Download monthly economic bulletin

December, 2015
MONTHLY
ECONOMIC
BULLETIN
p. 02/22
ITP Divison
Ministry of
External Affairs
Government of India
RECENT TRENDS IN INDIAN ECONOMY
Domestic Economy and Markets
India’s Foreign Trade
Agriculture
Inflation
Industrial Production
Foreign Direct Investments
More in this section
p. 23/27
NEWS FEATURE
No worries on fiscal deficit: Jaitley
India will lead the world in digital financial inclusion: Bill Gates
More in this section
p. 28/33
OVERSEAS INVESTMENTS
Indian Railways signs Rs 40,000 crore pacts with Alstom, GE
Facebook launches SME India Council for small businesses
More in this section
p. 34/39
TRADE NEWS
India plans price curbs to stem Chinese steel import deluge
India, China to study regional trade pacts
More in this section
p. 40/44
SECTORAL NEWS
FDI gets reform push in 2015; Govt expects 45% jump in 2016
Project to redevelop 400 railway stations will be largest PPP in world
More in this section
p. 45/49
NEWS ROUND-UP
Narendra Modi govt to push for passage of GST, real estate bills next week
IIP growth a morale booster for economy: India Inc
More in this section
December, 2015
MONTHLY
ECONOMIC
BULLETIN
2
>> RECENT TRENDS IN INDIAN ECONOMY
Domestic Economy and Markets
Manufacturing to help drive GDP in India: Suresh Prabhu
We must look at the whole Make in India campaign in a much broader context. The Indian economy is presently $2 trillion
plus. It has the potential to be, as the PM said last year on the same platform, $20 trillion.
It is just a matter of time when we reach there. We will be there surely, looks like sooner than later.
Therefore, if you want to do that, the important issue is how much part of that GDP should
come from manufacturing. The GDP can still
grow by making the services grow faster with
more than 60% coming from services. The question is whether it's sustainable. Many countries
have graduated from being manufacturing to
services.
We have just become services without getting
into manufacturing to begin with. We must make
sure that a large part of our GDP comes from
manufacturing. For this, we have to create jobs,
we have to create demand for services as well
as agriculture.
That will be a more sustainable, tenable and
enduring way of growing. The world situation
today is suited to India. There are a lot of advantages of manufacturing more in India. If anyone has to make a choice
globally, it will be India, as we have all other ingredients in place.
Just that we have to look at a holistic solution to the problem of global trade in a very effective manner. There is the
software part of making in India — ease of doing business, taxation etc, this is the software part.
It will transform the way how we do railway operations in India. We have already issued and finalised another big Make
in India initiative and all of $7 billion will be made in India.
Another component is the $16 billion high-speed railways, of which 25% will be made in India. There are other three or
four major projects — one of which is in West Bengal. We are already working on projects that in all will be $20-25 billion.
Negotiation is at an advanced stage.
What is important is that the ecosystem that is being developed will be unimaginable. If you want to make all these
things in India, some of the global players would be doing that — they obviously cannot make all of that in their own shop.
It is the ecosystem that they develop. It will promote small and medium-term enterprises that will in turn create employment, with the objective of GDP growth.
Along with that, they will bring in the technology that will upgrade the present ecosystem to the level that it will become part of global supply chain. You cannot imagine the huge impact of what we are trying to do in railways in terms of
manufacturing.
As Arvind Subramanian, my friend, pointed out in the Economic Survey last year, every rupee invested has a factor of
six. What I am telling you today is that railways have a $142 billion plan.
The capital goods - it is not just Make in India. The railways will be creating a huge benefit as it creates huge demand
for steel, cement. It will create jobs. It will have a huge impact in bringing in the new economic dynamism in the economy.
Source: The Economic Times
December, 2015
MONTHLY
ECONOMIC
BULLETIN
3
>> RECENT TRENDS IN INDIAN ECONOMY
INDIA’S FOREIGN TRADE (MERCHANDISE): DECEMBER, 2015
EXPORTS (including re-exports)
Exports during December, 2015 were valued at US$ 22297.48 million (Rs. 148491.18 crore) which was 14.75 per cent
lower in Dollar terms (9.53 per cent lower in Rupee terms) than the level of US$ 26154.46 million (Rs. 164127.08 crore)
during December, 2014. Cumulative value of exports for the period April-December 2015-16 was US$ 196603.94 million
(Rs. 1273322.99 crore) as against US$ 239928.91 million (Rs. 1458094.40 crore) registering a negative growth of 18.06
per cent in Dollar terms and 12.67 per cent in Rupee terms over the same period last year.
Non-petroleum exports in December 2015 are valued at US$ 19931.91 million against US$ 21631.89 million in December
2014, a reduction of 7.86%. Non-petroleum exports during April to December 2015 are valued at US$ 173291.60 million as
compared to US$ 191359.32 million for the corresponding period in 2014, a reduction of 9.4%. The trend of falling exports is
in tandem with other major world economies (the growth in exports have fallen for USA, European Union, China by 10.30,
10.83, 6.94 per cent respectively for October 2015 over the corresponding period previous year as per WTO statistics).
IMPORTS
Imports during December, 2015 were valued at US$ 33961.48 million (Rs. 226168.20 crore) which was 3.88 per cent
lower in Dollar terms and 2.00 per cent higher in Rupee terms over the level of imports valued at US$ 35333.27 million
(Rs. 221726.88 crore) in December, 2014. Cumulative value of imports for the period April-December 2015-16 was US$
295811.69 million (Rs. 1915849.40 crore) as against US$ 351613.95 million (Rs. 2136855.40 crore) registering a negative
growth of 15.87 per cent in Dollar terms and 10.34 per cent in Rupee terms over the same period last year.
CRUDE OIL AND NON-OIL IMPORTS:
Oil imports during December, 2015 were valued at US$ 6656.74 million which was 33.19 per cent lower than oil imports
valued at US$ 9963.44 million in the corresponding period last year. Oil imports during April-December, 2015-16 were
valued at US$ 68068.20 million which was 41.60 per cent lower than the oil imports of US$ 116559.48 million in the corresponding period last year.
Non-oil imports during December, 2015 were estimated at US$ 27304.74 million which was 7.63 per cent higher than
non-oil imports of US$ 25369.83 million in December, 2014. Non-oil imports during April-December, 2015-16 were valued at US$ 227743.49 million which was 3.11 per cent lower than the level of such imports valued at US$ 235054.47
million in April-December, 2014-15.
TRADE BALANCE
The trade deficit for April-December, 2015-16 was estimated at US$ 99207.75 million which was lower than the deficit of
US$ 111685.04 million during April-December, 2014-15.
INDIA’S FOREIGN TRADE (SERVICES): November, 2015
(As per the RBI Press Release dated 15th January, 2016)
A. EXPORTS (Receipts)
Exports during November, 2015 were valued at US$ 12019 Million (Rs. 79466.14 Crore).
B. IMPORTS (Payments)
Imports during November, 2015 were valued at US$ 5686 Million (Rs. 37594.18 Crore).
C. TRADE BALANCE
The trade balance in Services (i.e. net export of Services) for November, 2015 was estimated at US$ 6333 Million.
December, 2015
MONTHLY
ECONOMIC
BULLETIN
4
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
5
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
6
>> RECENT TRENDS IN INDIAN ECONOMY
Agriculture
Number of Initiatives During Last 18 Months for Development of Agriculture and Welfare of Farmers: Radha Mohan Singh
The Government has taken a number of initiatives during last 18 months for development of Agriculture sector and welfare
of farmers. Briefing about these initiatives here today ,Union Agriculture & Farmers Welfare Minister, Shri Radha Mohan
Singh said that promotion of Soil Health Card Scheme, creating
more irrigation resources under Pradhan Mantri Krishi Sinchai
Yojana and linking Agriculture mandis to common platform will
be focus of activities of his ministry.
Following are the sector wise achievements as briefed by the
Minister:
Department of Agriculture and Cooperation
Increase in productivity will eradicate poverty of farmers. Our
production is only half In comparison to worldwide production
per hectare. Productivity and production could not be improved
till the quality of land improves. Therefore, it is decided to provide Soil Health Card to 14 crore farmers of the country and this
programme has been started. 5 crore farmers to be provided
Soil Heath Card in 2015-16 and to remaining farmers in 2016-17. The Soil Health Card Scheme was inaugurated by the
Hon¡¯ble Prime Minister in February 2015. For this, Rs. 109 crore have been released till December 2015. No Government in
the past has released money under this head. Rs. 568 crore have been sanctioned for providing Soil Health Cards to all the
farmers. In the years 2014-15 and 2015-16, Modi Government has sanctioned 79 and 101 Soil Health Laboratories as against
only 43 such labs in the past four years. Similarly, 77 mobile Soil Testing Labs have been sanction in the present regime as
against only 17 in the past regime. Under soil health management Rs. 288 crore have been sanctioned as against only 72
crore in the past.
There Was no scheme to promote organic farming. New Scheme called Parampragat Krishi Vikas Yojana started in 201516 in allocated of Rs. 300 crore. So far 8000 cluster have been farmed.
Joint liability groups for landless labours were only 6.72 lakh during 2005-14. There have been 7.2 lakh group formation in
2014-15.
New Scheme called Prime Minister Krishi Sinchai Yojana (PMKSY) launched with an allocation of Rs. 5300 crore for the
present year with an objective to provide water to every farm. Officers have been trained to prepare district irrigation plan.
100 districts irrigation plan should be ready by 31st March, 2016 and remaining districts by the next year. Prime Minister has
launched the scheme to provide permanent solution to the problem of drought. Under water management, there is 40% increase in investment just one year in comparison to last year. Micro irrigation and water conservation are the thrust areas
under this scheme.
National Agriculture Market Scheme (NAM) launched to connect mandis across the entire country. More than 20 states
have expressed interest in linking their mandis with this project. Electrical portal will be launched by March, 2016, first 200
mandis will be connected by September, 2016 another 200 mandis by March, 2017 and remaining 187 mandis by Mach,
2018. Till 31st December 2015, proposals of 214 mandis from 8 states have been sanctioned @ 111.16 crores.
Modi government has changed the norms for compensation to the disaster affected farmers from minimum affected area
from 50% to now 30%. Further, the compensation has been increased to 1.5 times.
