India’s pharma exports have witnessed a growth of 103 per cent since 2013-14 from Rs 90,415 crore to Rs 1,83,422 crore in 2021-22. The exports achieved in 2021-22 is the Pharma Sector’s best export performance ever and is a remarkable growth with exports growing by almost USD 10 billion in eight years, said Ministry of Commerce & Industry in a statement on Sunday.

Highlighting the achievement in a tweet, the Union Minister of Commerce and Industry Piyush Goyal said: “India’s booming drugs & pharmaceuticals exports more than double in 2021-22 compared to 2013-14. Under the active leadership of PM @NarendraModi ji, India is serving as ‘Pharmacy of the World”.

The pharma exports in 2021-22 sustained a positive growth despite the global trade disruptions and drop in demand for COVID related medicines. The trade balance continues to be in India’s favour, with a surplus of USD 15175.81 Million, said the ministry.

India ranks third worldwide for production by volume and 14th by value. Indian pharma companies have made global mark with 60 per cent of the world’s vaccines and 20 per cent of generic medicines coming from India.

The share of pharmaceutical and drugs in India’s global exports is 5.92 per cent. The formulations and biologicals continue to account for a major share of 73.31 per cent in total exports, followed by Bulk drugs and drug intermediates with exports of USD 4437.64 million. India’s top five pharma export destinations are the US, UK, South Africa, Russia and Nigeria. (IANS)

As Americans feel the squeeze of rising inflation, fears are growing that a recession is around the corner.  The U.S. economy is running hot as a record stretch of job growth, steady consumer demand and intense demand for labor has helped fuel the highest inflation rate in 40 years.

While the economy has recovered far quicker than many economists expected, the speed of the rebound is putting pressure on the Federal Reserve to take more significant action to help slow price growth.

Wendy Edelberg, director of The Hamilton Project and a senior economic studies fellow at the left-leaning Brookings Institution, said the economy has been “revving” given the amount of fiscal stimulus that has been poured into the system to keep it afloat during the coronavirus pandemic.

But in order to combat the skyrocketing inflation, Edelberg and other economists say a slowdown is vital.

“So, now the question is, how smoothly does that slowdown happen?” Edelberg said. “And slowdowns can be painful. So, there’s absolutely a risk of a recession.”

The Fed’s primary tool for keeping prices stable and the job market strong is adjusting the federal funds rate. When the Fed raises or cuts its baseline interest rate range, borrowing costs for home loans, credit cards and other lending products typically move in the same direction.

When interest rates rise, consumer and business spending tends to decrease as the costs of borrowing money increase. Higher interest rates also incentivize saving, which means less immediate spending in the economy.

After slashing rates to near-zero levels amid the onset of the pandemic, the Fed in March launched a series of interest rate hikes meant to bring down soaring inflation.

The Fed hopes higher borrowing costs will slow down the economy enough to curb price growth without halting the recovery.

“Our goal is to restore price stability while fostering another long expansion and sustaining a strong labor market,” Fed Chair Jerome Powell said last month, adding the bank is aiming for the economy to achieve a “soft landing, with inflation coming down and unemployment holding steady.”

Powell, other Fed officials and some economists believe the U.S. economy is strong enough to withstand rising interest rates without falling into recession or losing jobs. The U.S. gained nearly 1.7 million jobs over the first three months of the year, consumer spending has remained strong and there are roughly two open jobs for every unemployed jobseeker.

Those confident in the Fed’s handle on inflation believe the bank can stanch inflation while only reducing job openings and the intense need for workers, rather than slowing the economy into layoffs.

Even so, the Fed is facing serious turbulence as it attempts to steer the recovery to a sustainable pace.  The war in Ukraine, the sanctions imposed on Russia and Moscow’s response has fueled rapid price increases for oil, gasoline, food, key minerals and other essential consumer goods already hit by inflation. COVID-19 shutdowns in China have also jammed up supply chains, which were already overwhelmed by consumer demand.

Dana M. Peterson, chief economist at The Conference Board, said Fed rate hikes could help reduce consumer demand for goods and services, pent-up savings, rising wages and housing market heat, but can’t do anything about supply chain dysfunction, COVID-19 shutdowns and the war.

“The supply side drivers of inflation, which includes the supply chain disruptions and also higher global commodity prices, the Fed can do very little about. Nonetheless, the Fed is going to be raising interest rates,” Peterson said during a Thursday briefing with reporters.

“I don’t know how confident the Fed is about anything, but certainly I think they’ve abandoned expectations that there’s going to be kind of a natural solution to inflation.”

Economists warn more must be done to tighten monetary policy to cool the economy, which could still mean pain in the months ahead for more Americans’ finances.

“As you slow the economy down, inflation will fall,” Ray Fair, an economics professor at Yale University, said, adding that’s how the Fed can help lower inflation. “But the cost of that, of course, is slower output growth and higher unemployment.”

And Fair, director emeritus at the National Bureau of Economic Research (NBER), said his own research suggests the Fed has “got to do quite a bit” of intervention to slow the economy.

“They’ve got to raise the interest rate, for example, more than just two percentage points, if they expect to get much lowering of inflation,” Fair said. The Fed funds rate is currently at a range of 0.25 to 0.5 percent and bank officials expect to raise it to roughly 2 percent by the end of the year.

Some economists fear inflation may be rising too quickly for the Fed to curb without raising rates so high, it halts economic growth.

In March, consumer prices shot up 1.2 percent, according to data released by the Labor Department this week. The data also found those prices had risen to 8.5 percent in the past year alone, marking the highest yearly increase in roughly four decades.

