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17

(1-15Th January 2017)

GOVERNMENT OF INDIA

DIRECTORATE GENERAL OF SUPPLIES &DISPOSALS

JEEVAN TARA BUILDING, 5 SANSAD MARG,

NEW DELHI - 110001

SUMMARY OF ECONOMIC INTELLIGENCE BULLETIN

Economic Intelligence Bulletin includes abstracts of important economic/commercial/

technical development and reviews as reported in the issues of financial dailies. The Bulletin

pertains to the fortnight ending 15th January, 2017.

1. PRICE TREND

1.1 PETROL PRICE HIKED BY RS 1.29 A LITRE, DIESEL UP BY 97 PAISE

Petrol price has been hiked by Rs 1.29 on 1st January, a litre-the third increase

in a month, and diesel rate was raised by 97 paise a litre-the second hike in a

fortnight.

The increase in rates announced by oil firms is excluding state levies and the

actual hike will be higher.

The actual hike after considering VAT would be Rs 1.66 a litre in Delhi for

petrol and Rs 1.14 for diesel. The hike has become effective from midnight on 2nd

January.

Petrol price was on December 17 hiked by Rs 2.21 a litre and diesel by Rs

1.79 per litre, excluding local levies. The actual hike after considering VAT came to

Rs 2.84 per litre in Delhi for petrol and Rs 2.11 for diesel.

After this hike, petrol in Delhi will now cost Rs 70.60 a litre as compared to

Rs 68.94 currently.

Similarly, a litre of diesel will cost Rs 57.82, up from Rs 56.68.

(FINANCIAL EXPRESS 2ND JANUARY, 2017)

1.2 STEEL MAKERS TO HIKE PRICES IN NEW YEAR

With demand for steel not so strong in the domestic market, primary producers

of the alloy are planning to pass on only a part of the Rs. 6,000 a tonne hike in prices

planned in early December.

The rise in international coking coal prices, a key raw material used in the

making of steel, had prompted steel producers to mull over a steep hike for January.

“A combination of market appetite to absorb the hike and cost push will decide

product price increase for January and this is not going to be anywhere close to Rs.

6,000 per tonne,” Jayant Acharya, Director (commercial & marketing ) at JSW steel,

told Business Standard.

According to Joint Plant Committee data, India’s finished steel consumption

grew 3% during April-November to 54.24 million tonne (mt) over the corresponding

period of last year. Consumption in November stood at 6.12 mt, up 3.8% from the

corresponding period last year but down 14.3% sequentially. Coking

coal prices have come down to about $250 a tonne from the peak levels of $320, but

steel prices have enough headroom to increase, said industry officials.

“In December domestic steel producers had raised product prices by 7-9%

across all categories. In January too, it should be same,” said Peeyush Gupta, vice-

president (Sales & marketing), at Tata Steel. “Though steel prices have been

increased, they are still lower than 2014 price levels.”

(BUSINESS STANDARD 3RD JANUARY, 2017)

1.3 OIL & GAS STOCKS INCREASE 1.97% ON RISE IN CRUDE PRICES

Crude oil prices rallied to an 18-month high on 3rd January, backed by hopes

that crude production cuts agreed to last year will help drain global surplus and

stabilise the market in 2017.

Hence, the S&P BSE oil and gas index began the year with a 1.97% rise on3rd

January, with Brent prices more than doubling from its previous year low. Oil prices

have been gaining after an OPEC agreement in November. The BSE oil and gas index

rose 1.97 % at 12,458.97. Mahanagar Gas, Indraprastha Gas and Indian Oil Corp are

among 21 stocks from the BSE500, Nifty 500 and small-cap index hitting their

respective 52-week highs on 3rd January in intra-day trade.

Oil India hit a fresh 52-week high intraday of Rs. 463, ahead of a bonus issue.

The firm has fixed January 13 as the record date for ascertaining the eligibility of

shareholders for the issuance of bonus shares in the ratio of 1:3. Indian Oil ended

5.79% higher after it submitted the shareholding pattern for the 2016 to BSE.

Brent crude, the global oil benchmark, rose 2.15% to $58.04 a barrel on

London’s ICE Futures exchange, having earlier peaked at $58.37, its highest level

since July 2015. On the New York Mercantile Exchange, West Texas Intermediate

futures were trading up 2.25% at $54.94 a barrel.

