeast, the polling will be held on April 19, 26, and May 7 in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim.

Among them, Assam comprises the maximum number of parliamentary constituencies (14). While Manipur, Meghalaya, Arunachal Pradesh and Tripura have two Lok Sabha seats each, the remaining states — Sikkim, Nagaland and Mizoram — have been allocated one seat each in the Lower House of the Parliament.

Here’s a look at some of the key seats in the Northeast for the 2024 Lok Sabha elections:

1. Arunachal West

Union Minister and BJP leader Kiren Rijiju is seeking a third consecutive term from this seat in the 2024 polls. He first won from this constituency in the 2004  elections but lost to Congress candidate Takam Sanjoy in the 2009 polls.

Rijiju has been fielded by the BJP from Arunachal West again. He is pitted against former Chief Minister and state Congress president Nabam Tuki. Rijiju defeated Tuki in the 2019 polls by over 1.74 lakh votes.

2. Inner Manipur

Once a Congress stronghold, this seat was wrested by BJP’s Dr RK Ranjan Singh in the last elections when he defeated Oinam Nabakishore Singh, who represented the grand old party, by over 17,000 votes.

In 2024, the BJP has fielded Thounaojam Basanta Kumar Singh from Inner Manipur. He is the state Education and Law Minister. He is contesting against Congress’ debutant Dr Angomcha Bimol Akoijam, who is a teacher at the Jawaharlal Nehru University (JNU) in Delhi.

3. Shillong

Since 2009, this Lok Sabha constituency has been held by Congress leader Vincent Pala, who is now seeking a fourth consecutive term from here. In 2019, Pala defeated Jemino Mawthoh of UDP by more than 1.5 lakh votes. This time, he is up against UDP’s Robertjune Kharjahrin.

4. Mizoram

The lone Lok Sabha seat in Mizoram is currently held by C Lalrosanga of the Mizo National Front (MNF). Reserved for the Scheduled Tribes, this constituency is witnessing a multi-corner contest between the Zoram People’s Movement (ZPM), MNF, the BJP and Congress in the 2024 Lok Sabha elections.

5. Nagaland

The only parliamentary constituency in Nagaland is represented by Nationalist Democratic Progressive Party (NDPP) leader Tokheho Yepthomi, who defeated Congress candidate KL Chishi by over 16,000 votes in 2019.

This time, NDPP has named Chumben Murry as its candidate. He is pitted against Congress’ S Supongmeren Jamir.

6. Tripura West

A bastion of the Communist Party of India (CPI), this seat was wrested by BJP’s Pratima Bhoumik in the 2019 polls. She won by a margin of over 3 lakh votes.

To secure a second consecutive win from here, the BJP has this time fielded former chief minister Biplab Kumar Deb. The Congress is represented by its state president Ashish Kumar Saha.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s retail inflation at 5.09% in February, remains within the RBI tolerance band for sixth straight month

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Indian government released the consumer price index data for the month of February on March 12. The consumer inflation stood at 5.09 according to the data published by the Ministry of Statistics and Programme Implementation.

The inflation level continues to remain within the Reserve Bank of India’s tolerance range of 2-6%. The CPI has remained within the RBI tolerance band for six months now.

The Consumer Price Index or CPI measures retail inflation by examining the changes in prices of most common consumer goods and services. CPI is calculated for a fixed list of items including food, housing, apparel, transportation, electronics, medical care, education, etc.

#BREAKING | February #CPI inflation at 5.09% vs CNBC-TV18 poll of 5.12%

Here’s more👇 pic.twitter.com/krIt2hKrsl

— CNBC-TV18 (@CNBCTV18Live) March 12, 2024

According to a poll by CNBC-TV18, CPI in February was projected at 5.12% against 5.1% in the preceding month, a three-month low. The retail inflation stood at a four-month high of 5.69% in December.

February’s core CPI came at 3.37%, the lowest since November 2019, against 3.6% in January. The CNBC-TV18 poll estimated the core inflation at 5.12%.

Akhil Mittal, Senior Fund Manager-Fixed Income of Tata Asset Management, said, “Headline inflation in February 2024 stands at 5.09%, slightly below market expectations of 5% and lower than January’s 5.10%. The major contributor was food inflation, registering at 8.66% against 8.3% in January. Core inflation remains below 3.4%, offering significant reassurance and potentially steering headline inflation closer to the RBI’s 4% target in the long run.

While the RBI has highlighted the risk of food inflation spilling over into broader inflation, we anticipate the regulator to maintain a cautious stance. However, the softening of core inflation should provide relief. We think RBI would rather continue with stability priority and continue maintaining the 4% inflation target as sacrosanct, and hence we do not see a premature easing from RBI.”

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

December consumer inflation data sparks talks of RBI policy shift; experts weigh in

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The consumer price index (CPI) data for December came in at a four-month high of 5.69%. However, it was below market estimates and lower than the Reserve Bank of India’s (RBI) forecast triggering discussions about potential changes in RBI’s stance on monetary policy.

Some market observers, including Citi India and ICICI Securities Primary Dealership, are speculating that the RBI might consider adjusting its stance as early as in February.

In a detailed discussion with CNBC-TV18, Samiran Chakraborty, Chief India Economist at Citi, shared insights, stating, “We think that for the January-March quarter, there is about a 60 bps of forecast revision possible by RBI from its current estimate of 5.2%; we are at 4.6%. So that is quite a substantial drop in inflation which might make the MPC think differently about their trajectory going forward.”

Based on a survey conducted by CNBC-TV18, the Consumer Price Index (CPI) for December was anticipated to be 5.9%, compared to the previous month’s figure of 5.55%. Retail inflation registered at 5.55% in November, showing an increase from 4.87% in the month prior.