Americans saw prices go up in a variety of areas, ranging from food to gasoline and transportation, as the Ukraine-Russian war helped exacerbate the nation’s ongoing inflation problem.

Fair, whose bureau is often looked to for measuring recessions, said the NBER’s defines such an event as roughly, but not completely, “two successive quarters of negative real growth in GDP.”

Recent weeks have seen reports of institutions like Bank of America warning of recession shocks. A recent survey by The Wall Street Journal found more economists are also changing their tune on chances of a recession, finding forecasters “on average put the probability of the economy being in recession sometime in the next 12 months at 28 percent,” compared to 18 percent in January.

In an interview, Desmond Lachman, a senior fellow for the right-leaning American Enterprise Institute, said he feels a recession is likely.

“In order for [the Fed] to get the inflation out of the system, they’re going to have to tighten policy and that’s going to produce a recession,” Lachman said.

But others believe the Fed may have to contend that higher inflation could be around for a little while longer, as the central bank proceeds in slowing down the economy.

“They’re also going to have to recognize that they may not get back to a 3 percent or 2 percent (annual inflation) target anytime soon,” Peterson said, arguing such an attempt “would essentially drive the US economy into recession.”

Mortgage rates swelled above 5 percent for the first time in more than a decade — an unexpectedly rapid ascent that has begun to temper the U.S. housing boom and could usher new uncertainty into an economy dogged by soaring inflation.

The 30-year fixed-rate mortgage, the most popular home loan product, hit the threshold just five weeks after surpassing 4 percent, according to Freddie Mac data released Thursday. The average has not been this high since February 2011.

The run-up comes as the Federal Reserve has launched a major initiative to rein in the highest inflation in 40 years. Fed officials are betting that higher interest rates will slash inflation and recalibrate the job market. But their plan also rests on the assumption that higher rates will cool demand for housing, especially while homes themselves are in such short supply.

Low rates fueled the revival of the U.S. housing market after the Great Recession and have helped drive home prices to record levels. But after two years of hovering at historical lows, rates have been on a tear: In January, the 30-year fixed average was 3.22 percent. It was 3.04 percent a year ago. And while mortgage rates had been expected to rise, they’ve done so more quickly than many economists predicted.

“I’m not surprised that rates have hit 5 percent, but I am surprised that everyone else is surprised,” Curtis Wood, founder and chief executive of Bee, a mobile mortgage app, said via email. “If you look at historical action by the Fed in a high-rate environment and compare that to what the Fed is doing today, the Fed is underreacting to the reality of inflation in the economy.

“I’m surprised that rates aren’t at 6 percent right now,” he added, “and wouldn’t be shocked if they’re at 7 percent by end of year.”

Consumers have been absorbing higher prices in nearly every facet of their lives, with essentials such as food and gasoline spiking 8.8 percent and 48 percent, respectively, compared with last year. But higher mortgage rates can significantly limit what they can buy, or price them out altogether.

Several months ago, a home buyer would be looking to pay $1,347 a month on a $300,000 loan at 3.5 percent interest. But if the buyer had waited until this week, the same loan at 5 percent would tack on $263, bringing the monthly payment to $1,610.

The Federal Reserve’s efforts to tame inflation are driving the rise in rates. Although the Fed does not set mortgage rates, it does influence them. The central bank took its first steps toward bringing down inflation in March when it raised its benchmark rate for the first time since 2018. In addition to the federal funds rate hike, the Fed is soon to begin the process of reducing its balance sheet.

The Federal Reserve holds about $2.74 trillion in mortgage-backed securities. It indicated it will reveal its plans for reducing its holdings at its May meeting. The more aggressively the Fed sells those bonds, the faster mortgage rates are likely to rise.

The cost of housing doesn’t only weigh on buyers and sellers. It also has proved to be a major complication for the economic recovery, and potentially jeopardizes policymakers’ ability to rein in soaring inflation.

Inflation is rising at the fastest pace in 40 years, with prices climbing 8.5 percent in March compared with the year before. Shelter is a major part — roughly one third — of the basket of goods and services used to calculate inflation, or what’s known as the consumer price index. That means that if housing costs don’t meaningfully turn around soon, it will be that much harder for overall inflation to simmer down to more normal levels.

Shelter costs also stand apart from other categories, such as gas, food or plane tickets, that may be more susceptible to forces like the ongoing coronavirus pandemic, supply chain disruptions or a war. (Courtesy: https://www.msn.com/en-us/money/realestate/mortgage-rates-hit-5-percent-ushering-in-new-economic-uncertainty/ar-AAWe1XQ)

Americans who have been to the grocery store lately or started their holiday shopping may have noticed that consumer prices have spiked. The annual rate of inflation in the United States hit 6.2% in October 2021, the highest in more than three decades, as measured by the Consumer Price Index (CPI). Other inflation metrics also have shown significant increases in recent months, though not to the same extent as the CPI.

Understanding why the rate of inflation has risen so quickly could help clarify how long the surge might last – and what, if anything, policymakers should do about it. The recent acceleration in the rate of inflation appears to be fundamentally different from other inflationary periods that were more closely tied to the regular business cycle. Explanations for the current phenomenon proffered to date include continuing disruptions in global supply chains amid the coronavirus pandemic; turmoil in the labor markets; the fact that today’s prices are being measured against prices during last year’s COVID-19-induced shutdowns; and strong consumer demand after local economies were reopened.

How we did this

At least one thing is clear: A resurgent inflation rate is by no means solely a U.S. concern. A Pew Research Center analysis of data from 46 nations finds that the third-quarter 2021 inflation rate was higher in most of them (39) than in the pre-pandemic third quarter of 2019. In 16 of these countries, including the U.S., the inflation rate was more than 2 percentage points higher last quarter than in the same period of 2019. (For this analysis, we used data from the Organization for Economic Cooperation and Development, a group of mostly highly developed, democratic countries. The data covers the 38 OECD member nations, plus eight other economically significant countries.)

