Economic Affairs and Research Division 1

Review of the Indian Economy, August 2013

The global economy is showing some signs of recovery. Recently released data for Euro zone indicates an

improvement being led by Germany and France which is encouraging. Revival has also been noted in US

and Japan. Though this is positive the overall situation is still fragile and it would take a little longer to see

firm signs of recovery.

On the domestic front, the steep plunge in the Rupee value has emerged as one of the biggest challenge.

Though the Central Bank has been in a watchful mode taking steps to tame Rupee, the situation continues

to be grave. However, some measures announced recently like imposing controls on companies investing

abroad do not conform to our pro liberalization stance. This was also evident from the reaction of the

markets which went in to a tizzy on August 16, 2013.

We hope the liquidity tightening measures announced recently will be reversed once the situation becomes

stable.

Gross Domestic Product

Slack recovery in the global economy paired with domestic issues continues to challenge the policy makers. India

has seen a visible moderation in GDP growth over the past few quarters and latest projections once again indicate

a downward revision in the forecasts for the current fiscal. The First Quarter Monetary Policy Review by RBI

puts the growth forecast for 2013-14 at 5.5%, 0.2 percentage points lower than estimate put out in the Annual

Policy statement in May 2013.

Table 1: GDP Growth Projection 2013-14 (in per cent)

Organization Latest GDP Forecast Previous Projection Previous Projection

Reserve Bank of India

5.5 (July 2013)

5.7 (May 2013)

-

PMEAC - 6.4 (April 2013)

-

Economic Survey - 6.1-6.7 (Feb 2013)

-

IMF 5.6

(July 2013) 5.8

(April 2013) 6.0

(January 2013) World Bank 5.7

(June 2013) 6.1

(April 2013) 6.4

(January 2013) Asia Development Bank

5.8 (July 2013)

6.0 (April 2013)

6.5 (December 2012)

NCAER - 6.2

(May 2013) 6.2

(January 2013) CRISIL 5.5

(July 2013) 6.0

(April 2013) -

HSBC 5.5 (June 2013)

6.0 (March 2013)

6.2 (January 2013)

Morgan Stanley - 6.0 (March 2013)

6.2

CARE - 6.0 (March 2013)

-

Source: Various Sources

Economic Affairs and Research Division 2

The latest available quarterly data for GDP, reported a growth of 4.8% in Q4 FY 13, marginally higher than the

fourteen quarter low of 4.7% in Q3 FY13. All the three major sub segments have witnessed a discernible

slowdown. What is particularly bothersome is the performance of the services sector. The sector which has been

the engine of growth for the Indian economy touched an eleven year low growth of 6.8% in 2012-13.

Table 2: GDP Growth

Item 2011-12*

2012-13#

2011-12 2012-13

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1. Agriculture, forestry & fishing

3.6 1.9 5.4 3.2 4.1 2.0 2.9 1.7 1.8 1.4

2. Industry 2.7 1.2 6.5 2.7 0.9 1.0 -0.2 0.5 2.3 2.0 2.1 Mining & quarrying

-0.6 -0.6 -0.4 -5.3 -2.6 5.2 0.4 1.7 -0.7 -3.1

2.2 Manufacturing

2.7 1.0 7.4 3.1 0.7 0.1 -1.0 0.1 2.5 2.6

2.3 Electricity, gas & water supply

6.5 4.2 6.6 8.4 7.7 3.5 6.2 3.2 4.5 2.8

3. Services 7.9 6.8 8.3 8.2 8.1 7.0 7.6 7.1 6.2 6.3

3.1 Trade, hotels, transport, storage and communication

7.0 6.4 9.5 7.0 6.9 5.1 6.1 6.8 6.4 6.2

3.2 Financing, insurance, real estate and business services

11.7 8.6 11.6 12.3 11.4 11.3 9.3 8.3 7.8 9.1

3.3 Community, social & personal services

6.0 6.6 3.5 6.5 6.8 6.8 8.9 8.4 5.6 4.0

3.4 Construction

5.6 4.3 3.8 6.5 6.9 5.1 7.0 3.1 2.9 4.4

4. GDP at factor cost (Total 1 to 3)

6.2 5.0 7.5 6.5 6.0 5.1 5.4 5.2 4.7 4.8

Source: MoSPI

Economic Affairs and Research Division 3

Further, the latest quarterly data saw the services sector growth slowing to 6.3% in Q4 2012-13. Except for the

trade, hotels, transport, storage and communication sub segment, all the major segments of the services sector

witnessed a deceleration vis-à-vis Q4 of last fiscal.

