ASSOCHAM Economic Weekly 16 th February, 2014

Transcription

1 ASSOCHAM Economic Weekly 16 th February, 2014 Assocham Economic Research Bureau THE ASSOCIATED CHAMBERS OF COMMERCE AND INDUSTRY OF INDIA

2 Contents 1. Macroeconomy 1.1 Highlights of Government of India s Railway Budget, Wholesale Price in India, January India s Foreign Trade: January, Consumer Price Index for Rural, Urban and Combined, January Corporate Sector 2.1 Index of Industrial Production, December Tourist availing Tourist Visa on Arrival (VoA) Scheme, January Market Trends 4. Global Developments 4.1 Euro Area and EU28 Industrial Production 4.2 China s Consumer Prices, January Data Appendix 2

3 1. Macroeconomy 1.1 Highlights of Government of India s Railway Budget, Measures for improving Safety & Security No unmanned Level Crossing. A total of 5,400 unmanned level crossings eliminated 2,310 by manning it and 3,090 by closure / merger / construction of ROBs or RUBs. Improved audio visual warning to road users in advance of approaching trains. Induction of indigenously developed Train Collision Avoidance System Development of crashworthy coaches In last five years, offering employment to over one lakh persons in Group C categories and to 1.6 lakh persons in erstwhile Group D categories. Provision of Vigilance Control Device in all locomotives Various measures to prevent fire incidents on trains Fire retardant materials Multi-tier protection for electric circuits Portable fire extinguishers in coaches Induction based cooking to replace LPG in pantry cars Intensive checks against explosives and inflammable materials. Financial Performance Loading Target raised to 1,052 Million Tonne from B.E. 1,047 Million Tonne. 3

4 Freight Earnings Target revised to Rs 94,000 crore from B.E. Rs 93,554 crore Stringent Financial control exercised and Ordinary Working Expenses pegged only at Rs 560 crore higher than Budget Estimates, despite various post-budgetary factors Plan Outlay revised to Rs 59,359 crore Operating Ratio likely to be 90.8% Fund Balances to continue to grow to Rs 8,018 crore Budget Estimates Loading target of 1,101 Million Tonnes Gross Traffic Receipts targeted at Rs 1,60,775 crore with Passenger Earnings (Rs 45,255 crore), Goods (Rs 1,05,770 crore), Other Coaching & Sundry Earnings (Rs 9,700 crore) Ordinary Working Expenses placed at Rs 1,10,649 crore, higher by Rs 13,589 crore Pension Outgo budgeted at Rs 27,000 crore against Rs 24,000 crore for The entire Dividend of Rs 9,117 crore to General Exchequer will be paid Fund Balances likely to be Rs 12,728 crore. Operating Ratio budgeted at 89.8% Annual Plan Annual Plan envisaged at Rs 64,305 crore with a Budgetary Support of Rs 30,223 crore, Internal Resources of Rs 10,418 crore and Extra Budgetary Resources of Rs 19,805 crore New Surveys: 19 New Lines & 5 Doubling Financial Health Rail infrastructure by cost sharing arrangement with State Governments; Karnataka, Jharkhand, Maharashtra, Andhra Pradesh and Haryana agreed to several projects Several Public Private Partnerships (PPP) projects are in the pipeline. FDI being enabled to foster creation of world-class rail infrastructure. Rail Land Development Authority raised Rs 937 crore so far. 4

5 Modernisation and Technology Induction High Speed Trains Joint feasibility study by India and Japan for Mumbai Ahmedabad Corridor to be co-financed by Japan International Cooperation Agency Business Development Study by SNCF for Mumbai Ahmedabad corridor. Semi- High Speed Projects Exploring low cost option of speeds kmph on select routes Green Initiatives Railway Energy Management Company becomes functional. Windmill and solar power plants to be set up with 40% subsidy from Ministry of New & Renewable Energy. 200 Stations, rooftops of 26 buildings and 2,000 level crossing gates to be covered. Railways bagged 22 out of 112 awards given by the Government. Green Curtains along the track close to major stations; Pilot work at Agra and Jaipur Coverage of Bio-toilets in 2,500 coaches and would be increased progressively. Passenger Friendly Initiatives Overwhelming public response to e-booking of ticket On-line tracking of exact location and running of train movements 51 Jan-Ahaar outlets for Janta Meals ; 48 passenger escalators commisionsed at stations and 61 more being installed ; air-conditioned EMU services in Mumbai from July 2014 ; information display system in important trains to indicate stations & arrival time. Upgradation scheme extended to AC Chair Car and Executive Chair car passengers. Demand Management through Dynamic Pricing Premium AC Special train introduced in Delhi Mumbai Sector with shorter advance reservation period and dynamically varying premium over tatkal fare 5