At 5.3%, the U.S. had the eighth-highest annual inflation rate in the third quarter of 2021 among the 46 countries examined, narrowly edging out Poland. The increase in the U.S. inflation rate – 3.58 percentage points between the third quarter of 2019 and the third quarter of 2021 – was the third highest in the study group, behind only Brazil and Turkey, both of which have substantially higher inflation rates in general than the U.S. does.

Regardless of the absolute level of inflation in each country, many show variations on the same pattern: relatively low inflation before the COVID-19 pandemic struck in the first quarter of 2020; flat or falling inflation for the rest of that year and into 2021, as many governments sharply curtailed most economic activity; and rising inflation in the second and third quarters of this year, as the world struggled to get back to something approaching normal.

For most countries in this analysis, 2021 has marked a sharp break from what had been an unusually long period of low-to-moderate inflation. In fact, during the decade leading up to the pandemic, 34 of the 46 countries in the analysis averaged changes in inflation rates of 2.6% or lower. In 27 of these countries, inflation rates averaged less than 2%. The biggest exception was Argentina, whose economy has been plagued by high inflation and other ills for decades. The OECD has no data on Argentine inflation rates before 2018, but in the 2018-19 period it averaged 44.4%.

At the other end of the spectrum is Japan, which has struggled against persistently low inflation and periodic deflation, or falling prices, for more than two decades, mostly without success. In the first quarter of 2020, Japan’s inflation rate was running at an anemic 0.7%. It slid into deflationary territory in the last quarter of 2020 and has remained there since: Consumer prices in the third quarter of this year were 0.2% below their level in the third quarter of 2020.

A few other countries have departed from the general dip-and-surge pattern. In Iceland and Russia, for instance, inflation has risen steadily throughout the pandemic, not just in more recent months.

In Indonesia, inflation fell early on and has remained at low levels. In Mexico, the inflation rate fell slightly during the 2020 lockdown period but returned quickly, hitting 5.8% in the third quarter of 2021, the highest level since the fourth quarter of 2017. And in Saudi Arabia, the pattern was reversed: The inflation rate surged during the height of the pandemic but fell sharply in the most recent quarter, to just 0.4%.

As China increases lending to other developing countries, ‘debt trap’ charges are growing quickly. As it greatly augments financing for development while other sources continue to decline, condemnation of China’s loans is being weaponized in the new Cold War.

Debt-trap diplomacy?
The catchy term ‘debt-trap diplomacy’ was coined by Indian geo-strategist Brahma Chellaney in 2017. According to him, China lends to extract economic or political concessions when a debtor country is unable to meet payment obligations. Thus, it overwhelms poor countries with loans, to eventually make them subservient.

Unsurprisingly, his catchphrase has been popularized to demonize China. Harvard’s Belfer Center has obligingly elaborated on the rising Asian power’s nefarious geostrategic interests. Meanwhile, as with so much else, the Biden administration continues related Trump policies.

But even Western researchers generally wary of China dispute the new narrative. A London Chatham House study concluded it is simply wrong – flawed, with scant supporting evidence.

Studying China’s loan arrangements for 13,427 projects in 165 countries over 18 years, AidData – at the US-based Global Research Institute – could not find a single instance of China seizing a foreign asset following loan default.

China has been the ‘new kid on the block’ of development financing for more than a decade. Its growing loans have helped fill the yawning gap left by the decline and increasing private business orientation of financing by the global North.

Instead of tied aid pushing exports, as before, it now shamelessly promotes foreign direct investment from donor nations. Unless disbursed via multilateral institutions, China’s increased lending to support businesses abroad has not really helped developing countries cope with renewed ‘tied’ concessional aid.

Grand ‘debt trap diplomacy’ narratives make for great propaganda, but obscure debt flows’ actual impacts. Most Chinese lending is for infrastructure and productive investment projects, not donor-determined ‘policy loans’. Some countries ‘over-borrow’, but most do not. Deals can turn sour, but most apparently don’t.

While leaving less room for discretionary abuse in implementation, project lending typically puts borrowers at a disadvantage. This is largely due to the terms of sought-after foreign investment and financing, regardless of source. Hence, the outcomes of most such borrowing – not just from China – vary.

Sri Lanka
Sri Lanka’s Hambantota Port is the most frequently mentioned China debt trap case. The typical media account presumes it lent money to build the port expecting Sri Lanka to get into debt distress. China then supposedly seized it – in exchange for providing debt relief – enabling use by its navy.

But independent studies have debunked this version. Last year, The Atlantic insisted, ‘The Chinese “Debt Trap” Is a Myth’. The subtitle elaborated, “The narrative wrongfully portrays both Beijing and the developing countries it deals with”.

It elaborated: “Our research shows that Chinese banks are willing to restructure the terms of existing loans and have never actually seized an asset from any country, much less the port of Hambantota”.

The project was initiated by then President Mahindra Rajapaksa – not China or its bankers. Feasibility studies by the Canadian International Development Agency and the Danish engineering firm Rambol found it viable. The Chinese Harbour Group construction firm only got involved after the US and India both refused Sri Lankan loan requests.

Sri Lanka’s later debt crisis has been due to its structural economic weaknesses and foreign debt composition. The Chatham House report blamed it on excessive borrowing from Western-dominated capital markets – not Chinese banks.

Even the influential US Foreign Policy journal does not blame Sri Lanka’s undoubted economic difficulties on Chinese debt traps. Instead, “Sri Lanka has not successfully or responsibly updated its debt management strategies to reflect the loss of development aid that it had become accustomed to for decades”.

