Here is a good news, inflation has hit 5 year low at 3.07%, as increased farm production reduced prices of fruit and vegetables which moved down to 4%.Prices of eggs as well as fish dropped down marginally by 1% whereas prices of bajra and maize dipped by 2%.

Lower food prices may not prevent inflation from accelerating in the coming months as banks increase lending in the world's second-fastest growing major economy. However, prices of furnaces shot up by 46 per cent followed by aviation turbine fuel which rose by 5 per cent. Prices of broad-gauged diesel locomotive prices also jumped by 9 per cent.

The Apex bank- RBI, stock regulator -SEBI as well as the Center have played a pivotal role in maintaining inflation at the sustainable level. They helped to curtail liquidity in the financial system by streaming in various norms such as raising ceiling on market stabilisation scheme (MSS) bonds, liberalizing rules on forex and controlling overseas capital inflow via P- Notes. RBI took prudential measures such as enhancing the provisioning requirements and risk weights for select categories of banking assets, namely consumer finance, real estate, housing and capital market exposures.

All this efforts have finally paid off. Moreover, with more than half of the $17.7 billion of the net purchases of Indian stocks this year may have been through the use of participatory notes, according to JPMorgan Chase & Co. analysts estimate and also record overseas investments have caused rupee to strengthen at 11.4% this year, the fastest gain in 33 years.

Source: (Times, MyIris, Bloomberg)