Wednesday October 24, 2018
Home India Inflation ris...

Inflation rises owing to surge in food, fuel prices

0
//
64
Republish
Reprint

A man weighs vegetables at a popular market in Caracas on October 24, 2013. Venezuela, which is highly dependent on basic commodity imports, will massively boost its food and basic supplies imports in the next two months to counter shortages and high inflation, Vice president for the economy Rafael Ramirez said Wednesday. Since President Nicolas Maduro took office on April 19, Venezuela has seen a cyclical increase in shortages of sugar, coffee, oil, milk and toilet paper, among other products. Meanwhile, annual inflation in September soared to 49.4 percent, the highest in the past 13 years, according to official data.  AFP PHOTO / JUAN BARRETO        (Photo credit should read JUAN BARRETO/AFP/Getty Images)

By NewsGram Staff Writer

India’s retail inflation surged to 5.40 percent in June from 5.01 percent in May due to a rise in food and fuel prices propelled, official data showed on Monday.

The data furnished by the Central Statistics Office (CSO) showed that the retail, or the consumer price index (CPI) inflation, in the corresponding month of 2014 stood at 6.77 percent.

According to the CSO data, the CPI-urban for June inched higher to 4.55 percent from 4.41 percent in May. The June CPI-rural, meanwhile, jumped to 6.07 percent from 5.52 percent in May.

The main cause for the rise in June inflation was attributed to costlier food items.

The “Food and beverages” sub-indice in the CPI has the highest weightage of about 45.86. It rose to 5.48 percent from 4.80 percent in May.

However, food inflation during June 2015 was lower in comparison to the corresponding month of 2014, when it stood at 7.21 percent.

The food inflation in the urban areas touched 5.24 percent from 4.48 percent in May. The food inflation burden for the rural households in June rose to 5.61 percent from 4.74 percent in May.

The food inflation in rural and urban areas during the corresponding month of 2014 stood at 8.05 percent and 5.62 percent, respectively.

Prices of protein based food items like pulses, milk, egg, meat and fish accelerated. Pulses became costlier by 22.24 percent on an year-on-year (YoY) basis.

Milk and milk-based products became dearer by 7.18 percent. Prices of meat and fish appreciated by 6.99 percent. Cost of eggs rose by 5.09 percent.

Spices became expensive by 9.71 percent. Vegetables’ prices were up by 5.37 percent.

However, sugar and confectionery costs came down by 8.55 percent in the month under review on an Year-on-Year(YoY) basis.

Fuel and light products which constitutes 6.84 percent of the CPI grew by 5.92 percent in June.

The uptick in the CPI will be a major concern for the Indian industry, as it belies the hope of a future rate cut by the Reserve Bank of India (RBI).

The recent slowdown in the factory output, revealed by the Index of Industrial Production (IIP) data released on Friday and good progress of monsoon, had renewed hopes of India Inc. for another rate cut from RBI during its monetary policy review in August.

“CPI breaching the 6 percent comfort level in rural India is a concern. Uptick in retail prices in urban and rural regions in June has shrunk RBI’s window for cutting rates further,” said Debopam Chaudhuri, chief economist, ZyFin Research.

A retarded growth in manufacturing output slowed India’s overall industrial production expansion to 2.7 percent for May — against 4.1 percent in April.

The RBI had lowered its short-term lending rate by 25 basis points in its monetary policy review in June.

That time RBI Governor Raghuram Rajan said the central bank’s next move will be data-dependent. It will also keep an eye on how monsoon progresses and the steps taken by the government to mitigate its negative effects, Rajan had added.

(With inputs from IANS)

Click here for reuse options!
Copyright 2015 NewsGram

Next Story

Say Goodbye to Heavy EMIs – Opt for Flexi Hybrid Home Loan

With pre-approved offers from Bajaj Finserv on a gamut of loans including business loan, personal loan, etc., availing finance is easy and quick.

0
Home Loan
Say Goodbye to Heavy EMIs - Opt for Flexi Hybrid Home Loan.
  • Flexi Hybrid Home Loan allows paying only interest as EMI
  • Principal holiday period of 4 years
  • The principal and interest after 4 years paid only on the amount utilised
  • Flexibility of flexi-interest and flexi term loan in a single loan

With the Reserve Bank of India (RBI) hiking repo rates in its bi-monthly monetary policy review by 25 bps, interest rates of several loans have already started tightening. Though aimed to control inflation, it’s anticipated that home loan borrowers will bear the brunt of the latest move by the apex bank.

Hike in repo rate would push up home loan interest rates and subsequently the EMIs. The move might be a dampener if you are a first-time home loan borrower. However, with Bajaj Finserv Flexi Hybrid Home Loan, not only do you get the requisite funds to buy your dream home but are also relieved of heavy EMIs. Read on to know more.

Home Loans
In this 21st century building a home is not everybody’s piece of cake but there is always a way for a will hence home loans provide you the way to own a house. Pixabay

Payment of only interest component as EMIs

A regular home loan, on a fixed interest rate, taken from a financial institution consists of the interest and the principal component. During the entire loan tenor, the EMI remains constant. Though the interest and the principal ratio varies during the loan tenor, the EMI remains fixed.

However, with Bajaj Finserv Flexi Hybrid Home Loan, during the initial tenor, you pay only the interest as the EMI and nothing for the principal. The principal holiday period, where you need not pay anything towards the principal, lasts up to 4 years. Only after 4 years, the EMI will constitute the principal and the interest component.

So, for instance, if the EMI of your home loan is Rs.30,000, with the interest component amounting to Rs.20,000, during the initial 4 years, you need to pay only Rs.20,000. Only after 4 years, you need to pay the principal component of the EMI. This not only reduces your EMIs but also help you better manage your finances. Also, during the interest-only period, there’s no reduction in the loan limit.

Principal and interest only on the amount utilised

Unlike a regular home loan where you need to pay interest on the entire loan amount disbursed, in case of Flexi Hybrid Home Loan, after the principal holiday period of 4 years for the balance tenor, the EMIs would consist of the principal and the interest – only on the amount utilised from your approved loan limit and not on the entire limit.

For instance, if your approved limit is Rs.25 lakh for a tenor of 15 years, and you use only Rs.20 lakh from this limit, after the principal holiday period, from fifth year onwards, you need to pay the principal and the interest only on Rs.20 lakh. This further brings down the EMI and helps in savings in the long-run.

High EMIs – No longer a hurdle

Thus, with a Bajaj Finserv Flexi Hybrid Loan, high EMIs are no longer a hurdle in purchasing your dream home. Irrespective of hike in home loan interest rate, following RBI’s move, this new and innovative home loan offering helps you buy your dream home with utmost ease.

Home Loan
You need to know we can get the loan for various purposes. Pixabay

Even if you are early into your career, where generally income levels are low, you can go on and address the crucial life goal of buying the home of your choice. The principal holiday period of 4 years not only keeps your EMIs low but also ensures you are able to take care of day-to-day expense of running a household. Apply for home loan today and enjoy the joys of owning your own home.

With pre-approved offers from Bajaj Finserv on a gamut of loans including business loan, personal loan, etc., availing finance is easy and quick. No long queues and lengthy paperwork. Just share a few basic details to know your pre-approved offer within seconds.