As the US Fed tapered ‘quantitative easing’, borrowing costs – due to Sri Lanka’s persistent balance of payment problems – rose, forcing it to seek International Monetary Fund help. Some argue borrowing even more from China is the best option available to the island republic.

To set the record straight, there was no debt-for-asset swap after Sri Lanka could no longer service its foreign debt. Instead, a Chinese state-owned enterprise leased the port for US$1.1 billion. Sri Lanka has thus boosted its foreign reserves and paid down its debt to other – mainly Western – creditors.

Also, Chinese navy vessels cannot use the port – home to Sri Lanka’s own southern naval command. “In short, the Hambantota Port case shows little evidence of Chinese strategy, but lots of evidence for poor governance on the recipient side”.

Malaysia
China has also been accused by the media of seeking influence over the Straits of Malacca, through which some 80% of its oil imports pass. Debt-trap proponents claim Beijing therefore inflated lending for Malaysia’s controversial East Coast Rail Link (ECRL).

The Chatham House report notes, “The real issue here is not one of geopolitics, but rather – as in Sri Lanka – the recipient government’s efforts to harness Chinese investment and development financing to advance domestic political agendas, reflecting both need and greed”.

ECRL was initiated by convicted former Malaysian prime minister Najib Razak. Ostensibly to develop the less developed East Coast of Peninsular Malaysia as part of China’s Belt and Road Initiative, it rejected other less costly, but much needed options.

Borrowings are far more than needed – probably for nefarious purposes. Loan terms were structured to delay repayment – to Najib’s political advantage by ‘passing the buck’ to later generations. But such abuse is by the borrower – not the lender – unless Chinese official connivance is involved.

Non-alignment for our times
There is undoubtedly much room for improving development finance, especially to achieve more sustainable development. Instead of mainly lending to the US, as before, China’s growing role can still be improved. To begin, all involved should respect the United Nations’ principles on responsible sovereign lending and borrowing.

After more than half a century of Western donors’ largely betrayed promises, China’s development finance has significantly improved ‘South-South cooperation’. Meanwhile, sustainable development finance needs – compounded by global warming, the pandemic and Ukraine war – have increased.

After decades of the West denying China commensurate voice in decision making, even under rules it made, its role on the world stage has grown. But instead of working together for the benefit of all, rich countries seem intent on demonizing it. Unsurprisingly, most developing country governments seem undeterred.

As the new Cold War and the scope of economic sanctions spread, collateral damage is undermining development finance and developing countries. To cope with the new situation, developing countries need to consider building a new non-aligned movement for our dark times.

Gautam Adani, founder and chairman of the Adani group, a conglomerate with businesses in sectors such as energy, ports, mining, edible oil and so on, with a net worth of $118 billion is now the world’s sixth-richest person, driven by a meteoric rise in the value of Adani group’s listed stocks. The 59-year-old mogul has overtaken Google’s famed founders Larry Page and Sergey Brin, according to the Bloomberg Billionaires Index.

It is important to note here in this context that Adani’s net worth soared by $8.57 billion, or about Rs 65,091 crore, due to a rise in the share prices of Adani Green Energy, Adani Enterprises, Adani Gas and Adani Transmission on Monday. While India’s benchmark indices ended the day in the red on Monday, shares of Adani Group surged up to 16 per cent.

Adani Green Energy breaks into list of top 10 most valued firms on BSE, replaces Bharti Airtel

With an almost $41.6 billion jump in his personal fortune, Gautam Adani is the world’s biggest wealth-gainer this year. Meanwhile, Reliance Industries (RIL)— India’s most valuable company—chairman Mukesh Ambani’s total wealth now stands at $97.4 billion, and he is now the 11th richest in the world, as per the latest Bloomberg billionaire ranking. So far this year, his personal wealth has increased by $7.45 billion. If we go by the Bloomberg wealth index, Adani is $20.6 billion ahead of Ambani at present, and it could be tough for the RIL boss to catch up very quickly.

The moot question is: What’s made Adani so rich, so fast? The tycoon is pushing into clean energy, airports and power plants. The mega stock market gainer that catapulted Adani to the top position is Adani Green Energy. Shares of the company soared 16.25 per cent to settle at Rs 2,701.55 apiece on BSE on Monday. It entered the list of top-10 valued companies as its market valuation zoomed over Rs 4.22 lakh crore.

For the last 14 years, Ambani has been the leader of India’s wealthiest list. The oil-to-telecom conglomerate boss was briefly dethroned by pharmaceutical tycoon Dilip Sangavi a few years ago but grabbed the top position.

Last week, Adani had reached a net worth of $100 billion as he became the new member of the centibillionaires club. Worth mentioning here is that Amazon founder Jeff Bezos (currently have a net worth of $176 billion) was the first to hit the $100 billion milestone in 2017 since Microsoft. co-founder Bill Gates back in 1999 for a brief period.

Tesla chief executive Musk, now the world’s richest person with a fortune of $249 billion, joined the elite club in 2020.

Meanwhile, in the last 10 years, while Ambani’s wealth has grown 400 per cent, Adani has seen a 1,830 per cent jump, as per the 2022 M3M Hurun Global Rich List.

US President Joe Biden announced last week that his administration will release 1 million barrels of oil per day for the next six months from its strategic reserve in an effort a bid to control energy prices that have spiked after the United States and allies imposed steep sanctions on Russia over its invasion of Ukraine. The releasing of over 180 million barrels from the US Strategic Petroleum Reserve is the “largest” release from national reserve in the country’s history, Biden said in a speech from the Eisenhower Executive Office Building on Thursday.

