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Journalism of Courage
The growth rate of eight key infrastructure industries slowed down to 1.6 per cent in January on the back of a contraction in the refinery products while moderation in the fertiliser and electricity sector, dashing hopes of any recovery during the current fiscal.
The index of eight core industries had grown 2.1 per cent in December 2013 while it stood at 8.3 per cent in January 2013, data from the commerce and industry ministry showed. In January, while production of fertiliser slowed down 1.2 per cent from 4.1 per cent a month ago, the output of refinery products further contracted 4.5 per cent compared to a contraction of 1.7 per cent in December.
The RBI said deceleration in credit growth has been observed in cement, infrastructure, metals , gems and jewellery, mining and quarrying, and petroleum, coal products and nuclear fuels. Credit to industry increased 14.1 per cent in December 2013 as against the increase of 15.2 per cent in December 2012.
“The overall outlook for FY14 is not very bright but there is expectation that there will be a big push to the infra sector after the spate of clearances by the Cabinet,” said DK Pant, chief economist, India Ratings.
Retail inflation for industrial workers eases to 7.24%
New Delhi: Retail inflation for industrial workers eased to 7.24 per cent in January compared to 9.13 per cent in previous month and 11.62 per cent in same month last year mainly due to softening food prices. PTI
Fiscal deficit crosses full year target in Jan
Finance minister P Chidambaram’s fiscal math seems under threat as the Centre’s fiscal and revenue deficit breached the “red line” by January 2014 as total expenditure outpaced revenue collection.
The fiscal deficit touched 101.6 per cent of the Revised estimate to Rs 5,32,842 crore while the revenue deficit rose 102.3 per cent of the full year target to Rs 3,78,850 crore in the first 10 months of FY14, according to data released by the Controller General of Accounts on Friday. The data indicates that there could be some pressure on the finance ministry’s math that hopes to better the fiscal deficit to 4.6 per cent of the GDP or Rs 5,24,539 crore in FY14 as against the Budget estimate of 4.8 per cent or Rs 5,42,499 crore.
“Net of the States’ share in Central taxes, we expect the shortfall in the Central Government’s tax collections to be around Rs. 10,000 crore. While this may result in slippages relative to the revised estimate of 4.6 per cent of GDP, the fiscal deficit is unlikely to exceed the projection of 4.8 per cent of GDP that had been made at the time of the Budget for FY14,” said Aditi Nayar, senior economist at ICRA.
A similar situation had occurred in FY12 when the Centre’s fiscal deficit breached the Revised Estimate by January 2011 to touch 105.4 per cent.
While the Budget estimate had pegged fiscal deficit at 4.6 per cent of the GDP in FY12, it was later revised to 4.6 per cent but the actual numbers revealed that the deficit was at 5.7 per cent of the GDP.
However, officials have expressed confidence that the full year figures would show an improvement in the deficit.
