Industrial output is steady

Retail inflation eased to a five-month low in March on the back of cooling food prices, while industrial output growth remained robust in February, signalling a recovery. Inflation, as measured by the consumer price index, rose an annual 4.3% in March, which was slower than previous month’s 4.4%. Inflation in the rural areas was 4.4%, while in urban areas it was 4.1%.

The food price index slowed to 2.8% in March from February’s 3.3% as vegetable prices cooled. Prices of pulses contracted 13.4% during the month as well as sugar and confectionary by 1.6%.

Industrial output growth remained steady in February, led by strong performances by the manufacturing and capital goods sectors. The index of industrial production rose an annual 7.1%, marginally slower than the previous month’s 7.4%

ADB Expects India to Clock 7.3% GDP Growth

India is expected to be the fastest growing economy in Asia and will reverse two years of declining growth to clock 7.3% rise in GDP in the current fiscal and further accelerate to 7.6% in FY20, the Asian Development Bank said in its forecast for the region.

The dip in growth to 6.6% in FY17 was in part due to the lingering effects of demonetisation that impacted the informal sector in the first half of FY17 and teething issues related to implementation of the GST, the ADB said in the latest Asian Development Outlook 2018 report. It expects various reforms measures to lift growth.

According to India’s official estimates, the economy picked up pace to 7.2% in October-December 2017 quarter from 6.5% in July-September quarter and 5.7% in April-June quarter. For the entire FY18, the economy is expected to grow 6.6%.

The Reserve Bank of India expects 7.4% growth in FY19.

China is forecast to slow down from 6.9% in 2017 to 6.6% this year and further 6.4% in 2019.

"India would remain the fastest growing country across Asia," ADB India country director Kenichi Yokoyama said but flagged rising NPAs and crude prices spiking to over $70 a barrel as risks.

India’s growth will get support from measures to bolster farmers’ purchasing power through higher procurement prices, agriculture market reforms and investments in irrigation and logistics, the Manila-based bank said. “Investment revival is expected to continue, albeit at a modest rate, as firms and banks strive to improve their balance sheets, and capacity utilization levels pick up,” it said in a statement.

Inflation is forecast to rise to 4.6% in FY18 and 5% in FY19 due to firmer global commodity prices and stronger domestic demand.

“The uptick in inflation along with deferment of fiscal consolidation and expected hikes in the US Federal Reserve’s interest rate has reduced the room for policy rate cuts to stimulate growth,” it said.

A pick-up in growth in advanced economies will likely help exports grow at a healthy rate, but the ADB added that though protectionist trade measures by the United States are yet to impact trade, they pose a risk.

Mhalunge model in Manjri-Khurd next

The outskirts of Pune are set for a makeover with the PMRDA willing to lay out 15 more town planning schemes within the next 18 months along the first 32 km stretch of the proposed 128 km Ring Road.

Pune Metropolitan Region Development Authority commissioner Kiran Gitte said following the approval to the Mhalunge town planning scheme, a meeting was held with villagers in Manjri Budruk villagers. “Two townships will come up in the area — one in Budruk and another in Manjri Khurd. Talks will be started with other villages for similar townships along the Satara road-Nagar road stretch,” he said.

“PMRDA will come up with 15 TP schemes be spread over 250 hectares. We have the manpower, but have to generate funds for the infrastructure through land monetisation,” Gitte said. The authority would have taken five more villages, but some of them have been included in the Pune Municipal Corporation’s jurisdiction.

The project would be based on the Ahmedabad model that saw development of 78 townships in 10 years. Gitte said the entire ring road would see nearly 50 such townships during the same period.

Among the villages considered for the townships in the first phase are Manjri Khurd, Wadachi Wadi, Avatalewadi, Holkarwadi, Wadki, Manjri Khurd and Manjri Budruk, Phursungi , Urali Devachi, Yevalewadi, Pissoli and Handewadi. Some of these villages will have two townships.

Gitte hoped that the township model here could be put on the fast track, as the real estate sector in Pune was better than the one in Ahmedabad. The township model will help these villages get a complete new look with land owners standing to get 50% of the plots in the same areas.

However, the roll-out of the project has its challenges as well. The biggest of the challenges is communication within the villages. To tide over this, PMRDA will have to raise funds through municipal bonds, loans and land monetisation for readying the infrastructure.

The schemes have been proposed to make the 128-km Ring Road project self-sustainable with planned development along it. The new schemes will be built 500m from the proposed road.

The town planning and the Ring Road projects will be developed simultaneously and they are a part of the same scheme.

Rupee sinks to a 5-month low

The Rupee nosedived by 32 paise to hit a fresh five-month low of 65.31 against the US dollar as surging crude oil prices and growing geopolitical uncertainties rattled forex market sentiment. This is the lowest closing for the home currency since November 14, 2017, when it had ended at 65.42 against the greenback. Brent crude, an international benchmark, was trading near a four year peak of $72 a barrel in early Asian trade.