(FINANCIAL EXPRESS 4TH JANUARY, 2017)

1.4 NMDC RAISES IRON ORE PRICES BY RS. 125

India's largest iron ore miner NMDC has raised the prices of higher grade iron

(lumps) by Rs. 125 per tonne to Rs. 2,225 per tonne for the current month.

The state-run firm also raised prices for iron ore fines, which are inferior grade

ore, by Rs 125 to Rs 1,985 per tonne for the month of January.

"The prices of iron ore with effect from January 3, 2017 has been fixed at

Lump ore at Rs 2,225/ WMT (wet metric tonne) and fines at Rs 1,985/- WMT," the

company said.

The firm said the revised prices exclude royalty, taxes, DMF, duties, levies

etc.

Last month, the company had said "the prices of iron ore with effect from 29

November 2016 has been fixed as Lump Ore at Rs 2,100- WMT, fines at Rs 1,860/-

WMT".

According to a company official the rise in the prices of lump ore and fines

has been due to various factors including hike in international prices of iron ore. Iron

ore is the main ingredient used in making steel.

NMDC is country's single largest iron ore producer, presently producing about

30 million tonnes of iron ore from three fully mechanised mines.


1.5 COTTON PRICE FIRMS UP 10% ON SUPPLY FALL

Cotton prices in India, the world's second-largest producer, have firmed up by

10% in the last fortnight on falling supplies in the spot markets and exports by mills.

Prices are expected to remain bullish with farmers holding the crop due to lack of

cash flow in the market, said trader and ginners.

On 7th January, Shankar 6 cotton prices in the Rajkot mandi was trading at Rs

40,000-41,000 per candy of 356 kg each from Rs 37,500-38,000 per candy a fortnight

ago.

Traders said prices could see an upward trend of 10% in the coming days with

exports and domestic demand picking up amid fall in arrivals in mandis. Further,

news of Cotton Corporation of India stating that it will procure 1520 lakh bales of 170

kg each of cotton in the year ahead too has supported prices, said a Mumbai based

trader.

Currently, major purchases were happening from Gujarat, Maharashtra,

Andhra Pradesh, Punjab and Karnataka.

(THE ECONOMIC TIMES 9TH JANUARY, 2017)

1.6 GOLD TOPS RS 29,000 MARK, HITS OVER 1 -MONTH HIGH ON GLOBAL

CUES

Gold prices reclaimed the Rs 29,000-mark by surging Rs 330 to trade at over

one-month high of Rs 29,030 per 10 grams, tracking uptrend in the global bullion

market and increased buying by local jewellers.

Silver also shot up by Rs 350 to Rs 40,750 per kg due to increased offtake by

industrial units and coin makers. Globally, gold rose 0.43% to $1,185.90 an ounce in

Singapore.

In the national capital, gold of 99.9 and 99.5% purity climbed Rs 330 each to

Rs 29,030 and Rs 28,880 per ten gram, respectively, a level last seen on December 5

when it had closed at Rs 29,050.

Sovereign, however, remained unaltered at Rs.24,200 per piece of eight gram

in limited deals. Following gold, silver ready also rebounded by Rs 350 to Rs 40,750

per kg and weekly-based delivery by Rs 305 to Rs 40,600 per kg.


1.7 RUBBER PRICES JUMP TO 2 YEAR HIGH ON SUPPLY CRUNCH; TYRE

MAKERS FALL

Natural rubber prices in India jumped to a two-and-a-half-year high on 12th

January on limited supplies and tracking gains in overseas markets due to supply

disruptions in top producer Thailand, three dealers said.

This price rise would increase the raw material cost of tyre makers, thereby

putting pressure on their profitability, as natural rubber makes up more than 40% of

the cost of a tyre.

The spot price of the most-traded RSS-4 rubber (ribbed, smoked sheet) at the

Kottayam market in the top producing southern state of Kerala rose by Rs. 200 to Rs.

14,500 ($213.24) per 100 kg, the highest since June 2014.

Benchmark TOCOM rubber futures rallied to their highest in nearly four

years, extending gains into a third session, boosted by supply concerns after flooding

hit a major rubber-producing area in Thailand.

Thailand will lose around 10% of its rubber output in the 2016-2017 crop year

due to flooding, a senior industry official said.

Shares of Indian tyre companies, including Apollo Tyres Ltd, JK Tyre &

Industries Ltd, CEAT Ltd and MRF Ltd, were trading lower in a firm Mumbai

market.


