oppn parties Inflation: No Sign Of Relief

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  • Karnataka HC has ruled that a harassment complaint lodged by a wife after receiving a divorce notice from the husband loses its weight in the eye of the law and quashed the FIR filed by a women against her husband and in-laws
  • 35 people killed in renewed violence in Manipur, 30 of them militants
  • Manipur boils on the eve of Home minister Amit Shah's visit as militants strike, vandalize MLAs home and loot armouries
  • Kerala chief minister P Vijayan says Centre's decision to cut the borrowing limit of the state is 'sadistic' and shows its negative mentality towards the state's development
  • Rahul Gandhi recieves passport, set to travel to the US
  • Centre said that the march-to-Parliament by wrestlers was a 'deliberate provocation'
  • Prime Minister Modi inaugurates the new Parliament building, calls it 'cradle of empowerment'
  • Mamata Banerjee will most likely attend the opposition meet called by Nitish Kumar in Patna
  • With container prices, which were on fire, crashing by 40% YoY, importers and exporters in India heaved a sigh of relief as the burden of high freight costs will reduce
  • In an aim to push lenders to manage risks better after the US financial crisis, the RBI has reviewed bond value norms
  • 14 countries under the Indo-Pacific Economic Framework (IPEF), including India, entered into an agreement to boost supply chains and counter China
  • Malaysia Cup badminton- H S Prannoy wins the title beating Weng Hong Yang of China 21-19,13-21, 21-18
  • Yashasvi Jaiswal replaces Ruturaj gaikwad as stand-by opener for the WTC final
  • IPL final washed out due to rain, rescheduled for today, the reserve day
  • In a shameful incident, Delhi Police manhandled international wrestlers when they sought to march peacefully to the new Parliament building to highlight their greivances, detained some top wrestlers
Fifth IPL title for Chennai as Ravindra Jadeja hits 10 off last two balls to spoil the party for Gujarat Titans
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.