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Consumer inflation slides below 6% mark for first time this year: Page 1
- Retail inflation in March 2023 dropped below 6% for the first time in the year and only the third time in the last 15 months, touching 5.66%.
- This drop was aided by base effects, as March 2022 had recorded a nearly 7% price rise, resulting in a high base for comparison.
- Despite the moderation in March, the average inflation for Indian consumers throughout the fiscal year 2022-23 was 6.66%, which is higher than the 6.5% average projected by the Reserve Bank of India (RBI) in February.
- Rural consumers experienced a sharper dip in inflation compared to urban consumers, with rural inflation easing from 6.72% in February to 5.51% in March.
- Vegetables remained in deflationary mode, with prices dropping 8.5% year-on-year. However, cereals, milk, and spices inflation remained high, while fruit prices surged 7.6% in March compared to 6.4% in February.
- Oil prices fell for the second consecutive month, with a quicker price correction from a year ago in March compared to February.
- The RBI has projected that price rise will moderate to 5.2% this year, with the April to June quarter expected to average 5.1% inflation, assuming normal monsoon rains and limited impact from unseasonal rain last month.
- The steep drop in headline inflation in March was due to a high base effect, which is expected to keep the inflation rate lower at least in the entire first quarter of 2023-24, as per CRISIL chief economist Dharmakirti Joshi’s analysis.
Corporate power and Indian inflation: Page 6
- Divergence between inflation rates in India and the rest of the world is not new, and has been driven by factors such as food price inflation in India, which tends to feed into core inflation.
- Corporate pricing power may not be the sole driver of elevated core inflation in India, as other factors such as rising input costs in the retail sector and the presence of conglomerates in sectors other than retail may also play a role.
- Comparing wholesale price (WP) inflation with consumer price (CP) inflation, including core inflation, may not be appropriate as the commodity basket for CP inflation includes items that do not enter the wholesale price index, leading to a mismatch.
- Data suggests that the rising price of food is currently driving inflation in India, with over 75% of the direct contribution to inflation coming from sectors where the Big 5 conglomerates are unlikely to have a significant presence.
- While corporate pricing power does exist in India, the extent to which it is driving overall inflation currently is debatable, and public policy should be vigilant against concentration of power in any sector, whether economic or social, and its potential consequences for inflation.
- The framing of the discourse on inflation in terms of core inflation and corporate pricing power may be limiting, and other factors such as food price inflation, input costs, and sectoral concentration should also be considered in understanding the trajectory of inflation in India.
Skill over chance: Page 6
- Tamil Nadu Governor R.N. Ravi recently gave assent to the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, which has been backed by almost all parties, including the AIADMK and the BJP.
- The passage of the Bill has had its ups and downs, with the Governor returning the Bill a month ago on the grounds of “no legislative competence,” but ultimately giving his assent on April 10.
- The Governor’s approach to the Bill, including meeting with e-gaming industry representatives while the Bill was under consideration, has been criticized, and there has been intrigue over the Raj Bhavan’s silence during the four months the Bill was with the Governor.
- The Centre has already notified the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, which should provide clarity in enforcing the law in conjunction with the IT Act, 2000.
- The proposed Tamil Nadu Online Gaming Authority should ensure a balance between banning online gambling and online games of chance, such as rummy and poker, and monitoring online game providers.
- Addiction to online gaming has resulted in financial distress and serious health issues in families, highlighting the need for a healthy online gaming environment.
- The interests of all stakeholders, including authorities, industry, and players, should be considered in creating regulations for online gaming.
India must board the Online Dispute Resolution bus: Page 6
- India has shown improvement in the World Bank’s Ease of Doing Business ranking, but still ranks low in ‘Enforcing Contracts’.
- India has been perceived as ‘arbitration-unfriendly’ due to factors like lack of preference for institutional arbitration, judicial interference, and setting aside of awards.
- Recent legislative amendments and judicial decisions are addressing these issues and improving the arbitration climate in India.
- India can leverage its strengths in technology to become a frontrunner in Online Dispute Redressal (ODR).
- ODR has several advantages, including reducing burden on courts, saving time and costs, and providing effective resolutions.
- Private platforms in India are already resolving disputes through ODR, and NITI Aayog has claimed that India is uniquely positioned to emerge as an epicentre for ODR developments.
- Measures such as incentivising ODR use through legislative measures, solving infrastructural challenges, and exploring ODR as a grievance redress mechanism can promote ODR in India.
- ODR has the potential to ensure justice for all, and India can catch up and overtake other countries in the realm of online dispute resolution.
The role of Parliamentary Committees: Page 8
- Parliamentary committees are constituted to deal with the volume of information and scale of operations that the Indian Parliament is required to undertake, as it is not feasible to take up all issues on the floor of the House.
- Contrary to popular perception, looking into Bills is not the only purpose that committees serve. They play a crucial role in analyzing the impact of legislation on governance indicators and making recommendations.
- Committees have been functioning in India since the unveiling of independent India, with some committees having been formed even before the establishment of a structured committee system in 1993.
