1.June inflation quickens to 4.8% as food prices climb

Food price inflation increases to 4.5% from less than 3% in the previous month due to rising costs of items such as cereals, pulses and tomatoes; retail inflation below RBI’s upper threshold limit

Retail inflation hardened in June to a three-month high of 4.81%, from May’s 4.31%, driven by a spike in food price gains due to the rising costs of items like cereals, pulses, milk and tomatoes. Food price inflation quickened to 4.5%, from less than 3% in the previous month.

While June’s pace of consumer price gains snapped a four-month streak of moderation from the 6.5% uptick logged in January, urban consumers faced almost 5% inflation last month with food price inflation almost doubling in pace from May’s 2.4% to 4.3%.

June was the fourth month in a row that retail inflation stayed below the Reserve Bank of India’s (RBI’s) upper tolerance threshold of 6%, but economists opine that the ongoing upturn in vegetable prices and the “flooding plus uneven monsoon” situation could exacerbate food price pressures on headline inflation.

While the RBI is unlikely to release its ‘pause’ on interest rates at next month’s monetary policy review, the inflation trend may further push back the prospect of rate cuts.

“The spike in vegetable prices is set to push retail inflation to an uncomfortable 5.3-5.5% in July,” said Aditi Nayar, chief economist at ICRA, who sees the vegetable price shock likely causing average Q2 inflation to overshoot the RBI’s 5.2% projection.

2.IIP rises 5.2%, led by infrastructure

Mining and manufacturing output increased at a swifter rate of 6.4% and 5.7%, respectively, in May, with the latter buoyed by consumer durables snapping a 5-month decline; NSO data shows 12 of 23 manufacturing sub-sectors reported contractions

Industrial output expanded at the fastest pace in three months in May buoyed by infrastructure to grow by 5.2%, compared with April’s 4.46%. Electricity generation snapped a two-month contraction to rise 0.9%.

Mining and manufacturing as a whole edged up at a swifter rate of 6.4% and 5.7%, respectively, data from the National Statistical Office (NSO) show. Production of consumer durables rebounded to growth for the first time in six months, expanding 1.1% compared with a 2.5% contraction in April.

Infrastructure and construction goods’ output continued to drive up the Index of Industrial Production (IIP), rising 14% after an almost 13% rise in April. Capital goods’ production growth also accelerated to 8.2%, from April’s 6.2%.

Of the 23 manufacturing sectors tracked by the NSO, 12 sectors recorded a contraction in output in May, with apparel makers (-21%) and furniture producers (-20.5%) reporting the sharpest declines, followed by wood products (-12.7%), paper products (-8.6%) and computers and electronics (-5.7%).

This was counter-weighed by a sharp 20.9% uptick in pharma output and a 13.4% surge in motor vehicles’ production. Other transport equipment grew 10.9%, while non-metallic mineral products and machinery and equipment makers also upped output by more than 10%.

“It is a mixed bag, with infra-oriented sectors doing better, but we still need to see consumer spending increasing,” remarked Bank of Baroda chief economist Madan Sabnavis. While the auto sector had done well thanks to post-harvest demand from rural India and the marriage season, Mr. Sabnavis said it needed to be seen if this was sustained.

ICRA chief economist Aditi Nayar said June IIP growth may have slowed to about 3%-4% as per high-frequency indicators.

3. 293 people stranded in Lahaul-Spiti district, rescue operations continue

To the rescue: Army personnel rescue flood-affected people who were stuck in the Urban Estate area of Patiala on Tuesday. ANI

At least 293 people were stranded in the Chandertal Lake area in the tribal district of Lahaul-Spiti in Himachal Pradesh, even as torrential rain relented on Wednesday, accelerating the rescue operations. Chief Minister Sukhvinder Singh Sukhu conducted an aerial survey of Sissu, Chandertal and Losar in the tribal Lahaul-Spiti district and Manali region of Kullu district to take stock of the destruction caused by the relentless rain.

Though the situation was challenging in Chandertal due to heavy snowfall, the State government was ensuring the safety of all the 293 people trapped there who were staying in the camps. Most of the tourists and locals stranded in Spiti Valley have been evacuated and the rest of the people will be rescued shortly. The State government was making earnest efforts to provide all possible assistance to the stranded people and I am equally monitoring the situation,” Mr. Sukhu said.

He said the 52 school children of Kullu, who were stuck up at Sissu in Lahaul were safely moved out.

From June 24 to July 11, the State has seen 51 instances of landslips and 32 incidents of flash floods. At least 88 people have lost their lives, while 16 are missing.

Haryana Chief Minister Manohar Lal announced a compensation of ₹4 lakh for the families who lost their next of kin in the flash flood.

In Punjab 1,058 villages of 14 districts have been ravaged by the flood fury. During the past 24 hours, three people died, a statement said.

