India's manufacturing sector growth steadied in May, with new orders and production increasing at similar rates to those registered in the previous month, while demand showed signs of resilience and improved further in spite of another uptick in selling prices, a monthly survey said on Wednesday. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) stood at 54.6 in May, little changed from 54.7 in April, pointing to a sustained recovery across the sector. The May PMI data pointed to an improvement in overall operating conditions for the eleventh straight month.
However, growth is expected to bounce back to an average of 7.3 per cent in the second half of 2017 and 7.7 per cent in 2018
Financials emerged as the top gainers while auto shares rallied on robust September sales
Financial markets are under stress and require steps by the central bank for market stability and revival of economic growth, he said while announcing the decisions taken by the Monetary Policy Committee in Mumbai.
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.
Data suggests that households too are expecting inflation to subside, with the three-month-ahead and the one-year-ahead expectations declining by 40 basis points, reports Abhishek Waghmare.
India's macroeconomic situation is improving fast and the country's GDP growth will turn positive in the third and fourth quarters of the current financial year, eminent economist Ashima Goyal said on Sunday. Goyal in an interview to PTI said the management of the COVID-19 pandemic and gradual unlocks announced by the government have helped in avoiding multiple COVID-19 peaks. The growth estimates by different agencies are being continuously revised, she said.
Financials were among the top losers along with Sun Pharma and index heavyweight Reliance Industries
The bigger worry is that its effects could linger well into the next financial year.
The Reserve Bank remains laser-focused to bring back retail inflation to 4 per cent over a period of time in a non-disruptive manner, Governor Shaktikanta Das stressed while voting for status quo in interest rates, as per minutes of the October policy meeting released on Friday. The central bank has been mandated by the government to ensure the Consumer Price Index (CPI) based inflation is at 4 per cent, with a band of 2 per cent on either side. The retail inflation, which was above 6 per cent during May and June, has started moving down and stood at 4.35 per cent in September.
The rate of price rise in the vegetable segment almost doubled to 7.47 per cent as against 3.92 per cent in September.
Amid uncertainties arising out of the second wave of COVID-19, the Reserve Bank on Thursday said that a durable revival of private consumption and investment would be critical for sustaining economic growth post-pandemic. Observing that 2020-21 has left a scar on the economy, RBI in its annual report said, "in the midst of the second wave as 2021-22 commences, pervasive despair is being lifted by cautious optimism built up by vaccination drives." The second wave of the pandemic has prompted revision of growth projections for the current fiscal and the consensus appears to be gravitating towards RBI's forecast of 10.5 per cent, the report added.
Many analysts over the past week have said the RBI has legroom to cut rates to the tune of 65 bps by June and some like Barclays and BofA have also spoken about the likelihood of an inter-meeting cut.
Shaktikanta Das is a master of the finest balancing act who listens to all but takes his own decisions, discovers Tamal Bandyopadhyay.
Urjit Patel's reappointment will raise market hopes that Rajan, will also be offered an extension when his tenure ends in September.
Domestic macroeconomic data, RBI policy and developments related to the Russia-Ukraine war would be major driving factors for the stock market this week, analysts said. Moreover, FPI investment and trends in crude oil would also influence the trading sentiment, they added. "This week, the RBI credit policy will be a critical factor for Indian markets.
India has been relatively insulated from the severe headwinds in the West. However, with a third of the global economy expected to slip into recession in calendar year 2023, the impact will strongly be felt on India's exports and trade economy, leading economists said in a panel discussion at the Business Standard BFSI Insight Summit in Mumbai on Wednesday. The panel comprised former Reserve Bank of India executive director and former Monetary Policy Committee member Mridul Saggar, State Bank of India Chief Economic Advisor Soumya Kanti Ghosh, Citibank India Chief Economist Samiran Chakraborty, ICRA Chief Economist Aditi Nayar, and IndusInd Bank Chief Economist Gaurav Kapoor. The topic of the panel discussion was No recession in sight: Is India decoupled from developed economies?