The industry sector witnessed a growth of 2.0% in Q4 FY13, lower than 2.3% growth in Q3 FY13 but slightly

better than 1.0% growth in Q4 FY12. Though a slight improvement has been reported in manufacturing growth, a

real pick up in manufacturing activity has not happened. In addition, the mining sector decelerated by 3.1% in Q4

of last fiscal and the performance of the Electricity, Gas and Water supply was also not very encouraging.

The persisting stubbornness of Rupee above 60 for a dollar has come up as one of the major concerns and will not

bode too well for the economy. Also, investments continue to languish and the continued efforts of the

government do not seem to have actualized. Though several announcements have been made to raise FDI caps in

a host of sectors, it is equally important to kick start domestic investments.

The gross domestic fixed capital formation (GFCF) increased by 1.7% in 2012-13, which was the lowest since

2004-05. In fact even during the crisis year of 2008-09, GFCF registered a growth of 3.5%. The quarterly

numbers do indicate an improvement vis-à-vis the situation last year and at the start of this year, but the numbers

are still too meager as investors continue to be apprehensive about the overall economic situation. The latest

available data for Q4 FY13, reported a growth of 3.4% in GFCF vis-à-vis 2.6% in the same quarter last year and

(-) 2.2% in Q1 FY13.

Table 3: Gross Fixed Capital Formation – Growth (in %)

05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13

GFCF 16.2% 13.8% 16.2% 3.5% 7.7% 14.0% 4.4% 1.7%

Agriculture 12.1% 6.5% 14.1% 20.5% 4.2% -1.9% 12.9% Na

Industry 18.5% 21.5% 18.3% -15.5% 16.0% 18.5% -5.6% Na

Services 15.0% 8.7% 14.6% 18.7% 2.7% 13.1% 11.1% Na

Source: MoSPI

Going ahead, the pace of recovery is likely to be moderate. However, GDP this fiscal is likely to see an

improvement from the 5.0% growth registered last year. This will be supported by an improved performance of

the agriculture sector. The monsoons have been normal this year, with 29 out of 36 sub divisions receiving excess

to normal rainfall as on July 24, 2013 relative to the corresponding figure of 14 last year.

Also, the recent news of a likely turnaround in the Euro zone is certainly positive. The data released recently

shows some signs of recovery, being led particularly by Germany and France. Some upturn has been evident in

the United States and Japan as well.

In fact, in the recently released FICCI’s Economic Outlook Survey, the respondents indicated that they expect a

growth of 6.0% in 2013-14, ranging from a minimum of 5.5% to a maximum of 6.5%. The quarterly forecast was

reported at 5.0% for Q1 FY 2013-14.

Economic Affairs and Research Division 4

Index of Industrial Production

The index of industrial production (IIP) numbers released for the month of June 2013 reported a growth of (-)

2.2%, which was a second consecutive month of decline. The poor performance though anticipated is very

worrying as the numbers are failing to show improvement.

The sectoral classification indicates negative growth in both mining and manufacturing sub sectors, and nil

growth in the Electricity sector in June 2013. The corresponding numbers were no better in June last year for the

mining and manufacturing sector except for the Electricity segment which reported a growth of 8.8%.

Further, within the manufacturing sector, 13 out of the 22 sub segments reported contraction vis-à-vis the same

month last year. Some sectors which witnessed a deceleration included Furniture manufacturing, Medical,

precision and optical instruments, Motor vehicles, trailers and semi trailers.

Table 4: Index of Industrial Production Growth (in %)

2013-14

(Apr-June)

2012-13

(Apr-June)

June 2013 June 2012

General Index -1.1 -0.2 -2.2 -2.0

Mining -4.5 -1.6 -4.1 -1.1

Manufacturing -1.2 -0.8 -2.2 -3.2

Electricity 3.5 6.4 0.0 8.8

Use-based industrial groups

Basic goods -0.3 3.3 -1.9 3.6

Capital goods -3.3 -20.1 -6.6 -27.7

Intermediate goods 1.5 0.8 1.1 0.9

Consumer goods -2.4 4.0 -2.3 3.7

Durables -12.6 8.0 -10.5 9.1

Non-durables 6.6 0.6 5.0 -0.5

Source: MoSPI

As per the Use Based Classification, the performance of the Capital goods sector was once again dismal. The

capital goods segment reported a growth of (-) 6.6% in June 2013, vis-à-vis (-) 2.6% growth in May 2013 and (-)

27.7 growth in June 2012. The growth in the Basic goods sector decelerated by 1.9% in June 2013, vis-à-vis (-)

0.9% growth in May this year. The Intermediate Goods sector witnessed a growth 1.1% in June 2013.

