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ORBIS ECONOMICS

India Macro Weekly

Industrial production zooms ahead, Indo-Japanese collaboration underway
Issue No. 85| December 12, 2015

Executive Summary
The big data story from the past week was the 9.8% growth seen in the Index of
Industrial Production (IIP) on a year on year (yoy) basis in October. While a weak
base as well as festive demand propped up growth during the month, continued
positive growth in both the capital goods and consumer goods segment,
however, portends well for economic recovery in India. Further corroboration of
some recovery is evident from data on indirect tax collections, which also
continued to show good growth increasing by over 24% in November from the
previous year.
Despite a weak global economy, exports of IT and ITeS sectors showed growth
of 14.8% yoy in 2014-15 as per RBIs recently released data, adding a still more
positive note to the weeks trends. Area under rabi crop also advanced
significantly in the past week, covering for at least some of the lag seen in the
past weeks. Area sown is now 9% behind that during the corresponding period
of the previous year, down from a 16% lag during the previous week.
Japanese Prime Minister (PM) Shinzo Abes recent visit to India resulted in fruitful
talks between the two countries, raising the status of the relationship to a Special
Strategic and Global Partnership. It is anticipated that Official Development
Assistance from Japan to India is now expected to reach JPY 400bn, the largest
ever for India. Japanese collaboration with India is likely to extend to sectors like
railway corridors, industrial corridors, special zones for Japanese companies,
major government programmes like Make in India and Skill India and Indias
investments into Japan, among others.
The Union Cabinet approved the amendments to the Real Estate Bill, with a view
to ensure more uniform growth in the segment and help in achieving the
objective of Housing for All. One of the key initiatives is the establishment of a
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