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KEY HIGHLIGHTS of RAILWAY BUDGET by Mamta Banerjee

Key Highlights of the Indian Railway Budget

Indian Railway Minister Mamata Banerjee presented the second Railway Budget for the financial year 2011 in Parliament on 24th February, 2010. Banerjee promised to introduce a 10-year plan "Vision 2020" and also chalked out an ambitious plan with an aim to raise Rs 10,000-20,000 crore in FY11.

Key highlights:

- To come out with a 10-year plan 'Vision 2020'

- Limited funds available constraint for line addition

- See 890 million tonne freight loading during FY10

- To beat FY10 freight target by 8 million tonne

- FY10 revised estimate on gross earning at Rs 88,200 crore

- Rs 6,490 crore net revenue revised estimate for FY10

- Non-core business revenue seen at Rs 1,000 crore

- Impact of 6th Pay Commission at Rs 55,000 crore

- Plan to raise Rs 10,000-20,000 crore in FY11

- FY11 freight loading aim at 944 million tonne

- FY11 gross traffic receipts at Rs 94,800 crore

- FY11 plan outlay seen at Rs 41,426 crore

- FY11 working spend seen at Rs 87,100 crore

- See FY11 dividend liability at Rs 6,600 crore

- FY11 operating ratio seen at 93.2%

- FY11 new line allocation cost at Rs 4,400 crore

- FY11 gross budgetary support seen at Rs 15,800 crore

- To borrow Rs 9,120 crore this fiscal

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Union Budget 2010 by Finance Minister Pranab Mukherjee

Union Budget 2010:

Finance Minister Pranab Mukherjee is coming live on Lok Sabha TV and other news channels, presenting the union budget 2010.

The key highlights of the budget will be posted once the speech is completed.

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Wednesday, February 24, 2010

RAILWAY BUDGET 2010 by Mamta Banerjee

Indian Railway Budget 2010

The budget is expected to be a populist one as the passenger fares may remain untouched in this railway budget but we may expect a slight and selective increase in the freight rates. Foodgrains or the items pertaining to food inflation (whether directly/indirectly) may not see an increase in the freight rates because even a slight increase in these fares would strongly impact the inflation which has been a top concern for the Centre. Also the Railway Budget would focus more on to getting more traffic.

Well let anyone say anything but the final words would only come from Indian Railway minister, Kumari Mamta Banerjee's Railway Budget which is to be presented today 24th February, 2010. This is the second railway budget from Mamta Banerjee.

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Thursday, February 4, 2010

NTPC FPO subscribed 0.77 times, gets maximum bids at Rs 209

NTPC's follow-on pubic offering (FPO) was subscribed 0.77 times on its opening day on Wednesday, with most of the bids at Rs 209 a share.

The floor price had been fixed at Rs 201 a share. The stock, which had been falling steadily since mid-January and had lost 10 per cent until now, rose 1.82% on the BSE to close at Rs 209.80 on Wednesday.

The retail reservation was 35% or 7.86 crore shares and brokers said that getting this portion fully subscribed may not be easy for the company. The non-QIB segment (retail and HNI) had bid for only 32,760 shares, the reservation for High Networth Individuals and retail being 20.80 crore shares.

"This portion is really huge, close to Rs 1,500 crore, bigger than most of the IPOs which are hitting the market now. The issue's floor price is Rs 201 and even seeing the highest bid price, retail are not seeing much of an upside," said the head of research at a brokerage.

According to a merchant banking source, the 50% portion reserved for the Qualified Institutional Buyers (QIB) was fully subscribed. "Among the QIBs, SBI and LIC bid for shares worth Rs 4,760 crore", said the source.

The 41.2-crore share issue received bids for 31.9 crore shares, of which 21.83 crore shares were bid for at Rs 209. For retail and high net worth individuals the floor price had been fixed at Rs 201 while qualified institutional buyers (QIB) could bid any price above this level.

At the floor price, the issue received bids for 29.78 lakh shares while the maximum bid price was Rs 210, for which 24.14 lakh shares were placed.

The FPO will close on February 5. Through this divestment, the Government will offload five per cent of its stake in NTPC and its holding will come down to 84.5%.

REC follow-on offer

REC will be the next Government- owned entity to come out with an FPO. Its 17.1-crore share FPO will open on February 19 and will close on February 23. This will be followed by NMDC's FPO and Sutlej Jal Vidyut Nigam's IPO.

