Experts say a large part of the expenditure in April was spent on heads such as creating infrastructure for testing capacity and procuring testing kits, among other things.
Barring rice, spices, iron ore and pharmaceuticals, all the remaining 26 key sectors registered negative growth in May. Imports too plunged 51 per cent to $22.2 billion in May.
Experts warn of over-interpreting the numbers and said their sustainability needed to be watched beyond November, says Indivjal Dhasmana.
After contracting for two quarters in a row, the Indian economy entered the positive territory with a growth of 0.4 per cent in the October-December quarter, mainly due to good performance by farm, services and construction sectors, official data showed on Friday. Trade and hotel industry registered a contraction of 7.7 per cent during the third quarter this fiscal, as the sectors continued to suffer on account of coronavirus pandemic. According to the data released by the National Statistical Office (NSO), the farm sector recorded a growth of 3.9 per cent, and the manufacturing sector output grew by 1.6 per cent in the quarter under review.
September import growth was the second lowest this fiscal year, after the April growth figures of 4.6 per cent, bringing the trade deficit down to $13.98 billion
Spiralling prices pinched the pocket of consumer as edible oil, fuel and many other commodities turned dearer this year amid pandemic-induced disruptions but the inflationary pressure is anticipated to ease, though marginally, in the coming months. As consumers, at retail as well as wholesale levels, are willy-nilly learning to live with the new normal of curbs to contain the spread of coronavirus infections, experts are of the view that elevated inflation is likely to stay longer. After dealing with the devastating blows from the second COVID wave, especially during the April-June period, the economy is well on the revival path but the emergence of Omicron might unsettle the recovery trajectory in the short term.
An expected withdrawal of FIIs from the market likely to weaken the rupee against the dollar.
Imports rise at highest pace in more than 2 years as crude oil price spikes.
The immediate revenue loss could worsen the Centre's fiscal deficit, from the budgeted 3.3 per cent of gross domestic product (GDP) to 3.7 per cent of GDP -- a massive 40-basis-point increase. It was stabilised at 3.4 per cent since 2016-17, report Abhishek Waghmare and Dilasha Seth.
If the government cuts wasteful expenditure as it is trying now, the deficit would at most fall to 8 per cent, not less than that.
Little indication of growth surge in either industry or services till well into FY14.
The wholesale price-based inflation accelerated to a record high of 12.94 per cent in May, on rising prices of crude oil and manufactured goods. Low base effect also contributed to the spike in WPI inflation in May 2021. In May 2020, WPI inflation was at (-) 3.37 per cent. This is the fifth straight month of uptick seen in the wholesale price index (WPI)-based inflation. In April, 2021, WPI inflation hit double digit at 10.49 per cent. "The annual rate of inflation, based on monthly WPI, was 12.94 per cent for the month of May, 2021 (over May, 2020) as compared to (-) 3.37 per cent in May 2020.
Costlier vegetables slowly pushed retail inflation, which had remained well within the Reserve Bank's comfortable level of 4 per cent during most part of 2019, peaked to more than three-year high of 5.54 per cent in November.
Significant portion of the funds used to fuel urban demand have become illegal and inoperative.
This time there has been a rather peculiar criticism of the latest GDP numbers.
To help revive the economy battered by COVID-19, Finance Minister Nirmala Sitharaman on Monday announced a slew of measures, including Rs 1.1 lakh crore credit guarantee scheme for improving health infrastructure, and enhancing the limit under the ECLGS by 50 per cent to Rs 4.5 lakh crore for the MSME sector facing liquidity crunch. Sharing the details of stimulus package, the finance minister said this comprises eight relief measures and other eight measures to support the economic growth. She announced Rs 1.1 lakh crore loan guarantee scheme for COVID-affected sectors, including health sector, which includes guarantee cover for expansion or for new projects. Besides, she said, additional Rs 1.5 lakh crore limit enhancement done for Emergency Credit Line Guarantee Scheme (ECLGS) scheme.
The industry has stepped up its demand for a rate cut
The mismatch between PMI and core sector could also be due to the fact that while core sector is calculated year-on-year, PMI is calculated month-on-month.
