India's retail inflation hits 8-month high of 3.18% on back of higher food prices

Agencies
July 13, 2019

New Delhi, Jul 13: India's macro-economic data presented a slightly grim picture as food prices pushed India's retail inflation higher in June, and lower manufacturing output slowed down the country's industrial production in May.

The two key economic macro-data points -- Index of Industrial Production (IIP) for May and Consumer Price Index (CPI) for June -- were released by the Ministry of Statistics and Programme Implementation on Friday.

As per the data furnished by the National Statistical Office (NSO), higher food prices accelerated India's June retail inflation to 3.18 per cent from 3.05 per cent in May.

However, on a year-on-year (YoY) basis, the CPI in June 2019 was lower than the corresponding period of last year when retail inflation stood at 4.92 per cent.

The Consumer Food Price Index (CFPI) inflated to 2.17 per cent during the month under review from an expansion of 1.83 per cent in May 2019.

Product-wise, the prices of milk-based items, egg, meat and fish increased in March YoY. In contrast, a deflation trend was witnessed in the cost of vegetables and pulses. 

Prices of milk-based products rose marginally by 0.68 per cent, while egg became dearer by 1.62 per cent and meat and fish prices recorded a rise of 9.01 per cent.

On a sub-category basis, vegetable prices increased on a YoY basis in June to 4.66 per cent. The category of "pulses and products" became expensive 5. 68 per cent and that of "sugar and confectionery" (-)0.09 per cent.

In terms of IIP, the country's factory output growth eased in May 2019 as it rose by 3.1 per cent from a revised growth of 4.32 per cent reported for April 2019. 

Even on a YoY basis, May's industrial production growth of 3.1 per cent was lower than the 3.8 per cent achieved during the corresponding month of the previous fiscal. 

"The cumulative growth for the April-May 2019 period over the corresponding period of the previous year stands at 3.7 per cent," the Ministry of Statistics & Programme Implementation said in 'Quick Estimates of IIP.

Besides, the output rate of the manufacturing sector rose 2.5 per cent in May from a year-on-year (YoY) rise of 3.6 per cent. On a YoY level, mining production grew 3.2 per cent from a rise of 5.8 per cent and the sub-index of electricity generation was higher by 7.4 per cent from 4.2 per cent.

Among the six use-based classification groups, the output of primary goods, with the highest weightage of 34.04, grew by 2.5 per cent. The output of intermediate goods, which has the second highest weightage, inched up by 0.6 per cent. 

Similarly, output of consumer non-durables rose 7.7 per cent, however, consumer durables slipped (-)0.1 per cent. 

In addition, output of infrastructure or construction goods increased by 5 .5 per cent, but that of capital goods inched-up by 0.8 per cent. In terms of industries, 12 out of the 23 industry groups in the manufacturing sector have showed positive growth during the month under review as compared to the corresponding month of the previous year.

"The industry group 'Manufacture of wood and products of wood and cork, ex cept furniture; manufacture of articles of straw and plaiting materials' has shown the highest positive growth of 24.8 per cent followed by 15.9 per cen t in 'Manufacture of food products' and 9.4 per cent in 'Manufacture of computer, electronic and optical products." 

"On the other hand, the industry group 'Manufacture of paper and paper pro ducts' has shown the highest negative growth of (-) 12.2 per cent followed b y (-) 9.9 per cent in 'Manufacture of furniture' and (-) 8.7 per cent in 'manufacture of fabricated metal products, except machinery and equipment'." 

On IIP, Aditi Nayar, Principal Economist, ICRA said: "The sequential dip in industrial growth in May 2019 reflects the trend in core sector expansion, which offset the shallower drag from the contraction in auto production, as well as an improvement in growth of non oil merchandise exports." 

According to Madhavi Arora, Economist, Edelweiss Securities said: "The CPI inflation ticks up to 3.18 per cent but remains overall benign... The uptick in June was largely led by sequential uptick in food components, while sequential increase in core components moderated." 

