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Inflationary risks from oil, HRA, fiscal slippage: RBI
Mumbai, Feb 21 (IANS) In holding its repo rate unchanged for the third time in succession, the RBI’s Monetary Policy Committee (MPC) was guided by concerns about upside risks to inflation posed by crude oil prices, house rent allowances (HRA) and the budgetary fiscal slippage, as per the minutes of the MPC meeting released on Wednesday.
At its final bi-monthly monetary policy review of the fiscal earlier this month, the Reserve Bank of India (RBI) kept its repo, or short-term lending rate for commercial banks, unchanged at 6 per cent citing upside risks for inflation from rising global crude oil prices and various domestic factors.
“Although inflation risks have increased in recent months, incoming data should provide greater clarity about the persistence of inflationary pressures.
“The economic recovery is also at a nascent stage and calls for a cautious approach at this juncture. I, therefore, vote for keeping the policy repo rate on hold while maintaining a neutral stance” was the view of RBI Governor Urjit Patel, as per the released minutes.
“Effective supply management by government could help in keeping food inflation under check,” he said.
Patel flagged the upside risks to inflation coming from the staggering impact of house rent allowance increases by various state governments, the higher minimum support prices for kharif crops announced in the farm-friendly Union Budget, as well as the fiscal slippage, by Finance Minister Arun Jaitley earlier this month.
The continuing rise in food and fuel prices kept India’s annual retail inflation rate over the five per cent mark in December 2017, and last month, at well above the RBI’s median inflation target of 4 per cent.
The central bank raised its inflation forecast for the fourth quarter of the current fiscal to 5.1 per cent, and between 5.1 per cent and 5.6 per cent for the first-half of 2018-19.
In defence of the decision to hold the policy rate with a neutral stance, Patel, however, said that economic recovery was at a nascent stage, which required a cautious approach.
“There are also early signs of revival of investment activity. Many service sector indicators have shown robust growth such as commercial vehicle sales, domestic and international air passenger traffic, and foreign tourist arrivals,” the Governor said.
“Domestic economic growth impulses are strengthening,” he added.
External member Ravindra Dholakia said the output gap continued to be negative and expanding.
“Fiscal space to accommodate future higher oil price shocks seems to be absent given fiscal slippage in Budget FY19,” Dholakia said.
According to external member Chetan Ghate, there were fewer mitigating factors to rising inflation as compared to two months ago.
“It’s highly possible that current growth trends will make economy accelerate into an inflationary phase,” he said.
Five members of the MPC, including the three external ones and the Governor, voted in favour of the decision, while RBI Executive Director Michael Patra voted for an increase in the policy rate by 25 basis points.
“The (inflation) target is in danger of getting out of reach and over the next few months, the upper tolerance band is under threat. This could seriously dent the credibility of the Committee’s commitment to the target,” Patra said in defence of his vote for a rate hike “to commence the withdrawal of accommodation”.
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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