Current Affairs 19th April 2022

Wholesale price inflation climbs to 14.55% in March #GS3 #Economy

Inflation in India’s wholesale prices hit a four-month high of 14.55% in March, from 13.11% in February, driven by accelerating price rise across all categories of goods, with fuel and power as well as primary articles driving most of the gains.

This is the 12th month in a row that wholesale inflation has exceeded 10%. Fuel and power inflation surged to a three-month high of 34.5% in March, from 31.5% in February, while inflation in primary articles accelerated to 15.54% from 13.39%.

The month-on-month rise in the fuel and power index was 5.68%, more than double February’s 2.7%. The rise in fuel and power inflation was triggered mainly by an uptick in electricity prices, Morgan Stanley economists Upasana Chachra and Bani Gambhir said in a note.

Wholesale price inflation, which was at 7.89% in March 2021, had hit a record high of 14.9% in November and was at 14.3% in December. It had eased below the 14% mark in January and February.

While retail inflation had hit a 17-month high of 6.95% in March, largely due to higher food prices, the wholesale food price index inched up marginally to 8.71%, from 8.47% in February. “This was on the back of a sharper rise in the prices of manufactured food articles even as primary food prices remained stable,” Ms. Chachra and Ms. Gambhir said.

The high inflation was attributed “primarily to rise in prices of crude petroleum and natural gas, mineral oils, basic metals, etc. owing to disruption in global supply chain caused by Russia-Ukraine conflict”, the Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade, said in a statement.

‘Higher than expected’

Terming the broad-based spike in wholesale inflation “higher than expected”, ICRA chief economist Aditi Nayar said the jump in crude oil prices was the biggest contributor to the rise in inflation, followed by fuels and core items. “We expect the inflation measured by the Wholesale Price Index (WPI) to remain in the range of 13.5% to 15% in April, partly depending on where crude oil prices settle in the rest of April 2022 and how much petrol and diesel prices are revised further,” she said.

Even core inflation hardened by a sharp 2.2% in March over February 2022 to hit 10.9%. “Only four of the 21 sub-groups of the core index escaped a month-on-month rise in March 2022, namely beverages, other transport equipment, wearing apparel and pharmaceutical products,” Ms. Nayar pointed out.

Meghalaya council opposes border deal #GS2 #Governance

A tribal council in Meghalaya has joined the list of individuals and organisations in opposing the State government’s deal with Assam to resolve a 50-year-old boundary dispute.

The Assam and Meghalaya governments had on March 29 finalized the pact to divide 36.79 sq. km of disputed areas. The two governments had taken up six of 12 disputed sectors in the first phase of discussions.

‘No authority’

The Khasi Hills Autonomous District Council (KHADC) claimed that the disputed areas belong to private parties and the Meghalaya government has neither the authority nor the right to hand them over to Assam.

“The government will be required to take the council’s consent according to Section 41 of the Right to Fair Compensation and Land Acquisition and Rehabilitation and Resettlement Act, 2013, before any handover,” said Titosstarwell Chyne, the Khasi Hills Autonomous District Council’s chief executive member.

The Khasi Hills Autonomous District Council is one of three tribal councils in Meghalaya created under the Sixth Schedule of the Constitution. Each of them functions as a government within a specified territory.

Apart from the Khasi Hills Autonomous District Council, some traditional institutions such as Hima (a Khasi state) and villagers not keen on being tagged with Assam have threatened to go to court if the Meghalaya government cannot review the boundary deal.

The Meghalaya government has said the agreement, based on a list of disputed sectors submitted to Assam in 2011, cannot be revisited. The deal remains to be ratified by Parliament and the Assemblies of the two States concerned before the boundary is redrawn.

Fear of losing rights

The residents of two border villages – Malchapara and Salbari – have said they will not give up without a fight. They fear they will lose their tribal rights if they are separated from Meghalaya.

“We are consulting legal experts for taking the matter to court if the government does not listen to our voices of protest. The disgruntled people of these and other such border villages have been carrying out rallies against the boundary deal for a month now. The government will be required to take the council’s consent according to Section 41 of the Right to Fair Compensation and Land Acquisition and Rehabilitation and Resettlement Act, 2013.