In the next fiscal, the Government is expected to divest its stake in PSUs such as Engineers India Ltd (IPO), Coal India (IPO), Power Grid (FPO) and SAIL (FPO).

Taken from

The Hindu Business Line

Source: Business Line
Courtesy moneycontrol.com

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Govt stake sales to cushion deficit: Fin Secy

India's fiscal deficit would be cushioned by better-than-anticipated proceeds from stake sales in state-run firms, Finance Secretary Ashok Chawla said on Wednesday.

Proceeds from sales in the year to end-March would exceed the budget estimate of Rs 1,120 crore (USD 240 million), Chawla told reporters.

The government has already raised USD 1.8 billion through stake sales in two energy firms in 2009, and is looking to raise a similar amount in stake sale in power producer NTPC this week.

Chawla said no decision had been made on the timing of the auction of 3G wireless spectrum, which was also seen helping limit the fiscal deficit, which is set to touch 6.8% of the GDP this year under the previous base-year.

Source: Reuters
Courtesy moneycontrol.com

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FY10 fiscal deficit may be lower than projected

The country’s fiscal deficit, the sum difference between revenues earned and money spent in a year, may be lower than what the government had originally estimated during last year’s budget. CNBC-TV18's Siddharth Zarabi reports.

In Budget 2009, Finance Minister Pranab Mukherjee had projected the deficit for fiscal year 2009-10 to stand at 6.8% of the nation’s gross domestic product (GDP).

However, the revised fiscal deficit for the year may be at around 6.1% to 6.3% of the GDP. The government is likely to project fiscal deficit for fiscal year 2010-11 at around 5.5%.

Among the factors that may have contributed to expected lowering of deficit is the government’s focus on disinvestment and an improvement in tax and non-tax revenue.

During the budget last year, the finance minister had estimated revenues coming from divestment — or government stake sales in public sector companies — at Rs 1,120 crore. However, divestment is now projected to have yielded about Rs 35,000–Rs 40,000 crore during the fiscal year.

The government has completed stake sales in NHPC and Oil India, which got listed on the stock markets this financial year, while more stake sales are expected to take place for companies like NMDC, NTPC and Satluj Jal Vidyut Nigam.

Source: CNBC-TV18
Courtesy moneycontrol.com

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Tuesday, January 26, 2010

61st Republic Day of India

The Republic Day of India marks the anniversary of the adoption of the Constitution of India and the transition of India from a British Dominion to a republic on January 26, 1950.

Although India obtained its independence on August 15, 1947, it did not yet have a permanent constitution; instead, its laws were based on the modified colonial Government of India Act 1935, and the country was a Dominion, with George VI as head of state and Earl Mountbatten as Governor General. On August 29, 1947, the Drafting Committee was appointed to draft a permanent constitution, with Bhimrao Ramji Ambedkar as chairman.
For more visit en.wikipedia.org

The 61st Republic Day Celebrations

Flag Hoisting Ceremony by Hon’ble President of India.

This will be followed by Republic Day Parade from Rajpath.

Saturday, January 23, 2010

Stronger rupee ahead may spur FII inflow: StanChart

Benign interest rates in developed countries and expectations of a strong rupee in the medium-term may continue to attract foreign investments into Indian debt, equity and real estate, a senior market official said.

The Federal Reserve is expected to hold interest rates this year as the US economy doesn't show definite signs of recovery, while rates in India are headed higher and the current account balance may turn positive, attracting investments from overseas.

"There is both interest rate differential as well as growth differential between the west and east," Ananth Narayan G, head of rates, foreign exchange and credit (South Asia) at Standard Chartered Bank told Reuters in an interview.

"So, people are borrowing cheap dollars with the anticipation dollar interest rates will not go up and using that to fund investments in the east, including India," he said.

Indian stock markets are driven largely by foreign investments, helping the benchmark index in 2009 record its biggest annual gain since 1991, while attracting their interest in debt is crucial for the country's infrastructure sector.

The total net foreign inflows into equity and debt in India stood at about USD 3.3 billion so far in January. Dealers suggest that investments in corporate bonds stand at about USD 5 to USD 6 billion as of now, of which around USD 2 billion came in January.

Standard Chartered Bank expects the rupee to rise to 45 per dollar by March-end and 42 by December-end, from 46.10 currently, Ananth Narayan said.

"We don't expect Fed to hike rates in this year at all. They may hike only in 2012," he added.

