News Analysis India

Tag: Economy

  • Inflation eases, but India’s economy not out of woods yet, feel experts

    By Express News Service

    NEW DELHI:  After staying above the Reserve Bank of India’s upper tolerance limit of 6% in May and June, retail inflation returned to the central bank’s comfort zone, registering 5.59% in July, thanks to cooling of food prices.

    According to data released by the Ministry of Statistics and Programme Implementation on Thursday, food inflation fell to 3.96% last month from a high of 5.15% in June. 

    “The decline in prices suggests that inflation was largely a function of supply chain disruptions. We believe that inflation may ease in the coming months assuming no rise in infections. However, high oil and commodity prices will keep the pressure on prices,” said Rumki Majumdar, economist, Deloitte India. 

    However, economists warn that service inflation could harden in the coming months.

    “As states ease (Covid-related) restrictions, there is likely to be a shift away from goods to services-led inflation, with firmer demand to also encourage producers to increasingly pass on higher input prices,” said Radhika Rao, economist at DBS Group Research.

    In its latest monetary policy review, RBI has kept the rates and stance unchanged and pledged to remain accommodative in the near future, while raising its inflation forecast to 5.7% for FY22 and 5.9% in the second quarter. 

    Meanwhile, industrial output for June rose 13.6% due to low base. Factory output measured by the Index of Industrial Production had contracted 16.6% in the year-ago period. 

    In June, the manufacturing sector saw output increase by 13%. Economists, however, point out that  production is yet to reach pre-Covid levels. 

    According to Aditi Nayar, Chief Economist, ICRA, it’s too early to term it a recovery.  

    “The production of consumer non-durables contracted by 4.5% in June, while capital goods and consumer durables continued to clock the worst performance relative to pre-pandemic levels,” she said. 

    3.96% The overall food inflation softened in July from 5.15% in June.

  • Economy likely contracted 12 per cent in Q1: Report

    This is despite the indicator rebounded to 88.7 in the week to June 13, up 3 per cent week-on-week after many states eased localised mobility restrictions from the last week of May.

  • Double whammy: Retail inflation jumps to four-month high, factory output contracts

    By PTI
    NEW DELHI: In a double whammy for the economy, retail inflation jumped to a four-month high of 5.52 per cent in March while industrial output contracted for the second month in a row, falling 3.6 per cent in February — reinforcing concerns over the pace of GDP recovery amid a fresh wave of coronavirus infections.

    Contraction in factory output, measured as the Index of Industrial Production or IIP, in February came on the back of a 0.9 per cent decline in January, according to government data released on Monday.

    With both mining and manufacturing contracting in February, the lack of momentum in industrial activity along with fresh COVID-19 lockdowns in certain states has cast its shadow on the likelihood of meaningful positive GDP growth in the fourth quarter of the 2020-21 fiscal.

    Policymakers had expected positive GDP growth in January-March to restrict the annual FY21 contraction to 7.5-8 per cent.

    Higher food inflation and spurt in fuel prices led the consumer price index (CPI) based retail inflation rising to 5.52 per cent in March, from 5.03 per cent in the previous month.

    Core inflation jumped to a 29-month high of 5.96 per cent in March 2021 (3.95 per cent in March 2020 and 5.88 per cent in February 2021).

    Though the contraction in IIP growth in February could be attributed to the base effect (February 2020 growth was at a 16-month high), there was a worrisome sequential drop in the manufacturing output.

    This comes as India reported yet another peak in daily COVID-19 cases with 1,68,912 new cases, the highest single-day rise since the pandemic began, with its total tally pushing past 1.35 crore.

    Some states such as Maharashtra and Delhi have already imposed partial lockdowns to curb its spread.

    Commenting on the macroeconomic data, India Ratings and Research said the uptick witnessed in September and October last year was more due to a combination of festive and pent-up demand and India is still far from witnessing a sustained recovery.

    “Growth pattern of primary and intermediate goods, two leading indicators of industrial production are pointing towards a lackluster industrial performance in short- to medium-run,” it said.

    “This also means government and RBI will have to continue to support the demand.” Inflation, it said, is expected to remain sticky, leading to the Reserve Bank of India (RBI) continuing with its accommodative policy stance throughout the 2021-22 fiscal.

    Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research, said any further increase in prices due to lockdown-driven potential supply constraints, continued depreciation of the rupee and continuing rise in commodity prices will remain a risk factor and may pose a policy challenge for RBI.