During the congress region, government used to not purchase grain spoiled due to hailstorm. Modi government has provided full support price to such cereals. This has been a historic decision.
December, 2015
MONTHLY
ECONOMIC
BULLETIN
7
>> RECENT TRENDS IN INDIAN ECONOMY
Four crops added in National Food Security Mission (NFSM) taking to figure seven. District increase from 486 to 627 in the
last two years.
Sanctioned post of extension workers increased from 18000 to 26000.
Pesticides registration has increased by 5 times to 51594 registration in 2014-15.
Rs. 10 cr sanctioned for honey bee development. This is in contrast to 4 cr sanction in the last 4 year. Increase in honey production from 72000 MT in preceding five year to 81000 MT in the present year.
Rs. 8,50,000 crore will be provided to the farmers through the bank so that the farmer should not go to doors of moneylenders. Rs. 534151 cr agriculture credit advanced to the farmers in 2014-15 and Rs. 603186 crore in 2015-16 (till December).
Achieving an increase of 23 % & 30% increase.
Neem Coated Urea is being distributed and steps have been initiated against black marketing of urea. Due to this effort,
black marketing of urea stopped and production improved despite using less urea.
DEPARTMENT ANIMAL HUSBANDRY DAIRYING AND FISHERIES
Two National Kamdhenu Breeding Centres opened in the country, one in the North and one in the South.
National Gokul Mission started for development and conservation of indigenous cattle breeds. Rs. 550 cr sanctioned in
2014-15 (till December) as against only Rs. 45 cr in 2013-14.
Blue Revolution initiated to increase fisheries production. Production increased to 150 lakh tonnes this year as against
95.72 lakh tonnes in the last year.
Coverage under National Livestock Mission (NLM) extended to entire country. 19 lakh Animal insured in present region as
against 10.88 lakh in last year (2013-14). Similarly, only 300 districts were covered in 2013-14 and this has been taken up to
676 districts in 2014-15.
Increase in an average price paid to the dairy farmers from Rs. 28.96 per liter to Rs. 32.72 per liter.
Significant increase in milk production in 2014-15 and 2015-16 has against 2013-14.
More than 1.5 time increase in animal vaccination has been achieved in Modi region during 2014-15.
Drastic reduction in foot and mouth disease (FMD) outbreaks from 377 such cases in 2013-14 to 238 in 2014-15 and only
46 in 2015-16. (till December).
.5 times increase in number of veterinary graduates.
Increase in seats in veterinary colleges by 1.5 times from 914 prior to September, 2014 to 1332 in 2014-15.
DEPARTMENT OF AGRICULTURE RESEARCH AND EDUCATION
More than 40 times increase in allocation to agriculture education. Central Agriculture University Imphal to have 13 colleges
in stead of existing 7 in north eastern region.
Four new colleges in Bundelkhand under Rani Laxmi Bai Central Agriculture University.
Rs. 3099 cr sanctioned for remodeling of KVKs and agriculture extension.
60000 hectare area covered under demonstration to bring focus on increasing production of pulses and oil seeds. Further,
more than 60 per cent increase in the development of crops species in comparison to 2013.
More than twice increase in agriculture machinery in comparison to 2013. This would help to labour, cost and time in agriculture.
Contingency plans made to fight against drought, flood, hailstorm, cyclone, etc. for all the district in 2015 and it is new
scheme started in 600 districts.
New Research centres opened in Jharkhand and Motihari on the lines of Pusa, New Delhi.
Eight new agricultural universities opened in several states to give thresh to the agriculture education.
Recorded 41 % increase in admissions in state agriculture university in comparison to 2013.
50 % increase in learning units in agriculture universities.
New schemes such as Mera Gaon Mera Garav, Mission 2050, Farmers First, Student Ready started in 2015.
Source: Ministry of Agriculture
December, 2015
MONTHLY
ECONOMIC
BULLETIN
8
>> RECENT TRENDS IN INDIAN ECONOMY
Inflation
The annual rate of inflation, based on monthly WPI, stood at -0.73% (provisional) for the month of December, 2015 (over
December, 2014) as compared to -1.99% (provisional) for the previous month and -0.50% during the corresponding
month of the previous year. Build up inflation rate in the financial year so far was 0.74% compared to a build up rate of
-0.89% in the corresponding period of the previous year.
Inflation for important commodities / commodity groups is indicated in Annex-1 and Annex-II.
The movement of the index for the various commodity groups is summarized below:-
PRIMARY ARTICLES (Weight 20.12%)
The index for this major group rose by 0.5 percent to 257.8 (provisional) from 256.5 (provisional). The groups and items
which showed variations during the month are as follows:The index for Food Articles group rose by 0.6 percent to
272.7 (provisional) from 271.0 (provisional) for the previous month due to higher price of poultry chicken (18%),
fish-inland (10%), beef & buffalo meat (9%), pork and
bajra (4% each), egg, tea, fish-marine and condiments &
spices (3% each), jowar, urad and barley (2% each) and
maize, arhar and wheat (1 % each). However, the price of
moong (7%), masur (5%), fruits & vegetables (2%) and
mutton (1%) declined.
The index for Non-Food Articles group rose by 1.0 percent to 223.9 (provisional) from 221.7 (provisional) for
the previous month due to higher price of mesta and
flowers (12% each), raw jute and linseed (5% each),
groundnut seed and raw wool (4% each), niger seed (3%), fodder and raw cotton (2% each) and rape & mustard seed and
sunflower (1% each). However, the price of guar seed (11%), castor seed and raw rubber (7% each), soyabean and gingelly
seed (3% each), coir fibre (2%) and copra (coconut) and cotton seed (1% each) declined.
The index for Minerals group declined by 2.4 percent to 212.3 (provisional) from 217.6 (provisional) for the previous
month due to lower price of iron ore (10%), zinc concentrate (6%) and manganese ore (1%). However, the price of sillimanite and copper ore (1% each) moved up.
FUEL & POWER (Weight 14.91%)
The index for this major group declined by 0.6 percent to 176.8 (provisional) from 177.9 (provisional) for the previous
month due to lower prices of furnace oil (10%), bitumen (3%) and petrol and aviation turbine fuel (1% each). However, the
price of LPG (1%) moved up.
MANUFACTURED PRODUCTS (WEIGHT 64.97%)
The index for this major group declined by 0.3 percent to 152.6 (provisional) from 153.0 (provisional) for the previous
month. The groups and items for which the index showed variations during the month are as follows:The index for Food Products group rose by 0.3 percent to 175.4 (provisional) from 174.9 (provisional) for the previous
December, 2015
MONTHLY
ECONOMIC
BULLETIN
9
>> RECENT TRENDS IN INDIAN ECONOMY
month due to higher price of tea dust (unblended) (7%), gram powder (besan) (6%), cotton seed oil and canned fish (4%
each) and soyabean oil, mixed spices, processed prawn, mustard & rapeseed oil, sugar, wheat flour (atta), groundnut oil,
palm oil, maida, sugar confectionary, gola (cattle feed) and bakery products (1% each). However, the price of powder milk
(5%), tea leaf (blended) and gur (3% each), sooji (rawa), oil cakes and sunflower oil (2% each) and gingelly oil, tea leaf (unblended), copra oil and khandsari (1% each) declined.
The index for Beverages, Tobacco & Tobacco Products group declined by 0.4 percent to 205.2 (provisional) from 206.0
(provisional) for the previous month due to lower price of bidi (2%). However, the price of zarda (4%) and dried tobacco
(1%) moved up. The index for Textiles group declined by 0.1 percent to 139.7 (provisional) from 139.8 (provisional) for the
previous month due to lower price of man made fabric and cotton yarn (1% each). However, the price of jute sacking
cloth, jute yarn and gunny and hessian cloth (2% each) and tyre cord fabric, jute sacking bag and cotton fabric (1% each)
moved up.
The index for Wood & Wood Products group declined by 0.7 percent to 196.4 (provisional) from 197.7 (provisional) for
the previous month due to lower price of processed wood (1%). The index for Paper & Paper Products group rose by 0.2
percent to 154.9 (provisional) from 154.6 (provisional) for the previous month due to higher price of paper cartons / boxes
(2%) and books/ periodicals/ journals and newsprint (1% each). However, the price of corrugated sheet boxes (1%) declined. The index for Leather & Leather Products group rose by 0.4 percent to 144.4 (provisional) from 143.8 (provisional) for the previous month due to higher price of leather garments & jackets (2%). The index for Rubber & Plastic
Products group declined by 0.3 percent to 145.8 (provisional) from 146.3 (provisional) for the previous month due to
lower price of plastic products (1%).
The index for Chemicals & Chemical Products group declined by 0.5 percent to 149.9 (provisional) from 150.6 (provisional) for the previous month due to lower price of antibiotics (3%), hair / body oils and non-cyclic compound (2% each)
and pesticides, polymers, urea, rubber chemicals, photographic goods and explosives (1% each). However, the price of
synthetic resin (2%) and pigment & pigment intermediates and safety matches/ match box (1% each) moved up.
The index for Non-Metallic Mineral Products group rose by 0.3 percent to 177.5 (provisional) from 176.9 (provisional)
for the previous month due to higher price of polished granite (2%) and bricks & tiles (1%). However, the price of marbles
(3%) declined. The index for Basic Metals, Alloys & Metal Products group declined by 1.2 percent to 150.3 (provisional)
from 152.2 (provisional) for the previous month due to lower price of pig iron, angles, plates and melting scrap (4% each),
HRC, pencil ingots and CRC (3% each), joist & beams, gp/gc sheets, billets, rounds, ferro silicon and steel: pipes & tubes
(2% each) and sponge iron, rebars, wire rods, steel rods, copper / copper ingots and steel castings (1% each). However,
the price of zinc (5%) and sheets, ferro chrome and ferro manganese (1% each) moved up.
The index for Transport, Equipment & Parts group rose by 0.1 percent to 138.0 (provisional) from 137.9 (provisional)
for the previous month due to higher price of auto rickshaw / tempo/matador (3%).
FINAL INDEX FOR THE MONTH OF OCTOBER, 2015 (BASE YEAR: 2004-05=100)
For the month of October, 2015, the final Wholesale Price Index for All Commodities (Base: 2004-05=100) stood at 176.9
as compared to 176.7 (provisional) and annual rate of inflation based on final index stood at -3.70 percent as compared to
-3.81 percent (provisional) respectively as reported on 16.11.2015.