However, the risks of another sharp downturn in 2010 cannot be ruled out, given the recent financial turmoil in Dubai, Greece and US commerical real estate sector, which could weigh on emerging market currencies, although chances were low, he said.

The government permits foreign investments of upto USD 15 billion in corporate debt and USD 5 billion in federal bonds.

Exporter hedge

Foreign fund investments in 2009 helped the rupee claw back more than 12% from its record low of 52.2 touched in March last year. In 2008, net outflows of more than USD 13 billion, had pushed the rupee down by a fifth.

With the rupee expected to rise going ahead, exporters have now begun increasing their hedge ratios, Ananth Narayan said.

"Over the last 12-18 months, we have seen a lot of importers covering and not so much of exporters covering and given the wide moves we saw in dollar-rupee, the tendency has been for exporters to stay quiet and importers to hedge themselves. So, that might even out or reverse," he said.

Standard Chartered expects the current account balance to be positive in the June quarter as remittances tend to be good and trade deficit low, Ananth Narayan said. India's current account was at a deficit of USD 12.63 billion in September quarter.

"First quarter the current account side is generally positive for the rupee and on the capital side as well the flows will continue between the IPOs..., 3G if it does happen," he said.

"In general there is a lot of interest in emerging markets and in India," he said.

Source: Reuters
Courtesy moneycontrol.com

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See 9% growth rate for FY11: Chief Eco Advisor

India's third-quarter growth should be "pretty good" and the economy should be back at a 9% growth rate by the next fiscal year, Kaushik Basu, chief economic adviser to the finance ministry, said on Friday.

India's economy grew at 6.7% in 2008/09, slowing from rates of 9% or more in the previous three years as the global credit crisis hit business activity. However, the economy clocked in a 7.9% expansion in the September quarter.

On Thursday, federal chief statistician Pronab Sen said that he expected Asia's third-largest economy to grow 6-6.5% in the December quarter, lower than the previous quarter, due to a contraction in farm output.

Basu, however, said the third-quarter economic growth should be "pretty good" as agriculture contributes only 17% to the country's national income.

"In addition to this, in the corresponding quarter last year, India did pretty badly and from the industry growth rate the feedback that we are getting suggests that manufacturing and services sectors are doing exceptionally well," Basu said.

India's economy will grow at rates of 7% and above in the coming quarters, helped by a recovering global economy and rapid expansion in domestic industrial output, a Reuters poll published earlier this week showed.

Basu said the rise in inflation was sector specific and was not the only factor that should prompt a roll-back of fiscal stimulus measures.

"Having said that, you cannot continue with the stimulus for too long. But, how and when it will be rolled back is still on the table," Basu said.

Source: Reuters
Courtesy moneycontrol.com

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India growth, inflation to quicken in 2010/11: Poll

India's economy will grow at rates of 7% and above in the coming quarters, helped by a recovering global economy and rapid expansion in domestic industrial output, a Reuters poll showed.

Analysts expect Asia's third-biggest economy to grow 7% in the 2009/10 fiscal year that ends in March, and 8% in 2010/11, up from forecasts of 6% and 7.5% in a similar Reuters poll three months ago.

"Growth drivers like industry and services and an improving business environment can support an economic growth of over 8%," said Shubhada Rao, Chief Economist at Yes Bank.

India's economy grew 6.7% in 2008/09, slowing from rates of 9% or more in the previous three years as the global credit crisis hit business activity.

Analysts expect the central bank to start lifting interest rates to tackle rising inflationary pressures as the economy rebounds, although they were divided over the timing of the first move.

Half of the 12 participating analysts said they expected the Reserve Bank of India to raise the repo rate at which it lends short-term funds to banks, by at least 25 basis points by end-March. The rest, with one exception pencilled in a rate rise in the following quarter.

Price pressures

Economists see the wholesale price inflation, India's main price barometer, spiking in the coming quarters as the impact of the weakest monsoon since 1972 keeps food prices high.

Wholesale prices rose 7.3% in December from a year earlier, its biggest annual rise since November 2008 and the full-year average is forecast to rise to 5.8% in 2010/11 from 3.4% in 2009/10.

In the previous poll, analysts forecast this fiscal year's wholesale price inflation at 2.8%, rising to 6% in 2010/11.

The rupee, which closed at 45.64/65 on Monday, is set to appreciate more than 6% between now and the end of fiscal 2010/11, the poll showed.

