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CEA much less hopeful now of RBI rate cuts
New Delhi, Jan 31 (IANS) Sounding a clear note of caution on rising crude oil prices pushing inflation, Chief Economic Advisor (CEA) Arvind Subramanian has toned down his earlier vocal expectation of a rate cut by the Reserve Bank of India (RBI) ahead of the central bank’s final bi-monthly monetary policy review of the fiscal due to be annouced next week.
In an interview here with CNBC TV18 following the release of the Economic Survey 2017-18 authored by him, Subramanian said that with retail inflation edging past the RBI’s median target of 4 per cent, the “cycle has turned”.
“Relative to the last 18 months when we consistently undershot our inflation target, now we are at or close to that. So clearly, the case for easing is now less persuasive…we seem to be close to the inflation target,” he said.
At the fiscal’s penultimate policy review in Mumbai last month, the RBI maintained the status quo on its key lending rate for the third time in succession at 6 per cent, citing concerns on the rising trajectory of inflation. The central bank also raised the inflation forecast for the remainder of the current fiscal to 4.3-4.7 per cent.
The continuing rise in food and fuel prices pushed India’s annual retail inflation rate over the five per cent mark in December, to 5.21 per cent, from 4.88 per cent in November.
In this connection, the CEA hinted that the government’s fiscal deficit target of 3.2 per cent of the gross domestic product (GDP) could be exceeded this year in the lead up to the 2019 general elections.
“May involve a bit of a (fiscal) slippage, may not, we will have to see but that is for this year. For next year, I have said three things. One the fact that it is an election year does not mean fiscal populism and I think everyone is on board, no fiscal populism,” he said.
“The second point made very clearly is that if you look at the pure economic cycle now, you would in-principle and I would argue for an ambitious fiscal consolidation on economic grounds because inflation is higher, output is higher, output gaps are closing, and there is more volatility and external uncertainty and therefore, consolidation,” he added.
The Economic Survey cautioned that ambitious targets of fiscal consolidation for the pre-election year be avoided.
“Reflecting largely fiscal developments at the Centre, a pause in general government fiscal consolidation relative to 2016-17 cannot be ruled out,” it said.
On the most disruptive measure since Independence — demonetisation, which, along with GST, “decoupled” the Indian economy from the rest of the world for around four to six quarters — the Survey said that carrots rather than sticks should be the mainstay of government policy in cleaning up the economy.
“I think both in terms of the informal sector, of exports, also GST, there were transitional costs (of demonetisation). I think no one can deny that, but let us see the other side of the ledger, what the benefits are going to be,” Subramanian said.
–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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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
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