December, 2015
MONTHLY
ECONOMIC
BULLETIN
10
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
11
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
12
>> RECENT TRENDS IN INDIAN ECONOMY
Industrial Production
The Quick Estimates of Index of Industrial Production (IIP) with base 2004-05 for the month of November 2015 have
been released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation. IIP is compiled using data received from 15 source agencies viz. Department of Industrial Policy & Promotion (DIPP); Indian Bureau
of Mines; Central Electricity Authority; Joint Plant Committee, Ministry of Steel; Ministry of Petroleum & Natural Gas;
Office of Textile Commissioner; Department of Chemicals & Petrochemicals; Directorate of Sugar & Vegetable Oils; Department of Fertilizers; Tea Board; Office of Jute Commissioner; Office of Coal Controller; Railway Board; Office of Salt
Commissioner and Coffee Board.
The General Index for the month of November 2015 stands at 166.6, which is 3.2 percent lower as compared to the
level in the month of November 2014. The cumulative growth for the period April-November 2015 over the corresponding period of the previous year stands at 3.9 percent.
The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of November
2015 stand at 131.5, 171.9 and 175.6 respectively, with the corresponding growth rates of 2.3 percent, (-) 4.4 percent and
0.7 percent as compared to November 2014 (Statement I). The cumulative growth in three sectors during April-November 2015 over the corresponding period of 2014 has been 2.1 percent, 3.9 percent and 4.6 percent respectively.
In terms of industries, seventeen (17) out of the twenty two (22) industry groups (as per 2-digit NIC-2004) in the manufacturing sector have shown negative growth during the month of November 2015 as compared to the corresponding
month of the previous year (Statement II). The industry group ‘Electrical machinery & apparatus n.e.c.’ has shown the
highest negative growth of (-) 46.5 percent, followed by (-) 13.8 percent in ‘Luggage, handbags, saddlery, harness &
footwear; tanning and dressing of leather products’ and (-) 13.1 percent in ‘Wood and products of wood & cork except
furniture; articles of straw & plating materials’. On the other hand, the industry group ‘Furniture; manufacturing n.e.c.’
has shown the highest positive growth of 102.1 percent, 2 followed by 11.1 percent in ‘Office, accounting & computing
machinery’ and 9.7 percent in ‘Radio, TV and communication equipment & apparatus’.
As per Use-based classification, the growth rates in November 2015 over November 2014 are (-) 0.7 percent in Basic
goods, (-) 24.4 percent in Capital goods and (-) 0.7 percent in Intermediate goods (Statement III). The Consumer durables
and Consumer non-durables have recorded growth of 12.5 percent and (-) 4.7 percent respectively, with the overall
growth in Consumer goods being 1.3 percent.
Some important items showing high negative growth during the current month over the same month in previous year
include ‘Cable, Rubber Insulated’ [(-) 87.1%], ‘Heat Exchangers’ [(-) 68.2%], ‘Polythene Bags including HDPE & LDPE
Bags’ [(-) 58.0%], ‘Tractors (complete)’ [(-) 42.3%], ‘Conductor, Aluminium’ [(-) 36.8%], ‘Rice’ [(-) 27.1%] and ‘ThreeWheelers (including passenger & goods carrier)’ [(-) 23.7%].
Some other important items that have registered high positive growth include ‘Gems and Jewellery’ (253.7%), ‘Sugar
Machinery’ (78.0%), ‘Lubricating oil’ (66.5%), ‘Wood
Furniture’ (46.9%), ‘PVC Pipes and Tubes’ (31.4%),
‘Transformers (small)’ (30.2%), ‘Polypropylene (including co-polymer)’ (30.1%) and ‘Sugar’ (25.7%).
However, growth rates in respect of individual
items may not reflect their actual contribution in
the overall growth rate of IIP. Taking into account
the weights of different items, the overall growth
rate of IIP can be decomposed into positive and
negative contributions of different items. Such
contributions of top five items with positive contribution and top five items with negative contribution are given below:
December, 2015
MONTHLY
ECONOMIC
BULLETIN
13
>> RECENT TRENDS IN INDIAN ECONOMY
Along with the Quick Estimates of IIP for the month of November 2015, the indices for October 2015 have undergone
the first revision and those for August 2015 have undergone the final revision in the light of the updated data received
from the source agencies. It may be noted that these revised indices (first revision) in respect of October 2015 may undergo final (second) revision along with the release of IIP for the month of January 2016.
Statements giving Quick Estimates of the Index of Industrial Production at Sectoral, 2-digit level of National Industrial
Classification (NIC-2004) and by Use-based classification for the month of November 2015, along with the growth rates
over the corresponding month of the previous year including the cumulative indices and growth rates are enclosed.
December, 2015
MONTHLY
ECONOMIC
BULLETIN
14
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
15
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
16
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
17
>> RECENT TRENDS IN INDIAN ECONOMY
Index of Eight Core Industries (Base: 2004-05=100) November, 2015
The Eight Core Industries comprise nearly 38 % of the weight of items included in the Index of Industrial Production (IIP).
The combined Index of Eight Core Industries stands at 166.8 in November, 2015, which was 1.3 % lower compared to the
index of November, 2014. Its cumulative growth during April to November, 2015-16 was 2.0 %.
Coal
Coal production (weight: 4.38 %) increased by 3.5 % in November, 2015 over November, 2014. Its cumulative index during
April to November, 2015-16 increased by 4.3 % over corresponding period of previous year.
Crude Oil
Crude Oil production (weight: 5.22 %) decreased by 3.3 % in November, 2015 over November, 2014. Its cumulative index
during April to November, 2015-16 decreased by 0.4 % over the corresponding period of previous year.
Natural Gas
The Natural Gas production (weight: 1.71 %) declined by 3.9 % in November, 2015. Its cumulative index during April to
November, 2015-16 declined by 2.3 % over the corresponding period of previous year.
Refinery Products (0.93% of Crude Throughput)
Petroleum Refinery production (weight: 5.94%) increased by 2.5 % in November, 2015. Its cumulative index during April
to November, 2015-16 increased by 2.5 % over the corresponding period of previous year.
Fertilizers
Fertilizer production (weight: 1.25%) increased by 13.5 % in November, 2015. Its cumulative index during April to November, 2015-16 increased by 9.7 % over the corresponding period of previous year.
Steel (Alloy + Non-Alloy)
Steel production (weight: 6.68%) declined by 8.4 % in November, 2015. Its cumulative index during April to November,
2015-16 declined by 1.5 % over the corresponding period of previous year.
Cement
Cement production (weight: 2.41%) decreased by 1.8 % in November, 2015. Its cumulative index during April to November, 2015-16 increased by 2.1% over the corresponding period of previous year.
Electricity
Electricity generation (weight: 10.32%) recorded no change in November, 2015 over November, 2014. Its cumulative
index during April to November, 2015-16 increased by 4.2% over the corresponding period of previous year.
December, 2015
MONTHLY
ECONOMIC
BULLETIN
18
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
19
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
20
>> RECENT TRENDS IN INDIAN ECONOMY
Foreign Direct Investment
FDI quality improves substantially with PM Narendra Modi's Make in
India push
The quality of foreign direct investment (FDI) coming into the country has improved substantially, according to Reserve
Bank of India data.
Much of this FDI materialised in the September 2014-November 2015 period after Prime
Minister Narendra Modi launched the Make in
India campaign and bettered portfolio inflows
during the preceding 15 months.
Gross FDI inflows amounted to $62.6 billion,
31% higher than $47.6 billion in the preceding 15
months.
This is more than triple the amount of net
portfolio inflows of $14.3 billion in the same period. An analysis of the monthly trend in foreign
investment inflows shows that in most months
stable long-term FDI has been more than portfolio inflows, which have been more volatile in
the period.
Economists say the surge in FDI is largely due to several initiatives by the government to attract investment in the
manufacturing sector. "FDI and portfolio flows over the past year-and-a-half suggest that conscious efforts of the government to encourage more stable direct investments are yielding results," said Saugata Bhattacharya, chief economist at
Axis Bank. "At a time when global capital markets have become volatile, FDI flows reduce uncertainty about foreign capital outflows and, conse ..
The surge in FDI in India is significant given that investment across the world has fallen by 16%, said Amitabh Kant,
secretary at the Department of Industrial Policy and Promotion, at a recent event.
Though a sizeable amount is estimated to have gone to the manufacturing sector, including consumer goods and food
processing, among others, a section of the market feels that a portion of the FDI inflows could have come through the private equity route.
This seldom finds its way into greenfield projects but at the same time provide an important source of finance for entrepreneurs.
"A significant part of the higher FDI has come in as PE and VC funding, which helps finance entrepreneurs," said Bhattacharya.
Prime Minister Modi's Make in India initiative is aimed at turning the country into a global manufacturing hub to generate jobs, raise incomes and drive growth.
The government has been seeking to drum up investment as part of this effort. India's growth is being driven by public
spending and consumption with private investment yet to kick in substantially.
Source: The Economic Times
December, 2015
MONTHLY
ECONOMIC
BULLETIN
21
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
22
>> RECENT TRENDS IN INDIAN ECONOMY
December, 2015
MONTHLY
ECONOMIC
BULLETIN
23
>> NEWS FEATURE
No worries on fiscal deficit: Jaitley
With the economy showing signs of returning to a growth path, the government is not concerned about keeping to fiscal
deficit targets, Finance Minister Arun Jaitley said.
"Normally, when Pay Commission recommendations are implemented, salaries and pensions put
pressure on the budgetary limit of 2.5 percent under
these heads that financial planners follow," Jaitley
said, addressing the Hindustan Times Leadership
Summit, here.
"This pressure on the fiscal deficit will move up in
the initial 2-3 years of the salaries, pension payments.
But the economy is also growing, with it the base of
the GDP...so the government's capacity to absorb expenditure is also increasing," Jaitley said.
In this connection, the finance minister said that
while the Indian model of development is now much
more market oriented than earlier, a large part of government revenues needs to go to fund social sector programmes for poverty alleviation in a country where over 30 percent of people live below the poverty line.
Source: Indo-Asian News Service
December, 2015
MONTHLY
ECONOMIC
BULLETIN
24
>> NEWS FEATURE
India will lead the world in digital financial
inclusion: Bill Gates
Microsoft founder Bill Gates said in a couple of years India will lead the way in digital financial inclusion.