The president said it was not known how much gasoline prices could decline as a result of his move, but he suggested it might be “anything from 10 cents to 35 cents a gallon.” Gas is averaging about $4.23 a gallon, compared with $2.87 a year ago, according to AAA.

“As Russian oil comes off the global market, supply of oil drops and prices are rising,” he said, acknowledging the US energy embargo on Russia would “come with a cost”.

“The bottom line is if we want lower gas prices we need to have more oil supply right now,” Biden said. “This is a moment of consequence and peril for the world, and pain at the pump for American families.”

The president also wants Congress to impose financial penalties on oil and gas companies that lease public lands but are not producing. He said he will invoke the Defense Production Act to encourage the mining of critical minerals for batteries in electric vehicles, part of a broader push to shift toward cleaner energy sources and reduce the use of fossil fuels. The actions show that oil remains a vulnerability for the U.S. Higher prices have hurt Biden’s approval domestically and added billions of oil-export dollars to the Russian government as it wages war on Ukraine.

Tapping the stockpile would create pressures that could reduce oil prices, though Biden has twice ordered releases from the reserves without causing a meaningful shift in oil markets. Biden said Thursday he expects gasoline prices could drop “fairly significantly.”

Part of Biden’s concern is that high prices have not so far coaxed a meaningful jump in oil production. The planned release is a way to increase supplies as a bridge until oil companies ramp up their own production, with administration officials estimating that domestic production will grow by 1 million barrels daily this year and an additional 700,000 barrels daily in 2023.

The markets reacted quickly with crude oil prices dropping about 6% in Thursday trading to roughly $101 a barrel. Still, oil is up from roughly $60 a year ago, with supplies failing to keep up with demand as the world economy has begun to rebound from the coronavirus pandemic. That inflationary problem was compounded by Russian President Vladimir Putin’s invasion of Ukraine, which created new uncertainties about oil and natural gas supplies and led to retaliatory sanctions from the U.S. and its allies.

Stewart Glickman, an oil analyst for CFRA Research, said the release would bring short-term relief on prices and would be akin to “taking some Advil for a headache.” But markets would ultimately look to see whether, after the releases stop, the underlying problems that led to Biden’s decisions remain.

“The root cause of the headache is probably still going to be there after the medicine wears off,” Glickman said. Biden has been in talks with allies and partners to join in additional releases of oil, such that the world market will get more than the 180 million barrels total being pledged by the U.S.

Americans on average use about 21 million barrels of oil daily, with about 40% of that devoted to gasoline, according to the U.S. Energy Information Administration. That total accounts for about one-fifth of total global consumption of oil.

Domestic oil production is equal to more than half of U.S. usage, but high prices have not led companies to return to their pre-pandemic levels of output. The U.S. is producing on average 11.7 million barrels daily, down from 13 million barrels in early 2020.

“Look, the action I’m calling for will make a real difference over time. But the truth is it takes months, not days, for companies to increase production,” he said on Thursday. In his address, Biden also highlighted the importance of US energy independence and called for a transition to clean energy.

“Ultimately, we and the whole world need to reduce our dependence on fossil fuels altogether. We need to choose long-term security over energy and climate vulnerability,” he said. Biden, who faces with mounting pressure to address a surging inflation ahead of the midterm elections, blamed the Covid-19 pandemic and Russia’s military action for rising gas prices.

Republican lawmakers have said the problem results from the administration being hostile to oil permits and the construction of new pipelines such as the Keystone XL. Democrats say the country needs to move to renewable energy such as wind and solar that could reduce the dependence on fossil fuels and Putin’s leverage.

Sen. Steve Daines, R-Mont., blasted Biden’s action to tap the reserve without first taking steps to increase American energy production, calling it “a Band-Aid on a bullet wound.″ Daines called Biden’s actions “desperate moves″ that avoid what he called the real solution: ”investing in American energy production,″ and getting “oil and gas leases going again.”

The administration says increasing oil output is a gradual process and the release would provide time to ramp up production. It also wants to incentivize greater production by putting fees on unused leases on government lands, something that would require congressional approval.

Oil producers have been more focused on meeting the needs of investors than consumers, according to a survey released last week by the Dallas Federal Reserve.

About 59% of the executives surveyed said investor pressure to preserve “capital discipline” amid high prices was the reason they weren’t pumping more, while fewer than 10% blamed government regulation.

In his remarks last week, Biden tried to shame oil companies that he said are focused on profits instead of putting out more barrels, saying that adding to the oil supply was a patriotic obligation.

“This is not the time to sit on record profits: It’s time to step up for the good of your country,” the president said.

The steady release from the reserves would be a meaningful sum and come near to closing the domestic production gap relative to February 2020, before the coronavirus caused a steep decline in oil output.

Still, the politics of oil are complicated with industry advocates and environmentalists both criticizing the planned release. Groups such as the American Petroleum Institute want to make drilling easier, while environmental organizations say energy companies should be forced to pay a special tax on windfall profits instead.

The administration in November announced the release of 50 million barrels from the strategic reserve in coordination with other countries. And after the Russia-Ukraine war began, the U.S. and 30 other countries agreed to an additional release of 60 million barrels from reserves, with half of the total coming from the U.S.

According to the Department of Energy, which manages it, more than 568 million barrels of oil were held in the reserve as of March 25. After the release, the government would begin to replenish the reserve once prices have sufficiently fallen.

After many years of historically low inflation, consumer prices in the United States continued their steep ascent last month. The Consumer Price Index, the most widely followed inflation gauge, increased 7.0% from December 2020 to December 2021 – its highest rate in nearly 40 years.