Also Read | India’s retail inflation rises to 4-month high of 5.69%

Year-on-year, there was an increase in food inflation, while core inflation, which excludes volatile factors like food and energy, decreased to 3.77%. This decline was primarily driven by a seasonal contraction in the housing sector. Madhavi Arora from Emkay Global predicts that the downward trend in inflation will become more apparent in the fourth quarter, with an expected average of 5.1%. Additionally, she anticipates the core inflation to be below 3.75%.

Also Read | India’s retail inflation rises to 3-month high of 5.55%, industrial production at 16-month high of 11.7%

A Prasanna of ICICI Securities Primary Dealership also weighed in, highlighting, “Worries about food inflation which was there earlier and there are other indicators like rabi sowing, global food prices and crude prices also. So, broadly the outlook looks favourable, and we are entering seasonally a period where food inflation will come, and core inflation has moved below 4% and growth is entering a phase where it’s also slowing down.”

For the entire discussion, watch the accompanying video

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

A bond rally has taken the 10-year yield to near four-month lows: Key reasons and what it means

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian bonds have witnessed buying interest, thanks to several factors that have aligned favourably. The yield on the 10-year g-sec plunged to 7.146 on January 16, taking the benchmark bond to its lowest since September 21, 2023.

The fall in bond yields has many implications, not least that it could nudge the Reserve Bank of India’s (RBI) to cut interest rates sooner.

A fall in bond yields is a positive as yields move inversely to prices. Basically, if investors are buying a lot of bonds, the prices of bonds move up and the competition to buy leads investors to accept bonds at lower yields.

Key reasons for the bond rally

Below are some of the key reasons for the fall in yields.

1. The immediate trigger was the release of the December consumer price index (CPI) data, which came in at 5.69%, much lower than 6% plus number that economists were expecting. The latest print meant that the rise in consumer prices averaged 5.4%, well below the Reserve Bank’s 5.6% forecast. The RBI has a 2-6% comfort range for inflation.

2. The fall in Indian prices is not the only positive. Disinflation is a trend that is seen in the US as well, where producer prices fell 0.1% in December, according to data released two days ago, compared to an expectation of a 0.1% rise.

3. Foreign portfolio investors have been buying Indian bonds in large quantities, with data showing purchases worth $108 million in a single day on January 12.

4. Another big positive was the announcement that states were going to borrow ₹19,000 crore from the market, lower than the expected nearly ₹22,000 crore. Lower borrowing indicates that states’ fiscal position is more comfortable than thought, leading investors to be more bullish on the country’s bonds.

Also Read | Worst is behind: Morgan Stanley’s Chetan Ahya says US bond yield has peaked, sees 4.2% on 10-year soon

What this means for markets, economy and consumer

The fall in inflation could prompt the Reserve Bank’s monetary policy committee (MPC) to cut interest rates sooner than expected.

The MPC has upped the benchmark repo rate six times since April 2022, from a low of 4% to 6.5% currently. It has also named its stance “as withdrawal of accommodation”, referring to the low rates that the economy enjoyed before the hike. Economists at Citi India and ICICI Securities Primary Dealership say this stance may now change to “neutral” as early as in February.

The RBI has held on the current repo rate of 6.5% for nearly a year, and a change to a neutral stance will precede any rate cut that can come through in future. A rate cut in the repo rate will have a cascading effect on bank loan rates, including consumer loans and will help cut EMIs.

The fall in bond prices also mean lower borrowing costs for the government, as well as for corporates as other bonds in India are priced relative to the benchmark government bond.

Lower borrowing costs lead to better earnings for companies, which could then benefit the stock market.

For more, watch the accompanying video

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s retail inflation rises to 4-month high of 5.69%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Indian government released the consumer price index data for the month of December on January 12. The consumer inflation rose to a four-month high of 5.69% according to the data published by the Ministry of Statistics and Programme Implementation.

The inflation level continues to remain within the Reserve Bank of India’s tolerance range of 2-6%.

The Consumer Price Index or CPI measures retail inflation by examining the changes in prices of most common consumer goods and services. CPI is calculated for a fixed list of items including food, housing, apparel, electronics, and medical care.

According to a poll by CNBC-TV18, CPI in December was projected at 5.9% against 5.55% in the preceding month. The retail inflation stood at 5.55% in November against 4.87% in the preceding month.

Food inflation rose on a year-on-year basis. On the other hand, the core inflation eased to 3.77%, led by a seasonal sequential contraction in housing. According to Madhavi Arora of Emkay Global, the inflation downtrend will be more visible in the fourth quarter, averaging 5.1%, while core could be sub 3.75%.

“We see FY25E headline inflation at near 5.2%* (FY24E:5.37%) , while *core would average much lower — near 4%*, after ~4.42% in FY24E. That said, we don’t see any action by the RBI, and it is unlikely to precede the Fed in any policy reversal,” Arora said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US consumer inflation holds steady in September

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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US inflation was higher than forecast in September, raising the prospect of Federal Reserve entering rate hike cycle again.

The consumer price index (CPI) rose 3.7% on year, according to the Bureau of Labor Statistics (BLS), continuing with the pace of previous month. The number is slightly higher with economists’ expectations.

However, core inflation, which excludes volatile energy and food prices, remained steady at 0.3% month-on-month (MoM) meeting analysts’ estimates. Core inflation edged down from 4.3% to 4.1% on a year-on-year (YoY) basis.

Data released by Labor department showed US job growth surged in September with nonfarm payrolls increasing by 336,000 jobs last month.

Data for August reflected 227,000 employment additions, an increase of 40,000 from the previous estimate, and July’s gain increased from 157,000 to 236,000. The two months as a whole exceeded earlier estimates by 119,000.

Also Read:US jobs surge by 336,000 in September, unemployment holds at 3.8%

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow