Winning Bizness Economic Desk

Retail inflation in November this year climbed up to 5.5 per cent from 4.87 per cent in the previous month of October, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI).

The northward movement in retail inflation can be mainly attributed to the combination of an unfavourable base effect and a rise in prices of some food items.

It must be pointed out that headline inflation remained within the Reserve Bank of India (RBI)’s tolerance band of 2-to-6 per cent for the third month consecutively.

However, a point to be noted here is that it has, however, been above the medium-term target of four per cent for fifty consecutive months.

An increase in the prices of some food items was a prime reason for retail inflation climbing up; in fact, the Consumer Food Price Index clocked a sequential increase of 1.1 per cent in November as opposed to the 0.5 per cent Month-on-Month (MoM) increase in the general index of the Consumer Price Index (CPI).

Vegetables led the upward movement as their index climbed five per cent MoM primarily due to a 48 per cent sequential increase in onion prices and a 41 per cent rise in tomato prices.

Additionally, food items exhibiting a strong price momentum included eggs (2.8 per cent rise MoM), pulses (1.6 per cent), sugar (1.2 per cent) and cereals (0.9 per cent).

A slide was registered in fruits and edible oils by 0.4 per cent and 0.2 per cent, respectively.

Here, it is pertinent to point out that price momentum was largely subdued with price indices for housing, clothing and footwear, fuel and light and miscellaneous categories only increasing by 0.1 per cent-to-0.3 per cent each as compared to the previous month (October)’s levels.

Consequently, core inflation in November slid further to 4.1 per cent from 4.3 per cent the previous month. Core inflation is inflation excluding food and fuel.

India’s apex bank, the Reserve Bank of India sees Consumer Price Index inflation as averaging at 5.6 per cent in the October-December period.

Industrial Production at 16-Month High in Oct

The country’s industrial production growth increased to a 16-month high of 11.7 per cent in October of this year.

This was primarily propelled by the healthy show of the manufacturing, mining and electricity sectors.

“India’s IIP growth rate rises to a 16-month high of 11.7 per cent in October 2023,” an official statement said.

According to data released by the National Statistical Office (NSO), the manufacturing sector’s output expanded by 10.4 per cent in October of this year.

In the case of mining, production increased 13.1 per cent while the power sector’s output moved northward by a sharp 20.4 per cent.

The Index of Industrial Production (IIP) registered a northward movement of 6.9 per cent in the April-to-October period as compared to the 5.3 per cent growth a year-ago.

Factory output which is measured in terms of the Index of Industrial Production (IIP) had slid by 4.1 per cent in October 2022.

SIAM Says Passenger Vehicles Sales Reach an All-Time High in November

India’s passenger vehicles (PV) segment posted its highest-ever sales in November of this year, reaching 3.34-lakh units. This is a 3.7 per cent Year-on-Year (YoY) growth compared to the year-ago period (November 2022)’s sales figure of 3.22-lakh units.

The above data was released by the Society of Indian Automobile Manufacturers (SIAM).

The passenger vehicles category spearheaded growth, clocking a very healthy increase in sales during November of this year. SIAM’s data clearly indicates a positive trend.

Three-wheelers have also registered a very robust growth of 30.8 per cent as compared to the previous year with this year’s November sales reaching about 59,738 units, approaching the peak observed in November 2017 when sales touched 45,664 units.

A point to be highlighted here is that two-wheelers which comprise a crucial segment in the country’s automobile market, clocked a very sharp surge in sales of around 16,23,399 units in November of this year.

While this is a robust 31.3 per cent expansion in growth as compared to the year-ago period, it is, nevertheless, slightly below the peak recorded in November 2018.

“All segments of the automobile industry witnessed a robust growth during the festival season which ended in the first part of November….Supported by strong economic growth, the industry is optimistic about ending the year 2023 on a high note and expects the trend to continue into 2024.”

RBI Ups FY 24 GDP Growth Forecast

India’s central bank, the Reserve Bank of India (RBI) has upped its GDP growth forecast for this fiscal (FY 24) to a very encouraging seven per cent from the earlier 6.5 per cent.

It has been increased by a good 50 basis points (bps) or 0.50 per cent.

This follows the surprisingly bright performance of the country’s economy in the second-quarter (Q2) of this fiscal.

The GDP number for the July-to-September period has come-in at an encouraging 7.6 per cent which is only slightly lesser than the 7.8 per cent clocked in the April-to-June period.

The Reserve Bank’s Governor, Mr Shaktikanta Das, said that the Indian economy is a “picture of resilience and momentum” amid an unsettled global economic backdrop.

A gradual improvement in rural demand, continued buoyancy in services and strengthening of manufacturing activities will all go towards supporting private consumption, Mr Das said.

A boost in consumption will have a positive impact on the country’s economy.

The RBI Governor further said that healthy balance-sheets of banks and corporates, a higher capacity utilisation, continued optimism about business and the government’s focus on infrastructure should push up capital expenditure by the private sector.

“The drag from external demand is also expected to moderate with a turnaround in merchandise and services exports. The protracted geo-political turmoil, volatility in global financial markets and growing geo-economic fragmentations, however, pose risks to the outlook,” Mr Das said.

Here, it must be pointed out that for the fifth time in a row, the Reserve Bank has left the repo rate untouched at 6.5 per cent. Repo rate is the rate at which the Reserve Bank of India lends money to commercial banks or financial institutions in India against government securities.

Adani Group to Plant 100-mn Trees by 2030

Leading Indian corporate group, the Adani Group, plans to plant a 100-million trees by 2030. The rapidly-growing and highly diversified conglomerate has already planted 29-million trees as a part of the World Economic forum (WEF) target to plant a trillion trees by 2030.

“Already at 29-million, we continue to give our best for enhancing bio-diversity, climate resilience and rural livelihoods. Our goal: 37-million mangroves on India’s coasts and 63-million inland trees, the group’s Chairman Mr Gautam Adani said.

This is among the various green initiatives by the Adani Group to ensure sustainability.

Its two cement companies, Ambuja Cements and ACC, are also playing a leading role in sustainability in the cement industry.

Mr Adani said that the group is committed to powering 60 per cent of its cement production with renewable energy sources by 2028. “This ambitious goal will establish us as a front-runner in the global arena of sustainable cement production,” Mr Adani added.

About Adani Electricity, he had said earlier that it was on course to provide 60 per cent renewable electricity to Mumbai by 2027.

“Currently, over 38 per cent of our supply is green. This Diwali we achieved a landmark by fuelling Mumbai entirely with 100 per cent renewable energy, demonstrating our dedication to a sustainable future,” he had said.