Economy Probe: June 2013
The index for eight core industries grew 2.4% during April-May 2013-14, as compared to growth rate of 6.5% during the corresponding period in 2012-13
- GDP growth (advance estimates) is at 5% in FY13 as compared to 6.2% in FY12 (first revised estimates).
- Foodgrains (rice & wheat) stocks held by FCI and state agencies were 77.7MT as on June 1, 2013.
- IIP growth declined 1.6% in May 2013 compared to 2.5% in May 2012.
- During April-May 2013-14, IIP growth was 0.1% compared to 0.6% in April-May 2012-13.
- Eight core infrastructure industries registered 2.3% growth in May 2013 against 7.2% in May 2012.
- During April-May 2013-14, eight core infrastructure industries grew 2.4% compared to 6.5% in April-May 2012-13.
- Foreign currency assets declined to $255.4 billion in end-June 2013 from $257.4 billion at end-June 2012.
- The rupee depreciated against US dollar, Pound sterling, Japanese yen and Euro in June 2013 over May 2013.
- WPI inflation for all commodities for June 2013 rose to 4.86% from 4.7% in the previous month.
- Gross tax revenue for FY13-14 (April-May) declined 7.9% to Rs. 777.67 billion over 2012-13.
- Fiscal deficit and revenue deficit was 33.3% and 38.1% during 2013-14 (April–May).
According to Central Statistics Office (CSO), the growth in gross domestic product (GDP) at factor cost at constant (2004-05 prices) is estimated at 5% in 2012-13 with agriculture, industry and services registering growth rates of 1.9%, 2.1% and 7.1%, respectively. The growth in GDP is placed at 4.8% in Q4 FY12-13.
BSE Sensex: Bell weather index S&P BSE SENSEX closed at 19,395.81 points on June 28, 2013. This represents a decrease of 1.84% in the index value in June 2013. The Sensex hit a high of 19,860.19 on June 03, 2013 and a low of 18,467.16 on June 24, 2013. The average intra-day volatility during the month was 1.28%.
RBI Monetary Policy:
The Reserve Bank of India (RBI) in its first quarter review of monetary policy 2013-14 kept both the repo rate and cash reserve ratio (CRR) unchanged. The repo rate—the rate at which the RBI lends money to banks—remains unchanged at 7.25%.
The reverse repo rate—the rate at which RBI borrows money from banks—stands at 6.25%. The bank rate is at 10.25%. The cash reserve ratio (CRR) is retained at 4%.
Rainfall: The cumulative rainfall received for the country from 1stJune to 18th July 2013 has been 16% above normal.
Foodgrains: As per the 4th advance estimates by Ministry of Agriculture, production of food grains is estimated at 255.36 million tonne during 2012-13 compared to 259.29 MT (final estimates) in 2011-12.
Procurement of rice as on 1 May 2013 increased 2.8% to 31.06MT in Kharif Marketing Season from 30.2MT last year in the corresponding period. Wheat procurement during Rabi Marketing Season 2013-14 is 20.76MT as compared to 20.83MT during the corresponding period last year.
Stocks of food-grains (rice and wheat) held by FCI declined 5.6% to 77.7MT as on June 1, 2013, from 82.31MT as on June 1, 2012.
During May 2013, the growth in IIP declined 1.6% as compared to 2.5% during the corresponding period of previous year. In electricity sector, the growth rate was 6.2% in May 2013, while in the mining sector and manufacturing sector, the growth rate was negative. The growth rate in intermediate goods and consumer non-durables sectors were 1.5% and 1.7%, respectively. In basic goods, capital goods, consumer goods sector, the growth rate was negative during May 2013.
Eight core industries: The index for eight core industries grew 2.4% during April-May 2013-14, as compared to growth rate of 6.5% during the corresponding period in 2012-13.
The eight core industries comprises crude oil, petroleum refinery products, coal, electricity, cement, steel, natural gas and fertilizers with a weight of 37.9% in the IIP.
During May 2013, the growth of the core sector industries was 2.3% compared to 7.2% during May 2012. During May 2013, the growth in electricity and refinery products was 6.2% and 5%, respectively followed by steel (4.1%) and cement (3%). The coal, crude oil, natural gas and fertilisers sectors have registered negative growth during May 2013.
Broad money: During 2013-14 (up to June 28, 2013), broad money stood at 4.3% compared to 5.3% during the corresponding period of the last year. The year-on-year growth, as on June 28, 2013 was 12.8% against 13.7% in the previous year.
Reserve money: In FY13-14 (up to June 28, 2013), reserve money rose 3.4% to 2.6% in the corresponding period of the previous year. The year-on-year variation revealed an increase of 7% (up to June 28, 2013) compared to 5.6% on the corresponding date of the previous year.
An important source of reserve money, namely, net foreign exchange assets (NFA) of the RBI, showed an increase of 4% y-o-y, as compared to an increase of 15.7% on the corresponding date of the last year.
Bank credit: During FY13-14 (up to June 28, 2013), bank credit increased 2.9% as compared to 3.3% during the corresponding period last year. The y-o-y variation revealed an increase of 13.7% as compared to 16.5% during the same period in the previous year.
Bank deposits: The aggregate deposits with scheduled commercial banks increased 5% (up to June 28, 2013), as compared to 5.5% during the corresponding period last year. The y-o-y variation revealed an increase of 13.8% as compared to 13.5% in the previous year.
Interest rates: As on June 28, 2013, bank rate was 8.25% per annum as compared to 9% per annum on the corresponding date of last year. Call money rates (weighted average) was 7.19% as compared with 8.13% on the corresponding date of last year.
Non-food credit: During this period, non-food credit increased by 2.7% as compared to a deterioration of 0.6% during the corresponding period of last year. The y-o-y variation revealed an increase of 14% as compared to 16.1% during the same period in the previous year.
Exports and imports (in US$ terms) decreased by 4.6% and 0.4% respectively during June 2013 over June 2012. Cumulative growth in exports and imports was 1.4% down and 6% respectively during the first quarter of 2013-14.
Foreign trade: Exports decreased by 4.6% and imports decreased by 0.4% in US$ terms during June 2013 over June 2012. During this period, oil imports increased by 13.7% and non-oil imports declined by 6.7% respectively.
Exchange rate: The rupee depreciated by 5.8% against US dollar, 7% against Pound sterling, 9.1% against Japanese yen and 7.4% against the Euro in the month of June 2013 over May 2013.
Wholesale Price Index (WPI 2004-05=100): The headline WPI inflation increased to 4.86% in June 2013 as against 4.7% last month.
Inflation for primary articles increased to 8.14% in June 2013 from 6.65% in the last month mainly on account of cereals, vegetables, egg, fish-inland, poultry chicken and spices.
Inflation for Fuel & power declined to 7.12% in June 2013 from 7.32% in May 2013. Inflation for Manufactured Products declined to 2.75% in June 2013 from 3.11% in May 2013.
Food inflation: Food inflation increased to 8.6% in June 2013 from 7.64% in the last month.
Consumer Price Indices: The all India CPI inflation (combined) increased to 9.87% in June 2013 from 9.31% in May 2013 mainly on account of increase in inflation of cereals, milk, vegetables and fruits.
India Infoline Research Team / 08:44, Jun 26, 2015
IIFL is hosting 10 companies at a Management Roadshow in Mumbai today. The opening is a subdued start. US market saw minor losses with Dow, S&P 500 and Nasdaq closing marginally lower.