Winning Bizness Economic Desk

The country’s Index of Industrial Production (IIP) expanded 5.9 per cent in May of this year on the back of a healthy performance in crucial segments such as mining and power.

As per the National Statistical Office (NSO) data, factory output measured in terms of the Index of Industrial Production registered a 5.9 per cent growth in May as against a growth of a lesser 5.7 per cent in May of last year.

“During April-May this fiscal, the IIP grew 5.4 per cent as compared to 5.1 per cent in the year-ago period,” the NSO data showed.

Beating estimates, India’s industrial output grew substantially in some of the sectors on a Year-on-Year (YoY) basis in May. It was widely expected that the growth would be 4.9 per cent for May—hence, the 5.9 per cent increase is very welcome indeed.

The mining production rose to 6.6 per cent and power output by 13.7 per cent while the manufacturing output slowed to 4.6 per cent in May 2024 as against 6.3 per cent in the year-ago period, the data released by the NSO showed.

According to NSO data, the output of consumer durables moved healthily northward by 12.3 per cent during May as compared to only a marginal growth of 1.5 per cent last year (2023).

The output of non-durable consumer goods grew by 2.3 per cent after increasing by 8.9 per cent in May 2023, but goods related to infrastructure and construction clocked a marginal growth of 6.9 per cent in May as against a 13.0 per cent growth YoY, the data showed.

Retail Inflation Climbs to 5.08 Per Cent in June

India’s retail inflation rate moved northward in June owing to an increase in food prices. It breached the five per cent mark, thus reversing its five-month downward trend.

The headline retail inflation increased to a four-month high of 5.08 per cent in June, propelled by the spike in the food inflation rate to 9.36 per cent, data from the National Statistical Office (NSO) revealed.

In May of this year, the headline retail inflation rate stood at a much lower 4.8 per cent.

The rise in food prices was propelled by an acceleration in the prices of cereals (8.75 per cent), fruits (7.15 per cent), vegetables (29.32 per cent) and sugar (5.83 per cent).

An important point here is that though prices of pulses (16.07 per cent) decelerated over the preceding month, it still registered a double-digit increase in June.

Prices of protein-rich items like meat and fish (5.39 per cent) and eggs (3.99 per cent) declined during the month.

Inflation in the food basket moved northward because prices of staple vegetables increased sharply and this was attributed to both supply-side and demand-side factors.

Core inflation, which excludes food and fuel components, had remained benign (3 per cent) as the rise in prices of clothing and footwear (2.73 per cent) and services like recreation (2.39 per cent), education (3.57 per cent) and health (4.13 per cent) witnessed a southward movement during the month.

Housing (2.69 per cent) and fuel (3.66 per cent) witnessed a slight rise in prices.

IMF Ups India’s GDP Growth Forecast to 7 pc

The International Monetary Fund (IMF) has raised India’s GDP growth forecast by 20 basis points (bps) or 0.2 per cent to seven per cent for this fiscal (FY 25).

For the next financial year (FY 26), the IMF has retained the projection at a lower growth rate of 6.5 per cent as stated in its latest edition of the World Economic Outlook.

“The forecast for growth in emerging markets and developing economies has been revised upward; this increase is powered by stronger activity in Asia, particularly in China and India. The forecast for growth in India, has also been revised upward to seven per cent this year, reflecting carry-over from upward revisions to growth in 2023 and improved prospects for private consumption particularly in rural areas,” the multilateral organisation said.

The country’s economy is forecast to expand by seven per cent, up from the 6.8 per cent which the IMF had projected in April.

Overall, global growth is projected to align with the April 2024 World Economic Outlook forecast, a 3.2 per cent in 2024 and 3.3 per cent in 2025.

India’s Q1 Goods Exports Crosses USD 200-bn

The country is eyeing exports exceeding USD 800-billion this fiscal (FY 25) with overall exports breaching the USD 200-billlion mark in the first-quarter (Q1) of this financial year.

“The quarterly figures are quite optimistic. If this trend continues, we will be crossing USD 800-billion in exports this fiscal,” said Commerce Secretary Mr Sunil Barthwal.

According to the provisional trade data released by the Commerce Ministry, the country’s overall exports (including goods and services) amounted to USD 200.3-billion in April-to-June 2024 as against USD 184.5-billion in the first-quarter (Q1) of the last fiscal.

This was the highest-ever exports by India in the first-quarter of a fiscal.

Merchandise imports during the April-June 2024 period were USD 172.23-billion as compared to USD 160.05-billion in the year-ago period.

Merchandise exports increased 2.55 per cent to USD 35.2-billion in June of this year as compared to USD 34.32-billion in June of last year.

Merchandise imports grew 5 per cent in June of this year to USD 56.18-billion as compared to USD 53.51-billion in June 2023.

The trade deficit in June 2024 was at USD 20.98-billion. India’s commerce and industries minister Mr Piyush Goyal had previously said that India’s exports were likely to cross USD 800-billion this fiscal despite external headwinds.

To boost its export growth, India is targeting 20 countries of significance and six major sectors. These include engineering goods, textiles and apparels, electronics, pharmaceuticals, chemicals and plastic and agriculture and allied products.

“This way we can take advantage of growth factors in these sectors and economies,” Barthwal said.

India’s Gems, Jewellery Exports Slide 13 pc in June to Rs 15,939.77-crore

India’s total exports of gems and jewellery registered a 13.44 per cent decline Year-on-Year (YoY) in June, amounting to Rs 15,939.77-crore (USD 1,909.57-million), reflecting a subdued demand in international markets as reported by the Gem and Jewellery Export Promotion Council (GJEPC).

Overall, export in this sector for June 2023 were recorded at Rs 18,413.88-crore (USD 2,240.77-million), according to data with the GJEPC.

An important point to note here is that overall exports of cut and polished diamonds dipped by 25.17 per cent in June to Rs 8,496.87-crore (USD 1,017.87-million) as compared to Rs 11,354.67-crore (USD 1,382.13-million) for the same period of the previous year.

However, the total gold jewellery exports rose by 7.97 per cent at Rs 5,074.27-crore (USD 608.01-million) as compared to Rs 4,699.56-crore (USD 571.63-million) for the same period of the same year.

IT Dept Says 2.7-cr Returns Filed Till July 14

India’s Income Tax Department has said that 13-lakh returns are being filed every day and that till July 14, around 2.7-crore returns have been filed.

“Over 2.7-crore ITRs (income tax returns) have been filed as on July 14, 2024, which is 13 per cent more compared to returns filed during the same period last year,” the Income Tax department said on its e-filing website.

The milestone of 1-crore ITRs for the assessment year 2024-25 was reached on June 23.

Subsequently, the two-crore mark was achieved on July 7 in contrast to the previous year’s dates of June 26 and July 11, respectively.

In the assessment year 2023-24, a total of 6.91-crore returns had been filed as of July 31, 2023. This increased to 8.62-crore by March 31, 2024.

Last week, the Income Tax department said that India’s net direct tax collection recorded a significant growth of 19.54 per cent in FY 25, amounting to Rs 5.4-lakh-crore as of July 11.

The net direct tax collection amounted to Rs 4.80-lakh-crore in FY 24 during the same period, signifying a growth in direct tax collections in the past one-year.

Total refunds stood at Rs 70,902-crore, a significant increase of 64.49 per cent from Rs 43,105-crore in FY 24.

This notable northward movement highlights the government’s efficacy in processing claims promptly and offering timely relief to tax-payers.

Total gross direct tax collection saw a healthy uptick of 23.24 per cent in FY 25, reaching Rs 6,45,259-crore compared to Rs 5,23,563-crore in the previous fiscal.