Inflation is down, but producer prices buck the trend

Inflation for the month of July shows a slight dip to 9.22%, compared to the 9.44% seen in the previous month. One could argue if a drop of one-fifth of a percentage point is significant, but lower inflation, however small the actual decline, is a good thing.

The government releases overall inflation data monthly, while primary inflation data (food and non-food) and fuel price behaviour is released on a weekly basis.

Food inflation soars, at 15.6%

The intertwining of agriculture and politics has usually meant that farmers and the consumers, especially those at the margin, suffer from government action or inaction. Food prices have been rising for a long period, at least a year, and show no signs of abating.
Today, the government announced the wholesale price index data (WPI) for the week ended November 14.
 

Inflation at 1.34% in October; may touch 3% in November

The base effect that held inflation to near zero levels has ended. Higher inflation also coincides with a period when the government has changed the frequency of inflation reporting from weekly to monthly. Now, only the primary articles (fuel and agricultural products) are reported on a weekly basis. Manufactured products' inflation will be available only on a monthly basis. October 2009 is the first month after the reporting frequency changed. Till now, inflation rates have been hovering around the zero mark and even turning negative, due to a high base effect in the previous year.

Rail freight rises: core sector in good shape

India’s goods traffic movement is a good lead indicator of how some core sectors are performing. Coal is shipped by rail. Steel plants transport ore and other raw materials to their plants, and transport finished steel back by rail. Other key commodities being transported by rail include fertilisers, foodgrains and crude oil. An increase in freight traffic either indicates higher demand for raw materials (coal is used by power and steel plants) or higher production because shipments are going up.
 

India's factory output grows by 7.3% in June 2009

Industrial output for June 2009 is a bright spot amidst the gloom, caused by a near certain drought and a swine flu outbreak in the country. The index of industrial production (IIP) for June 2009 has increased by 7.8% over the same period last year. There was a partial base effect, as mining grew by 15% compared to a 0.1% growth in June 2008 and electricity grew by 8% compared to 2.6%.
 

Inflation in rural areas rises sharply

Consumer inflation has been on a steady rise even as wholesale price inflation has been dropping, even turning negative in certain weeks. This is not a new development but the trend is not showing signs of slowing down. The Consumer Price Index for agricultural labour increased by 11.5% in June 2009 over the previous corresponding period while CPI for rural labour too increased by 11.2%. The price index had risen by 10.2% in May 2009, reflecting a sharp increase.
 

KPMG India's Budget highlights

KPMG India has analysed the implications of the budget in two parts. The report that talks about the Budget Highlights says in a foreword it is reassured by the government’s stand reiterating a commitment to bring in GST by April 2010. It also talks about issues like the new direct tax code, setting up of an alternative dispute resolution mechanism and empowering the Central Board of Direct Taxes to formulate safe harbour rules for transfer pricing in international transactions.
 

India's industrial output grows in May 2009

A revival in industrial production is a healthy sign for the Indian economy, as it had turned negative in the recent past. With a question on agricultural output due to a late monsoon, it falls upon industry and services to contribute to the economy's growth in 2009-10.
 
What:

  • The index of industrial production for May 2009 has increased by 2.7%, doubling from its growth in April 2009.
  • The manufacturing index, a keenly watched sub-indicator, grew by 2.5%.

Why: 

Highlights of the Union Budget 2009-10: Part Two

India’s tax-gdp ratio has improved from 9.2% in 2003-04 to 11.5% in 2008-09. The government wishes to simplify the tax structure. A new direct tax code will be released for public comments within 45 days and the new code will be finalised during the winter session of parliament. A Goods and Services Tax to be introduced from April 2010, but will comprise of a Central GST and a State GST.
 
Direct Taxes

Individual

Highlights of the Union Budget 2009-10: Part One

These are some of the highlights from the speech given by the Finance Minister Pranab Mukherjee, presenting the Budget in parliament. Part One deals with the state of the economy and key policy announcements while the second part will deal with tax proposals.

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