Speaking at a panel discussion on Transforming India through digital financial inclusion, Gates, in association with
NASSCOM, said they were helping the government implement its projects in sector.
“The results will be magical once critical mass is achieved.” Minister of State for Finance Jayant Sinha said the idea
was to create a plug-and-play platform for the
apps – essentially the direct benefits given to citizens. He said the Indian model is different from
the acclaimed Kenya model as it was based on
open architecture and allows interoperability.
“We have made it channel neutral. Whenever
the ultimate transactions happens is where the
commission is paid out. And there is also the
Right incentive for consumer choice,” the minister
said. He said while 90 per cent of NREGA payments are already going through bank accounts,
the government was now working on health insurance and crop insurance.
TRAI chairman R S Sharma said it was wrong to assume that technology is the barrier for Indian consumers. “Cost is
the real barrier. No one is going to pay Rs 20 cost for a Rs 100 transaction.
The cost of transactions has to come down for micro transactions,” he said, adding that it has to become as easy as
making a phone call. Gates said while everyone associates his foundation with work in the health sector, few knew that
they have been working on financial inclusion for over eight years and started with work on micro finance.
Advocating cashless transactions, he said: “When there is need for face-to-face transaction it means cost would be too
large.” Sinha said the architecture was in place for India to become a cashless society, but people’s behaviour will take
time to change. “The consumer will decide when that will happen.”
Source: Financial Express
December, 2015
MONTHLY
ECONOMIC
BULLETIN
25
>> NEWS FEATURE
RBI Governor Raghuram Rajan optimistic
about passage of GST Bill
RBI Governor Raghuram Rajan has told American investors that continued focus on fiscal consolidation and inflation will
mean they will reach their targeted goal.
In an interaction with American financial institutional investors in New York last week at an event organised by US
India Business Council, Rajan said another priority of the RBI is to clean up banks and their non-performing assets.
Rajan said RBI’s continued focus on fiscal consolidation and inflation will mean that they will
reach their targeted goals, according to a USIBC
media statement.
Another priority is to clean up banks and their
non-performing assets, he said. Intention is to
give banks more powers to allow for greater recovery of money and give relevant stakeholders
an active role in the resolution process, he observed.
During the interaction, Rajan said he is optimistic about the passage of GST and the opportunities for compromise that will help realise the
goals of the GST – a unified tax market, improvement in tax collection and broadening the tax base, USIBC said.
Led by USIBC chairman and president and CEO of MasterCard, Ajay Banga, the discussion focused on issues such as
inflation and fiscal deficit management, recent rate cuts and monetary policy, deepening capital markets, modernising
India’s capital markets to mobilise investment in Indian infrastructure and world-class companies.
Industry’s desire for reforms also included further development of a corporate debt market, improved infrastructure
trusts and debt fund structures, long-term rupee-denominated government securities, and an updated external commercial borrowing regime, USIBC said.
USIBC applauded the Indian government for its recent reform introduced in private sector banking that permits the
total foreign holding in private banks to have a composite cap of 74 per cent and eliminates existing sub-limits for FDI
and FII capital (which were at 49 per cent).
Banks and investors will have greater flexibility to raise capital and to meet the stringent capital adequacy norms.
This reform is a critical step in supporting credit growth in the financial markets and the Indian economy, USIBC said.
“As global commercial institutions and investors, we remain profoundly committed to India as we continue to provide a
variety of long-term resources including capital, technology, and know-how “which will help advance the Prime Minister’s
goals of financial stability, economic growth, digital access, and financial inclusion,” Banga said.
USIBC president Mukesh Aghi said the Indian financial markets are an important driver for the country’s economic
growth. “There needs to be a level playing field for global participants in India’s financial markets with clear, nationalityneutral regulations across all asset classes,” he said.
Source: PTI
December, 2015
MONTHLY
ECONOMIC
BULLETIN
26
>> NEWS FEATURE
Fitch says 'stable' India to grow at
7.5 percent
Maintaining a stable outlook for India, ratings agency Fitch said the country's economy will grow by 7.5 percent in the
current fiscal that will stand out globally
Fitch however warned that its business environment would remain weak despite improvements.
It has further forecast an 8 percent growth in
2016-17. The agency said a "BBB-" rating, the lowest
in the investment grade, along with a stable outlook
and a strong medium-term growth prospect and
favourable external finances, will balance out with
high government debt, weak structurals and a difficult, but improving, business environment.
"Translation of structural reforms into improved
indicators and higher real GDP (gross domestic product) growth depends on actual implementation.
India's sovereign ratings continue to be constrained
by limited improvement in its fiscal position," Fitch
said.
It said even as the government continues to
steadily roll out its structural reform agenda, like in liberalising the foreign equity regime, it is also facing difficulty in garnering support in the upper house of parliament for big-ticket steps, like goods and services tax regime.
"India's relatively weak business environment and standards of governance are gradually improving as a result of the
pursued reforms, but obstacles faced by investors, including infrastructure bottlenecks, have not been reduced
overnight," it said.
The agency said while India's sovereign ratings continued to be constrained by the limited fiscal space of the government, the 23.6-percent salary hike recommended by the 7th Pay Commission had raised doubts about the feasibility of
the medium-term consolidation path.
On inflation, it said, India's 7.9-percent average in annual price rise over the past five years was much higher than the
3.3-percent level among the peers with the same rating. But the changes in the retail inflation profile strengthened
India's sovereign credit profile.
Source: IANS
December, 2015
MONTHLY
ECONOMIC
BULLETIN
27
>> NEWS FEATURE
Assocham pegs growth at 8.1-8.2% for FY16
The finance ministry is not sure whether the economic growth will touch eight per cent in the current financial year, but
Assocham is confident it will.
The industry chamber in its mid-year review pegged the country's economic growth in 2015-16 at 8.1-8.2 per cent.
"The renewed optimism comes about despite continuation of a global meltdown in commodity prices
with crude oil trading well below the $40-barrel
mark, while the entire metal pack is melting away in
the heat of crisis. But , it is the domestic demand
pick-up, supported by government investment and
the services sector, especially transport, hotels and
trade that will push the Indian economy to cross the
psychologically important level of eight per cent," it
said.
The finance ministry's mid-year analysis slashed
economic growth projections from 8.1-8.5 per cent to
7-7.5 per cent for 2015-16.
"Asia's third-largest economy is now expected to
grow 7-7.5 per cent in the year ending in March 2016," the finance ministry said in its mid-year economic review.
In the first half of 2015-16, the country's economy expanded only 7. 2 per cent. Assocham made quite an optimistic
forecast of nine per cent and above growth in 2016-17, if the government and the Congress come together and clear the
goods and services tax Constitutional amendment Bill in Parliament and it is rolled out from April 2016.
For the current financial year, Assocham said the latest revival in manufacturing which helped overall index of industrial production reach 9.8 per cent in October, along with a robust pick-up in electricity and capital goods would trigger
the growth trajectory. In the process, a lot more activities in the services would get a boost.
The number of passengers handled by the civil aviation sector in the second quarter of the current financial year went
up by 17 per cent. So was the case with commercial vehicles, which registered a growth of 10.7 per cent, another indicator of a pick-up in economic activity, it said.
There was a catch-up seen by 3.5 per cent in the case of civil aviation cargo and 3.9 per cent by major ports during the
second quarter of 2015-16.
Source: Business Standard
December, 2015
MONTHLY
ECONOMIC
BULLETIN
28
>> OVERSEAS INVESTMENTS
Indian Railways signs Rs 40,000 crore pacts
with Alstom, GE
USA based GE (Marhowra) and France based Alstom (Madhepura) signed formal contract agreement with Indian Railways for setting up Diesel and Electric locomotive factories at Marhowra and Madhepura respectively.
The projects which will attract an investment of Rs 40,000 core over a period of 10 years is supposed to be the
biggest foreign direct investment in the railway sector.
Minister of Railways Suresh Prabhu noted that both these projects will be a great contribution under the ‘Make In
India’ vision of Prime Minister Modi. “The setting up of both these state of the art manufacturing facilities will create an
eco-system of its own with spin-off benefits, which will not only create jobs in the manufacturing facilities but will also
help in creation of jobs in ancillary units,” said Suresh Prabhu at the signing ceremony.” It’s interesting how the signing of
this agreement coincides with the climate change conference in Paris, besides other measures signing of these agreements for production of energy efficient locomotives is another contribution of Indian railways towards the environment,
he added.
The diesel locomotive factory at Marhowra will manufacture and supply modern diesel electric locomotives of 4500
HP and 6000 HP. According to the agreement, the factory will be supply 1000 diesel locomotives over a period of 11
years with a basic cost of Rs 14,656 crore. While the electric locomotive factory at Madhepura, will supply 800 electric
locomotives of 12,000 HP over the period of 11 years at a basic cost of Rs 19,904 crore. “This is a very unique day for Alstom and we are happy to enter in a long term partnership with Indian Railways, the investment for this project will start
from 2016 and we will be delivering to the transporter our state of the art locomotives in the year 2018-19.” said Henri
Poupart-Lafarge, CEO, Alstom. “This project will help create 1000 jobs within Alstom and in addition create 3000 jobs in
India,” he added
Finance Minister Arun Jaitley noted that the signing of this agreement was a win-win situation for all the stakeholders
with the major beneficiary being the people of Bihar. “I am very happy to see the progress of Indian railways under the
leadership of the Railway Minister, this is the result of structured game plan followed the Ministry of Railways to modernize the Indian Railways and its infrastructure,” said Arun Jaitley.
These high power locos will be used by the national transporter for heavy haul freight operations and freight operation
on the dedicated freight corridor. According to the press release the operation of these locos besides helping IR improve
its average speed of freight trains from 25Kmph to 50 Kmph will also help improve the Horse Power to trailing load ratio
from the present 1:1 to 2:1. “I am happy to announce that the price of these high power locos from GE and Alstom is
going to be less than the in-house production cost,” said Manoj Sinha, Minister of State for Railways.
The Ministry of Railways which has formed a JV with the international manufacturers will have equity of 26 per cent
or Rs 100 crore whichever is lower. The ministry of railways has provided land for the factory for a period of 30 years in
accordance with the land lease agreement and the Indian Railways will continue to hold equity of not less than 10% in
the JV Company until the supply period of 11 years. The JV has also been given the liberty to produce additional locomotives over and above the assured off-take for the Indian Railways, for other customers during the supply period.
