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Time of India
2 days ago
- Business
- Time of India
Centre procures 1L tonnes of onions so far for buffer stock
Nashik: Central govt has procured around 1.07 lakh tonnes of onions so far through its two central agencies: the National Agricultural Co-operative Marketing Federation of India Ltd (Nafed) and the National Cooperative Consumers' Federation of India Limited (NCCF). This was to create a buffer stock under the price stability funds. As many as 1.06 lakh tonnes of summer onions were procured in Maharashtra alone, stated the minister of state for agriculture and farmers welfare, Ram Nath Thakur, in a written reply to questions raised by the MP from Dindori parliamentary constituency, Bhaskar Bhagare, and other MPs during the ongoing parliamentary session. Thakur said, "The ministry of consumer affairs are procuring onions, which has set the total procurement target of 3 lakh tonnes of summer onions through the Nafed and NCCF. Each agency will procure 1.5 lakh tonnes." As per the Second Advance Estimates for 2024-25, area estimates of onion in the state of Maharashtra are 9.78 lakh hectares, compared to 6.67 lakh hectares in 2023-24, This was an increase of 46%. The All-India Wholesale Price Index (WPI) for onion was reported as 279.2 for June 2024 and 185.7 for June 2025, registering a rate of inflation of 33.49%, stated the minister in a written reply. The central govt undertakes onion procurement annually to create a buffer stock. This measure aims to manage the supply of the onions, particularly during potential scarcity periods that typically occur around Aug-Sept each year.
Time of India
4 days ago
- Business
- Time of India
Jigar Mistry on 3 sectors that offer better earnings upside in Q1
Jigar Mistry , Co-Founder, Buoyant Capital , says last quarter saw more earnings hits than misses, driven by cyclicals, but larger index components negatively impacted growth, leading to consensus estimate cuts for Nifty companies for the first time since Covid. IT faces challenges due to lower deal signings and reduced rupee depreciation, pressuring revenue and margins. Pharmaceuticals, healthcare, specialty chemicals, and banking/financials offer better earnings upside . Let us talk about the current domestic economy and market strength . Inflation is in check as far as it being under the comfort band of RBI is concerned. We are expecting another 25 bps rate cut; fiscal deficit and current account are in check for our economy and for our markets. What are you banking on and how exciting will the next six months of this current year be as far as the markets are concerned? Jigar Mistry: So, yes, in one line, India is the macro darling in an otherwise uncertain world. All the numbers you mentioned, the fiscal prudence with which the government has approached the central budget, inflation data, the WPI data, everything else seems to be checking perfectly fine. So, it is not the macro that is troublesome. It is actually the internal construct with which this seems to be moving. Explore courses from Top Institutes in Please select course: Select a Course Category others Cybersecurity Project Management Artificial Intelligence PGDM Design Thinking Management Healthcare Others healthcare Data Analytics Data Science Technology Operations Management Product Management Public Policy Leadership Digital Marketing MCA CXO MBA Data Science Finance Degree Skills you'll gain: Duration: 16 Weeks Indian School of Business CERT - ISB Cybersecurity for Leaders Program India Starts on undefined Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Many Filipinos don't know about this! Read More Undo In the last few years, the central government, the state government, and PSU capex have driven the majority of the gross value addition in the GDP and that construct now seems to be changing. The central government, in their budget, pushed through a lot in terms of lower taxes and giving money in the hands of end consumers. The state governments have been doing a lot more. If you add up all the announced freebies, that budget is now totalling almost the entire capex budgets of the states and what they have provided in the state budgets is a much lower number. But despite that, the capex has slowed down from the states to a negative number and the central government has also pushed it out by one year. So, there is more money in the hands of low-income and middle-income houses and less money from the central government and therefore, we are seeing a slight slowdown in corporate earnings growth as well which is filtering through the lower activity. It is a great place to be macroeconomically, but it is the macro to micro switch that is a little confusing. What is your view on the earnings season? It has been almost a week and more that the quarterly earning season has started. It started with the IT majors which were a disappointment, it was a mixed Q1 for IT and Infosys in comparison, did a little better but otherwise where TCS and other IT majors were and even midcap IT at present is not really performing. For banks and financials, expectations right from the quarterly updates and the numbers are also coming in those lines. Which sector according to you will be in focus for the quarterly earnings and where will the support come in from? Jigar Mistry: If you zoom out and see where the last quarter ended, that brings the current quarter into perspective. Last quarter overall there were more hits than misses, if we compare the consensus earnings to the actual numbers that came through. Overall, there were more hits than misses but again the devil somehow is always in the detail. The growth was driven by a lot of cyclicals. Live Events You Might