Indian Economy-News & Updates

[Bang Galore]

Surging Fuel Consumption Shows India's Economy Picking Up Speed
Debjit Chakraborty JournoDebjit
Rajesh Kumar Singh
November 27, 2015 — 12:00 AM IST

• Oil demand growth hits fastest in a decade as car sales rise
• Government workers pay increase to further boost consumption

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India’s busy fuel depots are providing another piece of evidence that Asia’s third-biggest economy is starting to move faster in bridging the vast gap with a slowing China.

Oil product consumption in India expanded at the fastest pace in a decade in October as petrol prices fell amid a global commodity slump. The data gives credence to revamped official gross domestic product figures that made India the world’s fastest growing major economy this year.

“There is no doubt of a pickup in the economy, and that’s fueling India’s oil demand,’’ said Amrita Sen, a London-based analyst with Energy Aspects Ltd. who holds an economics degree from Cambridge University. “This is a clear indication that India’s middle class is going out and spending."

India’s economy probably grew 7.3 percent from a year earlier in the three months through September, according to a Bloomberg survey ahead of Monday’s data release. That would mark three straight quarters of growth topping 7 percent. China’s gross domestic product -- five times bigger than India’s -- expanded 6.9 percent in that quarter, the slowest pace since 2009.

Most Confident Consumers
The oil data also bolsters the case that India’s consumers will help drive growth as investment and exports struggle. The world’s most confident consumers helped India’s passenger car sales jump the most in almost two years in October.

Soon the country’s 1.3 billion people might have even more cash. Prime Minister Narendra Modi’s administration is weighing a recommendation to raise the pay of government workers by 24 percent, the first increase in a decade.

In the best-case scenario, that windfall combined with low inflation could lead to a demand boost that jump-starts a “painfully slow" investment revival, HSBC Holdings Plc analysts led by Pranjul Bhandari wrote in a Nov. 23 note.

“Much of this rests in the hands of the government," Bhandari wrote. “If it can absorb wage hikes without compromising on its fiscal consolidation or capex targets, the consumption boost could herald a period of higher and sustainable growth."

Economic Weakness
That’s a big question mark. The wage increases along with increased economic stimulus spending will make it harder for Modi’s government to meet its fiscal targets, Fitch Ratings said this month.

Other indicators show softness in the economy. Credit growth remains near a 20-year low, while overseas shipments declined for the 11th straight month in October as lower crude prices hurt petroleum exports.

Consumers, though, have been a bright spot.

Higher consumption of oil products will continue through March 2017 driven by “recent policy reforms and a consequent pickup in investment,” according to the Oil Ministry’s Petroleum Planning & Analysis Cell. Fuel consumption touched a five-month high in October, led by diesel and gasoline sales, according to data published by the body.

‘Unsaturated Demand’
Consumption of diesel, which comprises about 42 percent of India’s overall petroleum-fuel use, rose on a pickup in construction activities and strong sales of commercial vehicles. India’s infrastructure output in September grew at its fastest pace in four months to 3.2 percent.

Quarterly growth numbers should signal a recovery in manufacturing, said Shubhada Rao, chief economist at YES Bank in Mumbai. “The trend in capital goods has been quite encouraging as reflected in the infrastructure data.”

Reserve Bank of India Governor Raghuram Rajan has cut the benchmark interest rate by 125 basis points this year in a bid to help spur flagging investment. Economists expect him to keep the rate at 6.75 percent next week.

“Higher consumption is coming from two sides -- a sustained fall in inflation and the monetary transmission from April following RBI’s rate cuts,” said Devendra Kumar Pant, chief economist at New Delhi-based India Ratings and Research Pvt., the local unit of Fitch Ratings. “There’s a lot of unsaturated demand in everything, be it fuels or anything else.”