2. FISCAL POLICY

2.1 SEBI REVISES NORMS FOR WRITTEN-OFF FPI SECURITIES

Markets watchdog Sebi on 2nd January said the proceeds from the sale of

written-off securities held by non-operating foreign portfolio investors would need to

be credited to Investors Protection and Education Fund of the regulator within seven

days from the date of receipt.

Besides, the regulator said corporate benefits received in form of cash or

dividend would also be credited to the Investors Protection and Education Fund not

later than seven days from the date of receipt of the same.

“Corporate benefits received in the form of cash viz dividend shall be credited

to the Investors Protection and Education Fund of Sebi not later than seven days from

the date of receipt of the same,” Sebi said in a circular.

With regard to corporate benefits, the regulator said, “in case of receipt of

corporate benefits in the form of securities arising out of shares written off, the same

shall be reported to Sebi in the normal manner”.

As per the norms, written-off securities are sold through the stock exchange in

case custodian is unable to deliver securities or ascertain the claimant for securities.


2.2 SERVICE CHARGE BY HOTELS& RESTAURANTS NOT MUST

Service charge on a food bill is not compulsory and a customer can choose to

have it waived if not satisfied with the experience, the government said on 2nd

January.

The Narendra Modi-led government has also asked states to ensure that hotels/

restaurants disseminate this information through displays in their premises.

“A number of complaints from consumers have been received that hotels and

restaurants are following the practice of charging ‘service charge’ in the range of 5-

20%, in lieu of tips, which a consumer is forced to pay irrespective of the kind of

service provided to him,” Union consumer affairs ministry said in an official

statement.

The ministry had sought clarification from the Hotel Association of India,

which replied that “service charge is completely discretionary and should a customer

be dissatisfied with the dining experience, he/she can have it waived off. Therefore, it

is deemed to be accepted voluntarily.”

(FINANCIAL EXPRESS 3RD JANUARY, 2017)

2.3 STATES OPPOSE CESS ON MORE ITEMS

The centre on 2nd January flagged the idea of expanding the list of items to be

brought under a specific cess to finance the states’ constitutionally provided five-year,

100% compensation for any revenue losses in the goods and services tax (GST)

regime. The proposal, however, met with stiff resistance from states at the GST

council here, as they feared that it would necessitate the GST rates to be lower on a

number of goods, including consumer durables which suffer tax incidence higher than

26% now.

While the compensation was earlier pegged at about Rs. 55,000 crore a year, it

is now felt that the figure could be far higher – up to Rs. 90,000 crore in the first year

after GST is brought in – given that states’ revenues have taken a hit due to

demonetization. The council had earlier computed the compensation based on states’

relevant revenue base of Rs. 4.42 lakh crore in 2015-16 and assuming 14% annual

growth.

The Centre had said that raising the GST rates for the compensation could be

more burdensome on taxpayers than the cess because raising Rs100 for the Centre via

GST would require tax worth Rs 172 given the Finance Commission’s

devolution formula.


2.4 FISCAL IMPACT OF PM MODI’S SCHEMES TO BE RS 3.5K CRORE

The fiscal impact of the recent measures announced by Prime Minister

Narendra Modi aimed at helping the economically-weaker sections could be around

Rs 3,500 crore, states a report by the State Bank of India’s research team.

Modi had announced three broad schemes, including interest rate sops for

housing for the poor and farm loans, besides financial incentives for pregnant women.

The overall fiscal impact of all these measures will be around Rs 3,500 crore

per year, which is minimal when compared to the social and economic benefits,” said

SK Ghosh, group chief economic advisor, SBI.

While the fiscal burden on account of financial incentives for pregnant women

is estimated at Rs 1,200 crore, sops on farm loans is estimated to cost Rs 1,300 crore.

Fiscal costs of offering sops on housing for the poor is at Rs 1,000 crore.

Under its Pradhan Mantri Awas Yojana (PMAY), the prime minister has

announced the creation of two new middle income categories in urban areas. Loans of

up to Rs 9 lakh and Rs 12 lakh will get interest subvention of 4% and 3% respectively

in 2017.

In addition, for the neo-middle and middleclass in rural areas, loans of up to

Rs 2 lakh taken in 2017, for new housing, or extension of housing in rural areas, will

receive an interest subvention of 3%.

