Indian Economy

The unabated hike in food and oil prices has accelerated this week’s inflation from 11.05 per cent to 11.42 per cent, which is again a 13-year high. The rise has been mainly on account of higher prices of food items like tea, milk and cereals.

While food articles and textiles were up 0.7 per cent, primary articles rose by 0.2 per cent, and fuel, power and energy were up by 0.1 per cent. A steep rise of 3.6 per cent was recorded in minerals, while tea was up by 3 per cent. Non-food articles, however, were down by 0.5 per cent.

Indian Economy is headed for a slow down. The inflation data published today shows that it has soared to a seven year high of 8.75 per cent for the week ended May 31 compared to a 8.24 percent in the previous week. Rising food and vegetable prices including cereals, milk, spices and manufactured goods have contributed to 0.51 percent increase.

8.75 per cent .. thats the highest inflation ever touched by the indian economy in the past 7 years. Instead of finding ways to fix this governments seems to be leaving the job to the Rain gods and other natural events.

While Montek Singh Ahluwalia agreed that inflation is on the rise and that it has turned into a major challenge for the government, he expressed hope that a good monsoon will help control the prices of commodities that are out of control.

India's forex reserves moved up to a record 315 billion dollars for the week ended june 6th. Foreign currency assets stood at 305 billion and include the appreciation or depreciation of the Non-US Dollar currencies such as Yen, Pound and Euro.

Gold reserves and Special Drawing Rights, during the week, stood static at USD 9.202 billion and USD 11 million respectively, it said.

The country's reserve position in the International Monetary Fund, during the seven-day period, stood at USD 527 million as against USD 526 million in the previous week.

The deal in which Ranbaxy Laboratories Ltd India’s largest pharmaceutical company was sold off to a Japanese-based Daiichi Sankyo Co. has been appreciated by experts.

ChrysCapital Managing Director Sanjiv Kaul, an ex-Ranbaxy executive and a sector analyst said, “Commercially, it is an awesome deal. However, Ranbaxy was the all-conquering Indian hero and should have been the last man standing instead of being the first to capitulate. A huge positive for Ranbaxy but a negative for Indian pharma.”

Oil Public Sector Units of India continue to bleed and be in a precarious situation as government defers its decision to raise prices of petrol, diesel and domestic LPG atleast until next week. The UPA government is fearful of the negative political impact of a raise in Oil and other prices considering the inflation of india continues to rise inspite of subsidized oil.

A marketplace for small farmers in India may soon be a reality with NSEL [ National Spot Exchange Limited ] being accorded the necessary licenses in 3 states of India including Gujrat, Maharashtra and Karnataka.

According to NSEL, they have received the licenses to launch an electronic platform that would allow them to launch a spot exchange where farmers can sell as low as one quintal of product without having to deal with too many middlemen. This level of openness in the market will allow farmers to reap much larger benefits than they have access to in today's Indian trading markets.

The weakness in rupee, which is inching closer to the 43-mark against the US dollar with a six per cent fall this fiscal, is not being resisted as strongly by RBI as during its appreciation, banking giant HSBC believes.

RBI is not stopping rupee weakness despite the continuing surge in wholesale and consumer price index-related inflation, HSBC's Chief Economist Robert Prior-Wandesforde wrote in a research note on Indian economy.

"Importantly, the impact from RBI intervention has shifted from preventing currency appreciation to reinforcing currency weakness," he said.

New Delhi, May 16 (ANI): The annual inflation rose to 7.83 percent for the week ended May 3 from 7.61 percent for the previous week. The data for the week ended March 8 has been revised to 7.78 percent versus 5.92 percent (provisional).
The food articles index and the manufacturing products index rose by 0.5 percent and 0.3 percent respectively. Fuel and power index was up by 0.8 percent.

New Delhi, May 14 (ANI): Secondary steel makers, Bhushan Steel and National Steel , have announced up to Rs 4,000 per tonne cut on all flat products toeing the line of primary producers even as the government is examining the merit of the steelmakers' request for lower export duty on the metal.

"The secondary steel producers have assured that they will reduce prices of their flat products by Rs 4,000 per tonne and maintain the new price line for the next three months," Steel Ministry Secretary, R S Pandey said after a meeting with the steelmakers.

The visit planned by Dominique Bussereau, French minister for Transport on May 12th is set to kick off a unique partnership between India and France to create a high speed rail network. France is known for its expertise in this area and is expected to help India create such a network.

India's foreign exchange reserves in US dollar terms declined for a continuous second week to reach 312.5 billion dollars according to a release by Reserve bank of India. According to Reserve Bank of India, the foreign currency assets (FCA) declined to 302.2 billion from 302.5 billion last week.

Despite several measures taken by the Government to control inflation, it rose to 42-month high at 7.61 per cent this week as against 7.57 per cent in the previous week.

Indian Government today granted a much awaited and coveted Navratna status to Rural Electrification Corporation. REC is the 16th public sector undertaking of the government of india to gain the navratna status.

In India 70% of the population is dependent on Agriculture for their livelihood while this sector contributes to 23% of the Nominal GDP of India. Agriculture and the dependent sectors contribute 23% of the GDP of India. Output from the agriculture sector is highly dependent on the monsoon rains and more than 60% of the cultivatable area is dependent on these rain.

An increase in the Wholesale Price Index due to rise in primary articles and manufactured goods drove India's inflation for April was reported at a 42 month high of 7.57%.

This is a pure statistics article showing the trend of GDP growth in India over the past 11 Years.. India reached a trillion dollar size in as the 12th largest economy in the world in terms of GDP on 25th April 2007. United States economy at 13 Trillion still leads the pack with Japan being the close second at 4 Trillion dollars. 2007 and 2008 GDP stats in the article are estimates and will be updated once the data is released by the appropriate government agencies.

The Reserve Bank of India (RBI) today hiked the Credit Reserve Ratio (CRR) by 25 basis points to 8.25 per cent with effect from May 24 and left key interest rates unchanged in its annual the monetary and credit policy for the year 2008-09.

The hike in the CRR, the mandatory amount that banks have to keep with the RBI, followed a two-stage rise earlier in April to 8.0 percent and the second hike has yet to take effect on May 10.The RBI left its key lending rate unchanged at 7.75 percent and left the reverse repo rate, unchanged at 6.0 percent. The bank rate, which is used to price medium-term and long-term loans, remained at 6.0 percent.