India's Gross Domestic Product (GDP) is expected to expand by 9.2 per cent in the current financial year, according to the Economic Survey 2021-22 tabled in the parliament on Monday. "Advance estimates suggest that the Indian economy is expected to witness real GDP expansion of 9.2 per cent in 2021-22 after contracting in 2020-21. "This implies that overall economic activity has recovered past the pre-pandemic levels," Economic Survey noted. Almost all indicators show that the economic impact of the "second wave" in Q1 was much smaller than that experienced during the full lockdown phase in 2020-21 even though the health impact was more severe, it said.
Tech Mahindra was the top laggard in the Sensex pack, cracking over 5 per cent, followed by Infosys, HDFC, IndusInd Bank, Reliance Industries and NTPC. On the other hand, Hero MotoCorp, L&T, Maruti, UltraTech Cement and Sun Pharma led the gainers' chart.
The new IIP series based on the new base year, is expected to lead to better capturing of ground data
Hardening prices of manufactured items during the month may refrain the Reserve Bank of India from cutting rates in its policy review on February 8.
The excise duty cut will translate into a reduction of Rs 9.5 a litre on petrol and Rs 7 a litre in diesel after taking into account its impact on other levies.
Over the years, NHAI's expenses have spiraled due to sharp increase in land acquisition costs, while budgetary support has shrunk, leading it to fall back on internal resources and market borrowings
The economic survey for 2020-21 has suggested revision in the weightage of food items to gauge the true picture of inflation in the country, and said new sources of price data also need to be incorporated in the wake of increasing retail e-commerce transactions. As per the survey, the current spike in consumer price-based retail inflation of food prices is mainly a supply-side phenomenon. The survey noted that the weights of all items in retail inflation are based on the NSO household consumption expenditure survey of 2011-12, adding the weight of food items in the index might have significantly decreased over the decade since then.
The US Fed's rate cycle is set to turn later this year, but India is in a much better position than it was in 2013.
Price of potato, a daily consumable vegetable, rose 58.78 per cent during the month
'The signal is crude oil prices will rise, I am cutting my subsidy. Be prepared, prices will rise.'
The industry has stepped up its demand for a rate cut
The Commerce and Industry Ministry will soon seek Cabinet nod to give out inflation data every month instead of the present practice of weekly release.
India's macroeconomic situation is certainly better than what it was a year ago, eminent economist Pinaki Chakraborty said on Monday, while expressing hope that the country will be back on the path of economic growth if there is no major third wave of the COVID-19 pandemic. In an interview with PTI, Chakraborty, who is the director of the National Institute of Public Finance and Policy (NIPFP), said that inflation may remain at an elevated level as there was a significant fiscal and monetary expansion in the last 18 months. "The current macroeconomic situation is certainly much better than what it was one year back. We are seeing recovery in most sectors," he said. Chakraborty noted that COVID-19 vaccination has been going on at a very fast rate in India.
The RBI's idiosyncratic focus on wholesale price inflation at the expense of retail inflation is a serious policy error.
Food articles inflation dips to 8.14% from 9.50% last month.
CARE Ratings, in a report, said it foresees an increase in the retail prices of petrol and diesel in the coming few days, depending on how the oil markets react in the reduction in supply from the cartel.
A Kotak research report expects RBI to cuts rates by 50 basis points in the first half of 2019. RBI will announce its sixth bi-monthly monetary policy on February 7.
'The robust tax collections give the finance minister a fair amount of headroom for an expansionary fiscal policy.'
Potato, a daily consumable vegetable, witnessed maximum inflationary pressure at 60.58 per cent
Wholesale price inflation stood at 4.78 per cent in November. The consumer price index for agricultural labourer and rural labourers were 13.73 per cent and 13.51 per cent in October.
With decline in number of fresh COVID-19 cases and easing of restrictions, the country's gross domestic product (GDP) will grow at 8.5 per cent in FY2021-22, according to credit rating agency Icra Ratings. It expects the gross value added (GVA) at basic prices (at constant 2011-12 prices) to grow at 7.3 per cent in FY2022. "The impact of the second wave of COVID-19 and the ensuing state-wise restrictions was seen across a variety of high frequency indicators in April-May 2021.
While headline and core WPI are stuck in a disinflationary phase, the retail measure is inching north.
The rate of price rise for food articles stood at 11.51 per cent during January as against 2.41 per cent a month earlier, while for non-food articles it rose nearly three-fold to 7.8 per cent from 2.32 per cent in December, the data released by the ministry of commerce and industry on Friday showed.
Despite admitting to price pressures both from food items and input prices, RBI Governor Shaktikanta Das on Wednesday hoped that a normal Southwest monsoon will have a "soothing impact" on inflation pressures and ruled out any wide variations in medium-term inflation forecast from what was given in April. In an unscheduled address earlier in the day amidst the raging pandemic, Das said the overall outlook for the economy is highly uncertain and is clouded with downside risks. He offered a slew of relief and liquidity measures to individuals and small businesses apart from a Rs 50,000 crore special liquidity window to the healthcare sector.
Wholesale inflation shot up to a 30-month high of 5.25 per cent in January as rising global crude oil prices spiked domestic fuel cost, even as food prices moderated.
Overall the inflation in vegetable segment was 8.57 per cent as compared to about 4 per cent in February.
The projects - Delhi-Varanasi, Mumbai-Nagpur, Delhi-Ahmedabad, Chennai-Mysore, Delhi-Amritsar, Mumbai-Hyderabad, and Varanasi-Howrah - are expected to cost around Rs 10 trillion.
According to the global research firm, though a sharp fall in WPI inflation and negative growth in Industrial production is exerting pressure on the RBI to cut rates, the quantum of rate cut will be more important than the timing.
WPI inflation even breached psychological level of 0% in Nov.
Inflation for the month of August stood at 8.51 per cent, according to the new Wholesale Price Inflation (WPI) series.
Declining inflation may present a case for further monetary policy easing.
Inflation rose to 4.86 per cent in June, driven mainly by rising prices of food articles, especially vegetables including onion.
Continuing decline in food prices, including vegetables, pulled wholesale price inflation to a five year low of 1.77 per cent in October.
Food prices rose 8.64 per cent year-on-year last month, slower than an annual rise of 9.90 per cent in March.
Softening of global commodity prices might not help much
If Nirmala Sitharaman does indeed present a 'never-before' like Budget on February 1, going by her promise, she would create a new benchmark for post-contraction Budgets, observes A K Bhattacharya.
The price rise measured in terms of Wholesale Price Index rose for the second straight month, to 5.79 per cent in July, on account of double digit rise in prices of food articles, mainly vegetables, including onion.
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A section of the market believes RBI should hold rates as negative real rates will hurt savings and investment.
Total debt for listed Indian companies excluding financials fell only 4 per cent to $368 billion in the year ended in March 2015.
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