Monthly Economic Review August 2014

Ministry of Finance Department of Economic Affairs Economic Division 4(3)/Ec. Dn. /2012 MONTHLY ECONOMIC REPORT AUGUST 2014 ***** HIGHLIGHTS  The overall growth of GDP at factor cost at constant (2004-05) prices (real GDP) for 2013-14 is placed at 4.7 per cent as compared to 4.5 per cent for 2012-13 (as per the Provisional Estimates released on 30th May, 2014). GDP growth in the first quarter (April- June 2014) was 5.7 per cent is the highest in nine quarters.  Food grains (rice and wheat) stocks held by FCI and State agencies were 57.28 million tonnes as on September 1, 2014 vis-à-vis the buffer stock norm of 31.90 million tonnes as on July 1, 2014.  Overall growth in the Index of Industrial Production (IIP) was 0.5 per cent during July 2014 as compared to 2.6 per cent in July 2013. During April-July, 2014-15, IIP growth was 3.3 per cent as compared to (-) 0.1 per cent growth in April-July, 2013-14.  Eight core infrastructure industries registered a growth of 2.7 per cent in July 2014 as compared to 5.3 per cent in July 2013. During April-July, 2014-15, these sectors grew by 4.1 per cent as compared to the same level of growth during April-July, 2013-14.  Broad money (M ) for 2014-15 (up to August 22, 2014) increased by 4.3 per cent as 3 compared to 4.4 per cent during the corresponding period of the last year. The year-on- year growth, as on August 22, 2014 was 13.0 per cent as compared to 12.1 per cent in the previous year.  Exports and Imports increased by 2.4 per cent and 2.1 per cent respectively, in USdollar terms during August 2014 over August 2013.  Foreign Currency Assets stood at US$ 293.4 billion at end-August 2014 as compared to US$ 248.4 billion at end-August 2013.  The Rupee depreciated against US dollar and Japanese yen and appreciated against Pound sterling and Euro in the month of August 2014 over July 2014.  The WPI inflation for all commodities for the month of August 2014 moderated to 3.74 per cent from 5.19 per cent in the previous month.  Gross tax revenue for the financial year 2014-15(April-July) was Rs 2,58,873 crore, recorded growth of 5.5 per cent over 2013-14.  As proportion of Budget estimate, fiscal deficit and revenue deficit during 2014- 15(April-July) was 61.2 per cent and 70.4 per cent respectively. (RANGEET GHOSH) Assistant Adviser (Rangeet.Ghosh@nic.in) 1ECONOMIC GROWTH As per the Provisional Estimates of the Central Statistics Office (CSO), the growth in Gross Domestic Product (GDP) at factor cost at constant (2004-05 prices) is estimated at 4.7 per cent in 2013-14 with agriculture, industry and services registering growth rates of 4.7 per cent, 0.4 per cent and 6.8 per cent respectively. The GDP growth rate is placed at 4.7 per cent, 5.2 per cent in the first, second quarters respectively and 4.6 per cent each in the third and fourth quarters of 2013-14. GDP growth in the first quarter of 2014-15 recorded at 5.7 per cent is the highest in nine quarters. Table 1: Growth of GDP at factor cost by economic activity (at 2004-05 prices) Growth Percentage Share in GDP 2011- 2012- 2013-14 2011- 2012- 2013-14 Sector 12 13(1R) (PE) 12 13(1R) (PE) 1 Agriculture, forestry & fishing 5.0 1.4 4.7 14.4 13.9 13.9 2 Industry 7.8 1.0 0.4 28.2 27.3 26.1 a Mining & quarrying 0.1 -2.2 -1.4 2.1 2.0 1.9 b Manufacturing 7.4 1.1 -0.7 16.3 15.8 14.9 c Electricity, gas & water supply 8.4 2.3 5.9 1.9 1.9 1.9 d Construction 10.8 1.1 1.6 7.9 7.7 7.4 3 Services 6.6 7.0 6.8 57.4 58.8 59.9 a Trade, hotels, transport & communication 4.3 5.1 3.0 26.7 26.9 26.4 Financing, insurance, real estate & b business services 11.3 10.9 12.9 18.0 19.1 20.6 c Community, social & personal services 4.9 5.3 5.6 12.7 12.8 12.9 4 GDP at factor cost 6.7 4.5 4.7 100 100 100 1R: 1st Revised Estimates; PE: Provisional Estimates. Source: CSO. Table 2: Growth of Quarterly Estimates of GDP at Constant (2004-05) Prices 2014 Sectors 2011-12 2012-13 2013-14 -15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 1 Agriculture, forestry & fishing 6.5 4.0 5.9 3.4 1.8 1.8 0.8 1.6 4.0 5.0 3.7 6.3 3.8 10. 4.2 2 Industry 8.2 6.9 6.3 0.3 -0.4 1.7 2.1 -0.4 2.6 -0.4 -0.2 1 a Mining & quarrying 0.3 -4.6 -1.9 5.8 -1.1 -0.1 -2.0 -4.8 -3.9 0.0 -1.2 -0.4 2.1 b Manufacturing 12.4 7.8 5.3 4.7 -1.1 0.0 2.5 3.0 -1.2 1.3 -1.5 -1.4 3.5 10. c Electricity, gas & water supply 8.5 10.3 9.6 5.4 4.2 1.3 2.6 0.9 3.8 7.8 5.0 7.2 2 d Construction 8.9 11.9 12.2 10.2 2.8 -1.9 1.0 2.4 1.1 4.4 0.6 0.7 4.8 3 Services 6.7 7.0 6.5 6.1 7.2 7.6 6.9 6.3 7.2 6.3 7.2 6.4 6.8 Trade, hotels, transport & a 5.5 4.7 4.0 3.3 4.0 5.6 5.9 4.8 1.6 3.6 2.9 3.9 2.8 communication Financing, insurance, real estate 10. b 11.3 12.0 11.1 11.0 11.7 10.6 10.2 11.2 12.9 12.1 14.1 12.4 and business services 4 Community, social & personal c 2.4 5.4 5.7 5.7 7.6 7.4 4.0 2.8 10.6 3.6 5.7 3.3 9.1 services 4 GDP at factor cost 7.6 7.0 6.5 5.8 4.5 4.6 4.4 4.4 4.7 5.2 4.6 4.6 5.7 Source: CSO. 2Real GDP Growth rate (%) at Factor Cost from Q1 2005-06 12.00 10.00 8.00 6.00 4.00 2.00 0.00 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-142014-15 AGRICULTURE AND FOOD MANAGEMENT Rainfall: With respect to rainfall situation in India, the year is categorized into four seasons: winter season (January-February); pre monsoon (March-May); south west monsoon (June- September) and post monsoon (October-December). South west monsoon accounts for more than 75 per cent of annual rainfall. The actual rainfall received during the Monsoon period 01.06.2014 – 16.09.2014, has been 727.7 mm as against the normal at 819.1 mm. Table 3A shows kharif area coverage as on September 19 of 2014-15 and 2013-14. Since kharif sowing goes on till September/October, the acreage under kharif area is expected to improve further in the coming weeks. There has been a decline in the overall kharif coverage vis-a-vis the corresponding period of last year over the last week as on September 19. Table 3A: Kharif Area Coverage – as on 19.09.2014 S. Crops Area Sown (In Lakh hectares) % change over No. 2014-15 2013-14 2013-14 1. Rice 373.60 373.15 0.12 2. Total Pulses 100.05 107.71 -7.11 a. Pigeon Pea (Tur/Arhar) 35.44 38.46 -7.85 b. Urdbean 24.73 23.79 3.95 c. Moongbean 21.15 23.96 -11.73 3. Total Coarse Cereals 182.07 195.25 -6.75 a. Jowar 18.48 21.68 -14.76 b. Bajra 68.34 74.67 -8.48 c. Maize 78.23 81.91 -8.14 4. Total Oilseeds 176.82 192.49 -13.78 a. Groundnut 37.04 42.96 -13.78 b. Soyabean 110.31 122.19 -9.72 5. Sugarcane 48.74 50.32 -3.14 6. Cotton 125.75 113.60 10.70 Total Kharif Area 1015.18 1040.85 -2.47 Source: DAC. 3All India production of food grains: As per the 4th advance estimates released by Ministry of Agriculture on 14.08.2014, production of total foodgrains during 2013-14 is estimated at 264.77 million tonnes compared to 257.13 million tonnes in 2012-13. Table 3B: Production of Major Agricultural Crops (in Million Tonnes) Crop 2008-09 2009- 2010-11 2011-12 2012-13 2013-14 10 (4th advance estimates) Rice 99.18 89.09 95.98 105.30 105.24 106.54 Wheat 80.68 80.80 86.87 94.88 93.51 95.91 Total Pulses 14.57 14.66 18.24 17.09 18.34 19.27 Total Food grains 234.47 218.11 244.49 259.29 257.13 264.77 Total Oilseeds 27.72 24.88 32.48 29.79 30.94 32.88 Sugarcane 285.03 292.30 342.38 361.04 341.20 350.02 Procurement: During the Kharif Marketing Season 2013-14, (which spans from October 2013 to September 2014), the procurement of rice stood at 31.57 million tonnes as on 19.09.2014. During Rabi Marketing Season 2014-15 (which spans from April 2014 to March 2015), the procurement of wheat was 28.02 million tonnes as on 11.07.2014. Table 3C : Procurement in Million Tonnes Crop 2010-11 2011-12 2012-13 2013-14 2014-15 Rice 34.20 35.04 34.04 31.57* Wheat 22.51 28.34 38.15 25.09 28.02** Total 56.71 63.38 72.19 56.37 * Position as on 19.09.2014 ** Position as on 11.07.2014. Off-take: Off-take of rice during the month of July, 2014 was 25.36 lakh tonnes. This comprises 21.94 lakh tonnes under TPDS and 3.42 lakh tonnes under other schemes. In respect of wheat, the total off-take was 17.15 lakh tonnes comprising 15.26 lakh tonnes under TPDS and 1.89 lakh tonnes under other schemes. Stocks: Stocks of food-grains (rice and wheat) held by FCI as on September 1, 2014 were 57.28 million tonnes that is lower by 12.08 per cent compared to the level of 65.15 million tonnes as on September 1, 2013. Table 4: Off-take and stocks of food grains (Million Tonnes) Crop Off-take Stocks 2011- 2012 -13 2013- 2014-15 Sep 1, Sep 1, 12 1 4 ( Till July) 2013 2014 Rice 32.12 32.64 29.20 2.54 20.57 17.33 Unmilled Paddy# 9.28 6.65 Converted Unmilled Paddy 6.22 4.46 in terms of Rice Wheat 24.26 33.21 30.62 1.71 38.36 35.49 Total (Rice & Wheat) 56.38 65.85 59.82 4.25 65.15 57.28 Note: Buffer Norms for Rice & Wheat are 11.80 Million Tonnes & 20.10 Million Tonnes as on 1.7.2014 respectively. # Since September, 2013, FCI gives separate figures for rice and unmilled paddy with FCI & state agencies in terms of rice. 4INDUSTRIAL PRODUCTION Table 5: Percentage Change in Index of Industrial Production Industry Group April-July, April-July, 2014-15 July 2013 July 2014 2013-14 General index -0.1 3.3 2.6 0.5 Mining -4.3 2.8 -3.0 2.1 Manufacturing -0.1 2.3 3.0 -1.0 Electricity 3.9 11.4 5.2 11.7 Basic goods 0.1 8.1 1.0 7.6 Capital goods 1.4 8.5 15.9 -3.8 Intermediate goods 2.1 2.8 3.2 2.6 Consumer goods -1.8 -4.5 -0.7 -7.4 Durables -11.9 -12.5 -9.6 -20.9 Non-durables 7.2 1.3 7.4 2.9 Table 6: Production growth (per cent) in core infrastructure-supportive industries Industry April-July, 2013-14 April-July, 2014-15 July 2013 July 2014 Coal -1.1 5.7 1.0 6.2 Crude oil -1.6 -0.3 -2.3 -1.0 Natural Gas -17.2 -5.2 -16.0 -9.0 Refinery 4.5 -2.2 5.0 -5.5 PFerortdiulizctesr s 1.9 4.9 0.4 -4.2 Steel 14.6 0.3 18.1 -3.4 Cement 2.7 11.1 0.2 16.5 Electricity 3.8 11.0 5.2 11.2 Overall growth 4.1 4.1 5.3 2.7 5MONEY AND BANKING Broad money (M ) for 2014-15 (up to August 22, 2014) increased by 4.3 per cent as compared 3 to 4.4 per cent during the corresponding period of the last year. The year-on-year growth, as on August 22, 2014 was 13.0 per cent as compared to 12.1 per cent in the previous year. Table 7: Money Stock: Components and Sources Item Outstanding as on Variation over (Per cent) 2014 (Rs. Billion) (as on August 22, 2014) Financial Year Year-on-Year so far 2013- 2014- 201 March August 2013 14 15 4 31 22 M3 94,973.3 99,035.6 4.4 4.3 12.1 13.0 1 Components 1.1 Currency with the Public 12,483.4 12,917.3 1.9 3.5 9.1 11.0 1.2 Demand Deposits with Banks 8,043.9 8,202.1 –2.4 2.0 6.6 11.6 1.3 Time Deposits with Banks 74,426.3 77,819.0 5.6 4.6 13.2 13.5 1.4 ‘Other’ Deposits with Reserve Bank 19.7 97.2 67.6 394.4 173.2 78.9 2 Sources (2.1+2.2+2.3+2.4-2.5) 2.1 Net Bank Credit to Government 30,386.0 30,161.7 8.3 –0.7 12.7 2.8 2.1.1 Reserve Bank 6,987.1 5,165.5 2.1.2 Other Banks 23,398.9 24,996.2 7.4 6.8 10.3 9.9 2.2 Bank Credit to Commercial Sector 64,424.8 65,688.4 4.9 2.0 16.5 10.5 2.2.1 Reserve Bank 88.4 111.2 2.2.2 Other Banks 64,336.4 65,577.3 4.9 1.9 16.6 10.4 2.3 Net Foreign Exchange Assets of Banking Sector 19,239.5 20,280.1 8.4 5.4 9.0 14.3 2.4 Government's Currency Liabilities to the Public 173.4 177.0 5.8 2.1 14.2 9.0 2.5 Banking Sector's Net Non- Monetary Liabilities 19,250.4 17,271.6 16.4 –10.3 24.8 –9.5 2.5.1 Net Non-Monetary Liabilities of – RBI 8,433.2 8,237.4 32.3 –2.3 32.5 10.1 Source: RBI Reserve money (M ) declined by 1.4 per cent during the financial year 2014-15 (up to August 22, 0 2014) as compared to an increase of 2.8 per cent in the corresponding period of the previous year. The year-on-year variation of reserve money for 2014 revealed an increase of 9.8 per cent (up to August 22, 2014) compared to 7.4 per cent during the corresponding period of the previous year. An important source of reserve money, namely, net foreign exchange assets (NFA) of RBI (up to August 22, 2014), showed an increase of 5.8 per cent in 2014-15 compared to an increase of 12.6 per cent during the corresponding period of the last year. 6Scheduled Commercial Banks (SCBs): business in India During 2014-15 (up to August 22, 2014), bank credit registered an increase of 2.1 per cent, as compared to 4.8 per cent during the corresponding period last year. The year-on-year variation revealed an increase of 10.9 per cent in 2014 (as on August 22, 2014) as compared to 16.8 per cent during the same period in the previous year. Non-food credit during 2014-15 (up to August 22, 2014) increased by 1.6 per cent as compared to 5.1 per cent during the corresponding period of last year. The year-on-year variation of non- food credit in 2014 (up to August 22, 2014) revealed an increase of 10.7 per cent compared to 17.3 per cent during the same period in the previous year. The aggregate deposits with Scheduled Commercial Banks (SCBs) increased by 4.5 per cent (up to August 22, 2014), as compared to 5.0 per cent during the corresponding period last year. The year-on-year variation in 2014 revealed an increase of 13.6 per cent as compared to 12.6 per cent in the previous year. Table 8: Scheduled Commercial Banks - Business in India Items 2014-15 Variation over (%) (as on August 22, 2014) Outstanding as on Financial year so far Year-on-year ( Rs. billion) March 28, August 2013-14 