6 Enhancing Market Share Clearing missing links in Carrying Capacity + 8 tonne routes; freight train speeding; upgradation of rolling stock; increasing length of trains; tariff and incentive schemes to encourage traffic to rail and minimizing empty running. Rail Tariff Authority Independent Rail Tariff Authority set-up to advise on fixing of fares and freight, to engage all stake-holders Information Technology Initiatives taken include proliferation of cash accepting Automatic Ticket Vending Machines; ticketing on mobile phones in unreserved segments; system update on PNR status; online booking of retiring rooms at important stations; online booking of meals for selected en-route stations; introduction of e-forwarding note and electronic transmission of railway receipts for freight customers. Revenue Freight Traffic Loading target of 1047 Million Tonnes for would be surpassed Empty Flow Discount Scheme to be implemented Carrying Capacity + 9 tonne + 1 tonne routes being planned Easing of some restrictions on movement of imported commodities through Containers Carrying capacity of 20 feet containers increased by 4 tonnes Parcel Terminals & Special Parcel Trains with scheduled timings. New policy on parcels to encourage transportation of milk. New concept of hub and spoke for parcel business Third party warehousing in Special Parcel Terminals envisaged. 6

7 New Services New Trains: 17 Premium trains, 38 Express trains, 10 Passenger trains, 4 MEMU and 3 DEMU Extension and Increase in frequency: 3 Extension of trains and 3 increase in frequency Achievements / Initiatives Major landmark achievement in National Project of Kashmir State of Meghalaya and capital of Arunachal Pradesh to be on Railway Map by this fiscal. Gauge Conversion of strategically important 510 km Rangiya-Murkongselek line in Assam to be completed by this fiscal. XIth Five Year Plan Targets exceeded in New Lines (2,207 km), Doubling (2,758 km) and Electrification (4,556 km), Production of Diesel (1,288) & Electrical (1,218) Locos and Acquisition of Wagons (64,875) Dedicated Freight Corridors on the Eastern and Western Routes leading to strategically critical capacity augmentation. Railways met from its own means the total additional impact of Rs one lakh crore due to implementation of 6 th Pay Commission In , 1532 km of New Lines, Doubling and Gauge Conversion commissioned. Production commenced at the new factories-rail Wheel Plant, Chhapra; Rail Coach Factory, Rae Bareli; and Diesel Component Factory, Dankuni. Specially designed coaches for adverse weather condition for rail travel in Kashmir. Successful development of Corrosion resistant, lighter wagons with higher pay-load and speed potential up to 100kmph. Railways sportspersons dominate national events by winning titles in 23 disciplines and runners up in 9 disciplines. In various international championships a total of 2 Gold, 4 Silver and 3 Bronze Medals won. Unigauge Policy started in 1992 has converted 19,214 km to Broad Gauge, benefitting several States including Gujarat, Rajasthan, Madhya Pradesh, Maharashtra, Karnataka, Uttar Pradesh, Assam and Tamil Nadu. 7