Also Like: Best-case scenario is a time correction in market; rebound possible in Q2: Dinshaw Irani The larger weight components in the index were contributing negatively to growth, whereas the cyclicals and turnaround stories typically have a lower weight in the index and that contributed massively. Now, because of this, for the first time since Covid, we are seeing a consensus cut their estimates into the Nifty companies. In the past five years or so, we have consistently at the start and end of the estimates been almost always aligned or there was a slight uptick and that is resulting in some amount of cuts now. Coming to the sectors where we see things playing out, IT remains a challenge for the way we see this. Our belief is that essentially we are getting into an environment where the amount of new deal signs will be much lower. At the same time, the rupee depreciation will be much lower. When you combine these two, you will have pressure on revenue as well as on margins and it is not like valuations are cheap, relative to the history they are cheaper relative to the market. But that is not how IT acts because IT is a global sectoral play. Where we do see reasonably decent upsides in terms of earnings are pharmaceuticals, healthcare, specialty chemicals in some places, and obviously banking and financials is one place we are quite interested in. Looking at this new trade world order, is there any red flag that can impact the strategizing of your portfolio in terms of sectors that you would not want to go ahead with? If you are overvalued over there, you might just want to cut down your weightages. As far as your portfolio management is concerned, do you want to just mitigate some kind of a risk? Jigar Mistry: Yes, there are two or three things. One is the fat tail of the probabilistic curve and one much closer. Given the rise in retail participation, we are seeing some huge increases in the number of shareholders for many businesses. We call them narrative stocks because the growth in the market capitalization has been much sharper compared to the growth in earnings for these businesses. You Might Also Like: Keep investment goals in mind; focus on a five-year horizon for better results: Shiv Chanani Wherever you see those playing out, liquidity is a two-way sword, that comes easy and goes away easy as well. Wherever you see a huge increase in market cap and a commensurate increase in earnings and accompanied with a very large increase in number of shares. These are the businesses we are a little wary about. Secondly, look into this situation where there are very strong singular monopolistic businesses. Like liquidity, monopoly also works in very questionable fashion because what can be given with the stroke of a pen can be taken away as we are seeing with one of the exchange companies on Thursday. We saw this with the gas companies earlier and now, we are seeing the same with these businesses, essentially where the reduction in administered price took away the monopoly of these businesses. The exchange of power was dealt with in a similar manner. Many of those businesses have a singular party ordering and when those are trading at 50-60 times, I would be wary of that. The last part is and maybe we can call this a fat-tailed philosophical line of thought, but historically wherever there have been revolutions, go back to the agricultural revolution in 10,000 BC or the Dutch, English, and French revolution 1600 to 1800s, there has always been an accompanying conflict with it. As AI takes over, that is one area where we should be a lot more prepared to face several types of conflict. Therefore wherever you find a lot of excess being built out, it makes sense to get a little more defensive along the way.
Economic Times
5 days ago
- Business
- Economic Times
How to make FIT fitter this time
Agencies Representational India's flexible inflation targeting (FIT) framework is up for review in early 2026, having been last reviewed in 2021. Some finetuning can make it more robust and enhance efficacy of the communication channel, which is critical to influence expectations of market participants and households. Band music Maintain headline CPI inflation midpoint target at 4% with +/-2% band. But also add a core inflation target of 4% +/-1% as an additional anchor to decide on the monetary policy stance. If headline CPI inflation and core inflation remain above 5% on a secular basis, then RBI will need to tighten its monetary stance to bring inflation back to the target. Level of the output gap should be considered while making the final decision. While the shift in monetary policy focus to CPI from WPI has been welcome, the current framework has led to an excessive emphasis on point-estimate headline CPI figures, at the cost of giving less importance to core inflation, a more reliable indicator of underlying inflation momentum. This overemphasis on headline CPI inflation delayed the rate-cutting cycle to February. If core CPI inflation had been given equal emphasis, then the rate-cutting cycle could have started ideally from October 2024. Now, the sharp drop in headline CPI inflation, led by lower food prices, is causing an opposite effect, with expectations rising that RBI can cut rates further as headline CPI inflation has dropped closer to 2% if core inflation is given equal weight in deciding the monetary policy stance, along with headline CPI inflation, then the justification for further rate cuts should not arise, with core CPI inflation currently being above the 4% mark. Reacting solely to the headline CPI inflation trajectory, which gets impacted readily by volatile vegetable prices, raises the risk of policy error, which can be avoided by giving equal weight