Positive Developments in the Indian Economy in the month of January 2017

Positive Developments in the Indian Economy

Consumer Price Index

The all India general CPI (Combined) for January 2017 stands at 3.2% as compared to 3.4 % in December 2016. The inflation rates for rural and urban areas for January 2017 are 3.36% and 2.9% respectively as compared to 3.83% and 2.9% respectively, for December 2016. Rate of inflation during January 2017 for sugar and confectionery stands at 18.69%, egg at 2.64 %, Pan and Tobacco at 6.36% and spices at 5.04%, etc.

Wholesale Price Index

The WPI inflation stands at 5.25% in January 2017 compared to 3.39% in December 2016, 3.15% in November 2016, 3.79% in October 2016, 3.8% in September 2016, and 3.85% in August 2016. The increase in WPI inflation in the month of January 2017 is attributed to increase in the prices of fruits (3.58%), fibers (15.18%), sugar (22.83%), fuel and power (14.91%), etc.

Driven by the increase in the prices of fruits, fibers, sugar, fuel and power, WPI inflation stands at 5.25% in January 2017 as compared to 3.39% in December 2016. The index for this major group declined by 0.2 percent to 255.7 (provisional) from 256.3 (provisional) for the previous month.  Build up inflation rate in the financial year so far was 5.31% compared to a build up rate of -0.40% in the corresponding period of the previous year. The WPI inflation for manufactured products stands at 3.99% for January 2017 as against 3.67% for the month of December 2016.The index for this major group rose by 0.5 percent to 158.8 (provisional) from 158.0 (provisional) for the previous month, Food inflation for the month of January 2017 stands at -0.56% as against (-)0.70% in December 2016.

Food Article inflation: The index for ‘Food Articles’ group declined by 1.1 percent to 267.2 (provisional) from 270.1 (provisional) for the previous month due to lower price of arhar (15%), gram (14%), masur (7%), urad (6%), moong (4%), egg (3%),  fruits & vegetables (2%) and tea, rice, bajra and wheat (1% each).  However, the price of jowar (5%), ragi and poultry chicken     (4 % each), fish-inland and condiments & spices (2% each) and maize, pork, fish-marine and beef & buffalo meat (1% each) moved up.

Non-food articles inflation: Non-food articles inflation for the month of January 2017 stands at 1.98% as against 0.62% in December 2016. The index for ‘Non-Food Articles’ group rose by 2.5 percent to 231.3 (provisional) from 225.6 (provisional) for the previous month due to higher price of flowers (23%),  raw rubber (10%), copra (coconut) and raw cotton (7% each), raw silk (6%), sunflower (5%), castor seed and safflower (kardi seed) (3% each) and soyabean (2%).  However, the price of mesta (19 %), gingelly seed (4%), cotton seed (3%), linseed, coir fibre, rape & mustard seed and niger seed (2% each) and raw wool and hides(raw) (1% each) declined.

Fuel & power inflation: Fuel & power inflation for the month of January 2017 stands at 18.14% as against 8.65% in December 2016. The index for this major group rose by 4.7 percent to 201.2 (provisional) from 192.1 (provisional) for the previous month due to higher price of coking coal (84%), aviation turbine fuel (10%), furnace oil (8%), high speed diesel and petrol (5 % each), bitumen (3%) and kerosene (2%).

India’s merchandize exports: India’s merchandize exports have continued with commendable growth rate registering growth figure of 4.32% in January 2017 to value at USD 22,115.03 million compared to USD 21,199.02 million during January  2016.

On the other hand, India’s merchandize imports also witnessed slight expansion, growing by 10.7% to value at USD 31,955.94 million in January 2017 compared to USD 28,866.53 million during same period previous year.

The cumulative value of exports for the period April-January 2016-17 stood at USD 220.922 billion as against USD 218.532 billion registering a positive growth of 1.09% over the same period last year. The Cumulative value of imports for the period April-January 2016-17 was USD 307.311 billion as against USD 326.277 billion registering a growth of (-)  5.81% over the same period last year.

A significant improvement has been witnessed in overall trade balance, viz. taking merchandize and services trade together. Overall trade deficit for April – January 2016-17 is estimated at USD 38.073 billion, which is 29.7% lower than the level of USD 54.187 billion during April – January 2015-16.

Important Cabinet Approval

RBI to remove withdrawal limit on savings bank account in two stages – During the Press Conference for 6th Bi-Monthly Monetary Policy Statement 2016-17, Reserve Bank of India has decided to remove the withdrawal limit on savings bank accounts in two stages as follows: Effective from 20th February, 2017, the limits on cash withdrawals from savings bank accounts will be enhanced to Rs. 50,000 per week from current Rs. 24,000 per week. Effective from 13th March, 2017, there will be no limit on cash withdrawals. As of now, there is no limit on current account and there is a cap of Rs 50,000 for farmers a week and Rs 2.5 lakh for marriage.

