Download REFERENCE NOTE . Current Economic Scenario – Some Indicators

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REFERENCE NOTE .
No. 4 /RN/Ref./February /2015
For the use of Members of Parliament
Not for Publication
Current Economic Scenario – Some Indicators
(April to December 2014)
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Current Economic Scenario – Some Indicators
(April to December 2014)
Domestic Economy
Economic Growth in the Year 2013-14: The Ministry of Statistics & Programme
Implementation has released the new series of national accounts, revising the base
year from 2004-05 to 2011-12. The base year of national accounts was last revised
in January 2010.
As per data released by the Ministry of Statistics & Programme Implementation on
30 January 2015, the Indian economy witnessed a strong recovery in the fiscal year
ended 31 March 2014 (FY 2013-2014). Based on a new series of national accounts
with revision in base year from 2004-05 to 2011-12, India's real gross domestic
product (GDP) expanded 6.9 percent in Financial year 2013-14 as compared with
5.1 percent expansion in Financial Year 2012-13. Based on the previous data, the
GDP grew 4.7 per cent in FY 2013-14, from 4.5 per cent increase in FY 2012-131.
The Economy in 2014-15: Before revision of the base year, the economy registered
a growth of 5.5 per cent in the first half (H1) of the current financial year. This is
distinctly higher than the growth recorded in H1 (4.9 percent)and second half (H2)
(4.6 percent) of, 2013-14, and is also in tandem with the projection of the full year
growth of 5.4 to 5.9 per cent made in the Economic Survey 2013-14 At the sectoral
level, growth rates are 3.5 per cent for agriculture and allied sectors, 3.2 per cent for
industry sector and 6.9 per cent for service sector2.
CSO revised the growth for the first two quarters upwards. As per new numbers,
growth touched 6.5 per cent in April-June,2014 quarter and 8.2 per cent in JulySeptember quarter as compared to 5.7 per cent and 5.3 per cent, respectively, as
per the 2004-05 base year. It also sharply revised up growth rate for the first half to
about 7.4 per cent from 5.5 per cent reported earlier under the old base.
1
2
India. Ministry of Statistics and Programme Implementation, Press Note, dated 30 January 2015
India. Ministry of Finance, Mid Year Review 2014-15, p.31
-2-
India’s gross domestic product at 2011-12 market prices (real GDP) grew by 7.5 per
cent in the 3rd quarter (October-December 2014). The growth was higher than the
4.6 per cent growth recorded in the year-ago quarter3.
Agriculture: The actual rainfall received during the period from 01.01.2015 to
14.01.2015 has been 10.1 mm as against the normal of 7.7 mm. Production of total
kharif foodgrains during 2014-15 is estimated at 120.3 million tonnes compared to
129.3 million tonnes in 2013-14 and 117.2 million tonnes in 2012-134.
Industry: As per the index of industrial production, the cumulative growth for the
period April-November 2014-15 stands at 2.2 percent while the figure for the
corresponding period of the previous year stood at 0.1 percent. The index of mining,
manufacturing and electricity registered growth rates of 2.5 per cent, 1.1 per cent
and 10.7 per cent, respectively during April-November, 2014-15, as compared to the
growth rates of (-)2.1 per cent,(-)0.4 per cent and 5.4 per cent, respectively during
April-November, 2013-145. Cumulative growth of eight core Industries during April to
December, 2014-15 was 4.4 per cent as compared to 4.1 percent in 2013-14
(Table-1).