2014-15 2013 2014 2014 22, 2014 Bank Credit 60131 61175 4.8 2.1 16.8 10.9 Non-food credit 59146 60097 5.1 1.6 17.3 10.7 Aggregate deposits 77394 80488 5.0 4.5 12.6 13.6 Investments in Government, and other approved securities 22217 23664 7.2 6.9 9.9 10.0 Source: RBI 7Table 9 : Policy Rates/Interest Rates (per cent per annum) Item / Week Ended 2013 2014 August 23 August 22 Cash Reserve Ratio (per 4.00 4.00 cent)(1) Bank Rate 10.25 9.00 Repo Rate 7.25 8.00 Reverse Repo Rate 6.25 7.00 Prime Lending Rate(2) 9.70 / 10.00 / 10.25 10.25 Deposit Rate(3) 8.00 / 9.00 8.00 / 9.05 Call Money Rate 10.21 7.86 (Weighted Average)(4) (1) Cash Reserve Ratio relates to Scheduled Commercial Banks (excluding Regional Rural Banks). (2) Prime Lending Rate relates to five major Banks. (3) Deposit Rate relates to major Banks for term deposits of more than one year maturity. (4) Data cover 90-95 per cent of total transactions reported by participants. Source: RBI As on August 22, 2014, the Bank Rate was 9.00 per cent as compared to 10.25 per cent on the corresponding date of last year. As on August 22, 2014 call money rate (weighted average) was 7.86 per cent as compared with 10.21 per cent on the corresponding date of last year. EXTERNAL SECTOR Foreign trade: Exports and imports increased by 2.4 per cent and 2.1 per cent respectively, in US dollar terms during August 2014 over August 2013. Oil imports decreased by 15.0 per cent and non-oil imports increased by 13.8 per cent during August 2014 over August 2013. Table 10: Exports and imports (in US$ million) Item 2011-12 2012- 2013- April-August (P) August (P) % 13 14 2013-14 2014-15 2013 2014 Change in August 2014 Exports 305964 300401 314405 125619 134798 26338 26958 2.4 Imports 489320 490737 450200 196221 190949 37026 37797 2.1 Oil 154968 164041 164765 66799 67979 15099 12839 -15.0 iNmopno-Ortisl 334352 326696 285435 129422 122970 21927 24958 13.8 iTmrpaodrets -183356 -190336 -135794 -70602 -56151 -10688 -10839 1.4 balance Source: Ministry of Commerce and Industry, P: Provisional. 8Table 11: Foreign Currency Assets Amount Variation Rs. Crore US$ million Rs. Crore US$ million At the end of (over last year) March, 2008 1196023 299230 359426 107306 March, 2009 1231340 241676 35317 -57554 March, 2010 1150778 254935 -80562 13259 March, 2011 1225999 274580 75221 19645 March, 2012 1333954 260742 107955 -13838 March, 2013 1418339 260775 84385 33 March, 2014 1672942 278361 254603 17586 2014-15 (over last month) April, 2014 1723905 285710 50963 7349 May, 2014 1695975 287290 -27930 1580 June, 2014 1750649 291322 54674 4032 July 2014 1781343 294504 30694 3182 August 2014 1780496 293380 -847 -1124 Source: RBI. Exchange rate: The rupee depreciated by 1.4 per cent against US dollar and 0.2 per cent against Japanese yen and appreciated by 0.8 per cent against Pound sterling and 0.3 per cent against Euro in the month of August 2014 over July 2014. Table 12 : Rupee per unit of foreign currency* US dollar Pound sterling Japanese yen Euro March, 2009 51.2287 72.9041 0.5251 66.9207 March, 2010 45.4965 68.4360 0.5018 61.7653 March 2011 44.9684 72.7070 0.5498 62.9660 March, 2012 50.3213 79.6549 0.6103 66.4807 March 2013** 54.4046 82.0190 0.5744 70.5951 March 2014 61.0140 101.4083 0.5965 84.3621 2014-15 April 2014 60.3566 101.0794 0.5886 83.3495 May 2014 59.3050 99.9398 0.5828 81.4886 June 2014 59.7307 100.9836 0.5853 81.2410 July 2014 60.0586 102.6220 0.5907 81.3943 August 2014 60.8951 101.8085 0.5917 81.1423 * FEDAI Indicative Market Rates (on monthly average basis). ** Data from March, 2013 onwards are based on RBI’s reference rate. 9External assistance and debt service payments: Gross external assistance during April-August 2014 stands at Rs. 13,545.61 crore as compared to Rs. 10,709.77 crore during the corresponding period of the previous year. Net disbursements stood at Rs. 3,258.27 crore during April- August 2014 as compared to Rs. 2,235.94 crore during April-August 2013. Table 13: External Assistance and Debt Service Payments (Rs. Crore)* AUGUST During the AUGUST During the 2014 Financial 2013 Financial year year 2013-2014 up to 2014- August, 2013 2015 up to August, 2014 External Assistance (Government Account) 1) Gross Disbursement 2,466.27 11,226.47 966.41 8,046.14 2) Repayments 1,421.33 8,109.70 1,237.26 7,230.24 3) Interest Payments 251.46 1,447.62 269.75 1,443.63 4) Net Disbursement (1-2) 1,044.94 3,116.77 -270.85 815.90 5) Net Transfers (4-3) 793.48 1,669.15 -540.60 -627.73 External Assistance (Non-Government Account) 1) Gross Disbursement 377.10 1,910.73 568.18 2,147.82 2) Repayments 117.36 2,177.64 115.13 1,243.59 3) Interest Payments 31.41 226.55 35.85 223.87 4) Net Disbursement (1-2) 259.74 -266.91 453.05 904.23 5) Net Transfers (4-3) 228.33 -493.46 417.20 680.36 Government Grants 1) Gross Disbursement 21.06 403.95 14.93 487.99 2) Repayments 0.00 0.00 0.00 0.00 3) Interest Payments 0.00 0.00 0.00 0.00 4) Net Disbursement (1-2) 21.06 403.95 14.93 487.99 5) Net Transfers (4-3) 21.06 403.95 14.93 487.99 Non-Government Grants 1) Gross Disbursement 1.60 4.46 27.82 27.82 2) Repayments 0.00 0.00 0.00 0.00 3) Interest Payments 0.00 0.00 0.00 0.00 4) Net Disbursement (1-2) 1.60 4.46 27.82 27.82 5) Net Transfers (4-3) 1.60 4.46 27.82 27.82 Grand Total 1) Gross Disbursements 2,866.03 13,545.61 1,577.34 10,709.77 2) Repayments 1,538.69 10,287.34 1,352.39 8,473.83 3) Interest Payments 282.87 1,674.17 305.60 1,667.50 4) Net Disbursement (1-2) 1,327.34 3,258.27 224.95 2,235.94 5) Net Transfers (4-3) 1,044.47 1,584.10 -80.65 568.44 *: Data are provisional. 10INFLATION Wholesale Price Index (WPI 2004-05=100): The headline WPI inflation moderated to a nearly five year low of 3.74 per cent in August 2014 from 5.19 per cent in the previous month. Inflation for Primary food articles for the month of August 2014 has declined to 5.15 per cent from 8.43 per cent in the previous month mainly on account of lower inflation in rice, wheat, fruits & vegetables, egg, meat and fish. However, higher inflation in case of pulses, potato, milk, oil seeds and coffee is a cause for concern. Food inflation (primary food + manufactured food) has declined to 4.61 per cent from 7.01 per cent in the previous month. Inflation for Fuel & power has declined significantly to 4.54 per cent in August 2014 from 7.40 per cent in the previous month. Inflation for Manufactured products has declined to 3.45 per cent in August 2014 from 3.67 per cent in the previous month. Non-food manufactured inflation (core as defined by RBI) has declined to 3.46 per cent in August 2014 from 3.58 per cent in the previous month on account of