    “However, the inflation levels are unlikely to trigger any action from RBI at this point given the increased risks of fresh lockdowns from the second COVID wave and the rising growth concerns.”

    According to data released by the National Statistical Office (NSO), the rate of price rise in the food basket accelerated to 4.94 per cent in March, as against 3.87 per cent in the preceding month.

    Inflation in the ‘fuel and light’ category was 4.50 per cent during the month vis-a-vis 3.53 per cent in February.

    Earlier this month, the RBI had projected the retail inflation at 5 per cent in the January-March quarter of 2020-21 and 5.2 per cent in the first two-quarters of the current fiscal.

    After breaching the upper tolerance threshold of 6 per cent for six consecutive months (June-November 2020), CPI inflation fell in December 2020 and eased further in January 2021 to 4.1 per cent on the back of a sharp correction in vegetable prices and softening of cereal prices.

    However, it rebounded to 5 per cent in February, driven primarily by base effects. The Reserve Bank, which mainly factors in the retail inflation while arriving at its monetary policy, has been asked to keep CPI inflation at 4 per cent with a margin of 2 per cent on either side.

    The central bank retained the key lending rate (repo) in its last monetary policy citing inflationary concerns. The manufacturing sector — which constitutes 77.63 per cent of the IIP — declined by 3.7 per cent in February 2021, as per NSO data.

    The mining sector output declined by 5.5 per cent in February 2021. However, power generation grew marginally by 0.1 per cent in the month under review. The index had grown by 5.2 per cent in February 2020.

    The industrial production had plunged 18.7 per cent in March last year following the COVID-19 outbreak and remained in the negative zone till August 2020.

    With the resumption of economic activities, factory output posted a rise of 1 per cent in September. The IIP had grown by 4.5 per cent in October.

    In November 2020, the factory output fell 1.6 per cent, while it again entered the positive territory by growing 1.6 per cent in December 2020.

    The IIP data for January 2021 has been revised to 0.9 per cent contraction from a 1.6 per cent decline, as per the provisional data released in March 2021.

  • Steps taken by govt during pandemic yielding results; economy on ‘V-shaped’ recovery: MoS Finance Thakur

    By PTI
    NEW DELHI: Steps taken by the government to deal with COVID-19 pandemic are resulting in ‘V-shaped’ economic recovery and the country is likely to witness double digit growth in 2021-22, Minister of State for Finance Anurag Singh Thakur said on Thursday in the Lok Sabha.

    Replying to a discussion on the second and final batch of the supplementary demands for grants for 2020-21, he said that it was because of the efforts of the government that GST collection was over Rs 1 lakh crore for continuously five months.

    In the final batch of supplementary demands for grants for the current fiscal, the government sought Parliament’s nod for an additional expenditure of Rs 6.28 lakh crore of which the net outgo has been estimated at Rs 4.12 lakh crore.

    The rest will be matched by savings in different ministries and departments.

    The Lok Sabha later passed the supplementary demands for grants and the related appropriation bill by voice vote.

    In his reply the minister said the government focused on saving lives during the pandemic without bothering about the fiscal deficit.

    In the next fiscal, the Budget has earmarked Rs 35,000 crore for vaccination and more would be provided if needed, Thakur said.

    “The GST collection in the last five months was continuously more than Rs one lakh crore. Because of the steps taken by the government during Covid, V-shaped economic recovery is happening. And world over, agencies have stated India will witness double digit growth in 2021-22,” he added.

    The growth in the current year is estimated to contract by 8 per cent on account of the Covid-19 pandemic.

    It is estimated to rise to 11 per cent in 2021-22.

    The minister further said that the government has provided additional funds for programmes such as MNREGA, Pradhan Mantri Awas Yojana, capital expenditure for defence, and free food for 80 crore people for eight months.

    He also said that West Bengal farmers were deprived of Pradhan Mantri Kisan Samman Nidhi because of non-cooperation by the state.

    Participating in the discussion, Hanuman Beniwal (RLP) urged the government to reduce the prices of petrol and diesel as these were impacting the common man.

    He regretted that fuel prices are skyrocketing at a time when international crude oil rates have declined.

    Several House members highlighted the issue of spiralling prices of fuel and cooking gas.

    Saugata Roy (TMC), whose party is locked in a high-stake electoral battle in West Bengal, dubbed the government as the “most cruel” because the rising prices of LPG cylinder has hit women hard.