The report explains that the fiscal impact of both these housing measures

would be around Rs 700 crore in FY18, according to the SBI report.

Additionally, for PMAY, the fiscal impact is around Rs 200 crore.

(THE ECONOMIC TIMES 4TH JANUARY, 2017)

2.5 FDI UP 27% AT $27.82 BN IN APRIL-OCTOBER THIS FISCAL

Foreign Direct Investment (FDI) into the country grew by over 27% to $27.82

billion during April-October this fiscal. The FDI stood at $21.87 billion in April-

October 2015-2016, according to the Department of Industrial Policy and Promotion

(DIPP).

The main sectors which have attracted the foreign inflows include services,

telecom, trading, computer hardware and software and automobile.

India receives maximum FDI from Singapore, Mauritius, the Netherlands and

Japan. The inflows increased by 23% to USD 55.6 billion in the last financial year.

Foreign investments are considered crucial for India, which needs around $1 trillion

for overhauling its infrastructure sector.

A strong inflow of foreign investments will help improve the country's balance

of payments situation and strengthen the rupee value against other global currencies.


3. IMPORT AND EXPORT POLICY

3.1 GOLD IMPORTS LOWEST SINCE 2003

With the government giving a push to digital transactions following

demonetisation and discouraging the purchase of assets using cash, some trends

expected to change the gold business have been identified.

While the demand for gold increased immediately after demonetisation, it fell

sharply in December. Now for buying jewellery or bullion worth more than Rs 2

lakh, purchasers have to state their permanent account number (PAN). ''It would not

be surprising to see the government stipulating that jewellery purchases of over Rs

20,000 ($300) should be supported by a government-authorised identification,” said

an analyst who tracks Asian gold markets.

The import of gold in 2016 in tonnage terms has been the lowest since 2003,

according to the GFMS TR. The organisation has estimated the official gold import in

2016 at 492 tonnes, a large part of that being for export.

The customs duty from gold import could be approximately Rs 8,000 crore,

about less than half of what was collected a year ago. The low revenue also leaves

room for cutting the import duty on gold to bring it in alignment with the proposed

goods and services tax (GST), whose rate could be 4-6%.

At present the customs duty is 10% and the excise duty is 12.5%, but with

input credit it is 1%.

This year India will implement its own gold standards. This means gold

refined by Indian refiners following prescribed standards will be accepted as valid

tenderable gold in accordance with Indian standards on commodity exchanges and

international markets. At present the global benchmark for refined gold is the gold

standard fixed by the London Bullion Market Association (LBMA).


3.2 EXPORTS POISED TO GROW ON GLOBAL DEMAND RISE

India’s exports, which failed to capitalize on the falling rupee because of the

adverse effects of demonetization, are expected to grow this year with a rise in global

demand.

The commerce ministry has suggested a revision in the export basket and is

focusing on labor-intensive products rather than raw materials. This is important with

regard to China, India’s second largest trading partner, with which India had a $61-

billion current account deficit in 2015-16.

“Sectors such as hardware, electronics, pharmaceuticals, textiles and auto

components have been identified for pushing export growth,” a commerce ministry

official said.

For engineering goods exports, the highest export earning category, exploring

markets like Iran and African countries and consolidating those in the United States

and European Union would be important, said BhaskarSarkar, executive director,

Engineering Exports promotion Council.

India’s exports for the first 11 months of the calendar year 2016 were $239.39

billion, less than the $243.63 billion in the corresponding period of 2015.

On the other hand, imports went down to $324.84 billion this year till

November from $358.14 billion in the corresponding period of the preceding year.

This translates into a deficit of $85.45 billion.

Raw materials such as cotton, iron ore and copper have come under scrutiny

because these constitute more than 70% of India’s exports to China, according to Ajay

Sahai, Director-General of the Federation of Indian Exports Organizations.

However, for major foreign exchange-earning industries such as

pharmaceuticals and textiles, addressing sectorial issues will be important, trade

experts say. The government has in the past two years focused on the domestic

manufacturing of APIs (Active Pharmaceutical Ingredients), crucial to the production

of medicines. However, firms are unwilling to manufacture APIs because of the large

capital outlay involved.

Textile manufacturers say that the beneficial effects of the Rs. 6,000 – crore

package announced by the government in July, such as boosting production and

employment will come much later than it had been estimated.


