Reserve Bank of India Governor Shaktikanta Das (Photo: IANS)
India’s inflation target should be maintained at 4 per cent in the medium term, according to a working paper by the Reserve Bank of India (RBI).
The paper, published by the RBI’s Department of Economic and Policy Research, noted that central to monetary policy is the concept of ‘Trend Inflation’ to which actual inflation outcomes are expected to converge after short-run fluctuations die out.
Accordingly, the inflation target needs to be fixed in alignment with trend inflation to avoid unhinging inflation expectations and flattening the aggregate supply curve or imparting a deflationary bias to the economy.
“Results from a regime switching model applied to a ‘hybrid New Keynesian Philips’ curve suggest a steady decline in trend inflation since 2014 to 4.1-4.3 per cent just before Covid-19 struck. This points to maintaining the inflation target at 4 per cent for India,” the paper authored by Harendra Kumar Behera and Michael Debabrata Patra of RBI.
The paper added the decline in trend inflation since 2014 is, however, coincident with a flattening of the ‘Philips Curve’.
Reserve Bank Of India
Trend inflation provides key insights for monetary policy committee in at least three important ways.
The Phillips curve is an economic concept that shows that inflation and unemployment have a stable and inverse relationship.
“First, the level and variability of trend inflation indicate how anchored inflation expectations are. Second, it is a valuable gauge of the appropriateness of the monetary policy stance and the necessity or otherwise of additional monetary policy actions to achieve steady state inflation,” it said.
Third, trend inflation provides a centering point for the evaluation of inflation forecasts over various time periods and, this in turn, can usefully inform the setting of monetary policy.
US President-elect Joe Biden has accused the Department of Defence of failing to provide his team details of the transition of power, the media reported on Tuesday.
In a video message posted on Twitter on Monday, Biden, who takes office on January 20, 2021, said: “My team needs a clear picture of our force posture around the world and our operations to deter our enemies.
“We need full visibility into the budget planning underway at the Defence Department and other agencies in order to avoid any window of confusion or catch-up that our adversaries may try to exploit.”
“We have encountered roadblocks from the political leadership at the Department of Defence and the Office of Management and Budget.
“Right now, we just aren’t getting all of the information that we need from the outgoing administration in key national security areas. It’s nothing short, in my view, of irresponsibility.”
Reacting to Biden’s remarks, Acting Defence Secretary Christopher Miller said officials had been “working with the utmost professionalism to support transition activities”, the BBC reported.
“The Department of Defence has conducted 164 interviews with over 400 officials and provided over 5,000 pages of documents – far more than initially requested by Biden’s transition team,” Miller was quoted as further saying.
The presidential transition process is the handover of important information and duties from the outgoing administration to the President-elect and his or her team, ensuring that they are fully up to speed when they take office.
After days of refusal following the November 3 polls, President Donald Trump, who is yet to concede, finally agreed to allow the formal transition process.
Tesla CEO Elon Musk who earlier said that the process to bring Tesla cars to India will begin in January 2021, has now refused to give any fixed timeline when his electric cars will arrive in the country.
Responding to a follower who asked about get an update on whether Tesla India is still happening in January 2021, Musk said: “No, but definitely this year”.
In October, Musk said the electric car maker is finally ready to enter the India market next year. Reacting to a tweet by Tesla Club India, Musk said: “Will release order configurator probably in Jan.”
On the other hand, in an interview with The Indian Express on Tuesday, Union Road Transport and Highways Minister Nitin Gadkari said Tesla will begin operations will sales in early 2021 and then “maybe” look at assembling and manufacturing vehicles in the country.
Tesla CEO Elon Musk. (File photo: IANS)
However, whether Musk will announce a Tesla plant in India to push Prime Minister Narendra Modi’s domestic manufacturing dream or source them from other facilities (Gigafactory in Shanghai, China is the nearest one) is not yet clear.
Tesla sales teams are currently working on building custom sales and production orders for the India market, ensuring orders are complete and validated once the configuration is finished.
The move will also open India to select as one of the countries where Tesla cars can be purchased.
On several occasions earlier, Musk had revealed that he would like to bring Tesla to India, but in a 2018 Twitter post, he cited “some challenging government regulations” as a hurdle.
He also criticised the foreign direct investment norms for the delay in the electric car maker’s entry into the Indian market.
“Would love to be in India. Some challenging government regulations, unfortunately,” Musk had tweeted in response to a Twitter user who wrote “No Tesla in India” on his Twitter handle
.In July this year, he hinted at allowing Tesla’s Indian fans to drive an electric Model 3 “hopefully soon”.
The Tesla’s entry comes at a time when India is ramping up charging infrastructure for electric vehicles with the aim of significantly increasing the proportion of electric vehicles plying on the roads.
In 2015, Modi visited Tesla headquarters at Palo Alto, California and met Musk who gave Modi a tour of the company’s electric car plant.
Tesla has not launched any of its electric cars in India or any other country in South Asia yet. The only Asian market where Tesla has a presence is China.
After China’s top market watchdog began investigation last week into alleged anti-competition practices by ecommerce giant Alibaba, media reported on Monday that the country has now laid out ‘rectification plan for the Jack Ma’s fintech venture Ant Group.