8 1.2 Wholesale Price in India, January 2014 Wholesale Price Index for All Commodities (Base: = 100) for the month of January, 2014 declined by 0.2 percent to from for the previous month. The annual rate of inflation, stood at 5.05% for the month of January, 2014 (over January, 2013) as compared to 6.16% for the previous month and 7.31% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 5.17% compared to a build up rate of 5.78% in the corresponding period of the previous year. The index for primary articles group declined by 1.9 percent to from for the previous month. The index for `Food Articles` group declined by 2.7 percent to from for the previous month due to lower price of fruits & vegetables (11%), maize (3%), ragi (2%) and gram, coffee, arhar and tea (1% each). However, the price of poultry chicken (5%), pork (3%), urad and egg (2% each) and moong, bajra, condiments & spices, masur, fish-inland, beef & buffalo meat and fish-marine (1% each) moved up. The index for `Non-Food Articles` group rose by 0.1 percent to from for the previous month due to higher price of guar seed (8%), raw cotton (6%), copra (coconut) (4%), mesta (3%), castor seed (2%) and fodder, linseed and raw jute (1% each). However, the price of logs & timber (13%), flowers (11%), raw silk (9%), safflower (kardi seed) (4%), gingelly seed (3%), soyabean (2%) and tobacco, cotton seed and raw rubber (1% each) declined. The index for `Minerals` group declined by 0.4 percent to from for the previous month due to lower price of barytes (3%) and crude petroleum (1%). However, the price of copper ore (5 %), steatite (4%), zinc concentrate (3%) and chromite (2%) moved up. The index for Fuel & Power group rose by 0.7 percent to from for the previous month due to higher price of LPG (5%), aviation turbine fuel and petrol (2% each) and furnace oil, kerosene, high speed diesel and bitumen (1% each). 8

9 The index for Manufactured Products group rose by 0.5 percent to from for the previous month. Please refer Table 1 Table 1 Wholesale Price Index and Rates of Inflation Weight WPI Jan, 2014 Latest month over month Build up from March Month of January, 2014 Year on year Primary articles Food Articles Non-Food Articles Minerals Fuel & Power Manufactured products All commodities Source: Office of Economic Advisor, Govt. of India 1.3 India s Foreign Trade, January 2014 Exports during January, 2014 were valued at US $ million (Rs crore) which was 3.79 per cent higher in Dollar terms (18.62 per cent higher in Rupee terms) than the level of US $ million (Rs crore) during January, Cumulative value of exports for the period April-January was US $ million (Rs crore) as against US $ million (Rs crore) registering a growth of 5.71 per cent in Dollar terms and growth of per cent in Rupee terms over the same period last year. Imports during January, 2014 were valued at US $ million (Rs crore) representing a negative growth of per cent in Dollar terms and a negative growth of 6.37 per cent in Rupee terms over the level of imports valued at US $ million (Rs crore) in January, Cumulative value of imports for the period April-January, was US $ million (Rs crore) as against US $ million (Rs. 9

10 crore) registering a negative growth of 7.81 per cent in Dollar terms and growth of 1.67 per cent in Rupee terms over the same period last year. Oil imports during January, 2014 were valued at US $ million which was 10.1 per cent lower than oil imports valued at US $ million in the corresponding period last year. Oil imports during April-January, were valued at US $ million which was 1.2 per cent higher than the oil imports of US $ million in the corresponding period last year. Non-oil imports during January, 2014 were estimated at US $ million which was 22.0 per cent lower than non-oil imports of US $ million in January, Non-oil imports during April-January, were valued at US $ million which was 12.3 per cent lower than the level of such imports valued at US $ million in April-January, The trade deficit for April-January, was estimated at US $ million which was lower than the deficit of US $ million during April-January, Please refer Table 2 Table 2 India s Exports & Imports January Exports (including re-exports) (US $ Million) April-January %Growth / Imports %Growth / Trade Balance %Growth / Source: Department of Commerce, Govt. of India 10

11 1.4 Consumer Price Index for Rural, Urban and Combined, January 2014 All India provisional General (all groups), Group and Sub- Group level CPI numbers for January 2014 for rural, urban and combined are 139.3, and 137.4, respectively. Provisional annual inflation rate based on All India general CPI (Combined) for January 2014 on point to point basis (January 2014 over January 2013) is 8.79 percent as compared to 9.87 percent (final) for the previous month of December The corresponding provisional inflation rates for rural and urban areas for January 2014 are 9.43 percent and 8.09 percent respectively. Inflation rates (final) for rural and urban areas for December 2013 are percent and 9.11 percent respectively. Please refer Table 3 Category Jan.13 Index Final Table 3 All India Annual Inflation Rates Rural Urban Combined Jan.14 Jan.13 Jan.14 Jan.13 Jan.14 Index Rate Index Index Rate Index Index Prov. (%) Final Prov. (%) Final Prov. Cereals and products Pulses and products Oils and fats Egg, fish and meat Milk and products Condiments and spices Vegetables Fruits Sugar etc Non-alcoholic beverages Prepared meals etc Food and beverages Fuel and light Clothing, bedding and footwear General Index (All Groups) Source: MOSPI, Govt. of India Rate (%) 11

12 2. Corporate Sector 2.1 Index of Industrial Production, December 2013 The General Index for the month of December 2013 stands at 178.3, which is 0.6 percent lower as compared to the level in the month of December The cumulative growth for the period April-December over the corresponding period of the previous year stands at (-) 0.1 percent. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of December 2013 stand at 133.0, and respectively, with the corresponding growth rates of 0.4 percent, (-) 1.6 percent and 7.5 percent as compared to December The cumulative growth in the three sectors during April-December over the corresponding period of has been (-) 1.8 percent, (-) 0.6 percent and 5.6 percent respectively. Please refer Table 4 Table 4 Index of Industrial Production-Sectoral Mining Manufacturing Electricity General Month (141.6) (755.3) (103.2) (1000) Apr May Jun Jul Aug Sept Oct

13 Nov Dec* Jan Feb Mar Average Apr-Dec Growth (Y-o-Y) Dec Apr-Dec Source: MOSPI, Govt. of India Note: Indices for December 2013 are Quick Estimates. Indices for the months of Sep'13 and Nov 13 incorporate updated production data As per Use-based classification, the growth rates in December 2013 over December 2012 are 2.4 percent in Basic goods, (-) 3.0 percent in Capital goods and 4.5 percent in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of (-) 16.2 percent and 1.6 percent respectively, with the overall growth in Consumer goods being (-) 5.3 percent. Please refer Table 5 Basic goods Table 5 Index of Industrial Production-Used Base Capital goods Intermediate goods Consumer goods Consumer durables Consumer nondurables Month (456.82) (88.25) (156.86) (298.08) (84.60) (213.47) Apr May Jun Jul Aug Sept Oct Nov Dec* Jan Feb Mar

14 Average Apr- Dec Growth (Y-o-Y) Dec Apr- Dec Source: MOSPI, Govt. of India Note: Indices for December 2013 are Quick Estimates. Indices for the months of Sep'13 and Nov 13 incorporate updated production data 2.2 Tourist availing Tourist Visa on Arrival (VoA) Scheme, January 2014 A growth of percent has been recorded in the number of tourists availing the tourist Visa on Arrival (VoA) Scheme during the period January A total number of 1,903 VoAs have been issued in this period as compared to 1,690 VoAs during the corresponding period of 2013 registering a growth of per cent. The following are the other important highlights of VoAs issued during January 2014: During the month of January 2014, a total of 1,903 VoAs were issued under this Scheme as compared to 1,690 VoAs during the month of January 2013, registering a growth of 12.6%. The number of VoAs issued under this scheme during January 2014 for nationals of the eleven countries were, New Zealand (465), Japan (427), the Philippines (290), Singapore (273), Indonesia (257), Finland (124), Cambodia (20), Myanmar (20), Vietnam (15), Luxembourg (12) and Laos (0). During January 2014, the highest number of VoAs were issued at New Delhi airport (783) followed by Mumbai (440), Chennai (282), Kolkata (126), Bangalore (116), Kochi (68), Hyderabad (62) and Trivandrum (26). As a facilitative measure to attract more foreign tourists to India, Government launched the Visa on Arrival (VoA) Scheme in January 2010 for citizens of five countries, viz. Finland, Japan, Luxembourg, New Zealand and Singapore, visiting India for tourism purposes. The Scheme was extended to the citizens of six more countries, namely Cambodia, Indonesia, Vietnam, the Philippines, Laos and Myanmar in January