The CPI – or, to give it its full name, the Consumer Price Index for All Urban Consumers (CPI-U) – isn’t the government’s only measure of inflation. For that matter, it isn’t even the only version of the CPI. Pew Research Center analyses typically use the CPI’s Retroactive Series, especially when adjusting prices or dollar values over several years or decades, because that series adjusts the CPI for previous years to reflect current methodology. There’s also the Chained CPI, which is meant to reflect how consumers alter their buying patterns in response to changes in relative prices – for example, buying more chicken when beef becomes more expensive. The Chained CPI often (but not always) comes in a bit below the “regular” CPI-U: It rose 6.9% between December 2020 and December 2021.

But the CPI-U is the most widely cited inflation metric, so it’s worth popping the hood and looking inside to see how it works.

The Bureau of Labor Statistics (BLS), which is responsible for the CPI, starts by collecting price data for hundreds of discrete goods and services – the so-called “market basket” – from around 8,000 housing units and 23,000 retailers, service providers and online outlets in 75 urban areas around the country. Data on rents is gathered from some 50,000 landlords and tenants. The items sampled, and their weights in the overall index, are determined by the Consumer Expenditure Survey, which is carried out for BLS by the Census Bureau.

The BLS reports index weights for dozens of categories, subcategories and specific items in the CPI’s basket of goods and services. The biggest category by far is shelter, which accounts for nearly a third of the index. The single weightiest item, at about 22.3%, is “owner’s equivalent rent of primary residence” – essentially how much homeowners would have to pay if they were renting their homes. (The idea is to separate out shelter, the service provided by a house, from whatever value the house might have as an investment.)

While shelter costs carry the most weight in the CPI, they’ve not risen nearly as much as the index as a whole. In December, owner’s equivalent rent was up 3.8% compared with December 2020, and regular rent of primary residence was just 3.3% higher. The one big exception among shelter costs was lodging away from home, a category that mostly tracks hotel and motel room rates, where prices were 27.6% higher than a year earlier. However, that subcategory accounts for less than 1% (0.849%, to be precise) of the CPI.

The next-biggest category, food, accounts for just under 14% of the index. Groceries, or “food at home,” makes up a bit more than half of that category. Grocery prices were 6.5% higher than a year ago, which will come as no surprise to anyone who’s been to a supermarket lately. Meats, especially beef and pork, led the way, with prices for beef roasts and steaks more than 20% higher than a year ago, bacon up 18.6% and chicken parts up 11.5%. (On the other hand, prices for hot dogs and cheese both are down 0.6%.)

Eating out has gotten more expensive too. Prices for full-service meals and snacks consumed away from home were up 6.6% from December 2020, and limited-service meals and snacks were up 8%. School breakfasts and lunches were down by nearly two-thirds, perhaps because the U.S. Department of Agriculture has authorized free meals for all children in public schools this academic year.

Besides at the supermarket, consumers also feel the effects of inflation acutely at the fuel pump. Gasoline accounts for just 4% of the overall CPI, but prices for it have risen more than any other good or service in the CPI basket over the past year. Regular unleaded gasoline, for instance, is up 50.8% since December 2020. It should be noted that gas prices fell sharply in 2020, as demand plunged because much of the U.S. economy was shut down. As the economy reopened and demand came back, so did gas prices, though they’ve since risen 20% or more above pre-pandemic levels.

Energy goods and services, a category of which gasoline is a major component, accounts for roughly 7.5% of the overall CPI. Prices for fuels used for home heating and cooking also are sharply higher than a year ago: Fuel oil is up 41%, propane, kerosene and firewood are up 33.8%, and piped natural gas is up 24.1%.

Aside from motor fuels, the vehicles that burn them also loom relatively large in the CPI. New vehicles account for nearly 3.9% of the index; prices for new cars rose 12% from December 2020 to December 2021, and new trucks prices almost as much (11.6%). But the real movement was for used vehicles: Prices for used cars and trucks, which make up about 3.4% of the index, have soared 37.3% over the past 12 months. Why? The pandemic has disrupted and depressed production of new vehicles, while low interest rates have increased demand for cars and trucks. Buyers who couldn’t find the new vehicles they wanted have moved over to the used lot, increasing demand at the same time as the flow of pre-owned cars and trucks dwindled.

The number of Indian billionaires grew from 102 to 142, while 84 per cent of households in the country suffered a decline in their income in 2021, which was also a year marked by tremendous loss of life and livelihoods, according to non profit Oxfam India’s latest report published on Monday.

The report ‘Inequality Kills’ comes ahead of the World Economic Forum’s Davos Agenda.

It indicates that the collective wealth of India’s 100 richest people hit a record high of Rs 57.3 lakh crore in 2021.

In India, during the pandemic (since March 2020, through to November 30th, 2021) the wealth of billionaires increased from Rs 23.14 lakh crore to Rs 53.16 lakh crore.

More than 4.6 crore Indians, meanwhile, are estimated to have fallen into extreme poverty in 2020 (nearly half of the global new poor according to the United Nations).

The stark wealth inequality in India is a result of an economic system rigged in favour of the super-rich over the poor and marginalised, the report said

It advocates a one per cent surcharge on the richest 10 per cent of the Indian population to fund inequality combating measures such as higher investments in school education, universal healthcare, and social security benefits like maternity leaves, paid leaves and pension for all Indians.

“The ‘Inequality Kills’ briefing shows how deeply unequal our economic system is and how it fuels not only inequality but poverty as well. We urge the Government of India to commit to an economic system which creates a more equal and sustainable nation,” Amitabh Behar, CEO, Oxfam India said in a statement.