Source: The Financial Express
December, 2015
MONTHLY
ECONOMIC
BULLETIN
29
>> OVERSEAS INVESTMENTS
Facebook launches SME India Council for
small businesses
In a move to help businesses better connect with their targeted audiences, the social networking giant Facebook has
launched the first SME India Council with 12 small business owners from different geographies and varied business objectives.
The council - first such in the Asia-Pacific region - will meet throughout the year to share feedback, discuss new ideas
and work with Facebook to build better ads solutions, Facebook India said in a statement on Friday.
“Mobility is the future of India. We are excited about the tremendous opportunities it creates for people and businesses
and are invested for the long-term,” said Kirthiga
Reddy, managing director, Facebook India.
“The SME India Council is an open forum for
local businesses to share feedback with our teams
so we can align and continue to develop impactful
solutions to grow their business,” he explained.
According to Facebook India, more than 1.99 billion interactions have been made between people
and two million small businesses with Facebook
Pages in India.
Of the 138 million people on Facebook in India
(90 percent on mobile), more than half of them are
connected to at least one small business in the
country.
The SME India Council will meet a few times
over the coming months to discuss progress on solutions, business ideas, discuss new successes and challenges and
meet the Facebook teams.
Globally, over 45 million small businesses actively use Facebook Pages because they are free, easy to use and immediately give businesses a digital (and mobile) strategy.
“The SME India Council will help our teams understand specific needs and build solutions to help all Indian businesses
connect with the right people and grow,” added Rahul Desai, India SME director, Facebook.
Some of the 12 small business owners are Amruta Walvekar, director, Wrapistry; Anaka Narayanan, director, Brass
Tacks; and Maya Chandrasekaran, chief of talent, Babajob.com, among others.
Source: Indo-Asian News Service
December, 2015
MONTHLY
ECONOMIC
BULLETIN
30
>> OVERSEAS INVESTMENTS
Japan poised to win India's bullet train
deal: Reports
Japan is expected to win the right to construct India's first bullet train, after losing an Indonesian high-speed rail deal to
China, the Nikkei business daily reported on Tuesday.
Japan will offer more than 1 trillion yen ($8.11
billion) in loans to construct India's 980 billion
rupee fast train, according to the report.
Japan recently lost the bid to build Indonesia's
first fast-train because Beijing provided a $5 billion
loan without guarantees.
Japanese Prime Minister Shinzo Abe, due to visit
India this week, and his counterpart Narendra Modi
are expected to issue a joint statement on the deal,
the Nikkei said.
Tokyo was picked to assess the feasibility of
building the 505 kms (313 miles) corridor linking
Mumbai with Ahmedabad, the commercial capital
of Modi's home state, and concluded it would be
technically and financially viable.
Construction of the high-speed railway link will start from 2017 and will be completed in 2023, the Nikkei reported.
Source: Reuters
December, 2015
MONTHLY
ECONOMIC
BULLETIN
31
>> OVERSEAS INVESTMENTS
Singapore's Temasek to buy CARE
Hospitals for Rs 1,800 crore
Singapore's Temasek Holdings is set to acquire a controlling 72 per cent stake in Hyderabad-based CARE Hospitals from
the current private equity owner Advent International for Rs 1,800 crore.
Temasek had earlier teamed up with TPG Growth to form a consortium but the latter opted out of the race a few
weeks back after it was not comfortable with the final contours of the transaction, including the pricing, said three people directly involved in the deal. Once completed,
this will arguably be the first time that Temasek
acquires a controlling stake in an Indian company
on its own. It had earlier this year joined hands
with Advent to buy the consumer division of
Crompton Greaves.
A formal announcement is expected in the next
seven to 10 days. "I would like to state that we
have no comments to offer to your query," an Advent India spokesperson said in an emailed response to ET query. A Temasek spokesperson
declined to comment on what he said were market speculation and rumours.
Founded in 1997 by Dr B Soma Raju and a team of cardiologists, Quality CARE India Ltd runs a network of 17 hospitals
with 2,400 beds across nine locations under the CARE Hospitals brand name. The hospitals are based in Hyderabad, Secunderabad, Visakhapatnam, Raipur, Pune, Nagpur, Bhubaneswar, Jabalpur and Surat.
It is expected to add 600 more beds in the near future through greenfield and brownfield expansion taking the overall
count to 3,000 beds. CARE also runs a network of telemedicine hubs in rural Andhra Pradesh and Maharashtra. Its
founders developed Asia's first indigenous coronary stent.
In 2012, Advent acquired 72 per cent of the chain for $105 million (Rs 680 crore at current exchange rate) from investors including investor Rakesh Jhunjhunwala, Matrix Labs founder Nimmagadda Prasad and UK-based Ashmore. The
remaining stake is held by doctors working at the chain.
Earlier this year, Advent mandated global independent investment bank Moelis & Co. and Capital Fortunes to sell its
three-year-old investment. The process had seen wide interest in the initial round from financial and strategic partners,
including consortiums such as PD Hinduja Hospital and Everstone Group as well as South African healthcare chain Netcare and Bain Capital. Singapore's Thomson Medical, China's Fosun Group, Malaysia's IHH Healthcare Bhd, private equity
heavyweights Carlyle and domestic rivals like Manipal were also in the fray but dropped out in successive rounds.
Temasek the Singapore government's investment company revised its initial offer to match that of Abraaj, sources
add. The doctors who plan to stay on and run operations are also believed to have preferred Temasek, a wellknown marquee investor in India. Even Thomson Medical had initially offered a higher price but its terms - a combination of stock
and cash and milestonelinked-payouts - are believed to have met with a lukewarm response. Temasek has been actively
investing in pharma and healthcare, having backed Gurgaon-based Medanta and cancer care specialist HealthCare
Global Enterprises previously.
In India, bed availability was nine per 10,000 people in 2012, significantly lower than the World Health Organization
guideline of 30 per 10,000. To meet this global standard, India will need to invest over Rs 14 lakh crore, Crisil said recently. The Indian healthcare market therefore has significant long-term growth potential, similar to other key regional
markets, analysts said.
December, 2015
MONTHLY
ECONOMIC
BULLETIN
32
>> OVERSEAS INVESTMENTS
"We expect the Indian healthcare sector to grow to $350-380 billion by 2025 at a CAGR of 13-14 per cent," Barclays
said in a September report. "In a highly fragmented healthcare market like India, where 90 per cent of the hospitals are
in the unorganised segment (primarily regional non-pan Asia players), we believe prospects for inorganic growth are one
of the highest across Asia."
In recent months, deal activity in the hospitals space has picked up with most PE-backed chains eyeing initial public
offerings. They include Dr Devi Shetty's Narayana Hrudayalaya, Bengalurubased HealthCare Global Enterprises Ltd and
Dubai-based cancer hospital chain Aster DM Healthcare.
In August, IHH Healthcare Bhd, which runs pan-Asian hospital chain Parkway Holdings, bought a 73.4 per cent stake in
Hyderabad-based Global Hospitals for Rs 1,284 crore.
Source: The Economic Times
Walmart to open stores in Haryana
Wal Mart India Private Ltd president and CEO Krish Iyer met Haryana chief minister Manohar Lal Khattar to share plans to
open its chain of stores in the state.
The meeting was part of Haryana government The meeting was part of the first Roadshow organized at New Delhi in a
run-up to 'Happening Haryana Global Investors'
Summit-2016' to be organized at Gurgaon on
March 7 and 8, 2016.
During the occasion, Micromax, Co-founder Rajesh Aggarwal today offered to set up a mobile
handset manufacturing unit preferably in National
Capital Region.
The unit would provide employment to 5500
youth with initial investment ranging from Rs 100
crore to Rs 500 crore proved to be immensely
successful as far as attracting the investments in
Haryana as several prestigious multi-national and
national companies expressed their willingness to
set up their ventures in the state in the field of
food processing, industrial parks, electronics,
health care, civil aviation, solar energy, warehousing and skill development. Besides it also generated a lot of hype regarding the proposed Investors' Summit in March
2016.
Source: The Economic Times
December, 2015
MONTHLY
ECONOMIC
BULLETIN
33
>> OVERSEAS
INVESTMENTS
Rio Tinto, De Beers to trade on Mumbai’s
diamond centre
Rio Tinto, De Beers and Alrosa are among the major mining companies that have decided to participate in the Indian Diamond Trading Centre (IDTC), the special notified zone in
Mumbai.
The development comes after these miners successfully completed two test shipments at IDTC-SNZ,
which became operational from Sunday.
The IDTC has been set up to do away with middlemen in diamond trade and allow Indian manufacturers
to deal directly with miners. In the test shipment
process, the miners imported test parcels of rough diamonds from their home country to IDTC-SNZ and then
sent back the parcels to their home country. The test
shipment was conducted first by British-Australian
multinational firm Rio Tinto on November 9, when it
imported the parcel, and sent it back the next day, said
Praveen Shankar Pandya, chairman, Gem & Jewellery
Export Promotion Council. He said Luxembourg-headquartered De Beers followed suit, bringing in its test parcels on November 19 and sending them back the next day.
"Following the successful test shipments, Rio Tinto conducted a full viewing session at IDTC-SNZ from November 21
till 25th. The viewings received a very good response from the industry and potential buyers lined up to attend the
same," Pandya told ET.
Source: The Economic Times
December, 2015
MONTHLY
ECONOMIC
BULLETIN
34
>> TRADE NEWS
India plans price curbs to stem Chinese
steel import deluge
India plans to step up measures to protect its debt-laden domestic steelmakers by imposing a minimum price on steel
imports and studying loan restructuring as the mills struggle under a flood of cheap products from China.
The curbs are necessary to ensure a “level-playing field” for Indian companies after restrictions imposed in September
failed to stop a decline in prices, Steel Secretary Aruna
Sundararajan, the nation’s top bureaucrat for the industry, said in an interview in New Delhi.
“We cannot have a situation where after so much investment having gone into our local manufacturing,
people are actually having to sell below their cost,”
Sundararajan said Monday. India will monitor the quality of steel imported from nations such as China, South
Korea and Japan, she said. The measures are expected
to be in place by March.
