Winning Bizness Economic Desk

Inflation Slides From 14-Month High to 5.48 pc

The country’s headline inflation slid from 14-month highs and stood at 5.48 per cent in November of this year.

This figure is a decline from the 6.2 per cent of October and is below the 5.53 per cent that was expected by the market.

The inflation number also comes after the country’s apex bank, the Reserve Bank of India (RBI) held rates at 6.5 per cent during its latest monetary policy meeting held earlier in the month.

While the Reserve Bank of India does not produce monthly inflation estimates, the country’s central bank projected the number would hit 5.7 per cent during the third fiscal quarter ending December 2024.

The Reserve Bank predicts inflation would reach 4.8 per cent across the full fiscal year which runs through to March next year (FY 2024-25).

Food inflation was likely to reduce in its fiscal fourth-quarter, the Reserve Bank said, given the seasonal easing of vegetables prices and autumn harvest arrivals.

A point that requires highlighting here is that good soil moisture conditions along with comfortable reservoir levels also bode well for the production of winter crops.

It is important to point out here that agriculture is a key component of India’s GDP and food prices play a critical part in the country’s inflation readings, measured against a separate metric known as the Consumer Food Price Index (CFPI).

The RBI had previously cautioned that adverse weather events and the rise in international agricultural commodities prices pose upside risks to food inflation.

India’s Oct Industrial Production Growth slows to 3.5 pc

The country’s industrial production growth slowed to 3.5 per cent Year-on-Year (YoY) in October of this year, mainly due to poor performance of mining, power and manufacturing, as per official data released earlier this month.

The Index of Industrial Production (IIP) registered a growth of 11.9 per cent in October of last year (2023), according to the Ministry of Statistics and Programme Implementation (MoSPI).

However, on a sequential basis, the factory output in October 2024 increased to 3.5 per cent from 3.1 per cent in September and a contraction of 0.1 per cent in August of this year.

Growth in factory output, measured in terms of the Index of Industrial Production (IIP) in the April-to-October period worked out to be four per cent as against the seven per cent of the year-ago period, the data showed.

Mining output decelerated to 0.9 per cent in October from the 13.1 per cent expansion in the year-ago month.

In power generation, output growth slowed sharply to two per cent from a 20.4 per cent growth a year-ago.

As per use-based classification, capital goods segment growth decelerated to 3.1 per cent in October 2024 from the 21.7 per cent in the year-ago period.

In October of this year, the consumer non-durables output growth slowed to 2.7 per cent as compared to a 9.3 per cent growth in October 2023.

The consumer durables goods segment’s production, on the other hand, expanded by 5.9 per cent during the reporting month as against a 15.9 per cent expansion in October of last year.

The infrastructure/construction goods segment registered a four per cent growth in October 2024, a slide from the 12.6 per cent expansion in the year-ago period.

Data also showed that output of primary goods logged a 2.6 per cent growth in October this year as against 11.4 per cent a year earlier.

Expansion in the intermediate goods segment was 3.7 per cent in the month under review, lower than the 9.5 per cent a year-ago.

Festival Demand Pushes Up Nov Veg Oil Imports to 4-Month High

The country’s vegetable oil imports moved steeply northward to a four-month high in November of this year as refiners increased their purchases of soyoil and sunflower oil, following a big festival season demand.

This was stated by the leading trade body, the Solvent Extractors’ Association of India (SEA) in a statement.

The country’s vegetable oil imports in November increased to 1.63-million metric tonnes (mt), up 10.4 per cent from a month ago, SEA said.

Here, it is important to highlight the fact that India is the world’s biggest edible oil importer. Two of the biggest festivals of the country—Diwali and Dussehra—were celebrated in October and November, increasing the consumption of sweets and fried food.

Soyoil imports moved northward 19.3 per cent in November to 4,07,648 tonnes and sunflower oil imports climbed up a steep 42.5 per cent to 3,40,600-tonnes, the trade body said.

Palm oil imports declined 0.4 per cent from October to 8,41,993 metric tonnes (mt), it said.

The Latin American nation of Argentina has been selling soyoil at very competitive prices for the past two-months, leading to higher imports by India but putting pressure on local soybean prices, the executive director of SEA, Mr B V Mehta said.

Soybean prices are trading below the government-set floor price of 4,892/100-kilogram and are likely to remain under pressure until the flow of excess soyoil is restricted, Mr Mehta observed.

It is important to point out here that India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

Palm oil usually trades at a discount to soybean oil and sunflower oil, but is currently holding a premium over these competing oils.

Palm oil’s premium is forcing Indian refiners to buy more soyoil and sunflower oil. There could be a sharp drop in palm oil imports in December, say industry observers.

UP Earmarks 17,000-Acres for Multimodal Logistics Parks

The Uttar Pradesh state government has earmarked 17,000-acres of land for developing multimodal logistical parks (MMLPs) across the state to feed its ambitious USD 1-trillion economy mission.

The state government is looking to offer a 30 per cent subsidy on land cost provided the company invests at least Rs 1,000-crore in such a project.

An MMLP integrates multiple transportation modes with warehousing and distribution at a single location. It fosters supply-chain efficiency and reduces transportation costs.

The nodal agency—UP Expressway Industrial Development Authority (UPEIDA) has identified swathes of land for MMLP projects in the vicinity of expressways and major highways near big cities.

One highlight of the proposed policy will be that it provides an array of incentives and sops to the private companies on land and capital investment.

The proposed MMLPs will comprise modern warehouses, cold storage, intermodal cargo containers and cargo terminals. It will provide relevant services such as customs clearance, storage yard, warehouse management, testing centre, packaging, grading and labelling under one roof.

Uttar Pradesh’s first multimodal waterway terminal park is being developed on the banks of the Ganga in Varanasi.

Here, it must be pointed out that the state government is making big-ticket investments in roads and expressways to make the state a USD 1-trillion company.

The expanding road infrastructure coupled with a proliferating chain of airports and industrial clusters is fuelling the growth of other sectors such as housing, realty, hospitality and commercial vehicles.

TCS Secures 5-Year Deal with Telenor Denmark

Tata Group company, Tata Consultancy Services (TCS) has secured a five-year deal to continue managing IT infrastructure for Telenor Denmark, the European country’s second-largest mobile operator.

The extension of the partnership builds on a six-year collaboration focussed on modernising and optimising the telecom company’s technological capabilities.

Under the new agreement, TCS will leverage its Machine First Delivery Model and advanced automation technologies to support Telenor Denmark’s IT infrastructure.

Here, it is important to note that the telecom operator which serves over 1.6-million subscribers will benefit from TCS proximity delivery centre in Europe, ensuring operational continuity and cost reductions.

This deal also reinforces TCS’ strong presence in the Nordics, where it has operated for thirty-years.

The company currently supports over 20,000 associates across the region and has been recognised as a top employer by the Top Employers Institute since 2014.

The announcement shows TCS’ commitment to delivering secure, managed services in the telecommunications sector, where it currently serves five of the top ten global telecom operators.