3.3 GOVT MAY IMPOSE ANTI-DUMPING DUTY ON 19 COLOUR-COATED

STEEL ITEMS

The government may soon impose anti-dumping duty on 19 colour-coated

steel products with a view to protect domestic players from cheap inbound shipments

and give a fillip to the sector.

Currently, the government has imposed minimum import price (MIP) on these

19 products, which are mainly colour-coated steel items, till February 4.

"The MIP was on 173 items. We have brought it down to 19. Rest of them, we

have converted into anti-dumping. Anti-dumping will continue as the evidences are

there," Steel Secretary Aruna Sharma said in a interview to PTI.

The 19 products include semi-finished products of iron or non-alloyed steel,

flat-rolled products of different widths, bars and rods.

For the first time, MIP was imposed in February last year on 173 items. But,

later on the number of products were reduced.

Steel makers had urged the government to extend MIP on certain products,

saying its imposition has marginally improved the industry's viability after a long

period of subdued prices.


4. MISCELLANEOUS

4.1 CORE SECTOR GROWTH SLIPS TO 4.9% IN NOV

The impact of note ban seems to be weighing on industrial output with core

sector growth decelerating to 4.9% in November 2016 as against 6.6% in October.

However on an annual basis, the eight core sectors reported healthy growth

over November 2015 figure of 0.6%.

The growth rate of eight infrastructure sectors, which contribute 38% to the

total industrial production, expanded 4.9% in April-November 2016 compared to

2.5% growth in the a year ago.

Rating agency ICRA said while the favourable base effect and healthy

production in the core and other organised sectors may support the growth of the IIP

in November 2016, “the early evidence of the impact of the note ban on several

unorganised sectors appears to be negative”.


4.2 COAL INDIA APR-DEC OUTPUT AT 378 MT, MISSES TARGET

State-owned Coal India output in April-December of this fiscal stood at 377.7

million tonnes, lower than the target of 417.5 MT.

CIL produced 54.2 million tonnes (MT) of fossil fuel in December, lower than

the target of 56.6 MT for the month, the company said in a BSE filing.

The offtake of coal in the April-December was at 391.7 MT, against the target

of 433.9 MT.

The coal offtake by CIL in December was at 51.4 MT, against the target of

52.4 MT for the month.

In October, the demand started picking up for both coal and power sectors, the

government had said.

CIL, which accounts for over 80% of the domestic coal production, is eyeing

598 MT production in 2016-17.


4.3 CEMENT SECTOR TO TAKE 2% GROWTH HIT FROM CASH RECALL:

IND-RA

Demonetisation is likely to pull down growth of the cement sector this fiscal

to 4% and may impact the debt level of small and medium firms, says a report.

Cement output is estimated to grow around 4% in 2016-17 as against earlier

projection of 4-6%, said India Ratings and Research (Ind-Ra) in its report 'Market

Wire: Black Day for Black Money, Structural Benefits of Demonetisation Outweigh

Short-term Agony'.

"Cement production is likely to grow by around 4% in 2016-17. The agency

earlier estimated 4-6% growth for 2016-17," said Ind-Ra.

"The lower cement output for 2016-17 is expected due to the fall in production

in the sector in November-December 2016. Cement production grew 4.3% in April-

November and recorded a growth of 0.5% in November 2016."

“The agency note that post demonetisation all Indian volumes declined in the

range of 20-25% in November-December 2016 while pan-India realisations have

declined in the range of Rs. 15-20 per bag in the same period,” it added.


4.4 DOMESTIC STEEL PRODUCTION RISES AS SALES PICK UP

Keeping with the pick-up in demand, domestic steel makers are increasing

production in the current financial year (FY17). State-owned steel Authority of India

(SAIL) has produced 10.18 million tonnes of saleable steel during April-December,

up 15% from the same period last year.

Meanwhile, Essar Steel saw the highest quarterly production in the quarter

ended December with production of flat steel products rising 61% on a year-on-year

basis to 1.48 million tonnes. Output of pellets also grew 99% in the period under

review to 2.59 million tonnes. SAIL posted sales growth of 16% during April-

December over the corresponding period last year, the company said in its recent

release.

“Improved domestic sales as well as expanding exports, with the latter

recording a remarkable rise during this period, contributed to the improved sales

numbers,” said the company. The company’s rise in exports is in keeping pace with

the SAIL’s focus to expand its global foot prints, it added.