Producers including China and Russia are aggressively selling steel at low prices, forcing governments
from India to the U.S. to impose protectionist measures. Faced with a glut of domestic production, surging
imports and prices trading around a six-year low, Indian steelmakers have sought safeguards against increasingly
cheaper imports.
Loan Package
The government is also working with banks on “a financial package” for restructuring loans to steelmakers, Sundararajan said, without giving details. “The cost of capital is high in India especially at a time when global markets are
down. We need to reduce their financial load. They need some reprieve.”
India’s iron and steel industry owes 2.87 trillion rupees ($43.3 billion) of loans. The big four steelmakers have the
equivalent of $17.8 billion of loans and $7.7 billion of bonds outstanding, data compiled by Bloomberg show.
“Indian steel makers have been finding it difficult to get credit,” said Goutam Chakraborty, Mumbai-based analyst at
Emkay Global Financial Services. “Most of measures that the Indian government is planning now should have come
much earlier. These measures will probably begin to have an effect only by the end of January. The threat from cheap
imports is still too big.”
Anti-Dumping
Chinese mills can undercut competitors because the government provides export rebates and subsidies for production, according to Roberto Cola, chairman of the Selangor, Malaysia-based South East Asia Iron & Steel Institute.
Steel exports by China exceeded 100 million tons for the first time in the first 11 months, rising 22 percent from a year
earlier, customs data show.
India is seeking minimum import prices for a range of products including hot and cold rolled coiled sheets, galvanized
sheets and rods, Sundararajan said. Floor prices will be fixed by comparing costs of products in domestic markets to international benchmarks, she said. Prices of hot-rolled steel in India have fallen 26 percent in the past 12 months, according to data from Metal Bulletin.
India announced earlier this month the imposition of anti-dumping duties on cold-rolled flat products of stainless steel
for five years as well as a probe on hot-rolled plates and sheets after Indian steelmakers including Steel Authority of
India Ltd., JSW Steel Ltd. and Jindal Steel Ltd. complained.
December, 2015
MONTHLY
ECONOMIC
BULLETIN
35
>> TRADE NEWS
The 20 percent duty imposed on hot-rolled coil in September slowed India’s monthly imports for the first time since at
least April, government data shows, though purchases for the eight months through November rose 34 percent.
The “proposed minimum import price has to cover about 45 to 50 percent of the imports coming in,” Sundararajan
said. “We may look at channelizing the imports through a few ports so that we can better monitor the quality." Her ministry is also looking at longer term anti-dumping duties, she said.
“The industry is preparing a case. We need to also see what kind of subsidies are being given in those countries to
prove what is the actual cost of production there.”
Source: Bloomberg
India, China to study regional trade pacts
India and China have decided to undertake a joint study on the impact of regional trade agreements, a first of its kind effort by the two Asian rivals, a senior official has said.
The move also signals growing ties on economic issues between the two Asian giants. The study will be conducted
jointly by the NITI Aayog and China's Development Research Centre (DRC). The deal to undertake the joint study was
signed during the recent visit of NITI Aayog officials to China.
"When I went to China we had a very good meeting with the president of DRC and we agreed that we will jointly do a
study on the impact of the mega regional trade arrangements that are being formed — how the TPP (Trans Pacific partnership) that the United States has signed with 11 other countries is going to impact us," Arvind Panagariya, vice chairman of NITI Aayog told TOI.
"Whether India and China should try to join those agreements? Should India and China speed up their own efforts at
something like the RCEP (Regional Comprehensive Economic Partnership)? There are a set of questions which we would
look up in this joint work," said Panagariya. In recent months, India and China have collaborated on several key issue including at the ministerial meeting of the WTO in Nairobi.
A group of 47 countries — including India, China, South Africa and host Kenya — had come together to argue that the
Doha Development Round should remain firmly on WTO's agenda and had attempted to block moves by advanced countries led by the US to focus on "new issues".
The rise of plurilateral trade agreements such as TPP, comprising a dozen countries led by the US, are a source of
concern for developing countries such as India as they go beyond the WTO agreements in areas such as intellectual
property rights. This has raised fears of adverse impact on access to medicines, given the weak patent rules that are proposed. Similarly, the agreement on investment is loaded in favour of developed countries.
Source: Times of India
December, 2015
MONTHLY
ECONOMIC
BULLETIN
36
>> TRADE NEWS
India to become urea exporting country in
three years, says Ananth Kumar
India will become a “urea exporting country” in the next three years, said Union Minister of Chemicals and Fertilisers,
Ananth Kumar.
“Today India is importing urea. But in the next three years, we, under the leadership of Prime Minister Narendra Modi,
it will become an urea exporting country,” said Kumar
while addressing an event organised to lay the foundation stone of a new campus of National Institute of
Pharmaceutical Education and Research (NIPER) at
Gandhinagar.
The estimated annual demand of urea in the country
is over 300 LMT (lakh metric tonne) and India exported
about 87 LMT of urea in 2014-15. Urea is the only fertilizer under statutory price control and its import is restricted and permitted through State Trading
Enterprises (STEs) namely MMTC Ltd, State Trading
Corporation Ltd and Indian Potash Ltd, under the Foreign Trade Policy of the government.
The government also imports approximately 20 lakh
metric tonnes of urea from Oman India Fertilizer Company (OMIFCO) under a long term urea off take agreement between
GoI and OMIFCO.
The Union minister also said that about 320 lakh metric tonne or 70 crore bags of urea have been neem coated which
is a record of sorts.
Source: Financial Express
December, 2015
MONTHLY
ECONOMIC
BULLETIN
37
>> TRADE NEWS
After a year of slide, Indian exports to
look up in 2016
After remaining in the negative zone throughout this year battered by a demand slowdown, India's exports are expected
to show improvement in 2016, propelled by government incentives.
But there is a word of caution. Improvement in outbound shipments would still depend largely on demand revival in
the global markets and movement in prices of crude oil. The main markets of Indian exporters - the US and Europe - are
not yet showing strong signs of demand revival. The two regions account for over 30 per cent of the shipments.
Multilateral body World Trade Organization too has lowered the trade growth projections for 2016 to 3.9 per cent
from 4 per cent earlier. "I (would) like to have exports improving (in 2016)," Commerce and Industry Minister Nirmala
Sitharaman said when asked about her expectation on exports performance next year.
The minister's expectation is based on the incentives announced by the government this year. It has extended the 3
per cent interest subsidy for exporters besides giving benefits under merchandise Export India Scheme (MEIS) and enhanced duty drawback rates. "We have given support under MEIS India Scheme. We have also announced the interest
subvention scheme. So there should be an improvement on our exports soon," she said recently.
The government has also taken steps to improve ease of doing business for traders. It has reduced the number of
mandatory documents required for import and export of goods to three in each case from 10 earlier.
The Federation of Indian Export Organisations (FIEO) has said meanwhile that improvement in export performance
will depend on the crude oil and commodity prices. "Further softening of prices of crude oil and commodity may dampen
the export's growth further. Since global situation will take some time to improve, a 15 per cent increase in exports may
take us to $305 billion in 2016," said S C Ralhan, president of industry body FIEO.
Last year, exports had stood at $323.2 billion.
"In the 11 months of 2015, exports have reached $243.68 billion. Going by the current trend, we may end with exports
of $265 billion this year, reflecting a decline of 21.9 per cent as compared to 2014," Mr Ralhan said.
As for the growth in shipments during the coming year, he said the support extended by the government will help in
pushing up exports. Since December last year, the country's merchandise shipments have been in the negative zone. In
November, the decline was the steepest in several months. Exports dipped 24.4 per cent in November.
India's exports in last four financial years (April-March) have been hovering around $300 billion.
Falling short of the $325 billion target, India's exports in 2013-14 stood at $312.35 billion. The figures for 2012-13
were $300.4 billion, after $307 billion in 2011-12. Further to boost exports from special economic zones (SEZs), the
Commerce Ministry is holding stakeholders consultation to revive these zones.
SEZs contribute about 23 per cent of the country's total exports. They are facing problems after imposition of minimum alternative tax and dividend distribution tax.
The Commerce Ministry has sought roll back of reduction in these taxes from the Finance Ministry.
Barring pharmaceuticals and textiles, all the top four exporting sectors - engineering, petroleum, gems & jewellery
and textiles - are registering negative growth. In November 2015, exports of engineering, the petroleum and gems &
jewellery industries dipped by 28.57 per cent, 54 per cent and 21.5 per cent, respectively.
Pharmaceuticals and textiles exports grew by a meager 1 per cent and 3 per cent, respectively, in November this year.
On the other hand, declining gold imports and crude oil prices are helping in keeping the country's trade deficit in
check. During April-November this fiscal year, trade deficit aggregated at $87.5 billion as compared to $102.5 billion in
the same period last year.
As almost all the major currencies depreciated in 2015 against dollar, rupee decline has not much impacted the country's exports growth. The rupee fell in 2015 for the fifth straight year.
Source: PTI
December, 2015
MONTHLY
ECONOMIC
BULLETIN
38
>> TRADE NEWS
First time Japan will import Maruti Suzuki
cars from India
Japanese premier Shinzo Abe and Prime Minister Narendra Modi addressed the India-Japan Business Leaders Forum in
New Delhi.
Shinzo Abe arrived here on Friday on a three-day visit for annual summit talks with Prime Minister Narendra Modi.
During this visit the two sides are expected to
seal a Rs 98,000 crore deal for India’s first bullet train track and deliberate on a civil nuclear
pact.
Highlights of Japanese PM Shinzo Abe’s
speech:
* PM Narendra Modi’s economic policies are
like Shinkansen-High speed, safe and reliable
and carrying many people along
* A strong India is good for Japan and a
strong Japan is good for India
Highlights of PM Narendra Modi’s speech:
* Growth in IIP numbers reflects that India is
a country of opportunities
* First time Japan will import Maruti Suzuki
cars from India
* Today there is a Make in India movement in Japan with a $12 billion fund
* Not just high speed train, India wants high speed growth
* India is a land of possibilities with excellent human resources and a technological base and Japan has been there at
every turning point.
On economic front, Japanese Prime Minister Shinzo Abe said the two countries would like to work closely as it will
benefit both. Strong Japan is good for India and strong India is good for Japan… I hope economic ties between our two
countries will be ever closer,” Abe said.
