The annual rate of
inflation, based on monthly WPI, stood at 3.74 percent (provisional) for the
month of August, 2014 (over August,2013) as compared to 5.19 percent
(provisional) for the previous month and 6.99 percent during the corresponding
month of the previous year. Build up inflation rate in the financial year so
far was 3 percent compared to a build up rate of 5.23 percent in the
corresponding period of the previous year.
RBI views: With crude oil prices falling globally, the Reserve Bank governor on Monday pitched in for eliminating diesel subsidies completely. However, he cautioned that geopolitical risks -Ukraine and Middle East - continue to remain and these low crude prices may be a temporary phenomenon. On the macro-economic front, the IIP and CPI data released on Friday point to the fact that recovery is still some time away. But Rajan says India is on path to recovery. He says when compared to other emerging markets, what worked well for India is the emergence of a stable government.
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