    He also said the central tax on fuel was exorbitant.

    Prior to Roy, Tapir Gao, BJP MP from Arunachal Pradesh, said that infrastructure development in his state was being done rapidly after 2014 and this was because “Modi hain to Mumkin hain” (It was possible because of Prime Minister Narendra Modi).

    To this Roy said, “Modi hain to Mummkin nagi hoga (West) Bengal mein” (BJP’s victory’ won’t be possible in West Bengal despite there is Modi).

    Jasbir Singh Gill (Congress) said the allocation of funds to Punjab was much less than its contribution through taxes.

  • Rural economy strengthened by the Godhan Nyaya Yojana

    The rural economy is being strengthened by the Godhan Nyaya Yojana launched by the Chhattisgarh government from 20 July 2020. Under this scheme, vermicompost is being made in Gothan by purchasing cow dung. 90 thousand 371 quintal cow dung of one crore 80 lakh 74 thousand rupees has been sold by 4 thousand 860 farmers in 207 Gothans of Kanker district. 24 farmers of the district have sold cow dung ranging from 50 thousand to one lakh 37 thousand rupees.

    Cow dung is also being purchased in the Gauthans of Koyilibeda development block of Kanker district. One thousand 452 quintal cow dung of 2 lakh 90 thousand rupees has been purchased from 50 farmers in Gauthan, Harnagarh (Donde) of this development block alone. In addition, 492 quintal vermi compost was prepared by self-help groups of the district. Out of this, 477 quintal vermi compost has been sold for Rs. 4 lakh 71 thousand. The women of the group got an additional income of Rs 62 thousand by selling diya made from cow dung.
    According to information received from the Agriculture Department, 4 thousand 600 quintal vermi compost has been prepared by the women self-help groups from the dung purchased, out of which 3 thousand 345 quintal vermi compost has been sold for Rs 32 lakh 35 thousand, which is in Bastar division. Is the highest in 51 thousand rupees by farmer Satish Yadav of Nagar Panchayat Charama, Aman Tiwari of Nagar Panchayat Bhanupratappur Rs 51 thousand 764, Thakur Ram Yadav of Babudbena Rs 52 thousand, Namita Gupta of Municipal Kanker Rs 52 thousand 276, Chhabila Khatik of Kanker 52 thousand 402, Jethmal Yadav of Markatola Rs 53 thousand 664, Anil Yadav of Bardatola Rs 55 thousand, Choavaram Yadav of Nagar Panchayat Charama Rs 56 thousand, Kavita Dey of Nagar Panchayat Bhanupratappur Rs 60 thousand, Bedam Ram of Salhetola Dung has been sold for 60 thousand 560 rupees, Nandlal Yadav of Marwari for 63 thousand 742 rupees and Radhika Yadav of Nagar Panchayat Charama up to 63 thousand 846 rupees.

  • Congress leader Rahul Gandhi slams Modi govt for ‘ruining’ country’s economy

    By ANI
    WAYANAD: Congress leader Rahul Gandhi on Thursday targeted Prime Minister Narendra Modi-led government for allegedly “ruining” the country’s economy.

    In a tweet, the Congress MP said: “Mr Modi’s governance is a lesson in how to ruin one of the world’s fastest-growing economies.”

    He has been actively criticising the ruling government over the issues of economy and employment in the country.

    During the COVID-19 lockdown, Gandhi had shared a report by Oxfam on the alleged increase in wealth of Indian billionaires saying, “This is what happens when the Prime Minister runs a country in the sole interest of 3-4 crony capitalists.”

    The Congress leader arrived in Kerala on Wednesday for the two-day visit ahead of the Assembly elections in the state scheduled for April-May.

    Earlier, he was on a three-day visit to the western belt in Tamil Nadu where he interacted with farmers, business people, weavers and the general public. During his visit, the politician said that the major economic policies of the present central government like Goods and Services Tax and demonetisation destroyed micro, small and medium enterprises (MSME) in the country.

  • Determined efforts needed to bring economy back on track: Vice President Venkaiah Naidu

    By PTI
    PANAJI: Vice President M Venkaiah Naidu on Saturday said while vaccines do offer hope of shielding people from COVID-19, determined efforts are needed to bring the country’s economic growth back on track.