Further, Behar said that Oxfam’s global briefing points to the stark reality of inequality contributing to the death of at least 21,000 people each day, or one person every four seconds.

Moreover, the pandemic set gender parity back from 99 years to now 135 years. Women collectively lost Rs 59.11 lakh crore in earnings in 2020, with 1.3 crore fewer women in work now than in 2019, the report showed.

“It has never been so important to start righting the wrongs of this obscene inequality by targeting extreme wealth through taxation and getting that money back into the real economy to save lives,” Behar said.

“India can show the world that democratic systems are capable of wealth redistribution and inclusive growth where no one is left behind. India’s fight against inequality and poverty must be supported by the billionaires who made record profits in the country during the pandemic,” he suggested. (IANS)

In a trend unprecedented since economic liberalisation, the annual income of the poorest 20% of Indian households, constantly rising since 1995, plunged 53% in the pandemic year 2020-21 from their levels in 2015-16. In the same five-year period, the richest 20% saw their annual household income grow 39% reflecting the sharp contrast Covid’s economic impact has had on the bottom of the pyramid and the top.

This stark K-shaped recovery emerges in the latest round of ICE360 Survey 2021, conducted by People’s Research on India’s Consumer Economy (PRICE), a Mumbai- based think-tank.

The survey, between April and October 2021, covered 200,000 households in the first round and 42,000 households in the second round. It was spread over 120 towns and 800 villages across 100 districts.

While the pandemic brought economic activity to a standstill for at least two quarters in 2020-21 and resulted in a 7.3% contraction in GDP in 2020-21, the survey shows that the pandemic hit the urban poor most and eroded their household income.

Splitting the population across five categories based on income, the survey shows that while the poorest 20% (first quintile) witnessed the biggest erosion of 53%, the second lowest quintile (lower middle category), too, witnessed a decline in their household income of 32% in the same period. While the quantum of erosion reduced to 9% for those in the middle income category, the top two quintiles — upper middle (20%) and richest (20%)— saw their household income rise by 7% and 39% respectively.

The survey shows that the richest 20% of households have, on average, added more income per household and more pooled income as a group in the past five years than in any five-year period earlier since liberalisation. Exactly the opposite has happened for the poorest 20% of households — on average, they have never actually seen a decrease in household income since 1995. Yet, in 2021, in a huge knockout punch caused by Covid, they earned half as much as they did in 2016.

How disruptive this distress has been for those at the bottom of the pyramid is reinforced by the fact that in the previous 11-year period between 2005 and 2016, while the household income of the richest 20% grew by 34%, the poorest 20% saw their household income surge by 183% at an average annual growth rate of 9.9%.

Coming in the run-up to the Budget, the task for the Government is cut out.

“As the Finance Minister is finalising her budget proposals for 2022-23 to give shape to the roadmap for economic revival of the country,” said Rajesh Shukla, MD and CEO, PRICE, “we need a K-shaped policy too that addresses the two ends of the spectrum and a lot more thinking on how to build the bridge between the two.”

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This couldn’t be more timely. Said PRICE founder and one of the authors of the survey Rama Bijapurkar. “Or else, we are back to a tale of two Indias, a narrative we thought we were rapidly getting rid of. The good news is that we have built a far more efficient welfare state for the disbursal of benefit be it DBT or vaccination for all.”

The survey showed that while the richest 20% accounted for 50.2% of the total household income in 1995, their share has jumped to 56.3% in 2021. On the other hand, the share of the poorest 20% dropped from 5.9% to 3.3% in the same period.

As for India Inc, it has been in a better position to weather the disruption. The pandemic accelerated further formalisation of the economy with large companies benefitting at the cost of smaller ones. The survey also shows that while job losses were quite evident among Small and Medium Enterprises in the casual labour segment, large companies did not witness much of that.

Even among the poorest 20 per cent, those in urban areas got more impacted than their rural counterparts as the first wave of Covid and the lockdown led to stringent curbs on economic activity in urban areas. This resulted in job losses and loss of income for the casual labour, petty traders household workers.

Data shows that there has been a rise in the share of poor in cities. While 90 per cent of the poorest 20 per cent in 2016, lived in rural India, that number had dropped to 70 per cent in 2021. On the other hand the share of poorest 20 per cent in urban areas has gone up from around 10 per cent to 30 per cent now.

“The data reflects that the casual labour, petty trader, household workers among others in Tier 1 and Tier 2 cities got hit most by the pandemic. During the survey we also noticed that while in rural areas people in lower middle income category (Q2) have moved to middle income category (Q3), in the urban areas the shift has been downwards from Q3 to Q2. In fact, the rise in poverty level of urban poor has pulled down the household income of the entire category down,” said Shukla.

“The elephant in the room is investment,” said Bijapurkar. “Inspiring confidence through long-term policy stability and improving ease of doing business should make the tide rise again and sweep small business and individuals up along with it. Most big companies are doing well and don’t need more help but we need to work the economy for the bottom half.”

Prices in the US are rising at their fastest rate in almost 40 years, with inflation up 7% year-on-year in December. Strong demand and scarce supply for key items such as cars are driving the increases, which are putting pressure on policymakers to act.

The US central bank is expected to raise interest rates this year. The rise in borrowing costs is aimed at reducing demand by making purchases such as cars more expensive.

December’s increase marked the third month in a row that the US annual inflation rate has hovered above 6% – well north of policymakers’ 2% target. The last time the pace of inflation exceeded that level was 1982.

Housing costs were up 4.1% year-on-year, while the cost of groceries rose 6.5% – compared to a 1.5% annual average over the last 10 years.

Wednesday’s report from the Labor Department showed signs that some of the pressures may be easing. The cost of energy dropped 0.4% from November to December – its first decline since April. But over 12 months energy costs are up by nearly 30% and have returned to their upward trend in recent days.

