India's food inflation lowest among 15 developing nations
Friday, 30 May , 2008, 17:45
New Dehli: India has been better off in managing food inflation compared to several other developing countries in 2007-08, even as the government faces public and political anguish over sharp rise in prices.
Prices of food articles rose by 5.8 per cent in India, the lowest increase among 15 developing countries for the period ending February 2007-08, a joint report of the Organisation for Economic Cooperation and Development (OECD) and Food and Agriculture Organisation (FAO) has said.
Food prices showed the highest increase at 25.6 per cent in Sri Lanka, followed by Kenya at 24.6 per cent and China 23.3 per cent, the report entitled 'Agriculture Outlook 2008' said.
A record foodgrain production estimates at 227.32 million tons during 2007-08, against 217.28 million tons last year has helped India keep food inflation under control, experts said.
However, recent negative yield shocks in key food commodities like pulses and oilseeds have contributed to the price increase, they said, adding that global price rise had a spill-over affect on domestic rates as well.
However, India's food inflation still remains higher than the developed countries like the US and Japan during the review period, the report said.
Rate of rise in food prices stood at 1.4 per cent in Japan, at 5.1 per cent in the US and at 5 per cent in France, it noted.
Showing posts with label inflation. Show all posts
Showing posts with label inflation. Show all posts
Friday, May 30, 2008
Saturday, May 10, 2008
Thanks to inflation, you are losing money on FDs-India Business-Business-The Times of India
Thanks to inflation, you are losing money on FDs-India Business-Business-The Times of IndiaThanks to inflation, you are losing money on FDs
10 May 2008, 0050 hrs IST,Prabhakar Sinha,TNN
NEW DELHI: Inflation is no longer just eating into your pocket by way of higher grocery bills. It's also eroding the money you've safely put away in a fixed deposit in your bank or post office.
That's because at 7.61%, it is more than enough to offset your interest earnings, giving you negative real returns.
Most banks offer interest in the range of 8% to 8.75% on fixed deposits of tenures ranging from one year to 10 years.
The country's largest bank, SBI, for instance, offers 8.5% on deposits of two years or more, while for shorter duration deposits, it gives 8.75%.
That may seem like it still gives you some positive real return after accounting for inflation, but that's an illusion for most.
This is because the interest income is taxable, even if your deposit is covered by Section 80C of the Income Tax Act.
If your annual income is above Rs 5 lakh, the tax deduction would be at 30.9% (including education cess), which means the effective interest income comes down to 6.05% if the nominal rate is 8.75% and to 5.87% if the rate is 8.5%. In either case, the current level of inflation more than wipes out this return.
Even if your income is lower, between Rs 2.5 lakh and Rs 5 lakh per annum, where the tax rate applicable is 20.6%, the effective interest rate would be between 6.75% and 6.95%, again not enough to give you a positive real return on your deposit.
Real estate and gold, which typically appreciate fast in inflationary periods, are possible options that are relatively risk-free.
Equity could be another option, but that requires a different kind of risk appetite and more in-depth knowledge of the market.
With an annual income below Rs 2.5 lakh current levels of bank deposit rates and inflation give you a marginal positive real return.
With a tax rate of 10.3%, your effective interest earnings on deposits would be between 7.62% and 7.85%, barely allowing you to keep your nose above water.
10 May 2008, 0050 hrs IST,Prabhakar Sinha,TNN
NEW DELHI: Inflation is no longer just eating into your pocket by way of higher grocery bills. It's also eroding the money you've safely put away in a fixed deposit in your bank or post office.
That's because at 7.61%, it is more than enough to offset your interest earnings, giving you negative real returns.
Most banks offer interest in the range of 8% to 8.75% on fixed deposits of tenures ranging from one year to 10 years.
The country's largest bank, SBI, for instance, offers 8.5% on deposits of two years or more, while for shorter duration deposits, it gives 8.75%.
That may seem like it still gives you some positive real return after accounting for inflation, but that's an illusion for most.
This is because the interest income is taxable, even if your deposit is covered by Section 80C of the Income Tax Act.
If your annual income is above Rs 5 lakh, the tax deduction would be at 30.9% (including education cess), which means the effective interest income comes down to 6.05% if the nominal rate is 8.75% and to 5.87% if the rate is 8.5%. In either case, the current level of inflation more than wipes out this return.
Even if your income is lower, between Rs 2.5 lakh and Rs 5 lakh per annum, where the tax rate applicable is 20.6%, the effective interest rate would be between 6.75% and 6.95%, again not enough to give you a positive real return on your deposit.
Real estate and gold, which typically appreciate fast in inflationary periods, are possible options that are relatively risk-free.
Equity could be another option, but that requires a different kind of risk appetite and more in-depth knowledge of the market.
With an annual income below Rs 2.5 lakh current levels of bank deposit rates and inflation give you a marginal positive real return.
With a tax rate of 10.3%, your effective interest earnings on deposits would be between 7.62% and 7.85%, barely allowing you to keep your nose above water.
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