New Delhi, February 14
Providing relief to the common man, inflation in January eased to an eight-month low of 5.05%, helped by a moderation in food prices.

The second straight month of deceleration in inflation as measured by the wholesale price index also gives a breather to the Reserve Bank, which has been trying to tame rising prices.

The Wholesale Price Index (WPI)-based inflation was at 6.16% in December compared with 7.52% in November. The January’s inflation rate is the slowest since May 2013, when wholesale prices increased 4.58%.

Inflation in food articles in January came down to 8.8% as against 13.68% in the preceding month, according to data released today.

“Food inflation remains elevated in spite of the overall favourable monsoon and agricultural production scenario, highlighting the demand-supply gaps and issues related to the supply chain,” ICRA senior economist Aditi Nayar said.

As per the WPI data, prices of vegetables rose 16.6% in January compared with a 57.33% increase in December. Onion prices climbed 6.59% compared with a 39.56% increase in December. Potato prices climbed 21.73% in January.

Fruits were cheaper, as were protein-rich items such as eggs, meat and fish. However, inflation in milk inched up slightly to 7.22% in January.

“We must and urgently concentrate on reviving growth for the manufacturing sector and lay special emphasis on resolving problems of the MSME sector also,” Ficci president Sidharth Birla said.

According to the WPI data, inflation in primary articles and in the fuel and power segment was at 6.84% and 10.03%, respectively.

Inflation in manufactured products such as sugar and edible oils was up marginally at 2.76% on a monthly basis.

The Reserve Bank had increased a key interest rate by 0.25% to 8% in its Third Quarter Review of Monetary Policy on January 28. The central bank factors both retail and wholesale price based inflation data in its monetary policy.

“In the absence of an upside surprise in the inflation trajectory or in inflation expectations, it is likely to hold policy rates steady in the coming months," Barclays said in a research note.

There have been demands from various quarters that the RBI should look at relaxing interest rates as inflation has showed signs of easing while the slowdown in industrial output has persisted.

A Finance Ministry document said high inflation poses a big threat to growth as it would impair the ability of the RBI to cut interest rates to boost economic activities. “The outlook on growth is...threatened by certain downside risks; the biggest of them being the high rate of inflation, which further dents the ability of the RBI to extend monetary policy support to growth revival,” it said.

“We expect this trend to continue in the coming months, giving more elbow room to the RBI for an accommodative interest rate policy,” Assocham president Rana Kapoor said. — PTI

Lahore, February 14
The Pakistan government today said the issue of non-discriminatory trade access to India and visa restrictions would be resolved soon.

Speaking at the inauguration of the India Show organised by industry body Ficci in Lahore today, Pakistan Commerce Minister Khurram Dastgir Khan said, “Visa restrictions are the biggest non-trade barrier although customs and import restrictions are often cited as non-trade barriers. People and businessmen are not able to travel freely for trade purposes.”

Khan made a pitch for allowing free movement for senior citizens especially those who were born in the other country. He also made a case for expanding the talks from just trade to moving towards a composite dialogue between the two countries. “Trade cannot happen in a vacuum. If the trade relationship is running fast, it can create an imbalance later. While the Trade Ministers are running faster, other ministeries also need to be engaging with each other,” he said.

“Trade can open the door, but it cannot solve all problems. The fact is that the composite dialogue is suspended as of today. What we are really hoping is that, the trade dialogue can go forward in the atmosphere in which our larger dialogue is resumed and we are able to discuss these issues. There are no preconditions on trade talks,” he said.

Though both sides are expressing optimism, but there seem to some hiccups as some of the decisions pertaining to increased trade access have not materialised.

Commerce Minister Anand Sharma put off his visit to Pakistan for the event and sources say that India was seeking faster implementation of the proposal on increasing the number of goods traded through the Wagah border and pruning of the negative list of items by Pakistan.

Leading the Indian delegation, Jyotsna Suri, senior vice president, Ficci, pitched for greater focus on the trade and hospitality sector to enhance trade relations between the two countries. She said tourism could act as a multiplier for a wide range of activities such as airlines, handicrafts, taxi and tour operators and also creates local employment.

Suri said Pakistan is home to many exotic destinations such as Mohenjodaro and Taxila which would be of great interest to tourists from India and other neighbouring regions. Speakers at the event fromboth sides called for greater trade enhancement for shared peace and prosperity in the region.

The India Show got off to a flying start as the local crowd thronged the stalls. Around 100 Indian companies mostly relating to consumer products are showcasing their products.

Mumbai, February 14
The State Bank of India (SBI) today said it would boost vigilance of bad loans after the country’s largest lender disappointed analysts and posted a fourth consecutive quarterly drop in net income.

Like state-run peers Punjab National Bank, Canara Bank and the Bank of India, the SBI’s profits have been clipped by an increase in defaults by companies battling reduced cash flows, high inflation and delays in government approvals for projects.

“We will do a better management of what we have and have much better processes in place to pick and choose. We will have much better early warning signals,” chairwoman Arundhati Bhattacharya said.

The SBI posted a 34% drop in third quarter net profits to Rs 22.34 billion in the quarter ended December, lagging analysts’ estimate of Rs 25.3 billion.

Mahindra Q3 profit up 12%

Auto major Mahindra & Mahindra today reported an 11.7% increase in standalone net profit to Rs 934.06 crore in the quarter ended December 31, riding on its farm equipment business.

The company had posted a profit of Rs 836.19 crore in the same quarter of the previous financial year, Mahindra & Mahindra said.

SAIL Q3 net up at Rs 533 cr

New Delhi: State-owned steel maker SAIL today reported a 10% rise in profit after tax at Rs 533 crore for the quarter ended December 31, on account of sales growth despite a “flat market”.

The company said, “Despite a subdued demand environment in the economy, in third quarter of 2013- 14, (its) total turnover was at Rs 12,716 crore, up 8%.” — Agencies

Chandigarh, February 14
The Sarovar chain of hotels will open 10 hotels across the country in the next six months, said Sarovar Hotels managing director Anil Madhok here today.

Inaugurating a hotel at Zirakpur here today, Modhok said the group would shortly launch projects at Kekri, Jaisalmer, Jaipur, Jalandhar, Dear Bassi, Amritsar, Rewari, Tirupati and in Gujarat.

With the government’s new visa on arrival policy for tourists of 180 countries, the hospitality sector, which saw a downfall after the 26/11 incident, will revive soon, he said.

He said, “Due to downturn in the hospitality sector, many players have to shelf out their projects while others re-look into their operations especially in energy conservation and deployment of staff, for cost cutting.

He said the General Election could affect on the clearance of the hotel projects for three months.

BRIEFLY

Economic growth to cross 5% this financial year: PM
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No going back on gas price hike decision, says Moily
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RBI tightens gold import norms under 80:20 scheme
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Nissan ends marketing, sales pact with Hover
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