"The food inflation seasonal uptrend will likely continue in the near term , albeit stay benign overall, partly reflecting structural change in food in flation dynamics." 

Devendra Pant, Chief Economist, India Ratings and Research, said: "CPI inflation is likely to follow its gradual increasing trend in the first half of this fiscal and likely to touch 4 per cent mark in third quarter (mainly due to base effect). 

"The August 2019 Monetary Policy growth inflation dynamics of Indian economy are evenly balanced," he said.

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News Network
January 20,2020

Langkawi, Jan 20: Malaysia will not take retaliatory trade action against India over its boycott of palm oil purchases amid a political row between the two countries, Prime Minister Mahathir Mohamad said on Monday.

India, the world’s largest edible oil buyer, this month effectively halted imports from its largest supplier and the world’s second-biggest producer in response to comments from Mahathir attacking India’s domestic policies.

“We are too small to take retaliatory action,” Mahathir told reporters in Langkawi, a resort island off the western coast of Malaysia. “We have to find ways and means to overcome that,” he added.

The 94-year-old premier of Muslim-majority Malaysia has criticised New Delhi’s new religion-based citizenship law and also accused India of invading the disputed region of Kashmir.

Mahathir again criticised India’s citizenship law on Monday, saying he believed it was “grossly unfair”.

India has been Malaysia’s largest palm oil market for the past five years, presenting the Southeast Asian country with a major challenge in finding new buyers for its palm oil.

Benchmark Malaysian palm futures fell nearly 10% last week, their biggest weekly decline in more than 11 years.

New Delhi is also unhappy with Malaysia’s refusal to revoke permanent resident status for controversial Indian Islamic preacher Zakir Naik, who has lived in Malaysia for about three years and faces charges of money laundering and hate speech in India.

Mahathir said even if the Indian government guarantees a fair trial, Naik faces the real threat of vigilante action and that Malaysia will only relocate the preacher if it can find a third country where he would be safe.

“If we can find a place for him, we will send him out.”

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News Network
June 23,2020

Jun 23: The U.S. government on Monday restricted charter flights from India, accusing the nation of "unfair and discriminatory practices" by violating a treaty governing aviation between the two countries.

Air India Ltd. has been making flights to repatriate its citizens during the travel disruptions caused by the Covid-19 outbreak, but also has been selling tickets to the public, the Transportation Department alleged.

At the same time, U.S. airlines have been prohibited from flying to India by aviation regulators there, the DOT said in its order. The situation "creates a competitive disadvantage for U.S. carriers," the agency said in a press release.

Air India is advertising a schedule that is more than half of pre-virus operations, the department said. "The charters go beyond true repatriations, and it appears that Air India may be using repatriation charters as a way of circumventing" that nation's flight restrictions, the U.S. agency said.

The order becomes effective in 30 days, the department said.

Indian airlines must apply to the DOT for authorization before conducting charter flights so that it can scrutinize them more closely, it said. The department will reconsider the restrictions once India lifts restrictions on U.S. carriers.

The action against India follows weeks of DOT restrictions against Chinese airlines after the U.S. agency accused that nation of unfairly banning American carriers in the wake of the virus. On June 15, the U.S. announced it would agree to allow four flights a week from China after it allowed the same number by U.S. carriers.

Attempts to reach Air India and the Indian embassy in Washington after business hours were unsuccessful.

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Agencies
March 1,2020

Kolkata, Mar 1: The Calcutta High Court has ruled that it is not mandatory for foreigners to produce a valid passport and its particulars for processing of application for grant of Indian citizenship if he is able to satisfy the appropriate authorities the reasons for non-availability of the document.

Justice Sabysachi Bhattacharya passed the order while disposing off a petition by granting the petitioner liberty to file an application before the authority "as contemplated in Rule 11 of the Citizenship Rules 2009, upon furnishing explanation as to the non-availability of the passport".