Further, Modi said “Japan Plus” initiative that began last year in India as a policy experiment, is also doing well. India
wants not only high speed train, but also high speed growth, Modi said, adding that Indo-Japan business forum has discussed various opportunities between the countries. Recommendations given by the forum will be actively considered by
the Indian government, he said.
Economies of both the countries are showing signs of improvement amidst global slowdown, he said, adding, “Japan
economic analysis which came yesterday was very encouraging. Even India’s manufacturing number was 10.6 per cent
and 9.8 per cent IIP indicates growth.”
Modi said there is a need to move forward, taking advantage of the strength of human resources and technological
base. He added that the strategy adopted to improve India’s position in the Ease of Doing Business rankings, policy decisions and their effective implementation are now showing results.
Bilateral trade between the two countries stood at USD 15.51 billion in 2014-15 as against USD 16.29 billion in 201314. India received USD 19.16 billion FDI from Japan during April 2000 and September 2015.
Speaking after the meeting, Maruti Suzuki chairman R C Bhargava said the company will export ‘Baleno’ at the moment. When asked about the target, Bhargava said “we expect to export 20,000 to 30,000 in a year.”
December, 2015
MONTHLY
ECONOMIC
BULLETIN
39
>> TRADE NEWS
However, he added that exporting automobiles to Japan is not an easy task.Apollo Tyres chairman Onkar S Kanwar
said Japanese companies have committed investment in infrastructure sectors including power.
Highlighting the technological prowess of Japan, CII past president Ajay Sriram said there is a lot to learn and there is
a high mutual access between both the countries which will be beneficial for investment in India.
Other business leaders who attended the meeting included Bharti Enterprises chairman Sunil Bharti Mittal, ICICI Bank
MD Chanda Kochhar, Essar Group chairman Shashi Ruia, CII president Sumit Mazumder, Ficci president Jyotsana Suri
and Assocham president Sunil Kanoria.
Source: Financial Express
Cotton exports may grow 18% in 2015-16:
Government
The country's cotton shipments are expected to rise by about 18 percent in 2015-16 as against the previous fiscal, the
government said.
Citing estimates of the Cotton Advisory Board, Union
Textile Minister Santosh Gangwar said in a written reply in
the Lok Sabha: "The exports from India for 2015-16 are expected to increase by about 18 percent compared with the
previous year." The cotton year is from October to September.
The minister added that during the cotton year of 201415 (from October 1, 2014 to September 30, 2015), 57.72
lakh bales of raw cotton were exported as against 116.96
lakh bales during the cotton year of 2013-14. "The decline
in exports was due to substantial reduction in import by
China," Gangwar said.
Source: PTI
December, 2015
MONTHLY
ECONOMIC
BULLETIN
40
>> SECTORAL NEWS
FDI gets reform push in 2015; Govt expects
45% jump in 2016
Bullish on a series of reforms unveiled in the year passing-by, the government expects FDI inflows to rise by 40-45 per
cent in the New Year while further steps could be on anvil to attract foreign capital.
As per the latest available figure for 2015, FDI inflows during January-September period has increased by 18 per cent
to $26.51 billion. In the entire 2014, India had received FDI worth $28.78 billion as compared to $22 billion in 2013.
“FDI will grow by 40-45 per cent in 2016 despite the global slowdown. The government has taken vast number of policy measures this year,” Secretary in the Department of Industrial Policy and Promotion (DIPP) Amitabh Kant said.
The sectors that have attracted maximum FDI this year include services, computer hardware and software, telecom,
automobile and trading. Singapore is the top source for FDI coming into India, followed by Mauritius, UK, Japan, the
Netherlands and the US.
In a bid to streamline the FDI structure, the government this year introduced a composite foreign investment cap by
clubbing all forms of overseas investments to define sectoral limits. It has also relaxed e-commerce norms for foreign
companies having manufacturing facilities in India.
Kant said that the steps announced to improve ease of doing business would help India in becoming the most easiest
place for investors.
He said that the government is planning to put 98 per cent of sectors, which are open to foreign investments, under
the automatic route so that businessmen won’t need to visit the Finance Ministry or ‘Udyog Bhavan’ for any approval.
India’s ranking in the World Bank’s report on ease of doing business improved to 130th position this year from 142nd
last year out of 189 countries. The Prime Minister has set a target to bring this rank to top-50.
For the first time, states have also been ranked in terms of ease of doing business. Gujarat topped the World Bankcompiled ranking of Indian states for bringing in reforms to improve ‘ease of doing business’.
Foreign Direct Investment is important for the country as it needs around $1 trillion worth investments between 201213 and 2016-17, the 12th Five Year Plan period, to fund infrastructure growth covering sectors such as ports, airports
and highways.
Experts said there are huge expectations for a significant jump in FDI flows in 2016, but a lot would depend on the
‘Make in India’ programme.
“FDI should improve next year but much will depend on the performance of ‘Make in India’ programme in terms of
more reform measures and steps to further improve ease of doing business in the country,” said Krishan Malhotra of corporate law firm Shardul Amarchand and Mangaldas.
As part of the reform measures, the government has hiked foreign investment caps, opened new sectors and relaxed
norms for several segments. It permitted portfolio investors to buy up to 74 per cent in local private banks, with full fungibility, while palm, coffee and rubber plantations have been opened up for the first time.
FDI norms have also been eased in real estate, defence, civil aviation and news broadcasting sectors.
Sourcing rules for single brand retailers, particularly for high-tech, have been eased by allowing them to sell online
without specific permissions. But there is no change in 51 per cent limit for multi-brand retailers like Wal-Mart.
To improve investment climate, the DIPP has taken a series of steps that include having a time line for clearance of
applications, de-licensing the manufacturing of many defence products and introduction of e-Biz project for single window clearance.
Source: PTI
December, 2015
MONTHLY
ECONOMIC
BULLETIN
41
>> SECTORAL NEWS
Project to redevelop 400 railway stations
will be largest PPP in world
India's ambitious project to redevelop 400 railway stations through private sector investment will be the largest publicprivate-partnership (PPP) project in the world, Railway minister Suresh Prabhu said.
However, Prabhu did not share the total project cost but he
said no project of such proportion has been ever undertaken in
the world.
As per rough estimates, there would be an average redevelopment cost of Rs 100 crore per station.
As a part of the station redevelopment project, railways will
have online bidding of stations and private players would be
allowed to earn revenue through commercially exploiting the
real estate.
Speaking at the CII PPP summit, Prabhu said no railway in
the world can survive on just ticketing revenues. "In long term we should target around 30-40% revenue from non-core
business like commercial exploitation of our assets, Prabhu said.
He also said railways will soon have a sectoral regulator.
Source: Economic Times
December, 2015
MONTHLY
ECONOMIC
BULLETIN
42
>> SECTORAL NEWS
Hiring in India up by 53% in November:
Monster survey
Hiring activity in India increased by 53 per cent in November from a year ago, a sign of growing positive business sentiment, according to a survey by job search website Monster.com.
Among sectors, retail charted the steepest annual growth in hiring, as per the Monster Employment Index India.
"This is a reflection of increased positive business sentiment and faith on business potential from mid- to long-term
perspective," said Sanjay Modi, managing director of Monster.com (India, Middle East, South East Asia and Hong Kong).
"Emerging sectors such as ecommerce (along with retail) have dominated the market with the right kind of enthusiasm."
According to the survey, the IT sector continued to be among the top recruiters, taking second spot. The ecommerce
sector showed continual growth in online recruitment activity, month-on-month, until October 2015, but it slowed in November, when it was down 1 per cent from a year ago.
The healthcare segment saw a 72 per cent growth in demand for professionals year-on-year—the steepest among all
job roles.
At 61 per cent, Baroda led all monitored cities in longterm growth in hiring in November despite moderation in the
pace of growth. Ahmedabad (up 60 per cent) was on the second rung.
Once again, the year-on-year growth rate in hiring diminished in all prime metros. Mumbai, with 58 per cent growth in
hiring from a year ago, was among the top employment generating cities.
According to Monster.com, the annual growth momentum slowed the most in Delhi-NCR (up 24 per cent) and the
least in Hyderabad (up 52 per cent) between October and November 2015. Delhi-NCR also registered the most restrained
year-on-year growth among all monitored cities.
Source: Economic Times
December, 2015
MONTHLY
ECONOMIC
BULLETIN
43
>> SECTORAL NEWS
Govt sets up mechanism to support
start-ups
A mechanism known as SETU to support all aspects of start-up businesses and other self- employment activities has
been set up by the government, Lok Sabha was informed.
Union Minister for Skill Development Rajiv Pratap Rudy, during the ongoing Winter Session of the parliament said the
National Policy for Skill Development and Entrepreneurs envisaged fostering entrepreneurship and grassroots innovation
by providing support in terms of fiscal incentives, creation of grass root technology innovation hubs, legal support and
market linkages.
“The government has established a mechanism to be known as SETU (Self-Employment and Talent Utilisation) under
NITI Aayog to support all aspects of start-up businesses and other self employment activities, particularly in technology—driven areas,” he said during Question Hour.
Mr. Rudy said the government has also launched in August 2015, India Aspiration Fund (IAF) under the Small Industries Development Bank of India with a capital of Rs. 2,000 crore to give a boost to start-up ecosystem in the country.
“The objective of the IAF is to catalyse tens of thousands of crores of equity investment into start-ups and MSMEs creating employment of lakhs of persons, mostly educated youth, over the next four to five years,” he said.
The Minister said the Department of Electronics and Information Technology is implementing a scheme entitled
‘Technology Incubation and Development of Entrepreneurs’ (TIDE) under which 147 start-ups have been supported at 25
TIDE centres established in premier institutes like IITs, NITs, IIMs etc.
Mr. Rudy said Prime Minister Narendra Modi in his Independence Day address had announced a ‘Start-Up India’ initiative in which each of the 1.25 lakh bank branches would provide funding support to at least one Dalit or Adivasi entrepreneur and at least one woman entrepreneur.
Source: PTI
December, 2015
MONTHLY
ECONOMIC
BULLETIN
44
>> SECTORAL NEWS
Internet usage surged 49% in 2015 so far:
Ravi Shankar Prasad
Telecom minister Ravi Shankar Prasad has that said internet usage during the current year registered a strong 49%
growth, and the number of rural mobile internet
users is slated to hit 87 million by the month-end.