The Consumer goods segment witnessed negative 2.3% growth in June 2013 as against the (-) 7.3% growth seen

in May 2013. While Consumer Durable goods segment growth declined by (-) 10.5% in June 2013, vis-à-vis (-)

18.4% growth in May 2013, a positive growth was reported in Consumer Non durable segment.

The demand situation remains subdued and has come across as one of the biggest constraints for industry

members. About 73% of the participants in FICCI’s Business Confidence Survey for Q4 FY13 reported weak

demand to be a worrying factor hampering their growth. Nevertheless, a slight improvement was indicated in the

Economic Affairs and Research Division 5

proportion of respondents citing an improvement in the order book position over the first and the second quarter

of 2013-14.

The participants of FICCIs Economic Outlook Survey put forth a growth forecast for industrial sector of 3.5% for

2013-14, which at this juncture seems a little difficult to achieve.

Core Sector

The Overall Core sector index reported negligible growth for the month of June 2013. The growth was reported at

0.1% for June 2013, vis-à-vis 2.3% growth in May 2013 and 7.9% growth in June 2012. Some of the major

constituent segments of the Overall Index like Electricity, Crude Oil and Coal witnessed negative growth.

However a substantial improvement was noted in the Fertilizer segment which reported a growth of 11.3% in

June 2013. The corresponding growth in June 2012 was (-) 11.7% and in May 2013 was (-) 2.0%.

Table 5: Core Sector- Growth (in %)

Apr-Jun

2012-13

Apr-Jun

2013-14

Jun-12 Jun-13

Coal 8.0 -1.1 8.4 -3.0

Crude Oil -0.6 -1.4 -0.8 -0.6

Natural Gas -11.0 -17.6 -11.1 -16.7

Refinery

Products

23.5 4.6 26.2 2.3

Fertilizers -12.2 2.5 -11.7 11.3

Steel 3.4 3.1 4.1 3.4

Cement 12.5 3.3 9.5 2.3

Electricity 6.7 2.8 8.8 -1.2

Overall 6.9 1.6 7.9 0.1

Source: MoSPI

Inflation

The Wholesale Price Index for the month of July 2013 indicates re-occurrence of inflationary pressures. This was

somewhat anticipated given the sharp plunge in the Rupee value. Inflation rate increased to 5.79% in July 2013,

which was the second consecutive month of increase. The corresponding number last month was 4.86% and was

7.52% in the same month last year (July 2012).

Table 6: Wholesale Price Index: Growth (in %)

Jul

12

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Apr

13

May

13

Jun

13

Jul

13

All

Commodities

7.52 8.01 8.07 7.32 7.24 7.31 7.31 7.28 5.65 4.77 4.58 4.86 5.79

(I)Primary

Articles

10.54 11.23 9.22 7.81 9.56 10.56 11.41 10.54 7.36 5.06 5.72 8.14 8.99

(II)Fuel &

Power

8.39 8.74 12.00 11.65 9.97 10.25 9.27 10.64 7.76 8.33 7.27 7.12 11.31

Economic Affairs and Research Division 6

(III)Manufac

tured

Products

5.87 6.36 6.47 5.95 5.41 5.04 4.95 4.80 4.28 3.69 3.25 2.75 2.81

Source: MoSPI

All the three broad sub segments witnessed an increase in price levels. The Primary articles inflation was 8.99%

in July 2013 led by an increase in food articles such as cereals and vegetables. Most of the protein rich items like

pulses, milk and egg meat and fish saw decline in price levels. Though the current increase in cereal and vegetable

prices might be due to seasonal factors, but it is imperative that the government double its efforts to address

supply side issues with regard to agriculture commodities’ distribution logistics.

