Learn Vocabulary from Newspaper Articles (THE HINDU)

Inflation Conundrum: on the record Low Retail Inflation

Record low retail inflation poses a monetary policy dilemma for the RBI - THE HINDU

The latest Consumer Price Index data show headline retail inflation has decelerated to a record low of 1.54% in June. That the reading has slid below the 2% lower bound of the Reserve Bank of India’s medium-term target for CPI inflation has understandably led to calls for the RBI to support economic growth by cutting interest rates. Economists, including Chief Economic Adviser Arvind Subramanian, have openly questioned the assumptions made by the majority of the members of the RBI’s Monetary Policy Committee with regard to prices and have urged a reboot of the policy rationale. Core inflation, which strips out the relatively volatile food and fuel prices, has also trended lower and eased below 4% for the first time in at least five years. And with the latest industrial output data from May reflecting weaknesses in key sectors like capital goods and consumer durables, the reasoning behind demands for monetary action that could help spur both investment and consumer demand is evident. Others have also flagged concerns about “deflationary trends” and the risks of relying too heavily on forecasting models. The voices exhorting the central bank to reduce interest rates are only going to grow ahead of its next bimonthly policy review at the beginning of August.

For the six members of the RBI’s rate-setting panel, including Governor Urjit Patel and his deputy overseeing monetary policy, Viral Acharya, the data pose a conundrum that is going to test their sagacity. For one, the beneficial base effect will begin to reverse after peaking in July. Also, the majority of the risks to the inflation outlook that the committee’s participants had flagged collectively and individually at the last meeting in June, when they had opted to sit pat while retaining a neutral stance, are still largely relevant and yet to play out. The impact from the July 1 introduction of the Goods and Services Tax, for instance, will begin to feed into prices only over the coming months -based on the initial anecdotal trends in the prices of various services, there could be upward pressure on core inflation. Similarly, the payment of increased allowances under the Seventh Central Pay Commission’s award, which came into effect from the beginning of this month, could also start to transmit into price gains. As Mr. Acharya had pointed out at the last meeting, fiscally expansive measures taken by several State governments to address farmers’ demands for debt relief could pose a “tail risk” by triggering generalised inflation over time. And the restoration of the health of the banking sector, a key caveat for ensuring effective transmission of monetary policy, is as yet far from being close to a fruitful outcome. Ultimately, the RBI will have to weigh whether the current trend in inflation is likely to remain durable enough for it to make a move that doesn’t end up proving to be a costly error in the long run.

IMPORTANT WORDS FORM ARTICLE & THEIR MEANING

1) Conundrum (noun) (कठिन समस्या , पहेली) : kuh-nun-drum
Meaning - a difficult problem that seems to have no solution
Synonyms -  problem, difficulty, mystery.
Antonyms - solution , obviousness , easy 
Example -Although the mechanic tried to identify the conundrum with the car, he was unable to pinpoint the issue.

2) Decelerate (verb) (धीमा करना) :   dee-sel-er-eyt
Meaning - to slow down or reduce the speed of something
Synonyms - brake, impede on, slack up.
Antonyms -  Accelerate, hasten, quicken
Example -The speeding man tried to decelerate when he saw the police officer parked beside the road.
3) Caveat (noun) (चेतावनी) : ca-ve-at
Meaning -  a warning of the limits of a particular agreement or statement
Synonyms -  Caution, condition, stipulation, provision/clause.
Antonyms -  Delinquency, imprudence
Example - Before you make your final decision, you should consider the caveat in this agreement.

4) Deflationary (adjective) (अपस्फीतिकर): de-fla-tion-ar-y
Meaning - the act of decreasing or reducing something
Synonyms -Diminish , lessen, lower
Antonyms- Inflationary, rise, increase
Example -But in deflationary times, like 2008, your cash will buy you more.

5) Exhorting (verb) (प्रोत्साहित) :  ex-or-ting
Meaning - to strongly urge someone to do something
Synonyms -  urge, encourage, pressure.
Antonyms - Dissuade, deter, discourage
Example - A good leader aims on exhorting people to achieve their own forms of greatness rather than trying to force them on a certain path.

6) Sagacity (noun) (बुद्धिमत्ता)  :    suh-gas-i-tee
Meaning -ability to make good judgments and decisions
Synonyms wisdom, insight, intelligence.
Antonyms - Foolishness, stupidity, insanity
Example - His lack of sagacity has led to the closing of his business.
7) Anecdotal (adjective) (उपाख्यानात्मक) : an-ec-do-tal
Meaning -not necessarily true or dependable, because based on someone's personal experience and not on facts or research
Synonyms -  informal, unreliable; unscientific/narrative.
Antonyms - scientific, concrete, proven, factual
Example - Our professor dislikes when students use anecdotal evidence when trying to support a scientific claim.

8) Spur (verb) (प्रेरणा): spur
Meaning -to motivate an individual or group into action
Synonyms -  stimulate, encourage, motivate/urge.
Antonyms -  Disincentive, prevent, hinder
Example -The chance to win a scholarship should spur my daughter into studying for the college admissions test.

9) Rationale (Noun) (दलील): rash-uh-nal
Meaning - an explanation given to justify something
Synonyms - reason/basis; principle; motivation.
Antonyms -  Reality, proof
Example -The judge asked the young man to explain his rationale for stealing a police car.

10) Enunciate (Verb)  - à¤¸्पष्ट उच्चारण करना
Meaning - to clearly state
Synonyms - Pronounce, utter, express, articulate
Antonyms - Mispronounce, mumble, muffle
Example (English) - Vast numbers of people even in the media front line can't enunciate words properly.
Example (Hindi) - à¤®ीडिया में काम करने वालों में भी अनेकानेक लोग शब्दों का स्पष्ट उच्चारण नहीं कर पाते हैं

Now it's time to check your vocabulary. We have given below some words from the same article. Try to make sentences with these words in the comment section which will be reviewed by us.
  • Oversee
  • Dilemma
  • Weigh
  • Reboot

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