Surging Fuel Consumption Shows India's Economy Picking Up Speed - Bloomberg Business

 

[Nilgiri]

Surging Fuel Consumption Shows India's Economy Picking Up Speed
Debjit Chakraborty JournoDebjit
Rajesh Kumar Singh
November 27, 2015 — 12:00 AM IST

• Oil demand growth hits fastest in a decade as car sales rise
• Government workers pay increase to further boost consumption

Share on FacebookShare on Twitter
Share on LinkedInShare on RedditShare on Google+E-mail
India’s busy fuel depots are providing another piece of evidence that Asia’s third-biggest economy is starting to move faster in bridging the vast gap with a slowing China.

Oil product consumption in India expanded at the fastest pace in a decade in October as petrol prices fell amid a global commodity slump. The data gives credence to revamped official gross domestic product figures that made India the world’s fastest growing major economy this year.

“There is no doubt of a pickup in the economy, and that’s fueling India’s oil demand,’’ said Amrita Sen, a London-based analyst with Energy Aspects Ltd. who holds an economics degree from Cambridge University. “This is a clear indication that India’s middle class is going out and spending."

India’s economy probably grew 7.3 percent from a year earlier in the three months through September, according to a Bloomberg survey ahead of Monday’s data release. That would mark three straight quarters of growth topping 7 percent. China’s gross domestic product -- five times bigger than India’s -- expanded 6.9 percent in that quarter, the slowest pace since 2009.

Most Confident Consumers
The oil data also bolsters the case that India’s consumers will help drive growth as investment and exports struggle. The world’s most confident consumers helped India’s passenger car sales jump the most in almost two years in October.

Soon the country’s 1.3 billion people might have even more cash. Prime Minister Narendra Modi’s administration is weighing a recommendation to raise the pay of government workers by 24 percent, the first increase in a decade.

In the best-case scenario, that windfall combined with low inflation could lead to a demand boost that jump-starts a “painfully slow" investment revival, HSBC Holdings Plc analysts led by Pranjul Bhandari wrote in a Nov. 23 note.

“Much of this rests in the hands of the government," Bhandari wrote. “If it can absorb wage hikes without compromising on its fiscal consolidation or capex targets, the consumption boost could herald a period of higher and sustainable growth."

Economic Weakness
That’s a big question mark. The wage increases along with increased economic stimulus spending will make it harder for Modi’s government to meet its fiscal targets, Fitch Ratings said this month.

Other indicators show softness in the economy. Credit growth remains near a 20-year low, while overseas shipments declined for the 11th straight month in October as lower crude prices hurt petroleum exports.

Consumers, though, have been a bright spot.

Higher consumption of oil products will continue through March 2017 driven by “recent policy reforms and a consequent pickup in investment,” according to the Oil Ministry’s Petroleum Planning & Analysis Cell. Fuel consumption touched a five-month high in October, led by diesel and gasoline sales, according to data published by the body.

‘Unsaturated Demand’
Consumption of diesel, which comprises about 42 percent of India’s overall petroleum-fuel use, rose on a pickup in construction activities and strong sales of commercial vehicles. India’s infrastructure output in September grew at its fastest pace in four months to 3.2 percent.

Quarterly growth numbers should signal a recovery in manufacturing, said Shubhada Rao, chief economist at YES Bank in Mumbai. “The trend in capital goods has been quite encouraging as reflected in the infrastructure data.”

Reserve Bank of India Governor Raghuram Rajan has cut the benchmark interest rate by 125 basis points this year in a bid to help spur flagging investment. Economists expect him to keep the rate at 6.75 percent next week.

“Higher consumption is coming from two sides -- a sustained fall in inflation and the monetary transmission from April following RBI’s rate cuts,” said Devendra Kumar Pant, chief economist at New Delhi-based India Ratings and Research Pvt., the local unit of Fitch Ratings. “There’s a lot of unsaturated demand in everything, be it fuels or anything else.”

Surging Fuel Consumption Shows India's Economy Picking Up Speed - Bloomberg Business

Posted back in Indian Economy-News & Updates | Page 352 for reference.

 

[Bang Galore]

Tokyo’s $828 mn aid for 2 metro rail projects fast-tracks India-Japan ties
By AT Editor on November 27, 2015 in Asia Unhedged

Bilateral ties between India and Japan have always been on the fast track and it further gained momentum recently thanks to Tokyo’s financial and technological help in modernizing Indian railways.