Bismillah Khan had filed the petition saying he was being denied the citizenship of India because of his inability to file an application under Section 5 (1) (c) of the Citizenship Act, 1955, apparently due to the mandatory requirement of furnishing a copy of the passport for such application.

The petitioner's counsel submitted that Khan was a Pakhtoon citizen and due to political turmoil in the said state, which subsequently merged partially into Afghanistan and partially into Pakistan, he, as a five-year old, had to migrate to India with his father in 1973.

Under such circumstances, the petitioner could not have any opportunity of having a valid passport, since they were refugees under distress, the counsel said.

The petitioner had previously approached a coordinate Bench of the court, wherein a single judge, passed an order on July 25, 2018, directing him to comply with the formalities required, as communicated by the secretary to the Government of India to the Secretary to the Government of West Bengal (Home), vide a letter dated December 7, 2017.

The court had then also given liberty to the petitioner to apply afresh before the appropriate authority under Section 5(1)(c) of the 1955 Act, having complied with all the formalities.

The petitioner then moved Bhattacharya's court submitting that a complete application as directed by the Coordinate Bench cannot be possibly filed by his client due to the mandatory requirement of uploading a copy of his passport, which the petitioner does not have due to reasons beyond his control.

The counsel said Khan is married to an Indian citizen, has a daughter and living in India for close to half a century.

The counsel for the union of India submitted that in view of no application having been filed by the petitioner, there is no scope of granting such proposed application at the present juncture for the Union.

The counsel argued that it is mandatory to file an application in Form III for the application of the petitioner under Section 5(1)(c) of the Act to be considered at all.

In view of the petitioner not complying with the mandatory requirement of submitting a copy of his passport, the state government cannot, under the law, forward such application to the union government.

After hearing all sides, Justice Bhattacharya said although the rule "contemplates that an application shall not be entertained unless the application is made in Form III, such provision ipso facto does not make the availability of a passport a mandatory requirement".

"..the Form given with the Rules or the Rules themselves cannot override the provision of the statute itself, under which the said Rules are framed, which does not stipulate such a mandate on the applicants for citizenship under Section 5 (1)(c) of the 1955 Act mandatorily to carry a passport".

The court said although such provision is included in the Form, which has to be complied with by the applicant, "it is nowhere indicated in such Form that all the relevant particulars, including the particulars regarding passport of the petitioner have to be furnished mandatorily, along with a copy of a valid foreign passport, even in the event the petitioner, for valid reasons, is not in a position to produce such passport".

Justice Bhattacharya ruled that under such circumstances, it cannot be held that the provision of producing a passport and its particulars is mandatory in nature and there has to be a relaxation in such requirement "in case the petitioner is able to satisfy the appropriate authorities the reasons for non- availability of such passport".

"Unless such a leeway is given to the applicants, genuine persons who otherwise have all the formal documents indicating that they have been residing in India for a long time and have married a resident of India would also be unable to apply for Indian Citizenship despite having lived their entire lives and contributed to the economy and diverse culture of this country."

He said such a scenario would be contradictory to the spirit of Article 14 of the Constitution of India.

"In such view of the matter, the requirement of having a passport has to be read as optional in Form III of the Citizenship Rules, 2009 and the authorities are deemed to have the power to relax such 6 requirement in the event the applicant satisfied the authorities for genuine reasons why the applicant is not in a position to produce such passport," the February 24 order said.

The court ruled that despite the provision of making applications online, a provision has to be made for persons who do not have all the particulars of their passport, which is read as optional, to file applications manually, which are to be treated as valid applications under Rule 5 of the Citizenship Rules, 2009.

The court also ordered that alternatively the necessary software be amended so that the online applications can be presented with or without passports, in the latter case furnishing detailed reasons as to non-furnishing of passports.

"Sanctioning of such forms, however, will be conditional upon the satisfaction of the relevant authorities about the reasons for the applicant not being able to produce her/his passport," the order said.

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