Industrial output maintained its double digit growth for the sixth consecutive month at 13.5 per cent in March, but was lower than expected.
India's current account surplus moderated to $15.5 billion or 2.4 per cent of the GDP in the July-September quarter of the current fiscal, the RBI said on Wednesday. The same was at $19.2 billion or 3.8 per cent of the GDP in the preceding three-month period on account of a rise in the merchandise trade deficit, the RBI said in a statement on 'Developments in India's Balance of Payments during the Second Quarter (July-September) of 2020-21'. It is for the third consecutive quarter that India's current account remained in surplus. In the last quarter of 2019-20, the surplus was $0.6 billion. Current account deficit/surplus reflects the difference between the outflow and inflow of foreign exchange in a country's current account.
The output, as measured by the Index of Industrial Production, had contracted by 2.5 per cent in the same month of last year.
Coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and comprise 40.27 per cent of the weight of items included in the Index of Industrial Production.
The positive numbers raises hopes of recovery.
'While collections under the Income Disclosure Scheme explain it partly, indirect tax numbers not showing any effect of the withdrawal of high denomination currency notes was puzzling.'
Propelled by a strong growth in manufacturing, the industrial production grew by 6.4 per cent in January over the same period of the previous year.
Though the ministry is considering 2017-18 as the new base year, no decision has been taken as the committees of experts are awaiting some more data before finalising their opinion.
Vivek Mahajan (Head - Research) Aditya Birla Money, analysed the slow IIP growth.
The 30-share Sensex ended down 12 points at 25,610.
Chief Economic Advisor Krishnamurthy Subramanian said China imports a lot of components, parts, assembles and integrates and then exports them.
A rate cut could stimulate demand and help revive industrial activity, without much risk of sparking off inflation again.
India's annual industrial output growth slowed to 4.2 per cent in July compared with an upwardly revised 4.4 per cent growth a month ago, government data showed on Friday.
An index value of 42 to 46 means moderate decline.
What came to the rescue of the IIP numbers in February were mining and electricity.
Fertiliser production dropped sharply by 11.5 per cent, crude oil by 5 per cent and natural gas by 0.9 per cent in October over the year-ago month
The fiscal 2008-09 began on somber note with industrial growth in April dropping to 7 per cent compared to 11.3 per cent in the same month a year ago, reflecting the impact of higher interest rates and rising input costs.The performance in April, however, was much better than the 3.9 per cent growth rate witnessed during March, the last month of the previous fiscal, according the Index of Industrial Production (IIP) data released on Thursday.
Industrial production growth rate has declined to 7.6%, due to dismal performance by manufacturing, mining and electricity sectors.
Economists surveyed by Reuters had forecast a 0.5 per cent growth in output
Categories such as washing machines, refrigerators and television sets have seen sales growth of around 8-10 per cent in August compared to last year, industry sources said, with September also reporting a similar growth trajectory.
The Index of Industrial Production recorded an impressive growth of 11 per cent in February despite power sector registering dismal performance indicating unpleasant summers in the days ahead.
Stock markets will remain closed on Tuesday
Lack of new investments may undermine higher consumption
The NSE Nifty settled the day 28.30 points, or 0.27 per cent, lower at 10,554.30.
The November IIP has been revised upwards to 3.9% from 3.8%.
'The economy is suffering (perhaps 'enjoying' is a better word) the lowest credit demand in decades; banks are struggling with stressed loans equivalent to near 10 per cent of GDP,' points out Devangshu Datta.
The broader NSE Nifty recaptured the key 10,000-mark and ended at 10,096.40
The NSE Nifty closed lower by 32.15 points, or 0.32 per cent, at 9,984.80.
'Let's not get carried away by stocks like D-Mart, Jubilant Foods and all those companies that are trading at an expensive valuations.'
Slow growth in key sectors would also have implications on the Index of Industrial Production number
India's GDP estimates for 2020-21 show that the economy is expected to perform much better than earlier projections by different agencies, indicating a sustained V-shape post-lockdown recovery, experts said. The first Advance Estimates (AE) by the National Statistics Office (NSO) has projected a contraction of 7.7 per cent in the real GDP during 2020-21. This was better than the projections by certain international agencies like the IMF and World Bank.
Department of Economic Affairs secretary Atanu Chakraborty said that equity capital flows have been positive this year.
Changes the base year and included more sectors.
India's industrial output grew a better-than-expected 6.4 per cent in August compared with a downwardly revised 4.1 per cent growth a month ago.
The eight sectors, which also include fertilisers, steel, natural gas, electricity and crude oil, had expanded by 1 per cent in June last year.
Consumer durables shrank year on year, which could suggest to observers that spending confidence is yet to return to the economy.
Poor performance of coal, petroleum refinery products and natural gas pulled down the core sector growth to 2.1 per cent in December, 2013 from 7.5 per cent in the same month a year ago.
India's gross domestic product growth, which had fallen under 5 per cent, is expected to be between 5.4 per cent and 5.9 per cent this fiscal.
Much of the Q3 data will simply not be available for the CSO to factor in its calculation.
Top losers include Hero MotoCorp, HDFC, SBI, Infosys, HCL Tech, ICICI Bank, Bajaj Finance, ONGC, Bajaj Auto and IndusInd Bank, falling up to 2.63 per cent.
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