India's industrial output stalls in April

India's industrial production growth barely budged in April, as manufacturing growth came to a grinding halt while the output in Mining and Capital Goods sub-categories shrank, the Government data revealed on Tuesday. The combined output of Factories, Mines and Power Utilities, as measured by the index of industrial production (IIP), grew by a measly 0.1% in April as against a 5.3% growth in April last year, the Commerce Ministry said. The three main constituents of the IIP are Mining, Manufacturing and Electricity. The monthly growth rates of these three sectors for the month under review stood at (-)3.1%, 0.1% and 4.6% respectively.

As per "use-based" classification, there has been negative growth in Intermediate Goods (-1.4%) and Capital Goods (-16.3%) while growth has been achieved in Basic Goods (2.3%), Consumer Durables (5.0%) and Consumer Non-durables (5.4%). The Government has revised March's IIP reading, from a 3.5% decline to a 3.2% drop. Markets recovered in the wake of the IIP data for April amid increasing hope of further monetary easing by the Reserve Bank of India (RBI) at its June 18 policy meeting. Pressure is mounting on the RBI to try and give a boost to the sluggish Indian economy in the wake of the warning by ratings agency S&P and downbeat GDP data for the fourth quarter of FY12. The IIP for April 2012 stands at 166.4 as against 187 in March 2012. It was at 166.2 in April 2011...Read More

FY13 will be year of turnaround for India: FM

India's inflation rises in May...Will RBI ease policy on June 18

India's annual inflation increased in May from the previous month, but the rise was not too steep, raising expectations of some sort of monetary easing by the Reserve Bank of India (RBI) on June 18. Inflation, as measured by the wholesale price index (WPI), stood at 7.55% in May as against 7.23% in April, the Union Commerce & Industry Minister said. The annual inflation rate was at 9.56% during the corresponding month of the previous year. The official WPI for ‘All Commodities’ for May rose by 0.5% to 163.9 from 163.1 in the preceding month. Build up inflation in the financial year so far was 1.80% compared to a build up of 1.94% in the corresponding period of the previous year. The Government revised upwards the inflation rate for March, to 7.69% from a preliminary estimate of 6.89%. The WPI for March has been revised to 161.0 as compared to a provisional reading of 159.8.

WPI Break-up for May 2012:

Primary Articles: 10.88% vs 9.71% MoM

Food Group: 10.74% vs 10.49% MoM

Fuel & Power: 11.53% vs 11.03% MoM

Manufacturing Products: 5.02% vs 5.12% MoM

Source: Commerce & Industry Ministry.

The following data shows how the Indian markets behaved just before the release of the inflation data for May and immediately after the data was published by the Government...Read More

FM sees WPI inflation between 6.5% and 7.5%

Inflation can't be contained without sacrificing growth: RBI

Inflation in India could not be controlled without sacrificing economic growth, the Reserve Bank of India (RBI) Governor, Dr. D Subbarao, said on Thursday. The central bank should be sensitive to the problems of poor due to high inflation while deciding on key policy rates, he said while delivering the K Obayya Memorial lecture in Hyderabad. Dr. Subbarao said there was criticism from corporates on not reducing rates. The RBI's monetary tightening did not reduce inflation but instead chocked growth, according to some India Inc. captains. "I have regards and sympathy for corporates. But I need to be sensitive to the voices of hundreds of millions, whose voices are not heard in English newspapers," Dr. Subbarao said. There has been a growing clamour for aggressive monetary easing from various sections in the wake of a sharp deceleration in the domestic economic growth even as inflation continues to be elevated. However, the RBI has flagged concerns over widening fiscal deficit, suppressed inflation in petroleum products and rising consumer inflation in defending its approach towards rates.

More growth sacrifice in the offing from RBI: Nomura

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