According to a report in TechCrunch, the People’s Bank of China, the country’s central bank, “summoned Ant Group for regulatory talks on December 26th, announcing a sweeping plan for the fintech firm to ‘rectify’ its regulatory violations”.
The banking authority has laid out a five-point compliance agenda for Ant Group.
The agenda is that Ant Group should return to its roots in payments and bring more transparency to transactions.
“It must obtain the necessary licenses for its credit businesses and protect user data privacy and establish a financial holding company and ensure it holds sufficient capital.
Jack Ma, founder of China’s Internet giant Alibaba
Ant group must also “revamp its credit, insurance, wealth management and other financial businesses according to the law and step up compliance for its securities business”.
Ant said it has established an internal “rectification workforce” to work on all the regulatory requirements.
Xinhua news agency had first reported that The People’s Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, and State Administration of Foreign Exchange will “interview Ant Group in the near future”.
The move is “to supervise and guide Ant Group to implement financial supervision and fair competition in accordance with the principles of marketisation and rule of law, and to protect the legitimate rights and interests of consumers, and regulate the operation and development of financial services”.
Chinese President Xi Jinping
The State Administration for Market Regulation last week started investigation into alleged anti-competition practices by ecommerce giant Alibaba, as Beijing tightened control of an expanding Internet.
In a brief note, the State Administration for Market Regulation said that it is investigating Alibaba over its “choosing one from two” policy.
As part of this policy, merchants are forced to sell exclusively on Alibaba e-commerce platforms and skip rivals like JD.com.
Alibaba Group said in a statement that they have received notification from the State Administration for Market Regulation.
“Alibaba will actively cooperate with the regulators on the investigation,” the company said, adding that its “business operations remain normal.”
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Indian Prime Minister Narendra Modi with Vice President and Prime Minister of UAE Mohammed bin Rashid Al Maktoum in Dubai
The market launch of GI-Tagged Kashmiri Saffron in Dubai, which Modi referred to, was part of a UAE-India Food Security Summit earlier this month…reports Asian Lite News
Indian Prime Minister Narendra Modi has took note of and praised an initiative by food traders in Dubai to promote Geographical Indication (GI) Tagged Kashmiri Saffron in the UAE.
“You will be delighted to know that after obtaining the GI Tag Certificate, Kashmiri Saffron was launched in a supermarket in Dubai. Now its exports will get a boost,” Modi told Indians in his monthly radio address to the nation known as “Mann ki Baat,” which translates randomly as “Thoughts from the Mind.”
The Prime Minister said “Kashmiri saffron is globally famous as a spice that has many medicinal properties. It has a strong aroma, its color is deep dark and its threads are long and thick which enhances its medicinal value.” It is also used to cook exotic South Asian and Arab culinary dishes.
“In May this year, Kashmiri Saffron was given the Geographical Indication Tag. Through this, we want to make Kashmiri Saffron a globally popular brand,” Modi told millions of Indians who tune into his radio broadcast regularly.
“A Geographical Indication is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin,” according to the United Nations World Intellectual Property Organization (WIPO). All 193 UN members are also members of WIPO, which leads the international Intellectual Property system.
The market launch of GI-Tagged Kashmiri Saffron in Dubai, which Modi referred to, was part of a UAE-India Food Security Summit earlier this month. The Summit was organized by the Consulate General of India in Dubai in association with the Confederation of Indian Industries and Invest India, the investment facilitation agency of the Indian government.
Dubai’s Al Maya Group took the initiative to promote GI-Tagged Kashmiri Saffron in the presence of Dr Aman Puri, Consul General of India in Dubai and Navin K. Choudhary, Principal Secretary for Agriculture in the government of Jammu and Kashmir.
Basmati export
Basmati rice, the largest agricultural product export from India, is to be refined in overseas consumer preferences with an increased share of its organic rice variety.
Outlining the multiple measures towards this goal, the Ministry of Commerce and Industry earlier said the UAE and Saudi Arabia are the major markets for Indian Basmati rice. These two Gulf countries are followed by the European Union and the US.
The move to increase production of the organic variety of this registered Indian Geographical Indication, GI, product is to be spearheaded by the Basmati Export Development Foundation. BEDF is a registered society associated with the Ministry of Commerce and Industry.
The Ministry’s announcement followed the Annual General Meeting of the BEDF. The meeting decided to encourage exporters to engage in value addition and product diversification for key export markets such as the Gulf countries. It also focused on strengthening the supply chain for the export of Basmati rice.
A workshop with stakeholders for increasing the share of organic Basmati rice to be organized soon. BEDF has set up a state-of-the-art laboratory with facilities for DNA finger printing for variety identification of Basmati rice and for testing of pesticide residues, aflatoxins and heavy metals, the Ministry said.
During 2019-20 India exported 4.45 million metric tons of Basmati rice with value of $ 4,331 million. Over the last ten years, Basmati rice exports have more than doubled, the Ministry added.
Treble food trade
The UAE and India also aim to treble the volume of their food trade in the next five years.