Table 1- GROWTH RATE (in %)
Sector
2009-10
2010-11
201112
2012-13
2013-14
Apr-Dec
13-14
Coal
8.1
-0.2
1.3
4.6
1.1
1.5
AprDec 1415
9.1
Crude Oil
Natural
Gas
Refinery
Products
0.5
11.9
1.0
-0.6
-0.2
-0.6
-0.9
44.6
10.0
-8.9
-14.5
-13.0
-14.9
-5.1
-0.4
3.0
3.1
29.0
1.5
1.9
0.2
Fertilizers
12.7
0.0
0.4
-3.4
1.5
2.6
-1.4
Steel
6.0
13.2
10.3
4.1
9.6
11.5
1.6
Cement
10.5
4.5
6.7
7.7
3.0
3.7
7.9
6.2
5.6
8.1
4.0
5.9
5.5
9.7
Electricity
Overall
6.6
6.6
5.0
6.5
3.7
4.1
4.4
Index
Source: India. Ministry of Commerce & Industry, Press Release dated 2 February 2015
3
4
5
India. Ministry of Statistics and Programme Implementation, Press Note, dated 9 February 2015
India. Ministry of Finance, Department of Economic Affairs, Monthly Economic Report, December 2014, p.3
India. Ministry of Statistics and Programme Implementation, Press Note, dated 12 January 2015
-3-
The key indicators of construction sector, namely, cement production and steel
consumption have registered growth rates of 7.9 per cent and 1.5 per cent,
respectively, during April-December, 2014-15 as compared to corresponding growth
rates of 3.7 per cent and 0.5 per cent, respectively, during April-December, 20136.
Capital formation, an indicator for the investment growth in the economy, dropped to
29.8 per cent during April-December 2014 from 30.8 per cent in April-December
2013.
Bank Credit: During 2014-15 (as on January 23, 2015), outstanding bank credit
(Rs. 63,938.1 billion) registered an increase of 6.7 per cent, as compared to an
increase of 9.8 per cent during the corresponding period last year. The year-on year
variation revealed an increase of 10.7 per cent as compared to an increase of 14.4
per cent during the corresponding date of the previous year7.
Inflation: The headline WPI inflation increased to 0.1 per cent in December 2014
from 0.0 per cent in November, 2014.. Inflation for Food articles for the month of
December 2014 has increased to 5.2 per cent from 0.6 per cent in the previous
month. Food inflation (primary food + manufactured food) has increased to 4.1 per
cent from 0.8 per cent in the last month. Inflation in Fuel & power has dropped -7.8
per cent in December 2014 from -4.9 per cent in the last month. Inflation for
Manufactured products moderated to 1.6 per cent in December 2014 from 2.0 per
cent in the previous month. Non-food manufactured inflation (core as defined by RBI)
also eased to 1.5 per cent in December 2014 from 2.2 per cent in the previous
month. The average WPI inflation rate for the last 12 months (January 2014 to
December 2014) was 3.9 per cent as compared to 6.3 per cent during the
corresponding period in 2013-14. The build-up of inflation since March is -0.3 per
cent as against 5.6 per cent in the corresponding period last year.
The all India Consumer Price Index (CPI) inflation (combined) increased to 5.0 per
cent in December 2014 from 4.4 per cent in November 2014. Inflation based on
CPI-Industrial Worker (CPI-IW) declined to 4.1 per cent in November 2014 from 5.0
per cent in October 2014. Inflation based on other CPI- Agricultural Labour (CPI-AL)
6
7
Ibid. dated 9 February 2015
RBI . Statistical Supplement
-4-
and CPI- Rural Labour (CPI-RL) was 4.6 and 5.0 per cent respectively in November
2014.
Table 2- Year-on-Year Inflation Based on WPI and CPI’s (per cent)
Base :
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
WPI
2004-05
6.4
5.1
5.0
6.0
5.5
6.2
5.7
5.4
3.9
2.4
1.7
0.0
0.1
CPI-IW
2001
9.1
7.2
6.7
6.7
7.1
7.0
6.5
7.2
6.8
6.3
5.0
4.1
-
CPI-AL
1986-87
11.2
9.1
8.1
8.4
8.4
8.1
7.7
8.0
7.2
6.9
6.1
4.6
-
CPI-RL
1986-87
11.2
9.2
8.3
8.5
8.7
8.3
7.8
8.1
7.6
7.1
6.4
5.0
-
CPI(NS)
2010
9.9
8.8
8.0
8.3
8.6
8.3
7.5
8.0
7.7
6.5
5.5
4.4
5.0
Source: Ministry of Finance, Department of Economic Affairs, Monthly Economic
Report, December 2014,p.9
Public Finance: India’s fiscal deficit i.e. the gap between government expenditure
and revenue exceeded the budget estimate of Rs.5.31 lakh crore by December-end
of 2014. The fiscal deficit during the April-December period was Rs.5.32 lakh crore
or 100.2 per cent of the 2014-15 estimates. The fiscal deficit during the same period
last year was at 95.2 per cent of that year’s target.
