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Q4 manufacturing outlook positive: Ficci survey




New Delhi, March 11: The outlook for the country’s manufacturing sector for the current fourth quarter (Q4) ending March 31 is positive, industry chamber Ficci said on Sunday.

Ficci cited an increased percentage of its survey respondents reporting higher production in the ongoing quarter as compared to the previous one.

Releasing its latest quarterly survey on Indian manufacturing, Ficci said the positive outlook for the sector in the fourth quarter (January-March) has increased significantly to 55 per cent from 47 per cent in October-December 2017.

“This positive outlook is notable as Q-4 2017-18 witnessed the highest percentage of respondents (55 per cent) expecting higher production since Q-2 of 2016-17,” said a Ficci statement.

“The percentage of respondents reporting low production has also come down to 11 per cent in the fourth quarter from 15 per cent in Q3 of 2017-18.”

Ficci’s latest survey assessed the expectations of manufacturers for the current quarter in 12 major sectors while responses were drawn from over 300 units in large as well as small and medium (SME) segments, with a combined annual turnover of over Rs 3 lakh crore.

“In terms of order books, 51 per cent of the respondents in Q4 are expecting higher number of orders as against 42 per cent of Q3 which again is a sign of revival,” the survey said.

According to Ficci, there are “visible signs of revival in capital goods and improvement is seen in export outlook also”.

“The future investment outlook remains pessimistic as 64 per cent respondents reported that they are not planning any capacity additions for the next six months,” the industry body said.

“High raw material prices, low domestic and export demand, exchange rate appreciation, increasing imports, excess capacities and shortage of working capital finance are some of the major constraints which are affecting expansion plans of the respondents.”

Noting that overall capacity utilisation in manufacturing remains low, the survey reported that “the average capacity utilisation for the manufacturing sector is about 77 per cent for Q3 2017-18 which is similar to that of Q2”.

The outlook for exports is marginally positive as 47 per cent of the participants are expecting a rise in exports during the quarter in consideration.

“Rupee appreciation has also affected exports during Q3 as 80 per cent of the respondents reported that the exports were affected by upto 5 per cent due to rupee appreciation,” Ficci said.

“Hiring outlook for the sector remains subdued in the near future as 70 per cent of respondents mentioned that they are not likely to hire additional workforce in next three months.”

Reflecting the rising inflation, the survey reported that the cost of production as a percentage of sales “has risen significantly for 62 per cent respondents in Q3 2017-18.

“This is primarily due to increase in cost of raw materials, increased wages, power cost and higher GST rates on certain products.”



Lower food prices ease India’s WPI to 4.64% in November



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New Delhi, Dec 14: Lower food and fuel prices eased India’s annual rate of inflation based on wholesale prices to 4.64 per cent in November from 5.28 per cent in October, official data showed here on Friday.

However, on a year-on-year (YoY) basis, the Wholesale Price Index (WPI) data furnished by the Ministry of Commerce and Industry was higher than the rise of 4.02 per cent reported for the corresponding period of 2017.

“The annual rate of inflation, based on monthly WPI, stood at 4.64 per cent (provisional) for the month of November, 2018 (over November, 2017) as compared to 5.28 per cent (provisional) for the previous month and 4.02 per cent during the corresponding month of the previous year,” the ministry said in its review of “Index Numbers of Wholesale Price in India” for November.

“Build up inflation rate in the financial year so far was 4.73 per cent compared to a build up rate of 2.83 per cent in the corresponding period of the previous year.”

On a sequential basis, the expenses on primary articles, which constitute 22.62 per cent of the WPI’s total weightage eased to 0.88 per cent, from a rise of 1.79 per cent in October.

Similarly, the prices of food articles declined. The category has a weightage of 15.26 per cent in the WPI index. It deflated by (-) 3.31 per cent from a rise of (-) 1.49 per cent.

In addition, the cost of fuel and power segment, which commands a 13.15 per cent weightage, increased at a slower pace of 16.28 per cent from a growth of 18.44 per cent.

The expenses on manufactured products registered a rise of 4.21 per cent from 4.49 per cent.

On a YoY basis, onion prices deflated by (-) 47.60 per cent, whereas potatoes became dearer by 86.45 per cent.