On Friday, the two nations exchanged notes for Japan’s Official Development Loan Assistance (ODA) worth Rs 55,360 million ($828 million) for Chennai and Ahmedabad metro rail projects.

The Japanese government has committed ODA loan of about Rs 10,800 million ($161 million) for the Chennai Metro Rail Project (IV phase) and Rs 44,560 million ($666 million) for Ahmedabad Metro Project.

In October this year, Japan had offered to finance India’s first bullet train, estimated to cost $15 billion, at an interest rate of less than 1%, officials said, stealing a march on China, which is bidding for other projects on the world’s fourth-largest network.

Tokyo was picked to assess the feasibility of building the 505-kilometer corridor linking Mumbai with Ahmedabad, the commercial capital of Prime Minister Narendra Modi’s home state, and concluded it would be technically and financially viable.

The project to build and supply the route will be put out to tender, but offering finance makes Japan the clear frontrunner.

In September, China won the contract to assess the feasibility of a high-speed train between Delhi and Mumbai, a 1,200-km route estimated to cost twice as much. No loan has yet been offered.

Japan’s decision to give virtually free finance for Modi’s pet program is part of its broader push back against China’s involvement in infrastructure development in South Asia over the past several years.

“There are several (players) offering the high-speed technology. But technology and funding together, we only have one offer. That is the Japanese,” said AK Mital, the chairman of the Indian Railway Board, which manages the network.

The two projects are part of a ‘Diamond Qaudrilateral’ of high speed trains over 10,000 km of track that India wants to set up connecting Delhi, Mumbai, Chennai and Kolkata.

Japan has offered to meet 80% of the Mumbai-Ahmedabad project cost, on condition that India buys 30% of equipment including the coaches and locomotives from Japanese firms.

Japan’s International Cooperation Agency, which led the feasibility survey, said the journey time between Mumbai and Ahmedabad would be cut to two hours from seven.

The route will require 11 new tunnels including one undersea near Mumbai.

“What complicates the process is Japanese linking funding to use of their technology. There must be tech transfer,” said Mital.

 

[ranjeet]

Power minister Piyush Goyal’s Domestic Efficient Lighting Programme (DELP) is possibly the most effective government scheme in recent times, and in the shortest possible time-frame. DELP was launched by the Prime Minister on January 15 and, within a period of 9 months, 3.1 crore LED bulbs have been distributed by a public sector firm in six states, as a result of which 1,042 MW of peak power demand has been avoided, 9,064 tonnes of carbon dioxide emissions reduced every day (3.3 million tonnes a year) and consumers are saving Rs 4.4 crore every day (Rs 1,600 crore a year). Once the scheme is fully rolled out across 100 cities, it hopes to replace 77 crore regular light bulbs, by which time this would have resulted in a saving of 20,000 MW load—that’s around a tenth of India’s connected load—along with a reduction of around 80 million tonnes of carbon emissions each year; consumer savings, at that point, will be a whopping Rs 40,000 crore per year. Most important, as a result of the government launching such an ambitious scheme and the state governments buying into it, there has been a dramatic reduction in costs of LED bulbs from an unaffordable Rs 350 apiece last year to around Rs 75 today.

Another very good example of how the government is using its powers of bulk purchases to dramatically drive down costs is what’s happened to cement. When highways minister Nitin Gadkari first spoke of constructing concrete highways, most rubbished this as too expensive and, in fact, cement prices started rising in anticipation of the increased demand. The government, however, decided to create a portal for purchasing cement and, in the process, managed to convince producers that they would benefit by lowering prices. With poor offtake for cement and capacity utilisation at most plants low, a total of 37 cement manufacturers have committed to selling the government 9.5 million tonnes at a price of Rs 120-140 per bag as compared to Rs 300 or so at the time Gadkari first announced the construction of concrete roads. The same exercise is now being replicated for steel. These schemes clearly show that when the government wants, it can play the role of a catalyst in promoting and pushing necessary changes quickly.