“Overall, this is every bit as bad as we expected,” Paul Ashworth, chief economist at Capital Economics, said of the December inflation report.

Reacting to the latest report, President Joe Biden said that it “demonstrates that we are making progress in slowing the rate of price increases”.

He added that there is “more work to do” in the US and noted that “inflation is a global challenge, appearing in virtually every developed nation as it emerges from the pandemic economic slump”.

The price pressures occurring in the US have been seen to varying degrees around the world.

The Organisation for Economic Cooperation and Development, which represents more than 30 of the world’s largest economies, said this week that inflation among its members had hit its highest rate in 25 years in November.

Further rises

In the UK, inflation hit a 10-year high in November, while globally, prices are rising at their fastest pace since 2008, according to the World Bank.

While many countries are grappling with higher food and energy costs, the US has seen an unusually large pick-up in inflation.

That’s due in part to strong demand from households, whose spending got a boost from government coronavirus aid and shifted suddenly from things like travel to furniture during the pandemic.

Economists in the US were initially hopeful that the pressures would ease as the pandemic faded. But ongoing production snarls and the emergence of virus variants have made the price increases more persistent than expected.

“It’s proving more difficult than we had hoped to end the pandemic,” the head of America’s central bank, Jerome Powell, told Congress on Tuesday.

Sarah House, economist at Wells Fargo, said it is no longer likely that inflation will fade naturally as the pandemic abates, pointing to worker shortages and wages, which have also been rising – though not as fast as prices.

“Although the exceptional pace of goods inflation and momentum in shelter costs are still firmly rooted in the pandemic, the increasingly tight labour market and ensuing wage pressures will make it difficult for inflation to fall back on its own,” she said.

The issue has put pressure on the Biden administration, eroding consumer confidence despite other signs of a strong economy.

Mr Powell has pledged to keep inflation in check by raising interest rates. But on Tuesday he warned those moves would only go so far to address the problem if supply chain issues persist, pointing to risks from new shutdowns in China.

“Omicron, particularly if China sticks to a no-Covid policy, Omicron can really disrupt the supply chains again,” he said.

Official inflation figures from China on Thursday showed prices rose less than expected in November, with producer prices up 10.3% and consumer prices up 1.5%.

But that easing is not necessarily an indicator of what will happen elsewhere, said Gian Maria Milesi-Ferretti, senior fellow at the Brookings Institution, a Washington think tank.

“Indicators of what is happening [in China] to the labour market, to wage demands and to the supply bottlenecks that have pushed up some prices … those are more important indicators,” he said.

Visa Inc has complained to the U.S. government that India’s “informal and formal” promotion of domestic payments rival RuPay hurts the U.S. giant in a key market, memos seen by Reuters show.

In public Visa has downplayed concerns about the rise of RuPay, which has been supported by public lobbying from Prime Minister Narendra Modi that has included likening the use of local cards to national service.

But U.S. government memos show Visa raised concerns about a “level playing field” in India during an Aug. 9 meeting between U.S. Trade Representative (USTR) Katherine Tai and company executives, including CEO Alfred Kelly.

Mastercard Inc has raised similar concerns privately with the USTR. Reuters reported in 2018 that the company had lodged a protest with the USTR that Modi was using nationalism to promote the local network.

Alfred Kelly, Jr., CEO, Visa Inc. speaks at the 2019 Milken Institute Global Conference in Beverly Hills, California, U.S., April 29, 2019. REUTERS/Lucy Nicholson/File Photo

“Visa remains concerned about India’s informal and formal policies that appear to favor the business of National Payments Corporation of India” (NPCI), the non-profit that runs RuPay, “over other domestic and foreign electronic payments companies,” said a USTR memo prepared for Tai ahead of the meeting.

Visa, USTR, Modi’s office and the NPCI did not respond to requests for comment.

Modi has promoted homegrown RuPay for years, posing a challenge to Visa and Mastercard in the fast-growing payments market. RuPay accounted for 63% of India’s 952 million debit and credit cards as of November 2020, according to the most recent regulatory data on the company, up from just 15% in 2017.

Publicly, Kelly said in May that for years there was “a lot of concern” that the likes of RuPay could be “potentially problematic” for Visa, but he stressed that his company remained India’s market leader.

“That’s going to be something we’re going to continually deal with and have dealt with for years. So there’s nothing new there,” he told an industry event.

Modi, in a 2018 speech, portrayed the use of RuPay as patriotic, saying that since “everyone cannot go to the border to protect the country, we can use RuPay card to serve the nation.”

When Visa raised its concerns during the USTR gathering on Aug. 9, it cited the Indian leader’s “speech where he basically called on India to use RuPay as a show of service to the country,” according to an email U.S. officials exchanged on the meeting’s readout.

Finance Minister Nirmala Sitharaman said last year that “RuPay is the only card” banks should promote. The government has also promoted a RuPay-based card for public transportation payments.

While RuPay dominates the number of cards in India, most transactions still go through Visa and Mastercard as most RuPay cards were simply issued by banks under Modi’s financial inclusion program, industry sources say.

Visa told the U.S. government it was concerned India’s “push to use transit cards linked to RuPay” and “the not so subtle pressure on banks to issue” RuPay cards, the USTR email showed.

Mastercard and Visa count India as a key growth market, but have been jolted by a 2018 central bank directive for them to store payments data “only in India” for “unfettered supervisory access”.

Mastercard faces an indefinite ban on issuing new cards in India after the central bank said it was not complying with the 2018 rules. A USTR official privately called the Mastercard ban “draconian”, Reuters reported in September.