- Both the Lok Sabha and the Rajya Sabha (the two houses of the Indian Parliament) have their own Standing (permanent) Committees and Ad Hoc (need-based) Committees, as well as Joint Committees with representation from both houses.
- Committees go into the details of specific legislation, analyze its impact, and make recommendations. While committee reports are not binding on the government, they help the legislature ensure oversight on the executive.
- Committee discussions take place in a more objective and non-partisan environment, where members can engage in detailed deliberations and reach consensus, unlike the often partisan and polarized environment of the floor of the House.
- Committee reports often highlight inconsistencies or shortcomings in government policies or actions, providing an opportunity for objective assessment and improvement.
- However, in recent times, there has been a declining trend in the percentage of Bills being referred to committees, with only a small percentage of Bills introduced in the Lok Sabha being referred to committees during the 17th Lok Sabha.
- Committees play a crucial role in making Parliament a dynamic and functional space where members converge to debate on matters of national importance, and their work deserves nuanced perusal to understand the functioning of the highest platform of multilateral dialogue in India.
- Overall, parliamentary committees in India have a significant role in ensuring oversight, analyzing legislation, and making recommendations for the improvement of governance, and their work is crucial for the effective functioning of the Indian Parliament.
A beginner’s guide to the Large Hadron Collider, its functions and its future: Page 9
- The LHC is the world’s largest science experiment, built by CERN for conducting experiments with highly energized subatomic particles.
- It is a particle collider that accelerates two beams of particles in opposite directions and smashes them head-on to study the effects of collision.
- The particles used in the LHC are hadrons, which are subatomic particles made up of smaller particles like quarks and gluons.
- The LHC uses a circular pipe that is 27 km long and encircles two D-shaped magnetic fields created by thousands of magnets to accelerate particles to nearly the speed of light.
- The highest collision energy achieved at the LHC so far is 13.6 TeV, which is packed into a volume of space the size of a proton, resulting in a high energy density.
- The LHC has nine detectors that generate massive amounts of data for analysis, and it has helped confirm the existence of the Higgs boson and study exotic particles and extreme natural conditions.
- Despite its successes, the LHC has not yet found “new physics” beyond the Standard Model of particle physics, which has led to discussions about upgrading the LHC’s luminosity or building a bigger version of the collider.
- The future of the LHC involves ongoing upgrades to improve its capabilities and luminosity, as well as discussions about building larger colliders to explore “new physics” at higher energies.
- There are differing opinions among physicists about the best path forward for particle physics research, with some advocating for building larger colliders and others suggesting alternative approaches with less expensive experiments.
Israel’s ministerial visits to India might include FTA talks: Page 10
- An India-Israel free trade agreement (FTA) is expected to be on the agenda during the upcoming visit of Israeli Economy Minister Nir Barkat, sources in Tel Aviv have told The Hindu.
- The visit by Mr. Barkat is likely to be followed by the visit of Foreign Minister Eli Cohen to India.
- The back-to-back official interactions are being interpreted as a prelude to the arrival of Prime Minister Benjamin Netanyahu in India.
- “While this upcoming delegation will focus on promoting business relations between our countries, the Cohen delegation will focus on the bilateral relations on wider fronts. I call on the parties to resume discussion on the FTA,” said Anat Bernstein-Reich, president of the Israel-Asia Chamber of Commerce, which will be a part of the delegation of Mr. Barkat and plays an important role in advancing India-Israel business interest.
- Mr. Barkat who served as the Mayor of Jerusalem from 2008 to 2018, was at the forefront of championing the Netanyahu government’s agenda.
- It has been learnt that during the next week’s visit, fintech, cybersecurity, climate tech and the automotive sectors are likely to be taken up by the two sides.
- The long-pending issue of an FTA between India and Israel was revived last year when Commerce and Industry Minister Piyush Goyal announced that India was planning to restart dialogue in that direction.
- The announcement which came in the backdrop of the successful conclusion of an FTA between India and the UAE was perceived as a positive sign.
IIP rises 5.6% year-on-year in February but slides from Jan.: Page 14
- India’s industrial output grew 5.6% this February, marginally higher than the 5.45% in January, with manufacturing output picking up pace to rise 5.3% even as electricity generation grew less than 10% for the first time in four months at 8.7%.
- Sequentially, however, the Index of Industrial Production or IIP was 5.6% below January levels. Consumer durables production contracted for the third month in a row, to drop 4% in February while intermediate goods shrank 0.3% with output 7.2% below January levels.
- The favourable base from February 2022 when consumer durables’ output had slipped by almost 10%, didn’t help much, and their production was also 0.4% below this January’s output. Bank of Baroda chief economist Madan Sabnavis attributed this to weaker demand owing to high inflation.
- On the other hand, consumer non-durables saw a 12.1% surge in output this February compared to a nearly 7% decline a year earlier. However, February marked the second month of a sequential decline in output with production 6% below January levels.
Source: The Hindu Epaper
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