News

WITH widespread rains in August and the possibility of monsoon being more active in September, the  country is set to record a normal rainfall this year, as the gap has been narrowed down to just 1 per cent. Despite a lean patch in July, India Meteorological Department last week said that the country received 719.9 mm rainfall till September 1 against normal 724.6 mm, a shortfall of just 1 per cent. Heavy and well distributed rains after mid-July cut the 16 per cent shortfall till june end to 4 per cent at the end of July.

Of the 36 meteorological sub-divisions in the country, only seven received deficient rainfall since the start of the monsoon season on June 1 up to September 1. No division recorded scanty rainfall, while excess rainfall was registered in 13 sub-divisions, Sixteen sub-divisions had normal rainfall.

FOOD INFLATION RISES AGAIN

Food and fuel inflation shot up in the week ended August 13, 2010. belying the expectation that prices will soften gradually following a good monsoon, Food  price index rose at an annual rate of 10.86 per cent in the week, after declining for two straight weeks, data released last week revealed, It was marginally lower at 10.05 per cent a week ago Fuel price, too, inched up marginally to 12.71 per cent from 12.57 per cent the week before This has raised structural concerns about food inflation. which has remained high since last even when headline inflation number dropped to negative levels.

The yield on the benchmark 10-year bond ended at 7.98 per cent unchanged from the close of September 2, on September 3, indicating that the spurt in inflation has not altered monetary policy expectation with inflation still too high for comfort, the latest round of PMI data continues to point towards the need for gradual monetary tightening.

The HSBC India services PMI showed growth in the sector, though the index declined marginally to 59.3 in August 2010 from 61.7 in july 2010. A reading above 50 on PMI shows expansion.