    Naidu was speaking at Goa Legislators’ Day event in Porvorim near here, in presence of Governor B S Koshyari, Speaker of Legislative Assembly Rajesh Patnekar, Chief Minister Pramod Sawant among others.

    “India and the world are passing through difficult times with the COVID-19 pandemic compounding the situation caused by the economic slide that was unfolding even earlier,” the Vice President said.

    “Vaccines do offer the hope of shielding people from the disease, but return to the potential economic growth trajectory calls for determined efforts,” he said.

    The Centre has been undertaking a series of reforms to unleash the growth potential since only a robust economic growth can help meet the aspirations of people, Naidu said.

    Legislators across the country need to seriously reflect on the challenging situation that the country is facing and mount a national effort to come out of it at the earliest, Naidu added.

    The Vice President further said that while the year 2020 had gotten off to a notorious start with the COVID-19 outbreak, people have ushered in this new year with a sense of hope, with scientists from the country and world coming out with vaccines.

    Last year, India rose to the occasion as one collective entity in handling the pandemic with considerable results, Naidu said.

    Given the state of the health infrastructure in the country, the demographic conditions and socio-economic inequalities, India was expected to be severely impacted in terms of caseload, mortalities and consequences, he said.

    “However, due to the national resolve demonstrated, we could contain the scale of damage remarkably and it is being acknowledged both within and outside the country,” the Vice President added.

  • Pandya handed over the Man of the Series award to Natarajan

    Hardik Pandya, the all-rounder of the Indian cricket team and made the Man of the Series of the T20 series against Australia on Tuesday, has handed over this award to the left-arm fast bowler T Natarajan of the team. Pandya was given the Man of the Series title for his outstanding performance in the T20 series against Australia. He played an important role in winning the series 2–1, thanks to his brilliant finish, in addition to scoring an important 78 runs and one wicket in three T20 matches.

    Pandya shared a photo with Natarajan with her Twitter handle after the match. He wrote the caption with his photo, “Natarajan, your performance in this series was excellent. Performing such a good game while presenting for India in difficult conditions shows a lot about your talent and hard work. Natarajan bhai, from my side you are entitled to the man of the series. Congratulations on winning Team India. “

    This message of Hardik Pandya went viral on social media and this post has received 91 thousand likes and 12.8 thousand retweets in just three hours. Natarajan made her debut in this series against Australia. He took a total of six wickets in three T20 matches. These are the most wickets taken by any bowler from both the teams. During this time, his economy rate was just 6.91.

  • If the job went into lockdown, then the PF itself will fill the new job for 2 years

    Finance Minister Nirmala Sitharaman has made several big announcements on the day of Dhanteras to support the economy struggling with Corona. On this occasion, the Finance Minister has announced the Self-Reliant India Employment Scheme. Finance Minister Nirmala Sitharaman has announced this scheme to strengthen performance on the issue of employment. This scheme will be applicable from October 1. Earlier, the PM Employment Promotion Scheme was announced. The objective of self-reliant Bharat Rojgar Yojana is an attempt to provide employment in the organized sector.

    Its benefits will be available to those who were not previously registered with Provident Fund (EPFO). If the salary is less than 15 thousand, then they will be taken under it. Those who would have got their job between March 1 and September 30 and got employment on or after October 1 will get benefits.

    The Finance Minister said that the institutions registered under EPFO ​​will get subsidy from the government on adding new employees. This scheme will remain in force till 30 June 2021. The government will give subsidy to the company for two years for the eligible employee.

    In EPF fund, 12 per cent is deposited by the salary employer and 12 per cent by the employee. Under this scheme, a total of 24 percent will be paid by the government for new employees. Its benefits will be available for two years. When a new employee will be associated with an institution, he will get subsidy from the government. In September 2020, the employee base will be considered a reference. The number of new employees who have got jobs will be based on this basis.

  • 8.81 lakhs approved for Kaneesa reservoir of Balrampur

    The state government has approved 8 crore 80 lakh 94 thousand for the revised cost of the Kanesa reservoir scheme of Balrampur district. This scheme proposes irrigation of 223 hectares in the area. Administrative approval has been issued to Chief Engineer Hasdeo Ganga Cachar Water Resources Department Ambikapur for completing the works of Kakensa reservoir scheme from Ministry of Water Resources Department, Mahanadi Bhavan. Under the scheme, instructions have been given to work with economical cost and quality in construction cost within the stipulated time.