Punjab’s Information and Public Relations Minister Chetan Singh Jauramajra accused the Haryana government of failing to clean the siphon built on Ghaggar under the Hansi-Butana canal on time, which, he said resulted in massive waterlogging in villages of Punjab.

4. Yamuna water level breaches 60-year record; Kejriwal seeks Centre’s help

Over 16,500 people evacuated from flood-affected areas as river crosses the 208-m mark; situation will improve in a day, Jal Shakti Minister tells CM

With the Yamuna water level in the city touching a 60-year high on Wednesday, Chief Minister Arvind Kejriwal urged the Centre to ensure that the level does not rise further. By Wednesday midnight, the river was flowing at 208.13 metres, which is the highest recorded level since 1963.

Addressing a press conference on Wednesday, the CM urged people living in areas close to the river to evacuate their houses immediately.

Several parts of the city close to the river, such as Monastery Market, Yamuna Bazar, Geeta Ghat and the stretch from Majnu Ka Tilla to Wazirabad, were flooded on Wednesday. Over 16,500 people were evacuated from flood-affected areas till Wednesday night, a Delhi government official said.

In a letter to Union Home Minister Amit Shah, the CM requested that “the water from Hathnikund barrage in Haryana [upstream of Delhi] be released [into the Yamuna] at a limited speed”, pointing out that the Capital is set to host the G-20 Summit in a few weeks.

The CM said soon after writing to Mr. Shah, Union Jal Shakti Minister Gajendra Singh Shekhawat contacted him and said there was no facility to stop water at the Hathnikund Barrage. “However, he said that less water is now flowing down from Himachal Pradesh and that the situation will improve in about a day,” Mr. Kejriwal said.

The Yamuna’s water level has been rising steadily since heavy rain lashed north India on July 8-9. It breached the ‘danger mark’ of 205.33 metres on Monday evening. By 11 p.m. on Tuesday, it had swollen to 206.83 metres. The Delhi government is in the process of evacuating close to 41,000 people living close to the river.

‘Flow to reduce’

The water released from Hathnikund Barrage fell from 3.59 lakh cusecs at 11 a.m. on Tuesday to 1.47 lakh cusecs at 8 p.m. on Wednesday. “The water released from the barrage takes 36-72 hours to reach Delhi. So, even as less water is being released now, it will take some time before the river flow in the Capital is affected,” an official said.

PWD Minister Atishi said the embankments along the river are being strengthened to prevent them from giving way to the river, which is in spate.

Lieutenant-Governor V. K. Saxena said various National Disaster Response Force (NDRF) teams have been deployed in the affected areas and that assistance will be extended to all affected persons.

5. Government rejects EU Parliament move to discuss Manipur situation

United appeal: Women belonging to the ‘Meira Paibis’, a group of women representing Meitei society, hold torches during a demonstation demanding the restoration of peace in Manipur.AFP

The issue is ‘totally internal’ to India, says Foreign Secretary, as MEPs criticise government, BJP for ‘implementing divisive ethnonationalist policies’, broader misuse of AFSPA, UAPA and FCRA and attacks on churches of Kuki tribals

India on Wednesday rejected the European Parliament’s plan to hold an “urgent debate” on the violence in Manipur, calling it an issue “totally internal” to India. The EU debate, set to take place later on Wednesday, seeks to condemn the violence and direct the EU’s top officials to speak to New Delhi about remedying the situation. At least 142 have been killed and more than 54,000 driven from their homes since violence erupted on May 3 this year.

Speaking at a briefing for journalists in Delhi, Foreign Secretary Vinay Kwatra said that the debate at the European Parliament is happening despite India’s attempts to dissuade parliamentarians and putting across India’s point of view.

“This is a matter totally internal to India. We are aware of the happenings in the [European] Parliament and have reached out to the Members of European Parliament (MEPs) concerned,” Mr. Kwatra said, in response to a question from The Hindu.

He, however, declined to comment on a report in a Manipur newspaper that said the government has hired a prominent lobbying firm in Brussels, Alber & Geiger, to help with the outreach to MEPs, that had reportedly sent a letter on behalf of the Indian government to them. At least six of the eight political groups in the European Parliament, who will vote on Thursday after the debate on Wednesday, have so far submitted motions ‘For a resolution on India, the situation in Manipur’.

While some of the motions criticise members of the ruling Bharatiya Janata Party (BJP) for alleged hate speech, and the BJP-led government in Manipur for “implementing divisive ethnonationalist policies”, others refer to the broader misuse of Indian laws such as the Armed Forces Special Powers Act (AFSPA), UAPA terror law and the Foreign Contributions Regulatory Act (FCRA) by authorities in the country.

Some of the motions make a special mention of the attacks on churches in the clashes, “between the majority Meitei community (mostly Hindu) and the Kuki tribal group (mostly Christians)”.

They also urged the government to end the “Internet shutdowns” in the State.

The move at the European Parliament follows days after U.S. Ambassador to India Eric Garcetti offered U.S. help in dealing with the situation in Manipur.