The Fuel and Power segment also witnessed price levels increasing by 11.31% in July 2013, vis-à-vis 7.12% in

June 2013 and 8.39% in July 2012. The increase in crude oil prices and steep depreciation of rupee has firmed up

fuel and power costs. Recent reports indicate the Oil Marketing Companies are facing under recoveries of Rs

10.22 per liter on diesel and this is despite the government mandate earlier this year allowing these companies to

raise diesel prices by 50 paise fortnightly. The under recovery on diesel was at a low of Rs 3.7 per litre in the

second fortnight of May 2013.

The inflation in case of Manufacturing remained well within the comfort zone. The WPI registered a growth of

2.81% in July 2013, which was a marginal reversal after nine consecutive months of decline. Non food

manufacturing inflation was about 2.4% in July 2013, vis-à-vis 2.0% in June 2013.

However, going ahead inflation is expected to remain benign. FICCIs Economic Outlook Survey expects inflation

rate to be about 5.5% by end of this fiscal, which is in line with RBI expectations.

In addition, what is also positive news is marginal decline noted in the Consumer Price Index-Industrial Workers

(CPI-IW). The CPI-IW inflation rate was reported at 9.64% in July 2013. The corresponding number was 9.87%

in June 2013 and 9.86% in July 2012.

Foreign Trade

Exports in July 2013 showed a double digit growth rate for the first time in two years. Exports rose by 11.6% in

July after registering negative growth rates in April, May and June 2013. The rise in exports in July can be

attributed to the weakened rupee and improvement in demand from Latin America, Africa and Asean.

Imports dipped further in July 2013 by (-) 6.2% to USD 38.1 billion as compared to (-) 0.4 % growth in June

2013. This might be due to a discernible fall in the imports of gold & silver and a decline in oil imports as well.

Gold and silver imports in July 2013 declined to USD 2.97 billion down from USD 4.47 billion in the same

month last year. Measures taken by the government in the last few months directed at raising import duty on gold

and imposing export conditionality on gold imports have been primarily responsible for the noted decline in

imports of gold. Oil imports in July 2013 stood at USD 12.7 billion down from USD 13.8 billion in the

corresponding period of previous year.

Trade deficit although slightly higher at USD 12.3 billion in July 2013 as against USD 12.2 billion in June 2013,

was lower than the deficit of USD 18.3 billion and USD 20.1 billion respectively in April 2013 and May 2013.

Economic Affairs and Research Division 7

During the period from April to July, exports increased to USD 98.3 billion in 2013 as compared to 96.6 billion in

2012. Imports during the same period also increased from USD 156.3 billion in 2012 to USD 160.7 billion in

2013.

Table 7: Exports, Imports and Trade Balance -India

Source: Reserve Bank of India

The central bank had raised the import duty on gold from 6% to 8% in June. Government further raised the import

duty on gold to 10% in August 2013 and banned imports of gold coins, bars and medallions. Owing to these

measures, it is expected that gold imports are likely to stay in the negative territory in August as well.

Steps were also adopted to raise the exports as a number of incentives were announced for export promotion in

December last year along with the rupee swap facility to support the pre-shipment export credit in foreign

currency.

In April 2013, the Ministry of Commerce and Industry released the annual supplement to the trade policy of 2009-

14 announcing measures to boost exports. It included measures to revive investors’ interest in SEZs, Zero duty

export promotion capital goods scheme, reduction in export obligation for domestic sourcing of capital goods and

for units in the state of Jammu and Kashmir, incremental export incentivization scheme, and facilities to close the

default cases in export obligation.

Recently on 31 July 2013, government decided to increase the rate of interest subvention scheme from 2% to 3%

which will cover handlooms, handicrafts, readymade garments and made ups coming under the textile value

chain. Under the scheme, the banks will provide loans to the MSMEs at a discounted rate of interest which will be

Indicators Sep-

12

Oct-

12

Nov-

12

Dec-

12

Jan-

13

Feb-

13

Mar-

13

Apr-

13

May-

13

Jun-

13

July-

13

Apr-

July

13

Exports

(USD Bn)

24.9 24.0 23.3 25.5 25.7 25.8 30.7 23.8 24.0 23.8 25.8 98.3

Imports

(USD Bn)

41.8 44.7 41.3 43.4 45.7 41.3 40.5 42.0 44.7 36.0 38.1 160.7

Trade

Balance

(USD Bn)