Editorial: Government LED the way | The Financial Express

 

[Echo_419]

Power minister Piyush Goyal’s Domestic Efficient Lighting Programme (DELP) is possibly the most effective government scheme in recent times, and in the shortest possible time-frame. DELP was launched by the Prime Minister on January 15 and, within a period of 9 months, 3.1 crore LED bulbs have been distributed by a public sector firm in six states, as a result of which 1,042 MW of peak power demand has been avoided, 9,064 tonnes of carbon dioxide emissions reduced every day (3.3 million tonnes a year) and consumers are saving Rs 4.4 crore every day (Rs 1,600 crore a year). Once the scheme is fully rolled out across 100 cities, it hopes to replace 77 crore regular light bulbs, by which time this would have resulted in a saving of 20,000 MW load—that’s around a tenth of India’s connected load—along with a reduction of around 80 million tonnes of carbon emissions each year; consumer savings, at that point, will be a whopping Rs 40,000 crore per year. Most important, as a result of the government launching such an ambitious scheme and the state governments buying into it, there has been a dramatic reduction in costs of LED bulbs from an unaffordable Rs 350 apiece last year to around Rs 75 today.

Another very good example of how the government is using its powers of bulk purchases to dramatically drive down costs is what’s happened to cement. When highways minister Nitin Gadkari first spoke of constructing concrete highways, most rubbished this as too expensive and, in fact, cement prices started rising in anticipation of the increased demand. The government, however, decided to create a portal for purchasing cement and, in the process, managed to convince producers that they would benefit by lowering prices. With poor offtake for cement and capacity utilisation at most plants low, a total of 37 cement manufacturers have committed to selling the government 9.5 million tonnes at a price of Rs 120-140 per bag as compared to Rs 300 or so at the time Gadkari first announced the construction of concrete roads. The same exercise is now being replicated for steel. These schemes clearly show that when the government wants, it can play the role of a catalyst in promoting and pushing necessary changes quickly.

Editorial: Government LED the way | The Financial Express

Goyal ji is doing a good job

 

[Nilgiri]

Piyush Goyal has asked people to hold him accountable and unveiled a real time dashboard for people to track progress of electrification across India:

Dashboard

 

[Ragnar]

Patanjali to invest Rs 1,000-crore on expansion: Baba Ramdev - The Economic Times

Patanjali to invest Rs 1,000-crore on expansion: Baba Ramdev

Patanjali Ayurved, the FMCG venture promoted by yoga guru Baba Ramdev, will invest Rs 1,000 crore next year on expansion and plans to sharpen focus on e-commerce and exports.

The Haridwar-based firm will set up manufacturing plants in South India and is looking to become partner in mega food park being developed in southern cities.

Patanjali, which has 15,000 stores across the country, plans to add more products in segments where it already has presence such as dairy, instant foods, baby care, natural cosmetics and health supplements.

"We are likely to invest about Rs 1,000 crore in 2016 for various initiatives," Ramdev told PTI.

On the source of funding, he said banks have already sanctioned Rs 500 crore as working capital loan and they are ready to grant more funds for further expansions.

"There is no issue on funding," he said.

Patanjali had sales turnover of Rs 2,000 crore in last fiscal and expects to reach Rs 5,000 crore in FY 2015-16. It operates a large mega food park at Haridwar.

In dairy segment, Ramdev said that Patanjali is planning to launch cow milk powder and is also looking at cheese and chocolates.

That apart, Patanjali will enter into manufacturing of nutritious animal feed and work of improve the indigenous cow breeds to boost milk production.

Ramdev said the company will launch its premium natural cosmetic under Saundarya brand and baby care products under Shishu care brand next month.

On expansion of sales network, he said Patanjali would soon be present in all modern retail chain formats.

"Our products are already at Big Bazaar, Reliance Fresh, D Mart and other modern retail outlets. Soon they will be available on the other remaining big retail format," said Ramdev.

Patanjali sells its products through 15,000 franchise stores pan India of which 5,000 are big stores and rest are in shop-in-shop concept.