to core CPI inflation, while keeping headline CPI inflation as the nominal anchor for the FIT is not to suggest replacing headline CPI inflation anchor with core CPI inflation. Instead, accord core CPI inflation equal weight alongside headline CPI inflation to make FIT more robust. Otherwise, monetary policy, at most times, may remain hostage to volatile price trends of key vegetables like tomatoes, onions and potatoes. Take a new stance The monetary policy rate stance should be aligned with the liquidity stance to improve efficacy of monetary transmission. When the former is accommodative, then the latter should be as well, with short-term rates possibly remaining closer to standing deposit facility (SDF) rate - but not below SDF rate, to maintain sanctity of the liquidity adjustment facility corridor. When the monetary policy rate stance is neutral, then the liquidity stance ought to be neutral as well, with short-term rates remaining closer to the repo rate. With RBI having changed its stance to neutral in June, it's not surprising it has announced variable rate reverse repo (VRRR) auctions to maintain short-term rates between SDF and repo rate. And in a rate hike cycle, the liquidity stance needs to be restrictive, so that short-term rates remain between repo and marginal standing facility (MSF) rates, to have an effective monetary transmission. Such an alignment between the rate and liquidity stances is easy to appreciate and can also serve as an effective signal from RBI's view regarding the turning point of monetary policy cycles. Dot plots With the inflation targeting framework now being in place for nearly a decade in India, MPC members could be given additional responsibility for providing their forecasts of interest rates (anonymously, of course) in the form of 'dot-plots' over different time horizons, like in US Fed. This will likely add to policy credibility, and sharpen the tool of forward guidance in signalling to the market about the potential turning point of monetary policy cycles. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Can victims of Jane Street scam be compensated by investor protection funds? Did the likes of TCS, Infosys, Wipro let India down in AI race? How India's oil arbitrage has hit the European sanctions wall Apple has a new Indian-American COO. What it needs might be a new CEO. Stock Radar: Tata Chemicals breaks out from 1-month consolidation; time to buy the dip? Power sector companies: Will they be able to outperform? 5 power stocks with an upside potential ranging from 6 to 29% For risk-takers with long-term perspective: 7 mid-cap stocks from different sectors with upside potential of over 26% Multibagger or IBC - Part 16: Regulatory tailwind turns compliance into cash. This auto ancillary could be a winner
Mint
5 days ago
- Business
- Mint
Himanshu: Low inflation masks a growing problem of fruitless farming
The latest inflation estimates based on the consumer price index (CPI) and wholesale price index (WPI) have brought cheer to policymakers and financial markets. For June, retail inflation, as measured by the CPI, was recorded at 2.1% on a year-on-year basis. Rural inflation was even lower, at 1.72%, while it was 2.56% in urban areas. These are India's lowest readings since January 2019, when the economy was in a slowdown. Wholesale inflation, in fact, turned negative, with prices down 0.13% in June from a year earlier. While inflation at a six-year low is good news for the central bank and policymakers who have struggled to bring it down, the composition of our inflationary trends across commodities and their groups should be a worry for India's economy. At both the retail and wholesale levels, the decline in inflation was driven largely by food prices. In the retail case, food inflation has turned negative, with prices declining 1.1% from a year earlier (rural food inflation was at -0.9% and urban at -1.2%). A better picture emerges from WPI data, which shows food inflation at -3.8%. Unlike retail, wholesale inflation has seen a sharp decline since December 2024, when it was 8.5%. The reading has declined steadily since. Also read: Mint Quick Edit | Farming has regained policy attention Prices have moderated for almost all items within the food group at the retail level. But in the case of vegetables and pulses, they have declined sharply by 19% and 12%, respectively. Meat and fish items saw a decline of 1.6%. The wholesale price drops are sharper. While the decline in food prices both at the retail and wholesale levels may have driven headline inflation down, it has hurt price realization for farmers and thus the profitability of farming. So much so that for major pulses, farmers are forced to sell their produce at prices much below Minimum Support Prices (MSPs) set by the government for not just this year, but also the last. This is also true for some other crops such as of soybean, which has seen prices collapse. Part of the reason for price deflation is good monsoon rainfall, which has increased production. But this increase wasn't large enough to cause a collapse in prices on its own. It was exacerbated by the government's exuberance in importing pulses, most of them at prices lower than the MSP. India imported about 7.3 million tonnes of pulses last year and 4.7 million tonnes in 2023-24 as against average annual imports of 2.6 million tonnes between 2018 and 2023. India will continue to allow the duty-free import of several pulses until March 2026, despite the collapse in domestic prices. Similar is the case with several other commodities where ad-hoc trade decisions have driven down price realization for farmers. A reduction in duties on edible oils such as soybean, palm and sunflower oil has weighed on