-16.9 -20.6 -18.1 -17.8 -20.0 -15.5 -9.8 -18.2 -20.7 -12.2 -12.3 -62.4

Growth

in

Exports

(per cent

yoy)

-6.3 1.7 -0.1 0.6 1.2 2.3 6.6 -0.1 -3.3 -4.6 11.6 1.7

Growth

in

Imports

(per cent

yoy)

5.0 8.5 5.7 8.3 6.3 2.8 -4.3 11.2 7.0 -0.4 -6.2 2.8

Economic Affairs and Research Division 8

reimbursed by the government to those banks. The decision was taken to reverse the declining trend of the

exports.

Government had set an export target of USD 360 billion for 2012-13. Meanwhile, due to low demand from US

and Europe on the back of global economic woes, the country’s export stood at USD 300 billion registering a

contraction of 1.8 per cent in 2012-13. Given the grim external outlook, the government has revised down its

export target to USD 325 billion from USD 350 billion for 2013-14.

Foreign Investments

The foreign investment inflows in June 2013 stood at USD (-) 6.5 billion down from USD 8.7 billion in May

2013 due to a decline in the net portfolio investments. There has been a sharp reversal in net portfolio investment

flows with US announcing to roll back its quantitative easing programme.

However, post announcement of reform measures in September last year, a remarkable increase was noted in

portfolio inflows. Between the months April and August 2012, the total foreign investment inflows amounted to

USD 9.5 billion, which increased to USD 37.2 billion during September 2012 and March 2013. This was led by a

record rise in net portfolio investments. The portfolio investments increased from USD 1.7 billion between April

and August 2012 to USD 25.2 billion between September 2012 and March 2013. However, the recent data

indicates a decline in net portfolio investments for the month of June 2013 by USD (-) 8.7 billion.

Table 8: Foreign Investments Flow (India)

(Net) Foreign Direct

Investment (USD

Million)

Net Portfolio Investment

(USD Million)

Foreign Investment

Inflows (USD Million)

Sep-12 4147 4124 8271

Oct-12 1213 2921 4134

Nov-12 439 2002 2442

Dec-12 453 4858 5311

Jan-13 2701 6042 8743

Feb-13 2210 4101 6311

Mar-13 822 1171 1993

Apr-13 2656 1588 4244

May-13 1917 6749 8667

Jun-13 2129 -8661 -6531

Source: Reserve Bank of India

Net FDI during April-June 2013 increased to USD 6.7 billion from USD 3.8 billion during the same period of the

previous year. The total foreign investment flows increased from USD 1.9 billion during April-June 2012 to USD

6.4 billion during April-June 2013.

In a desperate bid to increase the foreign investment inflows primarily to tame rupee, the government announced

second set of reform measures and liberalized the FDI limit in 12 sectors in July 2013. Either the sectoral caps

Economic Affairs and Research Division 9

were revised or sectors have moved under the automatic route from Foreign Investment Promotion Board (FIPB)

approvals. Post these announcements, it is expected that the foreign investment inflows will increase in the

coming months.

FDI limits have been revised in the following sectors:

Telecom: Raised the cap from 74% to 100%; upto 49% through automatic route and from 49% to 100% via

Foreign Investment and Promotion Board (FIPB).

Civil Aviation: No change was made in the FDI limit in the civil aviation sector at 49%.

Defence: FDI cap will remain at 26%. The Cabinet also has the power to allow more than 26% FDI on a case-to-

case basis for setting up of the ‘state-of-art’ manufacturing facilities.

Single brand retail: 100% FDI allowed. Moreover, FDI up to 49% in the sector will no longer require approval

of FIPB.

Insurance: FDI cap raised to 49% from 26%. Also, investment upto 49% will no longer require FIPB’s approval.

However, a bill to raise the cap is still stuck in the parliament for approval.

Petroleum and Natural gas: The FDI limit is kept unchanged at 49% but will no longer require FIPB’s approval

upto that level.

Commodity, Power and Stock exchange: Investments upto 49% will no longer require FIPB’s approval.

Asset reconstruction companies: FDI cap has been raised to 100% from 74%. No government approval required

for investments up to 49%. However, buying a bigger stake in an Indian asset reconstruction companies will

require prior approval of FIPB.

Credit information: No approvals required for foreign investments up to 74%.