decline in inflation of textiles, wood & wood products, paper & paper products, rubber & plastic products, basic metals and transport equipments & parts. The average WPI inflation rate for the last 12 months (September 2013 to August 2014) was 5.87 per cent as compared to 6.44 per cent during the corresponding period in 2013-14. WPI inflation rates for major groups are indicated in Table 14. Table 14: Current Price Situation based on Monthly WPI in August 2014(Base: 2004-05=100) Major groups Weight Cumulative change Inflation (%) Inflation (%) (%) (%) Since March (Average of 12 months) 2014-15 2013-14 2014- 2013-14 2014-15 2013-14 15 ALL COMMODITIES 100.00 3.00 5.23 3.74 6.99 5.87 6.44 PRIMARY ARTICLES 20.12 9.31 12.91 3.89 13.57 8.94 9.10 Food Articles 14.34 13.13 17.89 5.15 19.17 11.26 10.30 FUEL AND POWER 14.91 -0.09 6.84 4.54 12.66 9.57 9.87 MANUFACTURED PDT. 64.97 1.04 1.28 3.45 2.31 3.32 4.28 Inflation based on Consumer Price Indices (CPIs): The all India CPI inflation (combined) moderated to 7.80 per cent in August 2014 from 7.96 per cent in July 2014 on account of favourable base effect. Inflation based on CPI-IW increased to 7.23 per cent in July 2014 from 6.49 per cent in June 2014. Inflation based on other CPI’s (CPI-AL &RL) remained at above 7 per cent in August 2014. Table 15: Year-on-Year inflation based on WPI and CPI’s (per cent) WPI CPI-IW CPI-AL CPI-RL CPI(NS) Base : 2004-05 2001 1986-87 1986-87 2010 Aug-13 6.99 10.75 13.21 12.89 9.52 Sep-13 7.05 10.70 12.78 12.44 9.84 Oct-13 7.24 11.06 12.65 12.48 10.17 Nov-13 7.52 11.47 13.43 13.27 11.16 Dec-13 6.40 9.13 11.19 11.18 9.87 Jan-14 5.11 7.24 9.08 9.21 8.79 Feb-14 5.03 6.73 8.14 8.27 8.03 Mar-14 6.00 6.70 8.38 8.51 8.31 Apr-14 5.55 7.08 8.44 8.72 8.59 May-14 6.18 7.02 8.07 8.33 8.28 Jun-14 5.66 6.49 7.68 7.81 7.46 Jul-14 5.19 7.23 7.97 8.10 7.96 Aug-14 3.74 - 7.16 7.57 7.80 Note: WPI inflation for Jul & Aug-14 and CPI (New Series) inflation for Aug-14 is provisional. 11Global Commodity Prices (based on the World Bank Pink Sheet data) Global year-on-year inflation was negative for all broad groups except beverages in August 2014. Beverages prices are expected to gain 18 per cent in 2014 as per the Commodity Markets Outlook, July 2014 of World Bank. The increase in beverages prices was driven by rise in coffee (arabica) prices due to dry weather in Brazil- world’s largest coffee supplier. Actual price data reveal that prices of meat, urea, rice, banana, cocoa, lead, groundnut oil, soybean meal, DAP, Zinc and coal has increased in August 2014 compared to previous month Table 16: World Commodity Price Data Annual averages Monthly averages Commodity Unit Jan- Dec Jan- Dec Jan- Aug June July August 2012 2013 2014 2014 2014 2014 Coal, Australia $/mt 96.4 84.6 73.4 71.5 68.8 68.9 Crude oil, average $/bbl 105.0 104.1 104.4 108.4 105.2 100.1 Natural gas, US $/mmbtu 2.8 3.7 4.7 4.6 4.0 3.9 Cocoa $/kg 2.4 2.4 3.1 3.2 3.2 3.3 Coffee, Robusta $/kg 2.3 2.1 2.2 2.2 2.2 2.2 Tea, average $/kg 2.9 2.9 2.8 2.8 3.0 2.8 Coconut oil $/mt 1111 941 1328 1402 1260 1177 Groundnut oil $/mt 2436 1773 1287 1310 1325 1350 Palm oil $/mt 999.3 856.9 875.3 857.0 841.0 766.0 Palm kernel oil $/mt 1110 897 1210 1234 1116 947 Soybean meal $/mt 524.1 545.3 556.8 553.0 502.0 510.0 Soybean oil $/mt 1226 1057 947 936 888 857 