Heightened geopolitical uncertainties will lead the Reserve Bank's rate-setting panel to opt for a status quo at the next week's meeting, Axis Bank's chief economist Saugata Bhattacharya said on Monday. Bhattacharya said he had earlier expected a tightening action at the policy meet scheduled for April 6-8 but the increased uncertainties on the geopolitical front due to the Russian invasion of Ukraine and its impact on commodity prices makes him now think that RBI will defer such an action. He said the central bank's Monetary Policy Committee (MPC) may hike rates in the second half of FY23 by up to 0.50 per cent.
'The rising cost of construction, the cost of doing business, high compliance, and inflation/interest rates going up have already reduced returns to single digits.'
The industrial output for the third month in a row remained in the negative territory, contracting 1.5% in January
The Indian equity market is likely to remain under pressure and rangebound over the next few months. This comes as global central banks, led by the US Federal Reserve look at a possibility of hiking rates aggressively to tame inflation. Back home, the Reserve Bank of India, too, remains data dependent in its endeavour to keep inflation in check and pursue an aggressive monetary policy stance.
The main factor boosting production was a sustained rise in new work inflows.
RBI could opt for a 'deep cut' after winning inflation war, say experts.
Fitch Ratings had in December affirmed India's 'BBB-' rating with a stable outlook.
The new rates, effective Wednesday, is the third reduction by SBI in this financial year having cut the rates by 5 bps each in April and May, while its home loan rates has come down by 20 bps during this period.
Armed with necessary macro and micro growth drivers, India is on its way to becoming the fastest growing major economy in the world, a finance ministry report said. Rapid vaccination and teeming festivities will push India's ongoing recovery resulting in narrowing of demand-supply mismatches and greater employment opportunities, as per the monthly Economic Review prepared by the ministry.
'There are occasions when the prices of individual items like food raise inflation; then supply-side measures must be taken.' 'But if there is continued inflation, it means liquidity is aggravating the situation.'
India's services sector activity moderated further in January as new business rose at a noticeably slower rate amid the escalation of the pandemic, reintroduction of restrictions and inflationary pressures, a monthly survey said on Thursday. The seasonally adjusted India Services Business Activity Index fell to 51.5 in January, down from 55.5 in December, pointing to the slowest rate of expansion in the current six-month sequence of growth. For the sixth straight month, the services sector witnessed an expansion in output.
'They can transition from short to long-duration funds when the yield curve normalises.'
Heading to the third year, will Urjit Patel be busy firefighting a currency crisis? Almost no governor of the RBI managed to evade it and Patel perhaps knows it.
As per the RBI Act, the central bank should have four deputy governors - two from within the ranks and one commercial banker and the fourth one an economist to head the monetary policy department.
If this turns into reality, India's gross domestic product (GDP) growth will be the lowest since 2012-13, which could severely hit job creation and income growth in the near term.
The imported inflation component is also expected to ebb on lower oil prices and softer US dollar, it said.
If the concerns over risking political capital are overcome, the long-term gains for the Indian economy will be immense, asserts A K Bhattacharya.
A two-year extension at the helm of the RBI still looks a real possibility
RBI Governor Raghuram Rajan, who today surprised markets with a rate hike, defended the move saying a rate cut would not have impacted either banks or borrowers and that bringing down retail prices is the key to sustainable growth.
A combination of farm loan debt waivers by state governments and the implementation of the pay commission award could entail some fiscal slippages and pose a risk to inflation
In a double delight, retail inflation eased to a one-year low of 5.72 per cent - staying below the upper tolerance limit for two months in a row, while factory output rose sharply to 7.2 per cent on the back of healthy growth in manufacturing. The retail inflation numbers based on Consumer Price Index (CPI) will provide some room for the Reserve Bank to further moderate the quantum of hike in key interest rate or even press a pause button. The RBI has been on a rate hiking spree since May 2022 in its bid to tame inflation, having raised the repo rate by a cumulative 225 basis points (bps).
Rajan also did his bit by taking steps to protect the currency against speculative attack as did the government in curbing gold imports and bringing the Current Account Deficit
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances