The overall mood of the industry looks promising with growth at 10.6 per cent for the five month period , April- to August 2010. However, growth slipped to 5.6 per cent for the month of August 2010 from 10 percent plus in the previous year.
Capital goods production remained volatile as growth dipped into the negative zone on two occasions during the present fiscal after a steep rise. However, the average growth stood at 29 per cent during the period April- August as against 3.4 percent increase in the corresponding period of previous year. Output in the basic and intermediate goods rose but not as much as seen in the previous year. Consumer goods segment went up by 8.6 percent during the period from April to August in 2010-11, as against 3.6 percent increase in output in the previous year and the rise was seen on account of consumer durables segment.
8 of the 17 industry segments were seen to surpass the growth rate during the first five months of FY11 as compared to the growth observed in the previous year.
The six core infrastructure industries continues to remain positive cumulatively up to August 2010, however the pace of growth is slightly lower as compared to the growth posted in the previous year. Growth in the overall infrastructure industries mainly came from crude petroleum, petroleum refinery and steel.
Government’s efforts in taming inflation brought positive results. In September 2010 the rate of inflation was brought under 10 per cent. Currently the rate of inflation averaged for the month of September 2010 was 8.62 percent, this has come down from 9.55 percent in August and 10.3 in July 2010.
During the month of September the confidence of the foreign investors in the Indian stock market was seen to go up. The index Sensex was observed to swing between 19-20 K and Nifty was seen move between 5- 6 K points.
In August FY 11, M3 decelerated to 15 percent calculated on a Y-o-Y basis as compared to 19 percent in the previous year. The percentage changed in the net bank credit to the government halved as compared to the increase observed in the previous year. However, borrowings by the commercial sector were seen to increase by 18.3 per cent vis-a-vis the increase of 13.8 percent in the previous year.
Highlights – September 2010
2 : PageInvestments in the government securities slowed compared to the previous year and so were the aggregate deposits. The total credit off-take increased which was on account non-food segment.
Fiscal deficit up to August this year was lower at Rs 151425 crores compared to the fiscal deficit recorded in the previous year which was at Rs 182290 crores . The reasons for low fiscal deficits were increase in the revenue receipts ( non tax source ) on account of disinvestments in the PSUs and auction of 3G and BWA spectrum.
Total merchandise trade from April – August FY11 stood at USD 227 billion compared to the total trade of USD 171.9 billion in the corresponding period of previous year.
The trade deficit widened by 56 billion ( upto August) as the merchandise exports cumulatively from April to August 2010-11 rose to USD 85 billion as compared to USD 66 billion in the 2009-10. Imports were also seen to increase by 33 per cent to USD 141 billion.
FDI is an area which requires special attention because of its inherent long term investment intentions. Presently the FDI investments received up to August this year is running behind the investments received in the previous year.
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