Speaking in the UAE-India Food Security Summit 2020 earlier this month, Punjab’s Minister for Non-Resident Indian Affairs, Rana Gurmeet Singh Sodhi, said the UAE and India are ideal partners for the food industry because his country is 70 percent agrarian while the UAE is a pioneer in food security strategy.
Dr. Ahmed Al Banna, UAE’s Ambassador to India, told the summit that the UAE has the potential to be the “gateway to the world” for India’s food and agriculture products exports. He described the subjects being discussed over two days at the summit as being “close to our hearts” and revealed that a lot of work between the two sides has been done with common goals since the disruptions of COVID-19 began.
Pavan Kapoor, India’s Ambassador to the UAE, said “India wants to work with the UAE as a reliable partner in food security” as demonstrated by the movement of crucial cargo by air throughout the pandemic.
Underlining the “immense and untapped potential” of the food sector in bilateral business, Dr. Aman Puri, Consul General of India in Dubai remarked that UAE-India partnership in food trade can strengthen food security in the entire Middle East and North Africa region.
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Prime Minister Mustafa Al-Kadhimi said on Monday that Iraq was at a cross roads during a meeting with his ministers, according to Arab News
Kadhimi – who claimed he did not belong to any political bloc – said that the central role of his government was to hold early elections.
“Successive governments since 2003 have made the transition period a permanent one,” he said, adding that this was one of the biggest reasons the country stagnant.
“We have an opportunity to succeed in restoring the people’s confidence in the state, the political system, and democratic mechanisms, by holding fair and fair elections that would achieve stability in the country,” the Arab News quoted Kadhimi.
Iraqi Prime Minister Mustafa al-Kadhimi.
Earlier, the Iraqi Prime Minister had warned of a collapse of the social and political systems and overwhelming chaos without a financial reform in the country.
Al-Kadhimi made his comments during an extraordinary session of the Iraqi cabinet on Saturday to discuss the federal budget for the fiscal year 2021, which came after the Central Bank of Iraq (CBI) decided to devaluate the national currency due to the economic crisis that resulted from the decline in oil prices and the coronavirus pandemic, reports Xinhua news agency.
“The political crisis in Iraq is linked to three issues: power, money, and corruption. We are working to address the crisis from an economic standpoint and with a bold decision to overcome the obstacles of corruption and money,” al-Kadhimi’s media office said in a statement.
Houston Mayor Sylvester Turner has urged community leaders to work together to bring down violence in the city located in the US state of Texas.
Joining community leaders at a “Stop the Violence H-Town” rally on Sunday, Turner said the number of violent crimes in Houston has been on the rise in the year 2020, reports Xinhua news agency.
He said he exchanged ideas with a number of US Mayors recently to address this issue.
“2020 has been a challenging year. While everybody is dealing with this pandemic how do we bring down the violence?” he queried.
While giving credit to the organisers of this event, Turner urged more leaders to listen to people’s needs.
“It’s not just about adding police. It’s about getting in these communities and meeting people’s needs and letting people know that we care,” he said.
“It requires all hands working in all communities and letting people know that we are not just there to police them, we are to uplift these people,” the Mayor added.
Houston police have reported several times that the crime rate in the city increased this year.
According to Houston Crime Stoppers, a community program that helps people to provide anonymous information about criminal activity, 2020 is one of the most violent years in the country’s fourth populous city since the 1990s.
While there were a total of 120,256 crimes reported in the city, the crime rate stood at 51.71 per cent, according to figures provided by Neighbourhood Scout.
A maximum of 50 per cent of the total capacity of a stadium can now be filled with spectators during outdoor sports events, the Sports ministry on Sunday said in its Standard Operating Procedure (SOP) for resumption of sports competitions in the country.
The ministry said that the spectator management will be done in accordance to the Ministry of Home Affairs’ guidelines issued on November 25.
The Home Ministry had put a cap of 200 people in case the event is taking place in a closed space. It also allowed for state governments to reduce the according to their own assesments.
The SOP also calls for a “Covid task force” to be constituted for competitions by the respective organising committee. Apart from being responsible for the overall implementation of the SOP, the task force closely regulate and monitor “travel of athletes and ASP (Athlete Support Personnel)”.
Organising committees are to designate a Covid response team that athletes and their support staff can contact if they experience symptoms suggestive of coronavirus.
Athletes are also to avoid physiotherapy or massages “unless absolutely necessary” and ensure physical distancing and wear masks at all times except when it becomes necessary on the field of play.
The ministry also said that thermal screening is to be done at the entrance of the competition area and athletes and support staff living in “containment zones shall not be allowed entry in the main competition arena/field of play, warm-up area”.
Organisers are also to assess if it is to be mandatory for athletes and support staff to undergo RT-PCR tests within 72 hours of the event.
“In such cases. only those having a negative RT-PCR report shall be allowed to participate in the event. For this, organising committee may also make suitable linkages with ICMR approved laboratories for Covid-19 testing of athletes and ASPs who report wuthout a Covid test report,” said the ministry in the SOP.
The guidelines also advised support staff whose physical presence is not required to work from home through “tele-work/video conferencing”.