Source: Reuters
Courtesy moneycontrol.com

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SEBI issues notice to several insurers over ULIPs

On December 29, CNBC-TV18 had reported that market regulator Securities and Exchange Board of India (SEBI) had issued a showcause notice to HDFC Standard Life for one of its annuity products. SEBI was likely to issue further notices to companies, it was reported.

Now, SEBI has issued showcause notices to a number of insurance companies over their unit linked insurance plans (ULIPs). CNBC-TV18’s Avni Raja reports.

A number of companies including Bharti AXA Life, Bajaj Allianz, Max New York Life and Aviva Life have confirmed to CNBC-TV18 that they have received notices on the matter.

Confirming the development, an official at Bharti AXA Life said, “We have received a letter from the SEBI inquiring about some of our unit linked products. Since we learn that many other life companies have also received such a letter, we are referring this issue to Life Council and to [insurance regulator] Insurance Regulatory and Development Authority (IRDA).”

Sources close to the development say other companies — LIC, ICICI Prudential, Kotak and Birla Sun Life — are also likely to receive show cause notices from SEBI.

The showcause notice says that ULIPs fall under the "collective investment scheme" category, which are largely investment accumulation products. As per Section 12 1(b) of the SEBI Act, these products require SEBI’s approval.

The insurance regulator, IRDA, says that no company is in violation of any regulatory requirements.

It does not agree with the SEBI view that ULIPs require multiple regulatory approvals. All the insurance products that have been approved by the IRDA fall well within the purview of Section 2 (11) of the Insurance Act, IRDA has said, adding that the issue may require intervention from the Finance Ministry.

Source: CNBC-TV18
Courtesy moneycontrol.com

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India to receive $770 mn World Bank loan: Govt

The government will get a USD 770 million loan from the World Bank for three projects in the southern state of Andhra Pradesh, the finance ministry said in a statement on Friday.

With these new loan agreements, the multilateral agency's total ongoing commitment to India has increased to USD 19.38 billion, the statement added.

In the current fiscal year to end-March 2010, the World Bank has commited fund assistance worth USD 5.5 billion to India, the statement said.

Source: Reuters
Courtesy moneycontrol.com

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Liquidity adjustment won`t hit infra investments: Ahluwalia

Any short-term liquidity adjustments in the Reserve Bank's January monetary policy review would not affect investments in India's infrastructure sector in the medium term, a top policy adviser told Reuters on Friday.

"We should not be overly concerned about short-term adjustments in the liquidity situation," Montek Singh Ahluwalia, deputy chairman of the Planning Commission said.

The Reserve Bank of India (RBI), which reviews its quarterly policy on Jan. 29, is widely expected raise banks' cash reserve ratio, the level of deposits that banks must keep in cash, by 50 basis points.

But analysts are equally divided over when the RBI will start raising policy rates.

Ahluwalia said global slowdown and local regulatory issues had hit infrastructure investments, which would see the country miss its 2007/12 investment target of $500 billion.

India's failure to introduce insurance, pension, banking and bond market reforms over the years have hampered investment growth in the sector, analysts say.

"I think infrastructure needs long-term funding and that is why it's important to develop the bond markets and also reform the pension and the insurance sectors," said NR Bhanumurthy, economist at National Institute of Public Finance and Policy, a Delhi-based think tank.

Since December 2008, India has announced stimulus packages equalling about 12 percent of GDP to boost infrastructure and support economic recovery in Asia's third-largest economy.

"The government still aims to achieve investment of 9 percent of gross domestic product in that (infrastructure) sector by 2011/12," Ahluwalia said.

India's USD 1.2 trillion economy, which is expected to grow by over 7% in the financial year ending March, higher than 6.7% in 2008/09, is hampered by poor road, ports, railways and airports.

Industry lobbies are pitching for soft monetary stance to continue as the higher borrowing costs would adversely affect their investment plans.

Ahluwalia, who advises the government on key economic issues, said investment in infrastructure was also affected by problems in land acquisitions, regulatory clearances and a slowdown in foreign capital inflows.

Source: Reuters
Courtesy moneycontrol.com

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Tuesday, January 19, 2010

End of economic stimulus risk for oil demand: IEA

The end of huge economic stimulus packages around the globe threatens a modest recovery in global oil demand this year, an official from the International Energy Agency said on Monday.

"That is something we are watching closely," said IEA Deputy Executive Director Richard Jones in an interview with Reuters. "We think these are downward risks to demand."