15 3. Market Trends BSE: The 30 share BSE Sensex decreased by 0.3 per cent and closed at 20,366.8 NSE: Nifty decreased by 0.4 per cent during the week and closed at Dollar: The value of Rupee depreciated by Rs against the US dollar during the week and closed at Rs per dollar. Euro: The value of Rupee depreciated by Rs against the Euro and closed at Rs per euro. Gold: Prices of gold increased by Rs per 10 grams during the week and closed at Rs per 10 grams. Silver: Prices of silver increased by Rs during the week and closed at Rs Per kg. Crude Oil: The prices of crude oil increased by USD 1.8 per barrel and closed at USD per barrel. Forex Reserves: India s Foreign Exchange reserves increased by USD 1.2 billion to USD billion during the week-ended February 7,

16 4. Global Developments 4.1 Euro Area and EU28 Industrial Production In December 2013 compared with November 2013, seasonally adjusted industrial production fell by 0.7% in both the Euro Area (EA17) and the EU28, according to estimates from Eurostat, the statistical office of the European Union. In November, industrial production rose by 1.6 percent and 1.3 percent respectively. In December 2013 compared with December 2012, industrial production grew by 0.5% in the Euro Area and by 0.9% in the EU28. Average industrial production for the year 2013 compared with 2012 dropped by 0.8% in the Euro Area and by 0.5% in the EU28. In December 2013 compared with November 2013, production of capital goods decreased by 2.1% in the Euro Area and by 1.9% in the EU28. Energy fell by 2.1% and 1.5% respectively. Non-durable consumer goods dropped by 0.1% in the Euro Area and increased by 0.1% in the EU28. Durable consumer goods rose by 0.4% in the Euro Area, but decreased by 0.3% in the EU28. Intermediate goods grew by 0.9% and 0.7% respectively. Among the Member States for which data are available, industrial production fell in nineteen and rose in four. The largest decreases were registered in Estonia (-5.7%), Sweden (-2.7%), the Netherlands (-2.6%) and Croatia (-2.4%), and the increases in Slovenia (+2.7%), Greece (+2.6%), Portugal (+0.7%) and the United Kingdom (+0.4%). In December 2013 compared with December 2012, production of intermediate goods rose by 3.6% in the Euro Area and by 3.7% in the EU28. Capital goods fell by 0.3% in the Euro Area, but grew by 0.7% in the EU28. Nondurable consumer goods decreased by 0.9% in the Euro Area, but gained 0.3% in the EU28. Durable consumer goods decreased by 1.2% and 0.8% respectively. Energy fell by 1.9% in the Euro Area and by 2.3% in the EU28. Among the 16

17 Member States for which data are available, industrial production rose in ten and fell in thirteen. The highest increases were registered in Portugal (+7.1%), Romania (+7.0%), the Czech Republic (+6.7%) and Slovenia (+5.2%), and the largest decreases in Malta (-7.3%), Ireland (- 6.7%), Estonia (-6.4%) and Finland (-4.8%). Please refer Tables 6 & 7 Table 6 Industrial Production excluding Construction % change compared with previous month 13-Jul 13-Aug 13-Sep 13-Oct 13-Nov 13-Dec EA17 Total industry Intermediate goods Energy Capital goods Durable consumer goods Non-durable consumer goods EU28 Total industry Intermediate goods Energy Capital goods Durable consumer goods Non-durable consumer goods Source: Eurostat, the statistical office of the European Union Table 7 Industrial production excluding construction % change compared with same month of the previous year 13-Jul 13-Aug 13-Sep 13-Oct 13-Nov 13-Dec EA17 Total industry Intermediate goods Energy Capital goods Durable consumer goods Non-durable consumer goods EU28 Total industry