their local prices. An unfortunate consequence of the lower farm-gate prices has been lower sowing for most of pulses and soybean this season, regardless of abundant rainfall. Also read: Core inflation is back. What does it mean for India's monetary policy? Meanwhile, core inflation (which excludes food and fuel) continues to reign high in India. This points to a shift in the terms of trade against agriculture vis-à-vis other sectors. Recent data also suggests that agricultural input prices have continued to rise sharply. Also, a relevant negative consequence of the current global trade uncertainty has been a fall in fertilizer availability, which has pushed up black-market prices and dragged down usage. A shift in the terms of trade against agriculture has combined with a relentless rise in input costs, some of it on account of supply shocks, to erode the profitability of agriculture even further. With India's rural economy already facing stagnant real wages and a decline in farm incomes, mass distress is likely to intensify now. Ad-hoc trade policy shifts are not aberrative or one-off missteps, but a reflection of a larger political economy paradigm that prioritizes reducing retail inflation even if it results in farm incomes going down. It is part of a political economy architecture that favours the urban middle class against the country's large and vulnerable rural population. Given this context, any sacrifice by the government of the agricultural sector's interests to secure a favourable trade deal with the US for India's non-farm sectors would only reinforce our distorted political economy under which agriculture gets short shrift. Also read: Rural India's reality check: Consumers turn cautious as aspiration meets inflation True, low inflation makes space for interest rate cuts, but these will not trigger industrial investment so long as consumer demand stays weak. A policy paradigm that ignores this reality goes against the principle of equity. It also hurt incomes and the larger economy.
Time of India
6 days ago
- Business
- Time of India
RBI paper says 10% jump in crude prices can lead to 0.20% rise in domestic inflation
A 10 per cent increase in global crude oil prices can raise the domestic headline inflation by 0.20 per cent, a paper by RBI staffers released on Wednesday said. The paper on oil price and inflation nexus in India by Sujata Kundu, Soumasree Tewari and Indranil Bhattacharyya also asked for policy measures to decrease reliance on imported crude through ways such as alternate non-fossil energy usage. Explore courses from Top Institutes in Please select course: Select a Course Category Operations Management Public Policy MCA Digital Marketing Management Technology Degree others Finance Project Management healthcare Data Science Cybersecurity Healthcare CXO Others Design Thinking Data Analytics Data Science Leadership PGDM MBA Product Management Artificial Intelligence Skills you'll gain: Quality Management & Lean Six Sigma Analytical Tools Supply Chain Management & Strategies Service Operations Management Duration: 10 Months IIM Lucknow IIML Executive Programme in Strategic Operations Management & Supply Chain Analytics Starts on Jan 27, 2024 Get Details The paper does not represent the views of the central bank. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Farmer Finds Diamond Ring. When He Shows It To His Wife, She Says, 'I Want A Divorce'. Plays Star Undo In the current context, it is necessary to understand that a surge in oil prices has the potential to have a "debilitating" impact on the Indian economy, it noted. "The current global economic scenario, characterised by increasing trade fragmentation, supply chain disruptions and intensifying tariff wars, can shrink global trade sharply and thereby derail global growth. The resultant oil price volatility can be debilitating for the Indian economy at this stage," the paper reads. Live Events Sudden oil price surges can impact the undergoing disinflation process and thwart policy normalisation, it said, giving out details of the likely impact. "The results of the empirical analysis suggest that a 10 per cent increase in international crude oil prices could raise India's headline inflation by around 20 basis points on a contemporaneous basis," the paper said. Noting that the government also has a lever in the form of excise duties on petroleum products which influence the prices at the pumps, it said that despite this, the crude prices have an important role. "Unless retail fuel prices change, there is no direct impact of higher international oil prices on CPI. However, persistent increase in oil price can impact WPI and core (excluding food and fuel) in the form of higher transportation and input costs. It also has the potential to unhinge inflation expectations , thus changing the inflation path," the paper said. Additionally, higher energy prices can raise inflation expectations of consumers and businesses, indirectly exerting pressure on food and core inflation, it said. As current international prices are moderating consistently owing to increase in supply and fall in demand due to global economic slowdown, this augurs well for inflation as indicated by the limited passthrough to domestic prices, the paper said. Active government intervention has contained spillover to domestic prices, but policymakers need to be "vigilant and cautious" of the direct and indirect impact of the evolving global crude price dynamics through continuous assessment, it said. Reducing crude oil dependence by promoting alternate non-fossil energy usage and regional free trade agreements and bilateral treaties with major oil exporters could be explored for oil imports at favourable prices, it suggested.