Courier: Fully liberalized as 100% investments will no longer require government’s approval.

Tea plantation: 100% FDI allowed with government approval. However, the condition related to divestment of

26% to Indian Partner within 5 years has been relaxed.

Multi brand retail: Allowed 49% FDI in multi brand retail through automatic route. There have been relaxations

in rules related to back-end infrastructure, sourcing conditions and setting up of retail sales outlets in cities with

population of more than 10 lakh.

An increase in investment inflows will support the rupee and cushion the already elevated current account deficit

which given the current situation can mount further in the coming months.

Economic Affairs and Research Division 10

Exchange Rate

Depreciating rupee has been a major concern facing the economy at present along with the ballooning current

account deficit numbers. This was led by huge outflows of FIIs from the market triggered by Fed’s announcement

to taper off its quantitative easing (QE) measures. The exchange rate against USD deteriorated from 58.4 in June

2013 to 59.8 in July 2013. The Indian rupee hit an all time low as it crossed the 60 mark to reach 62.45 against the

US dollar on August 19, 2013. More recently the Rupee also breached the 64 level against the USD.

As can be reflected from the table below, rupee has depreciated against US dollar, pound sterling, Euro and

Japanese Yen in July 2013. As compared to the same month of the last two year, rupee depreciated against USD

from 44.41 to 55.49 to 59.77 respectively in 2011, 2012 and 2013.

The fall in the value of rupee is expected to raise the import bill (coal, crude oil, fertilizers etc.) of the country

posing a further threat to the already elevated current account deficit.

Table 9: Exchange Rates (India)

US Dollar Pound

Sterling

Euro Japanese

Yen

July-11 44.41 70.74 63.46 55.94

July-12 55.49 86.51 68.25 70.28

July-13 59.77 90.77 78.2 60.03

Source: Reserve Bank of India

To arrest the free fall in rupee, RBI and SEBI had taken several steps in the past two months. These include:

Trading by banks in the currency future and option markets to be stopped.

Liquidity adjustment facility (LAF) for banks reduced to 0.5 percent from 1 per cent, limiting the access to

borrowed funds from the central bank.

Further to suck out liquidity from the system, RBI had asked banks to maintain higher CRR of 99 percent as

against 70 percent on a daily basis.

Exposure norms for currency derivatives tightened by SEBI.

Deregulation of interest rates for certain deposits from NRIs to increase the foreign fund flows.

For infrastructure financing, the government urged the state owned financial institutions to go for quasi

sovereign bonds.

Measures to curb capital outflows: Overseas Direct Investment (ODI) by Indian companies has been cut from

400 percent to 100 percent of their net worth, making it difficult to buy overseas assets. It also lowered the

overseas remittances to USD 75,000 a year from USD 200,000 and prohibited investment in overseas property.

Economic Affairs and Research Division 11

Foreign Exchange Reserves

The overall foreign exchange reserves show a downward trend from April 2013 onwards. It declined from USD

284.64 billion in June 2013 to USD 280.16 billion in July 2013 led by a decline in foreign currency assets and fall

in the international gold prices.

The foreign currency assets, one of the major components of the overall foreign exchange reserves were down to

USD 252.05 billion in July 2013 from USD 255.28 billion and USD 258.51 billion respectively in May 2013 and

June 2013.

Gold constitutes around 7-9% of the total reserves. The gold reserves have fallen to USD 21.56 billion in July

2013 as compared to USD 22.84 billion in the previous month. Table10: Foreign Exchange Reserves, India (USD Billion)

Total foreign

exchange reserves

Foreign

currency assets

Gold SDRs Reserve tranche

position in IMF

Sep-12 294.81 259.96 28.13 4.45 2.27

Oct-12 295.29 260.46 28.13 4.43 2.26

Nov-12 294.51 260.01 27.80 4.43 2.26

Dec-12 296.58 262.01 27.80 4.44 2.33

Jan-13 295.75 261.71 27.22 4.43 2.39

Feb-13 291.92 258.23 26.97 4.38 2.34

Mar-13 292.65 259.73 26.29 4.33 2.30

Apr-13 296.37 264.03 25.69 4.34 2.31

May-13 287.90 258.51 22.84 4.33 2.23

Jun-13 284.64 255.28 22.84 4.34 2.19

July-13 280.16 252.05 21.56 4.37 2.18

Source: Reserve Bank of India

Weekly changes:

As per the latest available data, the total reserves stood at USD 280.16 billion in the week ending July 26, slightly

up from USD 279.20 billion in the previous week led by a marginal rise in the foreign currency assets.