Government’s net tax revenue collection till December end was Rs.5.46 lakh crore or
55.8 per cent of the Rs.9.77 lakh crore estimated for the whole year. The tax
revenue was slightly higher (58.6 per cent) during the same period last year.
Total receipts (from revenue and non-debt capital) during the April-December of the
year was Rs.7.04 lakh crore or 55.7 per cent of the target, Plan expenditure of the
government during the period was Rs.3.52 lakh crore (61.3 per cent) and non-Plan
expenditure was Rs.8.83 lakh crore (72.4 per cent)8.
8
India. Comptroller General of Accounts, December, 2014
-5-
EXTERNAL SECTOR
Foreign Trade: Cumulative value of exports for the period April-December 2014-15
was US $ 241153.78 million (Rs 1465171.42 crore) as against US $ 231829.87
million (Rs 1395186.97 crore) registering a growth of 4.02 per cent in Dollar terms
and growth of 5.02 per cent in Rupee terms over the same period last year.
Cumulative value of imports for the period April-December 2014-15 was US $
351205.70 million (Rs 2134282.62 crore) as against US $ 338907.35 million (Rs
2028361.39 crore) registering a growth of 3.63 per cent in Dollar terms and growth of
5.22 per cent in Rupee terms over the same period last year.
Oil imports during April-December, 2014-15 were valued at US $ 116499.48 million
which was 4.7 per cent lower than the oil imports of US $ 122208.56 million in the
corresponding period last year.
Non-oil imports during April-December, 2014-15 were valued at US $ 234706.22
million which was 8.3 per cent higher than the level of such imports valued at US $
216698.79 million in April-December, 2013-14.
The trade deficit for April-December, 2014-15 was estimated at US $ 110051.92
million which was higher than the deficit of US $ 107077.48 million during AprilDecember, 2013-149.
The Current Account Deficit (CAD): for the year's first half, April-September 2014,
was $17.9 billion (1.9 per cent of GDP) as against $26.9 bn (3.1 per cent of GDP) for
April-September 201310.
India’s Foreign Exchange Reserves: Reserves stood at US$ 327,884 Million
(Rs.20,294.4 billion ) in the week ended January 30,201511
Foreign Investment: Inflows stood at US$ 52,677 Million during April to December
2014 which was US $16,219 Million in April to December 2013. Foreign Direct
9
India. Ministry of Commerce & Industry, Department of Commerce, Press Release, dated 15th January, 2015
Reserve Bank of India (RBI), Press Release dated 8 December, 2014
11
RBI, Weekly Statistical Supplement
10
-6-
Investment was $24,192 million during April-December 2014 as against $20,655
million during the same period in 2013-1412.
External Assistance and Debt Service Payments: Gross external assistance during
April to December 2014 stood at Rs.23,489.8 crore as compared to Rs.22,240.8
crore during the corresponding period of the previous year. Net disbursement stood
at Rs. 4,988.5 crore during April-December 2014 as compared to Rs. 5,498.5 crore
during April- December 201313.
Prospects : GDP at constant (2011-12) prices is likely to attain a level of Rs.106.57
lakh crore, as against the First Revised Estimate of GDP for the year 2013-14 of Rs.
99.21 lakh crore. The growth in GDP during 2014-15 is estimated at 7.4 per cent as
compared to the growth rate of 6.9 per cent in 2013-1414. In his opening remarks at
the first meeting of the Parliamentary Consultative Committee,
Union Finance
Minister Shri Arun Jaitley said that overall economic situation in the country is
looking better and the basic parameters of the Indian economy are moving in the
right direction, Shri Jaitley further said that the global situation is favourable to the
country as more and more investors are showing curiosity and interest in India and
our major challenges will be to boost investment especially in infrastructure sector
and give further boost to both manufacturing and agriculture sector among others15.
12
RBI, Monthly Bulletin, February, 2015
India. Ministry of Finance, Department of Economic Affairs, Monthly Economic Report, December, 2014
14
India. Ministry of Statistics & Programme Implementation, Press Release, dated 9 February 2015
13
15
Live Mint, dated 10 February, 2015