A sense of volatility prevailed in the domestic currency market after a rapid surge in global crude prices driven by prospects of geopolitical uncertainty in the Middle East following US President Donald Trump’s promise to respond “forcefully” to a suspected chemical attack in Syria

Maruti dominates Top 10

Maruti Suzuki has ended fiscal 2017-18 with a clean sweep of the top five selling passenger vehicle models in India. The company’s Alto has topped the all-India sales tally for the fiscal with 2.5 lakh units, followed by Dzire (2.4 lakh), Baleno (1.9 lakh), Swift (1.7 lakh) and WagonR (1.68 lakh).

While Maruti’s dominance in the top-10 best-selling models list is not new, this year the difference between sales numbers of the mass market entry-level Alto and the compact sedan Dzire has come down from more than 40,000 units in FY16-17 to a mere 18,415 units. While Alto, too, has grown by 7%, the reason for the reduction in sales gap is due to Dzire’s much higher growth at 20%. Indeed, the only model that did not grow in the top-5 list is Maruti’s WagonR, which saw sales dipping from 1.72 lakh units in FY16-17 to 1.68 lakh this time round.

A look at the sales tally comparison between FY16-17 and FY17-18 tells the story: Maruti Suzuki clocked the highest growth in the top-5 list in the Baleno, which grew a staggering 58% year-on-year. The second-highest growth was in Dzire sales. In comparison, older models like Swift and Alto showed modest growth. While Swift grew just 5.4%, WagonR actually contracted by 2%.

Maruti also has two more models in the top-10 list — Vitara Brezza at No. 7 and Celerio at No. 10. While Vitara Brezza sales grew nearly 37% to 1.5 lakh units, Celerio sales actually contracted by almost 3% to 94,721 units.

The growth patterns show the trend: Although the entry segment is still growing on the back of the Alto’s popularity, the growth spurt is much lower than what’s being totted up by the SUV and sedan brigade. Even a not-so-new Dzire has clocked a significant double-digit growth rate, showing the increasing preference for ‘bigger’ vehicles. Clearly, India still loves the hatch, but is beginning to aspire for other vehicle types like sedans and SUVs.

Record Car sales in India in FY18

Passenger vehicles sales in India were at a record high in 2017-18 touching almost 3.3 million units, growing at 7.89% driven by demand from smaller towns coupled with increasing popularity of utility vehicles.

Domestic passenger vehicles sales were at 32,87,965 units beating the previous best of 30,47,582 units posted in 2016-17. Domestic car sales in 2017-18 were at 21,73,950 units as against 21,03,847 units in 2016-17, displaying a growth of 3.33%. Utility vehicles sales were at 9,21,780 units last fiscal as against 7,61,998 units in 2016-17, a growth of 21%. 

Linking river Sharda with the Gomti

The river Gomti will get additional water as the UP state government has approved linking the river with a canal of the river Sharda in Pilibhit. The linking work, under the Gomti revival project by the state irrigation department, began this week.

While the Gomti’s flow has been on the decline because of continuous silting and pollutants, river Sharda is relatively healthy, providing water to several irrigation projects in UP.

Under the canal linking project, the Gomti will be connected with Devipur (minor) canal of river Sharda in Madhotanda area of Pilibhit. It is about 2 km from the Gomti, and when connected, can yield about 10-15 cusec water daily into the river.

This would be of great help in the upstream area of the Gomti where the river has reportedly been drying due to excessive desilting.

Irrigation officials said that the Gomti’s total 900 km length will be revived from Pilibhit to Jaunpur in phases and the exercise will be completed by this year-end. The first phase will cover the stretch from Pilibhit to Lakhimpur and is expected to be completed before the arrival of monsoon.

Superintending engineer in the irrigation department in Bareilly AK Sengar said, “A special initiative under the revival project is desilting, where we have asked for support from people, NGOs, industries, schoolchildren and labourers under the Mahatma Gandhi National Rural Employment Act . This will help in manual desilting of the riverbed from Pilibhit to Lakhimpur Kheri.” The irrigation team, along with people’s participation, will desilt around 45 km of the Gomti till Lakhimpur Kheri in the first phase. Officials said people’s participation would also be sought in the plantation drive along the Gomti’s banks.

Everyday, millions of litres of untreated waste flows into the river, making it extremely polluted. The treated water does not meet the general standards for discharge according to the Water (Prevention and Control of Pollution) Act, 1974. This has affected the internal eco-system of the river, leading to a fall in its aquatic quality and making it unsuitable for secondary purposes like bathing or washing clothes.