EPWRF is pleased to further update the New Series of National Accounts with the fresh Advance Estimates of National Income for 2014-15 and Quarterly Estimates for all quarters of 2012-13 and 2013-14 and three quarters of 2014-15.

India’s real GDP growth registered an improvement in the first quarter of 2014-15 (5.7%) compared to the last quarter of 2013-14 (4.6%). While the growth rates of industry and services improved to 4.2% and 6.8% respectively, that of agriculture and allied activities slowed down. Within industry, the manufacturing sector registered a turnaround and grew at 3.5%; electricity generation posted double-digit growth of 10.2%. Within the services sector, growth in community, social and personal services at 9.1% was almost three times that of the last quarter of 2013-14, but less than the corresponding quarter of 2012-13.

The RBI study of select non-government non-financial public limited companies showed a deterioration in performance in 2012-13. The debt to equity ratio has gone up from 42.9% in 2011-12 to 46.2% in 2012-13. Expenditure on raw materials, as a percentage of the value of production, increased to 60.1% in 2011-12 from 59.2% in 2010-11 and remained stable in 2012-13. Interest expenditure as a percentage of gross profits rose from 21.8% in 2010-11 to 32.5% in 2012-13. Profits after tax to net worth, which stood at 12.0% in 2010-11, dropped sharply to 8.7% in 2012-13. The payout ratio steadily increased from 24.7% in 2010-11 to 33.4% in 2012-13.

The annual rate of inflation, based on the Wholesale Price Index, dropped to 5.4% in June 2014 as compared with 6.0% for May 2014 and was marginally higher than that of 5.2% during May 2013. The rate of inflation in the current financial year so far dropped to 1.3% from 1.8% in April-June 2013. The annual inflation rate in fuel and power in June 2014 at 9.0% was higher than that recorded in June 2013. Moreover, inflation in prices of manufactured products and food products is almost stable, while that of the food index (computed) is softened to 4.8% from 5.5%.

In the first two months of 2014-15, India’s foreign trade position improved significantly compared with the corresponding period during 2013-14: in dollar terms, exports increased by 8.9% against 1.4% and imports declined by 13.2% against an increase of 8.5%. In rupee terms, while exports rose from 4.3% to 19.0%, imports declined by 5.1% compared to an increase of 11.6% during the same period. The trade deficit narrowed from $ 37 billion to $ 21 billion in dollar terms and in rupee terms from Rs 2.03 lakh crore to Rs 1.28 lakh crore.

Even though there is no one-to-one correlation between El Nino, monsoon, agricultural output and food inflation, magnitude, timing and spread of monsoon rainfall in 2014 would impact sowing patterns, yields and the trajectory for food inflation. Adequate rainfall in June-July, which are key months for sowing, may lessen impact of overall monsoon deficiency.

The third advance estimate of agricultural production for 2013-14 points to record levels of production in many crops. Foodgrains production is estimated to have reached a high of 264.38 million tonnes (MT) compared to 257.13 MT in 2012-13. While cereals production is expected to reach a high of 244.81 MT, pulses production is estimated to reach a high of 19.77 MT. Among commercial crops, oil seeds production is estimated to touch 329.83 lakh tonnes. A significant increase is also seen in the estimated production of cotton, jute and mesta, and sugar cane.

The first month of financial year 2014 -15 has begun with a higher inflation rate. The wholesale price index-based inflation at 5.2% in April 2014 was higher compared with 4.8% a year ago. The index of primary articles rose by 7.1% in April 2014, compared with 5.1% in April 2013. Food articles inflation rose to 8.6% from 6.1%, while minerals’ prices shot up by 4.4% compared with a decline of 4.5% during the same period last year. However, inflation in non-food primary articles moderated to 3.1% from 7.6% and in manufactured products to 3.2% from 3.7%.

India's real GDP recorded a growth of 4.7% in 2013-14, only marginally higher than the 4.5% of 2012-13, despite the agriculture, forestry and fishing showing a significantly higher growth at 4.6% when compared with 1.4% in 2012-13. Growth in industry fell further to 0.4% from 1.0% in 2012-13. Within industry, manufacturing, and mining and quarrying segments have witnessed absolute declines. The growth of the services sector also fell to 6.8% in 2013-14 from 7.0% in 2012-13.