Soybeans $/mt 591.4 538.4 518.8 516.0 480.0 460.0 Maize $/mt 298.4 259.4 203.9 202.4 182.7 176.4 Rice, Thailand, 5% $/mt 563.0 505.9 422.3 397.0 422.0 445.0 Wheat, US, HRW $/mt 313.2 312.2 300.2 306.5 280.4 263.4 Bananas, US $/mt 1.0 0.9 0.9 0.9 0.9 1.0 Oranges $/mt 0.9 1.0 0.8 0.8 0.8 0.8 Fishmeal $/mt 1558 1747 1676 1765 1806 1774 Meat, chicken $/kg 2.1 2.3 2.4 2.4 2.5 2.5 Meat, beef $/kg 4.1 4.1 4.5 4.4 5.0 5.7 Sugar, world $/kg 0.5 0.4 0.4 0.4 0.4 0.4 Plywood $/sheets 610.3 560.2 533.2 535.1 536.9 530.4 Cotton A Index $/kg 2.0 2.0 2.0 2.0 1.8 1.6 Rubber, TSR20 $/kg 3.4 2.5 1.8 1.7 1.7 1.7 DAP $/mt 539.8 444.9 476.2 461.5 499.4 505.0 Urea $/mt 405.4 340.1 315.5 297.9 301.7 321.9 Copper $/mt 7962 7332 6949 6821 7113 7002 Lead $/mt 2064.6 2139.8 2128.2 2107 2193 2237 Tin $/mt 21126 22283 22750 22762 22424 22231 Nickel $/mt 17548 15032 17138 18629 19118 18600 Zinc $/mt 1950.4 1910.3 2116.4 2128.1 2310.6 2327.0 Gold $/toz 1670 1411 1294 1279 1311 1295 Silver $/toz 31 24 20 20 21 20 Iron ore $/dmt 128.5 135.4 107.2 92.7 96.1 92.6 Source: World Bank – The Pink Sheet. 12PUBLIC FINANCE As a proportion of Budget estimate, fiscal deficit and revenue deficit during 2014-15(April-July) was 61.2 per cent and 70.4 per cent respectively. Table 17: Trends in Central Government Finances : April-July 2014-15 Budget April-July Col.3 as Col.4 as Per cent Estimates ( Rs. Crore) per per change over ( Rs. cent of cent of preceding Crore) year 2014-15 2013- 2014- 2013- 2014-15 2013- 2014- 14 15 14 BE BE 14 15 (4/3) (1) (2) (3) (4) (5) (6) (7) (8) 1.Revenue Receipts 1189763 176155 175632 16.7 14.8 4.3 -0.3 Gross tax revenue* 1364524 245323 258873 19.9 19.0 6.5 5.5 Tax (net to Centre) 977258 145109 146865 16.4 15.0 1.6 1.2 Non Tax Revenue 212505 31046 28767 18.0 13.5 19.2 -7.3 2.Capital Receipts 605129 345010 328308 56.7 54.3 28.5 -4.8 of which Recovery of loans 10527 3461 3262 32.5 31.0 28.0 -5.7 Other Receipts 63425 940 122 1.7 0.2 -29.3 -87.0 Borrowings and other 531177 340609 324924 62.8 61.2 28.8 -4.6 liabilities 3.Total Receipts (1+2) 1794892 521165 503940 31.3 28.1 19.2 -3.3 4.Non-Plan Expenditure 1 2 1 9 8 9 2 3 7 1 4 2 7 371891 33.5 30.5 14.9 0.1 (a)+(b) (a) Revenue Account 1114609 331916 338048 33.4 30.3 14.3 1.8 of which: Interest payments 427011 86307 118615 23.3 27.8 7.1 37.4 Major Subsidies 251397 113437 83577 51.3 33.2 17.0 -26.3 Pensions 81983 21766 29129 30.8 35.5 16.3 33.8 (b) Capital Account 105283 39511 33843 33.8 32.1 19.9 -14.3 5.Plan Expenditure (i)+(ii) 575000 149738 132049 27.0 23.0 31.4 -11.8 (i) Revenue Account 453503 121617 104003 27.4 22.9 30.5 -14.5 (ii) Capital Account 121497 28121 28046 25.1 23.1 35.2 -0.3 6.Total Expenditure (4)+(5) 1794892 521165 503940 31.3 28.1 19.2 -3.3 (a)Revenue Expenditure 1568112 453533 442051 31.6 28.2 18.2 -2.5 (b)Of which Grants for 168104 44095 36213 25.2 21.5 46.3 -17.9 creation of Capital Assets (c)Capital Expenditure 226780 67632 61889 29.5 27.3 25.8 -8.5 7.Revenue Deficit 378349 277378 266419 73.0 70.4 29.2 -4.0 8.Effective Revenue Deficit 210245 233283 230206 113.7 109.5 26.4 -1.3 (7-6(b)) 9.Fiscal Deficit 531177 340609 324924 62.8 61.2 28.8 -4.6 10.Primary Deficit 104166 254302 206309 148.0 198.1 38.3 -18.9 Source: Controller General of Accounts. * Gross Tax Revenue is prior to devolution to the States. 1314