The foreign currency assets rose by USD 914.1 million to USD 252.05 billion in the July 26 week, up from USD

251.14 billion in the prior week.

Gold reserves remained same in the past two weeks at USD 21.55 billion.

The special drawing rights were up by USD 30.8 million and India’s reserve position with IMF was up by USD

15.3 million in the week ended July 26 as compared to the previous week.

Fiscal Position

The fiscal position indicated an improvement in the year 2012-13; but we still stand at the risk of a likely

slippage. The implementation of the National Food Security Bill will impose a huge cost on the exchequer and

Economic Affairs and Research Division 12

would make it difficult for India to move ahead on the path of fiscal consolidation. Also, not much progress has

been seen on the disinvestment target. The government had budgeted a target of Rs 40, 000 crore for 2013-14 and

the receipts have been about Rs 1325 crore so far this year.

The Fiscal deficit stood at Rs 2,62,823 crore during the first quarter of the current fiscal (April-June 2013) as

compared to Rs. 1,90,460 crore in the corresponding period last year registering a growth of 38.0%. Fiscal deficit

in the first quarter itself has touched 48.40% of the budget estimated for the entire fiscal which was 37.1% of the

Budget estimate last year during the same period.

The revenue receipts of the government declined by 1.3% during the period from April–June 2013 as compared

to the same period of the previous year. Tax collections remained muted for the first quarter. Net tax revenue

collections contracted by 2.5% during the period. However, the non-tax revenue registered a growth rate of 7.8%.

The total expenditure stood at Rs. 3,82,229 crore in April-June 2013 as compared to Rs. 3,11,582 crore in April-

June 2012 owing to a rise in both plan and non-plan expenditure. Plan expenditure rose by 33.2% and non-plan

expenditure rose by 18.7%

Table 11: Trends in Central Government Finances: April – June 2013 (Rs. Crore)

S.

No

Indicators Budget

Estimates

2013-

2014*

Actuals@

upto

June

2013

Actuals@

upto

June

2012

Growth

(%)

% of Actuals to Budget

Estimates

(Rs.

Crore)

(Rs.

Crore)

(Rs.

Crore)

(June

actual

2013

over

June

actual

2012)

Current Corresponding

Period of the

Previous Year

1 Revenue Receipts 1056331 117234 118720 -1.3 11.1% 12.7%

2 Tax Revenue

(Net)

884078 101910 104505 -2.5 11.50% 13.60%

3 Non-Tax

Revenue

172252 15324 14215 7.8 8.90% 8.60%

4 Non-Debt Capital

Receipts

66468 2172 2402 -9.6 3.30% 5.8%

5 Recovery of Loans 10654 1566 1072 46.1 14.70% 9.20%

6 Other Receipts 55814 606 1330 -54.4 1.10% 4.40%

7 Total Receipts 1122799 119406 121122 -1.4 10.60% 12.40%

8 Non-Plan

Expenditure

1109975 267397 225361 18.7 24.10% 23.20%

9 On Revenue

Account

992908 233556 199874 16.9 23.50% 23.10%

(i) of

which Interest

Payments

370684 61481 60630 1.4 16.60% 19.00%

10 On Capital

Account

117067 33841 25487 32.8 28.90% 24.40%

Economic Affairs and Research Division 13

(i) of which Loans

disbursed

337 9928 10223 -2.9 2946.00% 1107.60%

11 Plan

Expenditure

555322 114832 86221 33.2 20.70% 16.50%

12 On Revenue

Account

443260 94153 71558 31.6 21.20% 17.00%

13 On Capital

Account

112062 20679 14663 41.0 18.50% 14.60%

(i) of which Loans

disbursed

19732 3921 2994 31.0 19.90% 15.60%

14 Total Expenditure 1665297 382229 311582 22.7 23.00% 20.90%

15 Fiscal Deficit 542499 262823 190460 38.0 48.40% 37.10%

16 Revenue Deficit 379838 210475 152712 37.8 55.40% 43.60%

17 Primary Deficit 171814 201342 129830 55.1 117.20% 67.00%

Source: Controller General of Accounts, Government of India