The oil market was 'pretty well supplied' so OPEC was unlikely to change output at its March meeting, he said.

"We see similar action in March as we saw in the last few meetings, which is to leave things as they are," Jones said.

Source: Reuters
Courtesy moneycontrol.com

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Saturday, January 16, 2010

Cabinet panel to take up soon SAIL stake-sale plan

The Cabinet Committee on Economic Affairs (CCEA) will soon take up the Steel Ministry's proposal to offload 10% stake in Steel Authority of India (SAIL).

“We have already cleared the proposal for disinvestment in SAIL. The CCEA should take up the proposal soon. I hope they take it up in the next meeting,” said the Minister for Steel, Virbhadra Singh.

SAIL's follow-on public-offer could hit the market by the first quarter of 2010-11. The Government hopes to mop up Rs 16,000 crore through the sale of 10% stake in SAIL and a further fresh issue of the same number of shares. Part of the money raised would also be used to fund SAIL's expansion projects. The Government will soon come out with a notification conferring the Maharatna status on SAIL.

Singh added that the Steel Ministry had also cleared a proposal to disinvest 10% stake in Manganese Ore India Ltd (MOIL). “Proposal for disinvestment in NMDC has been cleared. We have also sent a proposal for the disinvestment for 10% disinvestment in MOIL,” said Singh.

MOIL's disinvestment proposal is yet to be tabled with the CCEA. “The ball is in their court now. My Ministry has cleared the proposals,” Singh said. The Steel Ministry had sent the proposal for disinvestment in MOIL to the Finance Ministry in July 2009.

Taken from

The Hindu Business Line

Source: Business Line
Courtesy moneycontrol.com

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Friday, January 15, 2010

Mah govt hikes benchmark rates; property to get costlier

Get ready to shell out more for your dream house this year, at least in the Mumbai market. That's because the Maharashtra government has increased benchmark property rates for the year 2010 by 20%, reports CNBC-TV18’s Priyanka Ghosh.

The Maharashtra government has come out with its Ready Reckoner 2010 and it has increased prices to the tune of about 15-20% across verticals. These rates are applicable for land, residential as well as commercial properties. The Ready Reckoner gives the benchmark based on which the stamp duty and registration charges are calculated, which is basically about a 6% cost for the consumer.

Industry estimates state that Mumbai’s property rates have already increased by about 30-35% in the past 10 months, and hovering close to the 2007 highs. HDIL, Lodha Developers, Unitech, Mahindra Lifespaces are among those who have increased prices. Developers say that raw material prices have increased therefore leaving them with little choice, but to increase prices and pass it on to the consumers.

As far as Mumbai’s residential property is concerned, analysts say there may be a second property bubble in the making. It is also not good news for commercial properties. Commercial demand is unlikely to pick up as it hasn’t shown a revival in the past six months post the government’s new announcement.

Source: CNBC-TV18
Courtesy moneycontrol.com

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Cabinet okays 10% stake sale in Engineers India

The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal to sell 10% government stake in Engineers India. This will be done through a follow-on public offering (FPO), and will only involve the sale of government stake, and not a fresh issue.

Before the public offering, however, EIL will issue two bonus shares for every one share held in the company. It will also split the existing share, which has a face value of Rs 10, into two shares of Rs 5 each.

At 10:20 am the share was quoting at Rs 2,079.70, up Rs 346.60, or 20.00%

In addition, EIL will declare a 1,000% special dividend.

After the FPO, the government's stake in the company will come down to 80.4% from the current 90.4%. The issue is likely to hit the market in April or May.

Source: Moneycontrol.com
Courtesy moneycontrol.com

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Thursday, January 14, 2010

Economists see robust industrial output till mid-2010

MUMBAI: India's industrial output data is expected to remain robust and in double digits till mid-2010 on a robust purchasing managers index and benign base effect, economists said on Wednesday. "Capital goods production remained in double-digits at 12.2 per cent - supporting our view that the capex cycle has indeed turned despite the weakness of bank lending growth, typically a lagging indicator," HSBC said in a note.

India's industrial output rose at a faster-than-expected 11.7 per cent in November from a year earlier, helped by stimulus measures that boosted domestic demand, governemnt data showed on Tuesday. [ID:nDEL002550] The growth was mostly driven by a sharp rise in consumer durables production to 37.3 per cent in November from 0.3 per cent year ago.

