The Prime Minister’s office has made it clear it supports more rate hikes by the Reserve Bank. Speaking on Thursday, the Prime Minister’s chief economic advisor C. Rangarajan said inflation remained above the comfort level and that it was necessary for RBI to act. On another note, Rangarajan said the government needed to raise diesel prices to help reduces the losses of state-run oil firms. But he added that this would only happen after inflation started slowing down.
And even as Rangarajan expressed his concerns new figures show inflation in food items accelerated in the first week of October. The food price index rose to 10.6% in the week to 8 October. The previous week it was at just 9.32%.
Biotech firm Biocon has reported a fall in its second quarter results. Net profit declined 4% to Rs86 crore. That’s on a 23% gain in revenue to Rs524 crore. Biocon’s numbers have been hit by higher costs. Wage hikes, manufacturing and other factors add up to a 29% increase in expenses. Chairman Kiran Mazumdar-Shaw added that the development costs of Biocon’s licensing operations also ate into profits. Shares of the firm dropped 0.47% on the BSE to 346.85 on a day the Sensex fell 0.87%.
Indian markets fell on Thursday, after uncertainty about Europe’s debt crisis increased and after heightened expectations of more rate hikes in India. The Sensex dropped 148 points to 16,937. And the Nifty fell 47 to 5,092.