Sixth Bi-monthly Monetary Policy Statement 2016-17 – On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 %. Consequently, the reverse repo rate under the LAF remains unchanged at 5.75 %, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 %. The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 % by Q4 of 2016-17 and the medium-term target of 4 % within a band of +/- 2 %, while supporting growth.

Cabinet apprised of Framework Agreement between India and Vietnam on cooperation in the exploration and uses of outer space for peaceful purposes – The Union Cabinet has been apprised of the Framework Agreement between India and Vietnam on cooperation in the exploration and uses of outer space for peaceful purposes. The Framework Agreement has been signed on September 03, 2016. The Framework Agreement will enable pursuing the potential interest areas of cooperation such as space science, technology and applications including remote sensing of the earth; satellite communication and satellite-based navigation; space science and planetary exploration; use of spacecraft and space systems and ground system; and application of space technology.

Cabinet approves ‘Pradhan Mantri Gramin Digital Saksharta Abhiyan’ for covering 6 crore rural households – The Union Cabinet has approved ‘Pradhan Mantri Gramin Digital Saksharta Abhiyan’ (PMGDISHA) to make 6 crore rural households digitally literate. The outlay for this project is Rs.2,351.38 crore to usher in digital literacy in rural India by March,2019. This is in line with the announcement made by Hon’ble Finance Minister in the Union Budget 2016-17.  PMGDISHA is expected to be one of the largest digital literacy programmes in the world. Under the scheme, 25 lakh candidates will be trained in the FY 2016-17; 275 lakh in the FY 2017-18; and 300 lakh in the FY 2018-19. To ensure equitable geographical reach, each of the 250,000 Gram Panchayats would be expected to register an average of 200-300 candidates.

Cabinet apprised of MoU (Memorandum of Understanding) between India and France in the field of Science, Technology and Innovation – The Union Cabinet has been apprised of the signing of the Memorandum of Understanding (MoU) of Cooperation between Technology Development Board (TDB), Department of Science & Technology, Govt. of India and Bpifrance, a Public Investment Bank, France.  The agreement will ensure exchange of best practices and setting up of coordinated measures to foster technological exchanges in the field of Science, Technology and Innovation through collaboration between companies, organizations and institutions of France and India.

Shri Piyush Goyal to launch TAMRA Portal and Mobile Application to ensure transparent award of Statutory Clearances for Mining Operations – With an objective to enhance transparency and accountability as a part of the Ease of Doing Business in the Mining sector, Hon’ble Union Minister of State (IC) for Power, Coal, New & Renewable Energy and Mines, Shri Piyush Goyal will launch TAMRA (Transparency, Auction Monitoring and Resource Augmentation) portal and Mobile Application here on 10th February, 2017. Ministers of Mining and senior officers from 12 mineral rich States would also be connected through videoconferencing. TAMRA will be an interactive platform for all the stakeholders to compress the timelines for statutory and other clearances as it would help minimize the gestation period for commencing production.

Hon’ble Minister of Railways Shri Suresh Prabhakar Prabhu Launched the first Phase of the Station Redevelopment Program comprising 23 major Railway Stations of Indian Railways – In order to transform the face of the Indian Railways, Hon’ble Minister of Railways, Shri Suresh Prabhakar Prabhu launched the first Phase of the World’s largest Station Redevelopment Program comprising 23 major Railway Stations on Indian Railways network. He stated that the Ministry of Urban Development is collaborating with the Ministry of Railways to develop smart stations because smart stations are a pre-requisite for becoming a smart city.  He further said that the project of re-developing 400 A1 and A Category Stations in the country is the biggest non-fare revenue generating programme which will be done on PPP (Public-private partnership) model through a fair bidding system conducted by the respective Zonal Railways. He said that in the first phase, 23 stations will be bid out and redeveloped to the fullest use where so many facilities can be enjoyed by the passengers at one place.

A fillip to NITI Aayog’s incentive schemes on Digital Payments promotion – The initiative to make Digital Payments a mass movement in India through NITI Aayog’s two incentive schemes – Lucky Grahak Yojana and DigiDhan Vyapar Yojana – has reaped huge dividends in just 45 days since its launch. Latest data from the National Payments Corporation of India (NPCI), which has been executing the schemes, shows that Rs.117.4 crore has been disbursed as reward money to over 7.6 lakh consumers and merchants, as on February 7, 2017. In addition to the daily cash backs to 15,000 consumers, 90 additional consumers and 3,000 merchants have won Rs1 lakh and Rs.50,000 each as weekly prize money for adopting digital mode of payments. The schemes have seen active participation from both males and females. The latest data shows that Maharashtra, Tamil Nadu, Andhra Pradesh, Uttar Pradesh and Karnataka have emerged as top five states with maximum number of winners.