(BUSINESS STANDARD 6TH JANUARY, 2017)

4.5 INDIA TO SEE 7% GROWTH IN FIRST HALF OF FY18: SAY SOURCES

India expects growth of around 7% in the first half of the next financial year,

two officials said, painting a rosier picture for the economy than many economists

after Prime Minister Narendra Modi’s shock move to abolish large banknotes.

Nearly 90% of transactions used to be in cash in India, which was gripped by a

severe shortage of currency after Modi's November 8 decision to take Rs 500 and Rs

1,000 notes, out of circulation overnight. Several economists have said the move

could drag down growth in FY18 to 6.5%, as small businesses fired workers,

consumer demand fell and farmers' winter sowing efforts were hit.

Demonetisation has become a major election issue in states going to the polls

this year, such as Uttar Pradesh, where the performance of Modi's ruling Bharatiya

Janata Party could shape his political future. The Budget leaves Modi little room to

hand out large, populist sops, despite demands by politicians, businessmen and other

lobby groups for relief to the industry and taxpayers.


4.6 WORLD BANK PROJECTS INDIA’S GDP GROWTH AT 7% IN FY17

The World Bank has projected India’s economy to grow at 7% in the current

financial year, even after taking into account the impact of demonetization. It stated

the impact of demonetization was for the short term.

Though the projection was 60 basis points lower than its earlier estimate of

7.6%, these are only a shade below the Advance Estimates put out by the Central

Statistical Office (CSO). CSO estimated the growth to be 7.1% without considering

the effect of demonetization and will factor in the impact in its revised Advance

Estimates to be put out by February end.

The World Bank also highlighted weak private investments for “slightly”

pulling down economic growth, besides demonetization.

India’s economy grew 7.6% in 2015-16 and the World Bank expected the

country to return to this growth rate by 2017-18. That way, it slightly cut growth

projections for the next financial year by 0.1% points from the 7.7% forecast earlier.

However it raised growth forecasts by 0.1% points for 2018-19 at 7.8%, which it said

the country would maintain in 2019-20, when the Narendra Modi government is

expected to seek the electoral verdict in the initial part of the year.

The World Bank said India’s growth in 2016-17 will reflect the direct and

indirect benefits of a normal monsoon following two years of sub-par rains, and solid

private and public consumption.

The World Bank said India is expected to regain its growth momentum in

2017-18 as reforms loosen domestic supply bottlenecks and increase productivity.


4.7 DIESEL DEMAND TO DROP IN FIRST QUARTER OF 2017

Diesel demand in India might drop in the first quarter as a government

decision to abolish high-value currency bills is expected to hurt small businesses,

analysts said.

Diesel demand is expected to grow only 2% in the first quarter of 2017

compared with a year ago, less than half of the 5% growth rate seen in the first 10

months of 2016, said Tushar Tarun Bansal, director of Singapore-based consultancy

Ivy Global.

Demand for oil product may be lower than projected as consumers have been

stocking up fuel as an avenue to spend the 500 rupee and 1,000 rupee notes as

exceptions were given to purchase diesel and gasoline at pump stations temporarily, a

source with an Indian refiner said.

Asian refiners' profit margins from producing diesel in 2017 may rise for the

first time in four years as demand for the fuel improves in the infrastructure,

construction, mining and oil and gas exploration sectors.


4.8 RETAIL INFLATION HITS THREE-YEAR LOW OF 3.40%

Retail inflation decelerated slightly to a series low last month, led by a decline

in food prices. The likely cause is the cash crunch of high denomination currency that

suppressed demand.

Consumer Price Index- based inflation, primary gauge of the central bank, fell

to 34% in December versus 3.6% in the previous month, data released by the Central

Statistics Office showed on 12th January. This was a fifth month in a row of decline in

the rate of rise. The consumer food price index fell to a 15-month low of 1.34 %, from

2.03% the previous month.

Farmers reported a drop in sales after Rs. 500 and Rs. 1000 currency notes

ceased to be legal tender from the midnight of November 8. The non-food price

indices for clothing, housing and others saw inflation of 4 to 5%.

“The fall in prices of vegetables and fruits is likely to have come on the back

of insufficient cash to transact, while the decline in pulses is possibly on account of

supply augmentation,” said Richa Gupta, senior economist at consultancy Deloitte.

Inflation in pulses eased to a negative 1.57% versus 0.23% inflation the previous

month.

Fuel inflation moved up to 3.77%, from 2.8% in November.


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