India's industrial output shrinks 3.5% in March
In what is yet another shocking economic data, India's industrial production growth decelerated sharply in March, with the output shrinking sharply as against expectations of a moderate expansion, the Government data revealed on Friday. The combined output of factories, mines and power utilities, as measured by the index of industrial production (IIP), contracted by 3.5% in March as against a 4.1% growth in February, the Commerce Ministry said on Friday. Industrial output in the financial year ended March 31, 2012 grew by 2.8% compared to an expansion of 8.2% in the fiscal year ended March 2011. The IIP for the month of March 2012 stands at 186.4 as against 193.1 in March 2011. It was at 174.9 in February.
IIP Break-up for March 2012 - Growth in (%)
| Sector |
March 2012 |
February 2012 |
March 2011 |
| Manufacturing |
-4.4% |
2.7% |
11.0% |
| Mining |
-1.3% |
3.9% |
0.4% |
| Electricity |
2.7% |
8.0% |
7.2% |
| Overall |
-3.5% |
4.1% |
9.4% |
Use-based Classification - Corporate Investments
| Sector |
March 2012 |
February 2012 |
March 2011 |
| Capital Goods |
-21.3% |
10.2% |
14.5% |
| Basic Goods |
1.1 |
7.7% |
6.4% |
| Intermediate Goods |
-2.1 |
-0.2% |
3.0% |
Use-based Classification - Corporate Investments
| Sector |
March 2012 |
February 2012 |
March 2011 |
| Consumer Non-durables |
1.0% |
4.5% |
11.9% |
| Consumer Durables |
0.2% |
-6.1% |
14.9% |
| Consumer Goods |
0.7% |
0.3% |
13.2% |
Indices for March 2012 are Quick Estimates.
In terms of industries, 10 out of the 22 industry groups in the manufacturing sector showed a positive growth during March 2012 compared to the corresponding month of the previous year. The industry group ‘Publishing, Printing & Reproduction of Recorded Media’ showed the highest growth of 52.8%, followed by 17.4% in ‘Radio, TV & Communication Equipment & Apparatus’ and 13.9% in ‘Rubber & Plastic Products’. On the other hand, the industry group ‘Wearing Apparel; Dressing & Dyeing of Fur’ showed a negative growth of 54.5% followed by 42.9% in ‘Electric Machinery & Apparatus’ and 21.9% in ‘Medical, Precision & Optical Instruments, Watches & Clocks’.
RBI announces fresh measures to lift rupee
The Bank of India'> Reserve Bank of India'> Reserve Bank of India (RBI) said on Thursday that it has decided to fix the intra-day open position / daylight limit of the Authorised Dealers (AD) at five times the Net Overnight Open Position Limit available to them or the existing Intra-day open position limit as approved by the central bank, whichever is higher, for positions involving Rupee as one of the currencies. It may be recalled that in a circular dated Dec. 15, 2011, the RBI'> RBI had stated that intra-day open position / daylight limit should not exceed the erstwhile Net Overnight Open Position Limit available. It was further clarified on Dec. 21, 2011 that restrictions placed on Intraday positions limits is only applicable for positions involving Rupee as one of the currencies. In a separate move on Thursday, the RBI said that 50% of the balances in the EEFC accounts should be converted forthwith into rupee balances and credited to the rupee accounts as per the directions of the account holder. This process may be completed within a fortnight from the date of the circular, the RBI said in a circular. Also, in respect of all future forex earnings, an exchange earner is eligible to retain 50% (as against the previous limit of 100%) in non-interest bearing EEFC accounts, the RBI said today. The balance 50% shall be surrendered for conversion to rupee balances, it said. The facility of EEFC scheme is intended to enable exchange earners to save on conversion/transaction costs while undertaking forex transactions in future, the RBI said. This facility is not intended to enable exchange earners to maintain assets in foreign currency, as India is still not fully convertible on Capital Account, the central bank added.
Rupee falls for 6th straight week on poor IIP data
GAAR to be rolled out from next fiscal: FM
Finance Minister Pranab Mukherjee said in the parliament on Monday that the general anti-avoidance rule (GAAR) will be implemented from next financial year instead of this fiscal year. The earlier proposal was for an April 2012 rollout for GAAR. However, the Standing Committee has recommended that the GAAR be implemented, along with the Direct Tax Code (DTC), in April 2013. Mukherjee also told parliament that the burden of proving tax evasion under GAAR will lie with the authorities rather than with overseas investors. The stock market and the rupee recovered following the announcement by the Finance Minister. It may be recalled that FII flows turned negative in April after the Finance Minister proposed to introduce GAAR in Budget 2012-13. Mukherjee also told the Lok Sabha today that the proposed retrospective amendment of income tax laws will not override tax break treaties with countries such as Mauritius. Clarificatory provisions don't override tax treaties, Mukherjee said. He said that the threshold limit for TCS (tax collection at source) on cash purchase of jewellery will be raised to Rs. 5 lakh from the present Rs. 2 lakh. However, the Finance Minister said that the threshold limit for cash purchase on bullion will be retained at Rs. 2 lakh. Bullion will not include any coin or other article weighing 10 gm or less, he added, setting the tone for the debate on the crucial bill...Read More
GAAR to divert foreign investments from India to other emerging markets: ASSOCHAM
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