"This is the strongest figure since November 1995, although it should be noted that durables only represent just over 5 per cent of the production index," HSBC note said. Manufacturing production rose 12.7 per cent in November from a rise of 2.7 per cent a year earlier.

ICICI Securities Primary Dealership said the revival in exports are likely to sustain, which may support the double digit rise in industrial output going ahead. Such consistent rebound in the industrial activity has strengthened faster monetary policy tightening measures by the Reserve Bank of India.

"This release (industrial output) together with the likelihood of a strong December wholesale price inflation number on Thursday seals India's near-term interest rate fate," the HSBC note said. HSBC maintains its expectation of a 50 basis points cash reserve ratio hike at the central bank's Jan. 29 policy.

Reacting to the strong output number, RBI Deputy Governor Subir Gokarn had said the revival in growth was skewed and patchy. "Consumer durables, which have been a huge driver in last few months is at 37 per cent. So, there is still an imbalance in pattern of growth. That is a consideration that will dominate our thinking," Gokarn said late on Tuesday.

Citigroup is also bullish on recovery in growth and raised its 20010/11 growth forecast to 8.4 per cent from 7.8 per cent earlier. It expects industrial growth in the 9-11 per cent range in the coming months, Citi said in a note.

Source: Reuters
Courtesy economictimes.indiatimes.com

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Industrial output picks up, RBI action seen

India's November industrial output grew at its fastest pace in two years, which analysts say will strengthen the case for the Reserve Bank of India (RBI) to tighten monetary stance to temper inflationary expectations.

Industrial output rose 11.7% in November from a year earlier, higher than the median forecast of an annual rise of 10% in a Reuters poll and an unrevised 10.3% rise in October, data showed on Tuesday.

The growth was the fastest since October 2007, when the industry grew an annual 12.2%.

Factory output in November, which had expanded just 2.5% in the same month last year, is riding a revival in consumer demand following aggressive rate cuts by the RBI and stimulus through tax breaks after the global downturn.

"This number combined with an expected 7.3% WPI inflation for December, would strengthen the case for monetary tightening by the RBI," said Gaurav Kapur, senior economist at ABN Amro Bank.

"The RBI may wait until the 3Q GDP release due end of February for hiking policy rates, but is likely to start withdrawing liquidity through a 50-basis points CRR (cash reserve ratio) hike in the January 29th policy review."

Back pay of about Rs 18,000 crore (USD 3.96 billion) to federal government workers in October, the second instalment of a wage pact agreed in 2008, has also helped shore up consumers' purchasing power.

A private survey found last week the December purchasing managers' index showed the pace of manufacturing activity jumped to its highest since May on sharp rises in new work and output, while car sales in December rose an annual 40.3%.

Industrial output, which grew for the 11th consecutive month exceeded South Korea's but lagged the figure for neighbouring China. Output in China grew 19.2% in November, while it rose 1.4% in South Korea.

The benchmark 10-year bond yield rose to 7.81% from 7.78% before the data, while the rupee pared some of its loss to be at 45.38/39 per dollar from 45.41/42 before the data.

Ending stimulus

Consumer durables goods output continued to surge, growing an annual 37.3% in November. Manufacturing production rose 12.7% on year, while mining output was up 10% and power generation rose 3.3%.

Analysts say the rising trend in India's industrial output may lose momentum when the government begins to pull back fiscal and monetary stimulus starts this year and the low statistical base begins to fade from June.

"The headline IP (industrial production) number is much higher than expected, but it may be the last double-digit growth number for the current financial year," said ABN's Kapur.

India's economy grew an annual 7.9% in the quarter through September, its fastest in 18 months, prompting the finance minister to raise the growth forecast for the current fiscal year to end-March to around 8% from 7.0%.

However, a robust economic rebound and rising prices have put pressure on the RBI to tighten monetary policy.

India's annual food price inflation rose 18.22% on supply shortages in the week to Dec. 26. Broader annual wholesale price inflation is expected to have risen to 7.31% in December, higher than 4.78% in November, the median forecast in a poll of 22 economists showed.

The December data, which is due on Jan. 14, will be the last important data for the Reserve Bank of India (RBI) to gauge price pressures before its policy review on Jan. 29.

The RBI is widely expected to increase the cash reserve ratio, the level of deposits that banks must keep with it as cash, at its policy review. But economists are divided when it will start hiking rates.

Source: Reuters
Courtesy moneycontrol.com

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