Indian Economy in 2005 – 2006 (India Economy 05-06)

In April – November 2005 -06 overall industrial productions achieved a growth rate of 8.3 %, marginally below the growth rate last year. The index indicates a slowdown in the month of November 2005. [br]

Manufacturing continued to grow faster in April- November 2005-06 than it did last year and remained the main growth driver in the current year.

In April – November 2005 -06 overall industrial productions achieved a growth rate of 8.3 %, marginally below the growth rate last year. The index indicates a slowdown in the month of November 2005. [br]

Manufacturing continued to grow faster in April- November 2005-06 than it did last year and remained the main growth driver in the current year.

Industry was aided by the buoyancy in both the consumer and investment goods sectors. Growth in the capital goods sector was up by 3 percentage points to 15.9% in April- November 2005-06. However in the consumer goods sector it was the consumer nondurable that registered a significant pick up in growth even as the growth in the consumer durable goods segment.

Despite fluctuations in the output the growth in the basic goods sector was marginally higher than in the previous year at 6%. In contrast overall growth in the intermediate goods sector went down by more than half to 3%.

Sectors with positive growth rate in November 2005-06 are Cotton Textiles (13.3%), Basic Metals (13.3%), Transport (11.8%), Food Products (5.8%), Jute and other fiber textiles (4.2%), Manmade textiles (3.4%) and Rubber (1.8%).[br]

• Index of six core infrastructure industries grew at a slower pace of 4.4% in April- November period of current year. Among the six core infrastructure industries, production grew faster only for Cement at 10.6% in the April- November period of 2005-06. In the April- November 2005-06 Production of Finished Steel, Coal and Power grew up at a lower rate than last year, by 7.2%, 7.1% and 4.9% respectively.
   
• Highest ever addition to telephone network of 28.37 million was made at the end of December 2005-06. Total phones stood at almost 125 million on account of 23.7 million cellular phones booked in April- December 2005-06. Mobile phone network also added a record of 4.46 million phones in December 2005-06.
   
• Stock Markets had shown resilience in November 2005-06, further picking up to exceptionally all time high levels. Sensex and Nifty increased to 9390 and 2835 points respectively. Both the indices recorded a 5% rise in November against the previous month of 2005-06.
   
• Broad Money grew at higher magnitude of 12% in the fiscal year upto December 2005- 06 this was mainly due to higher growth credit to the commercial sector. Government Borrowings reduced further, however, aggregate deposits in Scheduled Commercial banks increased by 14% by December 2005. Lower government borrowings is also reflected in low investments made by SCB, which registered a decline.

  The total credit of SCBs increased in December 2005-06, ascribed to higher non -food credit.
   

• In November 2005-06 Gross tax collections increased at a marginally lower rate. For the first time in the last eight months collections from income tax showed a positive going up by 22.1%. Corporation tax however decelerated for the first time after five months in November 2005-06. The revenue receipts and net tax revenue in the April – November period of 2005-06 went up by 16.5% and 22% respectively. Non-Plan Expenditure accelerated by 7.7% as compared to a 8.4% fall in the same period of last FY. Expenditure in the plan category also rose by 19.6%, primarily because of increased expenditure in the revenue head.
   
• Over all commodity prices index increased by 4.6% in the last month of Q3 2005-06. Vegetables (15%) , Cement (9.9%), Drugs and Medicines (6.6%), Food grains (4.9%), and Chemical Products (3.9%) have become expensive with prices rising faster than the other commodities . Commodities with slow prices increase in December of 2005 are Minerals (29.9%), %, Mineral Oil (11.2%), Sugar KG (8.2%), Fuel with (7.7%), and Food products (5.7%).

  Textile and Edible oil became cheaper, price of Edible oil was reduced by 7.5 % and Textile by 3.8%.
   

• Exports increased at a higher rate of 16.19% in December 2005-06 where as Imports grew at 8.44%. In December 2005 Oil imports exhibited a sharp rise by 63% over a negative 18% in the December 2004. On the other hand, the non-oil imports decelerated sharply in the second consecutive month of Q3 2005-06.

  Growth in April-October 2005 period of the major commodities for Indian exports are: Transport equipments (48%), Iron ore (40%), Machinery & instruments (31.9%), Basic Chemicals Pharmaceuticals (22.5%), Manufacture of Metals (20.1%), Rubber Glass (18.4%), Readymade Garments (15.9%), Electronic Goods (3.5%) and Iron and Steel (0.7%).

  Major partners for Indian exports in April-October 2005 are: Singapore with 68% Growth, Sri Lanka (54%), Netherlands (53.2%), China (48.8%), UK (37.6%), Hong Kong (34.7%), EU (25.2%), France (24.9%), Japan (20.9%,) Germany (18%), UAE (15.6)%, Belgium (15.1)% and Italy (8.6).

  Growth in major commodities for India’s imports are Iron and Steel (95%), Metal scrap and ores (57%), Fertilizers (57.4%), Artificial Resins ( 56.7%), Transport Equipments (53%), Machinery (48.9%), Textile Yarn Fabric (36.5%), Pearls, Precious stones (36.4%), Gold and Silver (34.1)%, Organic and Inorganic Chemicals (20.6)% and Electronic Goods (18.3%), Major Importing Partners for India are: Russia (62%), Germany (48.1%), China (47%), Switzerland (43.1%), Hong Kong (42.6%), UAE (40%), Australia (37%), EU (30%), UK (29.9%), South Korea (29.8%), USA (21.8%), Belgium (21.%), Singapore (19.7%), Japan (12.9%) and Malaysia (6.7%).
   

• Total Foreign Investment in the April – October 2005-06 went up to $ 8472 million. October 2005-06 figures show a drop in Total Foreign Investment inflow due to erosion in Portfolio Investments, however, Foreign Direct Investment firmed up in the beginning Of Q3 2005-06.
   
• In December 2005-06 Foreign Exchange Reserves fell by 3.4%, from $ 142.1 billion in November 2005-06 to $ 137.2 billion. This is mostly due to the sale of dollars for the redemption of IMDs (India Millennium Deposits).
   
• Indian Currency exchange rates vis-à-vis USD remained unchanged at Rs 45.7 in last month of Q3 2005-06 against previous month of 2005-06 and in the same period INR position weakened against Euro at Rs 54.15 , changing by 0.47% .