According to him, the phenomenal growth in
internet use in rural India is surprising in the
backdrop of fact that the eight metros together
showed a growth of 31% during the year. He was
speaking at a telecom workshop in Delhi Monday.
Prasad urged administrators across levels to
collectively promote "inclusiveness through digitization from major cities to muffasil towns" in
step with the Narendra Modi government's Digital India goals.
He said the Centre's initiative of setting up
BPOs in small towns was a major step in this direction and states needed to take advantage.
"The private sector has responded well with 1,25,000 seats being requested against expression of interest (EoIs) floated
for 48,000 seats only."
As many as 1,25,000 rural post offices, he said, were being given the role of CSCs or `common service centres' to get
seamless service to rural population. The post offices would also be engaged in payment banking & e-commerce activity.
Source: The Economic Times
December, 2015
MONTHLY
ECONOMIC
BULLETIN
45
>> NEWS ROUND UP
Narendra Modi govt to push for passage
of GST, real estate bills next week
The government has proposed heavy business in both Houses of Parliament next week, listing key legislation like GST
and Real Estate bills for consideration and passage.
It plans to pass six bills in the Lok Sabha and seven in the Rajya Sabha next week. Of these, two bills are already listed
in the Lower House and three in the Upper House.
The government’s main focus will be on the
passage of the key GST Bill, officially known as
The Constitution (122nd Amendment) Bill, 2014,
as passed by the Lok Sabha and as reported by a
Select Committee of Rajya Sabha.
The Centre plans to roll out the Goods and
Services Tax (GST) from April next year. Other
important bills include the Prevention of Corruption (Amendment) Bill, 2013, which was discussed in Rajya Sabha on Friday.
The Business Advisory Committee (BAC) of
Rajya Sabha has allotted a time of four hours for
the GST Bill and two hours for the Real Estate
Bill.
The Select Committees of the House have already submitted their reports on these two bills which are pending for further consideration and passing by the Rajya
Sabha.
The legislative agenda of Lok Sabha includes consideration and passage of the High Court and Supreme Court Judges
(Salary and Conditions of Service) Amendment Bill 2015, the Arbitration and Conciliation (Amendment) Bill, 2015, The
Indian Trusts (Amendment) Bill 2015, the Payment of Bonus (Amendment) Bill 2015, and the Industries (Regulation and
Development) Amendment Bill 2015.
The government also plans to take up the discussion and voting on Supplementary Demands for Grants (General) for
2015-16 and Demands for Excess Grants (General) for 2012-13 in the Lok Sabha in the third week of the winter session,
sources in the Parliamentary Affairs Ministry said.
In the Rajya Sabha, it plans to take up the Prevention of Corruption (Amendment) Bill, 2013, on which discussion has
already begun, the Negotiable Instruments (Amendment) Bill 2015 and the Whistle Blower Protection (Amendment) Bill
2015, as passed by Lok Sabha.
While the first bill was taken up in Rajya Sabha on Friday on which Congress, Samajwadi Party and some others advocated caution, the Whistle Blower Bill was listed on Friday but could not be taken up.
Source: PTI
December, 2015
MONTHLY
ECONOMIC
BULLETIN
46
>> NEWS ROUND UP
IIP growth a morale booster for economy:
India Inc
Cheering the spurt in industrial output which grew by 9.8 per cent in October, India Inc on Friday termed it as a booster
for the economy, hoping that the strong growth trend would continue on the back of reforms.
“The industrial growth on the back of an impressive double digit expansion in manufacturing should no doubt be considered a morale booster for the economy,” Assocham President Sunil Kanoria said.
“We look forward to strong industrial growth recovery, with the sector registering double digit growth in the coming
times,” PHD Chamber Secretary General Saurabh Sanyal said.
In a big jump, the October industrial production grew 9.8 per cent on an annual basis, riding on the back of a robust
growth in consumer products and capital goods during the festive season. IIP growth for September has been revised upwards to 3.84 per cent while it was -2.7 per cent in October 2014.
The manufacturing sector, a key indicator of economic activity, grew 10.6 per cent year-on-year in October. Electricity
generation expanded 9 per cent and the mining sector was up 4.7 per cent.
“Though manufacturing registered a high growth in October, the low base in major sectors like capital goods and consumer durables has contributed significantly to this high growth. “Nonetheless, the outlook for growth remains positive
and can be strengthened in coming months if pace of reforms continues,” Ficci Secretary General A Didar Singh said.
However, Singh pointed out that the global slowdown continues to impact trade and affect India’s exports adversely
thus impacting manufacturing growth especially when the domestic demand is also sluggish. Hailing the October industrial production growth, engineering exporters’ body EEPC India said a similar feat is desperately required in the country’s export performance.
India’s exports remained in the negative territory for the 11th month in a row by registering a dip of 17.53 per cent in
October to USD 21.35 billion due to a demand slowdown, while trade deficit showed an improvement.
The growth in the consumer durables segment was a whopping 42.2 per cent in October over the same month last
year. While, the consumer goods category saw a growth of 18.4 per cent and consumer non-durables rose by 4.7 per
cent.
The data further showed that capital goods segment grew 16.1 per cent while the expansion in basic goods came in at
4.1 per cent.
Source: PTI
December, 2015
MONTHLY
ECONOMIC
BULLETIN
47
>> NEWS ROUND UP
At 7.3%, India to remain fastest growing
economy in 2016: United Nations
India's economy is projected to grow by 7.3 per cent next year and will continue to be the fastest growing economy in the
world in 2016 and 2017, according to a UN report released today.
The United Nations World Economic Situation and Prospects (WESP) 2016 report said that India will record a 7.3 per
cent economic growth in 2016 and 7.5 per cent in 2017.
While the growth is only a marginal improvement from the 7.2 per cent India achieved in
2014-15, the country will remain the fastest
growing economy in the world in 2016 and 2017,
the report said.
India's rival in South Asia, China will see a
slowdown in growth in 2016 to 6.4 per cent from
6.8 per cent it had achieved in 2015.
The growth of the Chinese economy will not
improve in 2017, when it will grow by just 6.5 per
cent, a percentage point slower than India, which
will be the fastest growing economy in the world.
The report further said that the world economy, which stumbled in 2015, will see only a
modest improvement in 2016/17 as a number of
cyclical and structural headwinds persist.
Global growth is estimated at a mere 2.4 per cent in 2015, marking a downward revision by 0.4 percentage points
from the UN forecasts presented six months ago.
In 2016, the world economy is projected to grow by 2.9 per cent and by 3.2 per cent in 2017, supported by generally
less restrictive fiscal and still accommodative monetary policy stances worldwide, it said.
The report identifies some major headwinds for the global economy including persistent macroeconomic uncertainties, low commodity prices and diminished trade flows, rising volatility in exchange rates and capital flows, stagnant investment and productivity growth and continued disconnect between finance and real sector activities.
It further said that the anticipated timing and pace of normalisation of the US monetary policy stance is expected to
reduce policy uncertainties and support a moderate pickup in investments and growth, while preventing excessive
volatility in financial markets and ensuring an orderly adjustment in asset prices.
Given the much-anticipated slowdown in China and persistently weak economic performances in other large emerging
economies, notably Russia and Brazil, the pivot of global growth is partially shifting again towards developed economies,
it said.
"Stronger and more coordinated policy efforts are needed to ensure robust, inclusive and sustainable economic
growth, which will be a key determinant for achieving the 2030 Sustainable Development Goals," Assistant SecretaryGeneral of the United Nations Department of Economic and Social Affairs Lenni Montiel said.
Growth in developed economies will gain some momentum in 2016, surpassing the 2 per cent mark for the first time
since 2010, the report said.
December, 2015
MONTHLY
ECONOMIC
BULLETIN
48
>> NEWS ROUND UP
The US is projected to grow by 2.6 per cent next year and 2.8 per cent in 2017, a marginal growth from the 2.4 per
cent growth clocked in 2015.
Economic growth in developing and transition economies is expected to bottom out and gradually recover, but the external environment will continue to be challenging and growth will remain well below its potential.
The report indicates that the challenges for policymakers around the globe are likely to intensify in the short run in
view of the weaknesses in the world economy and difficult trade-offs in the areas of monetary, fiscal and exchange rate
policies.
The report underscores that monetary authorities would need to make concerted efforts to reduce uncertainty and financial volatility, striking a delicate balance between their economic growth and financial stability objectives.
"The expected timing and pace of normalisation of the US monetary policy will help reduce some policy uncertainties
and provide impetus to revive investment," Hamid Rashid, Chief of the UN's Global Economic Monitoring Unit added.
Given the massive build-up of private debt in many emerging economies, policymakers would need to fine-tune their
policy mix - more active fiscal policies, macro- prudential instruments, targeted labour market policies, among others amid volatile global financial conditions.
The report also warned that the broad slowdown in economic growth in many developing economies could restrain
progress in poverty reduction in the near term and derail long-term sustainable development.
To avert such a scenario and stimulate inclusive growth, more effective policy coordination - at the national, regional
and global level - is needed.
Further progress in poverty reduction could come from policy interventions that also address inequality, such as investment in education, health and infrastructure, and stronger social safety nets.
Source: The Economic Times
December, 2015
MONTHLY
ECONOMIC
BULLETIN
49
>> NEWS ROUND UP
Modi, Abe sign $35-bn pact
Christmas arrived early in India, with Japanese Prime Minister Shinzo Abe on Saturday presenting about $35 billion to
take the strategic partnership between the two
nations to a new height.
Abe said his country's ties with India had witnessed the dawn of a new era from politics to
economy as well as defence ties, as India and
Japan inked 16 agreements.
Japan committed to provide a "highly concessional" loan of $12-15 billion at 0.1 per cent interest to help India build its first Shinkansen, or
high-speed train, from Mumbai to Ahmedabad. It
put in place a 'Make in India' fund of $12 billion
for Japanese business persons keen to invest in
India. The two sides also signed a broad agreement to cooperate in the civil nuclear energy
sector.
Source: Business Standard
December, 2015
MONTHLY
ECONOMIC
BULLETIN
>> NEWS ROUND-UP
DISCLAIMER
This newsletter is compilation
of news articles from various
business-e-newspapers and in
no way is an endorsement
or reflection of
Ministry of External Affairs
views.
Designed & Developed by
IANS Publishing