In contrast, the overall vegetable prices in the month under review declined by (-) 26.98 per cent, against a rise of 59.87 per cent in the same month a year ago.

Among the non-food items, the price of high-speed diesel rose by 20.16 per cent on a YoY basis, petrol by 12.06 per cent and LPG by 23.22 per cent.


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Sensex, Nifty opens in green; banking stocks down



Sensex equity Nifty

Mumbai, Dec 14: The Sensex and Nifty on Friday opened with slight gains. However, minutes into the trading key indices slipped in the red tracking its global peers.

The financial stocks witnessed selling pressure while telecom, IT and realty counters gained.

On the domestic front, the Reserve Bank of India’s (RBI) board meeting and the release of key macro-economic data was due on Friday.

The BSE Sensex that opened at 35,960.19 from its previous close at 35,929.64 on Thursday, traded at 35,919.73 at 9.36 a.m. — lower by 9.91 points or 0.03 per cent.

The Nifty50 of the National Stock Exchange (NSE), which opened at 10,784.50 after closing at 10,791.55 on Thursday, traded at 10,777.80 during the morning trade session, down 13.75 points and 0.13 per cent.


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Modi government thinks it owns RBI, says Chidambaram




New Delhi, Dec 13 : Attacking the Narendra Modi government over its differences with RBI Governor Urjit Patel who resigned on Monday midway through his term, former Union Finance Minister P. Chidambaram on Thursday said the Modi government thinks it owns the RBI.

He also hoped that the new Governor, Shaktikanta Das, although a vocal supporter of the much-debated demonetisation, would stand up for the central bank’s autonomy.

“This government thinks it owns the Reserve Bank of India (RBI). This government thinks the RBI is another department of the government. This government thinks if CBI is listening to them, why is RBI not listening?” Chidambaram said at an event here.

“This government simply does not understand what a central bank’s independence is,” he added.

The former Finance Minister slammed the government for its eagerness to get hold of the central bank’s reserves, which apparently became the bone of contention between the government and Urjit Patel and ultimately led to his resignation.

“This government is like ‘I have one hoard of cash, so much cash lying there. I can’t meet my fiscal deficit this year, my GST revenues are less than expected, I have not provided for the food subsidy, I have not provided for Ayushman Bharat programme, and I need money in my election year. What do I do? There is this pot of gold. Now I want to reach that pot of gold’. That’s the only aim of this government,” he said.

Stressing that RBI’s independence is crucial, he said it “worries” him that the government has appointed a perceived “yes man” as the central bank’s boss.

“It worries me that they (government) have appointed two persons to two key posts, both of whom were vocal supporters of demonetisation. It worries me,” he said.

However, he “hopes” that the new RBI Governor would not buckle under pressure from the government and would keep the central bank’s autonomy intact.

“I sincerely hope, and I would appeal to Mr. Shaktikanta Das, that you (Das) are now the RBI Governor. You are no longer ex-Secretary Economic Affairs, you are the Governor of central bank of India. Therefore, you must stand up for the autonomy and rights of India’s central bank,” he added.

Asked about his differences as then Finance Minister with then RBI Governor D. Subba Rao, Chidmabaram said those were the “usual differences” that Finance Ministers across the world have with their central bank Governors.

He pointed out that Rao never resigned over these differences unlike the case of Urjit Patel who put in his papers on December 10, around 10 months before his three-year tenure could end.

He also said that the RBI suffered a blow to its reputation among the world’s central banks due to demonetisation and has not recovered its image to this day.

“Urjit Patel should have walked out on November 19 itself. He delayed his resignation. Perhaps he gave benefit of doubt to the government and thought perhaps the government would retrace its step. But everything that happened after November 19 proved the government was pressing ahead its agenda,” the senior Congress leader said.

Asked if Patel erred in endorsing demonetisation of Rs 500 and Rs 1,000 currency notes announced by Prime Minister Narendra Modi on November 8, 2016, Chidambaram said: “Of course, he (Patel) was wrong. He should not have called a Board meeting in Delhi, a hurriedly called truncated Board meeting to pass a resolution endorsing demonetisation. He should have stood his ground. He was wrong.”

“He suffered a huge reputational slide by endorsing demonetisation and the RBI suffered reputational damage in the world. I don’t think RBI has recovered its reputation among the central banks of the world after demonetisation,” he added.

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