Economy

Inflation Data



Warning: The graphic above is completely unrelated to what you're about to read.

Inflation in India at the wholesale level jumped to the highest level in over 2 years in February!

The Wholesale Price Index (WPI) based inflation number came in at 4.17% - the highest since November 2018. And this is after a subdued January with just 2.03% recorded.
At the retail level too, Consumer Price Index (CPI) inflation was on the higher side at 5.03%.
Food and fuel prices rising were an important factor. But we guess you felt that already.

How Is Inflation Measured?

Now while WPI and CPI may sound like complicated economic terms, they’re actually fairly straightforward to understand.

To measure price changes at the wholesale or retail level, a fixed basket of goods and services is decided and their prices are tracked every month. The prices for a particular month are usually compared with the same period 1 year ago and this change is reported as % inflation.

A key difference between WPI and CPI is that WPI includes only goods and not services. That’s because services can not be given at a ‘wholesale’ level.

How Much Is Too Much?

The RBI (and many other central banks across the world) operates with inflation control being their main target.
In India, the ideal inflation level is between 2% to 6% at the CPI level. The RBI primarily uses interest rates to increase or decrease the flow of money in the economy, which in turns helps bring down/push up inflation.

Next month, the Finance Ministry and the RBI are due to meet to decide if any changes are needed to this inflation targeting mechanism.

Tech

Tech Snippets

 

Lot of maybe type news going on today in the tech world. So tech snippets is back for you guys.

CRED Entering The Club

So all of you regular readers will know how we've been speculating about whether CRED or BharatPe will be our next fintech unicorn.
Turns out it may be CRED that enters the club first.
CRED is in advanced stages of talks to raise about $200 million at a $2 billion valuation as per Techcrunch.


CRED was last valued at $804 million when we last wrote about it a little less than 2 months back.
We don't exactly know what they're doing but top VCs are lining up to invest in this round. Maybe it's the whole Download CRED Baby thing, we personally haven't been able to get the song out of our minds.

If the deal does end up going through, CRED will be the fastest Indian startup to $2 billion.

Serious question, who would you like to run a Masterclass on how to raise money? Mukesh Bhai or Kunal Shah?


Anti-Business

The Economic Times got access to a leaked copy of the upcoming draft of the e-commerce policy.

Here is The Gyst of what's proposed:

• Marketplaces like Amazon and Flipkart will need to be impartial. So while they probably argue that they already are impartial, there are plenty of vendors who feel like their data is misused data and then Amazon and Flipkart enter their business fields and take over.
• If you get a counterfeit product, now the responsibility is both on Amazon/Flipkart as well as the sellers vs just the seller earlier.
• The biggest issue is that the draft policy is going to be applicable to marketplaces like Amazon/Flipkart and their associates and related parties. But what is included under "related parties", the government hasn't mentioned.

Naturally, people in the e-commerce industry are quite worried by this vague definition and think this is anti business since they don't know what is included. Let us hope better sense prevails like it seems to have done in the crypto space.


Trace That Message

You remember the new rules proposed for online content?

One of the rules was about how the government wants to make sure no "problematic news" spreads through messaging platforms like WhatsApp, Telegram etc. So they will require these companies to trace the originator of any such message. If the originator is outside India then the first person to share it within India will be considered the originator.

The issue is that these messaging companies say they'll have to break their end to end encryption to do this.

But our government feels like what they want is still possible to do without breaking encryption.

And this isn't just India. A whole list of other countries including the UK gov feel the same way.

Let's see which direction this plays out in.

After the Chinese government’s crackdown on Jack Ma and his Alibaba group, the latest tech billionaire in their sights seems to be Pony Ma.

Pony Ma is the founder of the Tencent group which has been officially put on notice by Chinese authorities.

The Tencent Group is Asia’s largest conglomerate and also the owner of WeChat which is the most popular "Super App" in China.

Earlier this month Chinese Premier Li Keqiang pledged to expand oversight of financial technology to stamp out monopolies and prevent the "unregulated" expansion of capital.

Tencent’s stock has fallen almost 9% in 2 trading days, wiping off $62 billion in market value.
Analysts say that this means the company’s online finance business is now valued at close to zero!

• Check out this record-breaking 9,000+ piece LEGO Colosseum. The level of detail is amazing!
• Fun Fact: In 2015, a New Zealand man memorized the French dictionary and won the French Scrabble Championship without actually speaking the language! 

If you have more time ...

• Services at public sector banks have been impacted as employees go on a 2-day strike.
• The gov has opened bidding for 392 new flight routes under the UDAN Scheme.

Share The Gyst