"We are soon coming out with our Patanjali mega stores which would be spread in 2,000-3,000 sq feet, exclusively for our products," Ramdev said.

When asked about e-commerce, he said: "We are present online on a very small scale and we are gearing up to make it big. We are working on that."

Patanjali is considering manufacturing units in Andhra Pradesh, Karnataka, Maharashtra and Madhya Pradesh to cater to the Southern market and meet the demand of other regions.

Ramdev said the company would focus on exports from March next year and target countries including USA, UK, Canada.

 

[Nilgiri]

Has anyone tried any of their products? ^^

 

[Great Sachin]

Has anyone tried any of their products? ^^

excellent quality products....just love them....

 

[Ragnar]

Has anyone tried any of their products? ^^

Good products. I like their biscuits. Amla Hair Oil is also pretty good.

 

[ranjeet]

 

[Echo_419]

 

[ranjeet]

https://twitter.com/x/status/671298906635042816

https://twitter.com/x/status/671299145659994112

https://twitter.com/x/status/671299219655942144

 

[Nilgiri]

@Dungeness Q2 growth is 7.4% compared to 7 % for Q1 (Both may be revised upwards later on too)

Comments?

In a big boost for manufacturing, the sector grew at 9.3% versus 7.9% YoY. Agricultural sector growth was reported at 2.2% versus 2.1% YoY. " The growth in the 'agriculture, forestry and fishing', 'mining and quarrying', 'electricity, gas, water supply & other utility services, 'construction' and 'public administration, defence and other services' is estimated to be 2.2 per cent, 3.2 percent, 6.7 per cent, 2.6 per cent and 4.7 per cent, respectively, during this period," the release added.

Read more at:
India's GDP grows at 7.4% in Q2 of FY16; manufacturing grows at robust 9.3% - The Economic Times

 

[ni8mare]

Moneycontrol Bureau India's second quarter gross domestic product (GDP) grew 7.4 percent, compared to 7 percent in the previous quarter. This is slightly shy of the 7.5 percent figure a CNBC-TV18 poll of economists had forecast. The GDP data was boosted by a nominal increase in agriculture sector growth, which stood at 2.2 percent, compared to 1.9 percent QoQ. Mining sector grew at 3.2 percent versus 4 percent while manufacturing growth stood at 9.3 percent, compared to 7.9 percent QoQ. "The strongest positive sign is the strong growth in manufacturing which we are seeing and also, relatively strong growth in elements of the services sector," TCA Anant, Chief Statistican of India, told CNBC-TV18 in an exclusive interview. "The weakness which I see in this number is actually the fact that a significant part of the good growth in GDP at constant prices is arising because of the negative inflation rate which is there in WPI and as a consequence, the overall GDP deflator comes out to be negative," he said. "That is a point of concern because growth in current prices is less than the growth in constant prices," he added. "The numbers are largely in line with the market's expectations," SBI chief economist Soumya Kanti-Ghosh told CNBC-TV18. "The numbers were boosted by strong performance by agriculture. This was thanks to the robust kharif season," he added. The GDP growth measured in the methodology that was revised recently is through the gross value added (GVA), which is a higher number because of low input prices, said Dr Pronab Sen, former Planning Commission member Pronab Sen. "The industry also appears to have become efficient," he added. According to Dr Sen, GDP mumbers will likely not go back to their "8-9 percent glory years" till construction activity turns around. Construction sector growth stood at 2.6 percent in the second quarter, and has been languishing for a few years due to the real estate slowdown. "This shows that the steps taken by the government to boost public investment and push projects approval are yet to reflect fully," he said. SBI economist Ghosh said he expects growth in the next few quarters to increase marginally. However, the second quarter GDP will likely not have an impact on bond or stock markets as they are in line, Standard Chartered's Ananth Narayan and stock broker Dipan Mehta told CNBC-TV18. Mehta said equities will look forward to upcoming monetary policy decisions by the Reserve Bank of India and the Federal Reserve.

Read more at: Q2 GDP rises to 7.4% vs 7% QoQ, boosted by mfg, agriculture - Moneycontrol.com


@Guynextdoor2 @Rangila