Moody's listed six agenda on the list of pending reforms -- land acquisition Bill, labour law reforms, significant infrastructure investment, tangible benefit from Make in India initiative, tax administration and PSU bank reforms
India's factory output climbed 22.4 per cent in March, benefiting from the base effect of the lockdown-marred month a year back as well as a turnaround in the manufacturing sector, while retail inflation slipped to a three-month low of 4.29 per cent in April. The high positive annual growth in the index of industrial production (IIP) in March 2021 came on back of a contraction of (-)0.9 per cent and (-)3.4 per cent in January and February 2021 respectively, according to the data released by the National Statistical Office (NSO) on Wednesday. This turnaround was led by recovery in the mining, manufacturing and electricity sectors.
The internals of the food inflation are worrying, given a broad-based uptick across categories that tend to be sticky, such as proteins, and a narrower-than-expected reduction in inflation for vegetables.
Import growth moderated to a four-month low, owing to sharp decline in that of gold.
Declining vegetable prices brought down the retail inflation to a 15-month low of 4.59 per cent in December and within the comfort zone of the Reserve Bank, government data showed on Tuesday. It is for the first time during the current fiscal that the Consumer Price Index (CPI) based inflation print is below 6 per cent or in the RBI's target range of 2 to 6 per cent. The central bank factors in the CPI-based inflation while arriving at its monetary policy. The inflation in December 2020 came down from 6.93 per cent in November, mainly on account of 10.41 per cent decline in vegetable prices over the year-ago period.
RE of GDP for 2015-16 show that the economy grew 7.9% in 2015-16, rather than the earlier estimate of 7.6 per cent.
During the month, inflation in vegetables shot up to 35.99 per cent, as against 26.10 per cent in October. Likewise, the prices of cereals and eggs grew at a faster pace of 3.71 per cent.
The sharp rise was also due to a statistical illusion -- low industrial numbers in November 2015, and sharp reversal of a 12-month declining trend in capital goods.
Lower inflation, FCNR(B) outflows likely to influence central bank decision
During the first quarter ended June, gross tax collections fell 31 per cent driven down by a massive 76 per cent plunge in advance tax mop-up, as the country was in a full lockdown due to the pandemic.
Export growth picked up mainly owing to rising global crude prices, which pushed up processed petroleum exports by nearly 40 per cent, apart from a broad-based improvement in exports of major foreign exchange earners such as engineering goods and gems and jewellery.
Despite the 6-month high, trade deficit has widened to a four-month high of $14.62 billion, as imports rose by 14.85 per cent during the month, reports Subhayan Chakraborty.
'A broad-based revival of private sector investment was likely in 2018-19 after businesses had successfully made the switch to the GST.'
If imputed inflation for April and May is used, then you have inflation of over 6 per cent for two consecutive quarters, which is a worrying signal for the RBI.
Most analysts expect the note ban to sharply hit GVA growth in Q3 and Q4, and the central bank's stance is being called into question.
By no means do economists see the Reserve Bank of India stop at just a 25-bp cut. Some of the economists such as Soumyakanti Ghosh of State Bank of India are of the firm view that rates have room to fall by a total of 75 bps in the current financial year, starting with 25 bps in the August 7 policy.
A monsoon deficit is likely to affect the agriculture output, which could have an impact on the food inflation
Retail inflation inches up to 3.77%; IIP growth dips to 3-month low
No longer Bengal's finance minister, Amit Mitra, Mamata's principal chief advisor, will still advise and aid the 'chief minister and finance department on all matters relating to management of state finance', represent the 'state government in national and international events/meetings/committees' and examine 'important proposals/files and policy issues relating to financial matters referred to him for advice/views'.
Depreciating the rupee against the dollar to boost economic growth has fiscal constraints and monetary limitations
Home Minister Rajnath Singh said that the decision could cost the government roughly Rs 15,000 crore.
November IIP data show a fall of over 20%, led by automobiles, gems & jewellery and home appliances; turnaround seen as unlikely.
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