Winning Bizness Economic Desk

The country’s industrial production increased by 3.1 per cent in September of this year, according to data released by the central government.

In August, the Index of Industrial Production (IIP) registered a 0.1 per cent slide.

“The IIP growth rate for the month of September 2024 is 3.1 per cent which was (-) 0.1 per cent in the month of August 2024,” an official statement said.

There was a 3.9 per cent Year-on-Year (YoY) increase in manufacturing output, a 0.5 per cent growth in electricity generation and a 0.2 per cent rise in mining activity in September.

Here, it must be pointed out that these sectors had clocked growth rates of 5.1 per cent, 9.9 per cent and 11.5 per cent, respectively, a year ago.

In the April-to-September period, industrial output witnessed a four per cent increase compared to the revised 6.2 per cent growth from the previous year.

The growth rates of three sectors—mining, manufacturing and electricity—for September are 0.2 per cent, 3.9 per cent and 0.5 per cent, respectively.

Within the manufacturing sector, the top three contributors for September are manufacture of coke and refined petroleum products (5.3 per cent), manufacture of basic metals (2.5 per cent) and manufacture of electric equipment (18.7 per cent).

Based on use-classification, the top three positive contributors to the growth of IIP for September are intermediate goods, consumer durables and primary goods.

Retail Inflation Crosses Reserve Bank’s Tolerance Limit of 6 pc in October

India’s retail inflation rate moved northward to 6.21 per cent in October of this year, up from the 5.49 per cent in the previous month (September), propelled primarily by high food prices during the festive season.

A point that needs to be highlighted here is that this is the first time since August 2023 that inflation has exceeded the Reserve Bank of India (RBI)’s tolerance threshold of six per cent.

Here, it must be mentioned that in September, inflation exceeded the Reserve Bank’s medium-term target of four per cent for the first time since July, reaching 5.49 per cent.

Food inflation increased to 9.69 per cent in October, up from 9.24 per cent in September.

Rural inflation moved northward to 6.68 per cent from 5.87 per cent in September while urban inflation increased to 5.62 per cent from 5.05 per cent the month before.

Food inflation stood at 10.69 per cent in rural areas and 11.09 per cent in urban areas.

The spike in food prices was mainly due to increase in costs of essential items like vegetables, fruits and oils.

What needs highlighting here is that items such as tomatoes, onions and potatoes maintained high prices throughout the month.

Conversely, there were significant decreases in inflation for pulses, eggs, sugar and spices.

A point to note here is that the sharp increase in onion prices in October has been concerning. Wholesale onion prices have surged from Rs 40-Rs 60 per kg to Rs 70-Rs 80 per kg.

The increase in food prices was mainly propelled by vegetables and edible oils.

Moving forward, the focus will be on the kharif harvest season, with careful monitoring of rabi sowing progress.

The housing inflation rate in urban areas increased slightly from 2.72 per cent in September to 2.81 per cent in October. Additionally, the All India Electricity Index witnessed a slight rise in inflation, increasing from 5.39 per cent in September to 5.45 per cent in October of this year.

UK Businesses Drive Growth in Indian Eco

British businesses continue to make significant impact on India’s economy landscape, with 667 UK-owned companies generating Rs 5-trillion in revenue and employing over 5,23,000 people, according to a report.

The Britain Meets India 2024 report by Grant Thornton Bharat and CII highlights the growing footprint of UK businesses in India. It said that 162 UK companies surpass an annual revenue of Rs 50-crore and achieve an at least 10 per cent Year-on-Year (YoY) growth.

These firms span key sectors such as education, technology and infrastructure supporting India’s long-term economic and sustainability goals.

The India-UK trade has expanded from USD 17.5-billion in FY 22 to USD 20.36-billion in FY 23.

According to the report, Maharashtra has emerged as a major hub for UK businesses, accounting for 36 per cent of all British companies in the country.

Other key states for British investments are Delhi, NCR, Karnataka and Tamil Nadu.

An important point the report highlights is that nearly 63 per cent of the UK firms in the country are micro, small and medium enterprises, with business services, industrial products, media, telecom and tech sectors being the leading contributors.

The report also spotlights the important role of UK companies in India’s renewable energy sector.

British International Investment (BII) has committed USD 2.2-billion for India with plans for an additional USD 1-billion investment by 2026 in climate projects.

UK-India partnerships are also growing in the technology and telecom sectors and recent initiatives such as the Technology Security Initiative are driving collaborative research in Open RAN systems and the development of 6G technology which will strengthen telecom security and infrastructure in both countries, the report stated.

Income Tax Department Receives 6,500 Suggestions on Review of IT Act

The Income Tax (IT) Department has received 6,500 suggestions from stakeholders over the past month on the subject of a review of the Income Tax Act.

India’s union finance minister Mrs Nirmala Sitharaman, chaired a meeting on the budget announcement of a comprehensive review of the Income Tax Act.

The meeting was attended by the Revenue Secretary Mr Sanjay Malhotra, the Central Board of Direct Taxes (CBDT) Chairman, Mr Ravi Agarwal and senior CBDT officials.

In a post on X, the finance ministry said that Mr Malhotra informed the finance minister that 22 specialised sub-committees have been established to review the various aspects of the IT Act.

These committees have actively engaged in numerous meetings “both in person and via VC, with domain experts to collaboratively explore and recommend improvements to the Act.”

“During the meeting, the revenue secretary also apprised the finance minister that 6,500 valuable suggestions have been received through the portal since it was opened on 6 October 2024, reflecting active public participation towards further simplification of the IT Act,” the ministry said.

India’s Forex Reserves Decline for Sixth Week

India’s foreign exchange reserves slid for a sixth consecutive week to a near three-month low of USD 675.65-billion as of November 8, data from the Reserve Bank of India (RBI) showed.

The reserves declined by USD 6.5-billion in the reporting week and are down USD 29.2-billion from the record high of USD 704.89-billion touched in late-September.

Changes in the foreign currency assets (FCAs) are caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves.

The Reserve Bank intervenes on both sides of the forex market to prevent undue volatility in the Rupee.

The forex reserves also include India’s reserve tranche position in the International Monetary Fund (IMF).