18 Intermediate goods Energy Capital goods Durable consumer goods Non-durable consumer goods Source: Eurostat, the statistical office of the European Union 4.2 China s Consumer Prices, January 2014 In January, China s consumer price index (CPI) went up by 2.5 percent year-on-year. The prices grew by 2.6 percent in cities and 2.2 percent in rural areas. The food prices went up by 3.7 percent, while the non-food prices increased by 1.9 percent. The prices of consumer goods went up by 2.0 percent and the prices of services grew by 3.7 percent. In January, the month-on-month change of consumer prices was up by 1.0 percent, of which, prices increased 1.0 percent in cities and 0.9 percent in rural areas. The food prices went up by 2.4 percent, while the non-food prices went up by 0.3 percent. The prices of consumer goods increased 1.1 percent, and the prices of services grew by 0.8 percent. Source: National Bureau of Statistics of China 18

19 5. Data Appendix Item Table 8 Latest Available Financial Information Jan. 31, 2014 Feb. 07, 2014 Percentage Change Deposits of Scheduled Commercial Banks with RBI (Rs. Billion) 3, , Foreign Currency Assets of RBI (Rs. Billion) Advances of RBI to the Central Government (Rs. Billion) 16, , Advances of RBI to the Scheduled Commercial Banks (Rs. Billion) Source: RBI, Govt. of India Index BSE SENSEX Table 9 BSE Sensex and NSE Nifty Index Feb. 10, 2014 Feb. 14, 2014 Percentage Change S & P CNX NIFTY Source: BSE India and NSE India 19

20 ASSOCHAM Economic Research Bureau ASSOCHAM Economic Research Bureau (AERB) is the research division of the Associated Chambers of Commerce and Industry of India. The Research Bureau undertakes studies on various economic issues, policy matters, financial markets, international trade, social development, sector wise performance and monitoring global economy dynamics. The main banners of the Bureau are: ASSOCHAM Eco Pulse (AEP) studies are based on the data provided by various institutions like Reserve Bank of India, World Bank, IMF, WTO, CSO, Finance Ministry, Commerce Ministry, CMIE etc. ASSOCHAM Business Barometer (ABB) are based on the surveys conducted by the Research Team to take note of the opinion of leading CEOs, MDs, CFOs, economists and experts in various fields. ASSOCHAM Investment Meter (AIM) keeps the track of the investment announcements by the private sector in different sectors and across the various states and cities. ASSOCHAM Placement Pattern (APP) is based on the sample data that is tracked on a daily basis for the vacancies posted by companies via job portals and advertisements in the national and regional dailies, journals and newspaper. Data is tracked for 60 cities and 30 sectors that are offering job opportunities in India. ASSOCHAM Financial Pulse (AFP) as an analytical tool tracks quarterly financial performance of India Inc; forming strong inter-linkages with the real economy and presents sectoral insights and outlook based on financial indicators, demand signals and corporate dividend activity. research@assocham.com 20

21 THE KNOWLEDGE CHAMBER Evolution of Value Creator ASSOCHAM initiated its endeavor of value creation for Indian industry in It has witnessed upswings as well as upheaval of Indian Economy and contributed significantly by playing a catalytic role in shaping up the Trade, Commerce and Industrial environment of the country. ASSOCHAM derives its strength from the following Promoter Chambers: Bombay Chamber of Commerce and Industry, Mumbai; Cochin Chamber of Commerce and Industry, Cochin; Indian Merchant's Chamber, Mumbai; The Madras Chamber of Commerce and Industry, Chennai; PHD Chamber of Commerce and Industry, New Delhi. VISION Empower Indian enterprise by inculcating knowledge that will be the catalyst of growth in the barrier less technology driven global market and help them upscale, align and emerge as formidable player in respective business segment MISSION As representative organ of Corporate India, ASSOCHAM articulates the genuine, legitimate needs and interests of its members. Its mission is to impact the policy and legislative environment so as to foster balanced economic industrial and social development. We believe education, health, agriculture and environment to be the critical success factors. GOALS To ensure that the voice and concerns of ASSOCHAM are taken note of by policy makers and legislators. To be proactive on policy initiatives those are in consonance with our mission. To strengthen the network of relationships of national and international levels/forums. To develop learning organization, sensitive to the development needs and concerns of its members. To broad-base membership. Knowledge sets the pace for growth by exceeding the expectation, and blends the wisdom of the old with the needs of the present. 21