7th Pay Commission had a negative impact on something? FM Arun Jaitley has something to say on this. The month of November saw higher inflation and Finance Minister Arun Jaitley revealed the reason behind it.
7th Pay Commission had a negative impact on something? FM Arun Jaitley has something to say on this. The month of November saw higher inflation and Finance Minister Arun Jaitley revealed the reason behind it. Jaitley on Thursday, said that higher inflation last month was due to the 7th Pay Commission pay-out. He also said that the higher oil prices added to the effect, CNBC-TV18 reported. However, he did paint a rosy picture about some critical stats. He added that Foreign Exchange reserves were high and the current account deficit (CAD) was within limits. Reserve Bank of India governor Urjit Patel shared similar views as those of FM Jaitley. Patel had recently said that India’s market is stable despite geopolitical uncertainties and the current account deficits are also within limits. However, at the last meeting of the monetary policy committee (MPC), he added that the recent, upturn in crude oil prices has emerged as a cause of concern.
The Retail Inflation for November hiked to a 15-month high at 4.88 percent, breaching the 4 percent target by the RBI. On December 6, given the concern over rising inflation, the central bank kept the repo rate unchanged at 6%, and stance neutral, saying that its decision will depend on data.
The rural inflation also saw a rise of 4.79 percent from 3.36 percent in October, while the urban inflation rose to 4.9 percent from 3.81 percent in October. As per the economists, rising commodity prices globally and a n pay reviseon for government employees may have led to the rise in inflation. Heavy rains in November created lots of damage for perishable fruit and vegetable crops, said Rupa Rege Nitsure, group chief economist at Larsen & Toubro. “We have seen that translated into price rises for onions, tomatoes and other perishable commodities”.