CMIE Sample

Economic Intelligence Service
CMIE
Monthly Review
of the Indian Economy
January
2008
Economic Intelligence Service
Monthly Review of the Indian Economy

January 2008
CMIE
CENTRE FOR MONITORING INDIAN ECONOMY PVT LTD
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Contents 1
1. Executive Summary 2 12. Industry
2. Annual Indicators 4 Industrial Production 37

Sugar 40
3. Monthly Indicators 9 Tea 41
Edible Oils & Vanaspati 42
4. GDP Growth 12 Textiles 43
Man-made Fibre 44
5. Inflation 15 Chemicals 45
Fertilisers 46
6. Interest Rates 18 Cement 47
Steel 48
7. Balance of Payments 20
Non-ferrous Metals 49
Capital Goods 50
8. Public Finance
Consumer Durables 51
Transport Equipment 52
Central Government Finance 22
Government Debt Floatations 26
13. Corporate Sector
9. Agriculture Financial Performance 54

Prospects 27 Corporate Debt 55
14 Capital Markets
10. Energy
Coal 29 Primary Capital Market 56

Crude Oil 30 Secondary Capital Markets 57
Mutual Funds 59
Electricity 32
15. Money & Banking

11. Infrastructure
Railways 33 Money Supply 60

Scheduled Commercial Banks 63
Ports & Shipping 34
Civil Aviation 35 16. Foreign Trade 66
Telecommunications 36
17. World Economy 75
Monthly Review of the Indian Economy, Centre for Monitoring Indian Economy January 2008
2 Executive Summary
GDP Growth Agriculture
The Indian economy has been growing at an im- Till 28 December 2007, rabi acreage was lower at
pressive pace of nine per cent per annum in recent 519.3 lakh hectares as compared with 543 lakh
years. We believe that this pace would be sustained hectares a year ago. Sowing was lagging in all three
in the coming quarters and in the next fiscal as major groups of crops. Cereal sowing was down by
well. The rising consumption expenditure and do- 3.7 per cent, pulses by 2.4 per cent and oilseeds by
mestic savings, the execution of the huge Rs.55.6 9.6 per cent.
lakh crore outstanding capital investments and the
continuous pouring in of the fresh ones assures that Area sown under wheat stood at 249.3 lakh
the Indian economy would grow at 9.1 per cent in hectares, lower than the 263.3 lakh hectares sown in
2007–08. These factors along with the apparent the corresponding period a year ago. The acreage
perception of low inflation are expected to sustain was lower in Madhya Pradesh and Uttar Pradesh
the strong economic growth in the next fiscal. As- due to moisture stress and initial higher temper-
suming an adequate precipitation during the mon- ature in several regions of Madhya Pradesh, Ut-
soon, and a slight fall in interest rates in the early tar Pradesh and Rajasthan. Among the oilseeds,
months of the coming year, we expect the real GDP sowing of mustard fell short by 8.9 per cent till 27
to grow at 9.1 per cent in 2008–09 as well. December 2007 as compared to the acreage in the
same period of last year. Progress of rabi ground-
nut sowing was satisfactory. Till 28 December area
Inflation sown stood at 4.5 lakh hectares, higher than the
4.4 lakh hectares sown a year ago.
Inflation rose to 3.6 per cent in December 2007 from
its five–year low of 3.1 per cent in November 2007.
Energy & Infrastructure
This rise in headline inflation came mainly on ac-
count of the continuous rise in prices of some fuels
and the lower base last year. While inflation in the During November 2007, coal production in In-
fuel group is expected to continue to rise due to the dia rose by a sharp 7.7 per cent to 39.2 million
firm trend in the prices of the non–administered tonnes. A less than proportionate increase in coal
crude derivatives, the fall in inflation in primary despatches led to a 4.6 per cent rise in coal stocks
articles and manufactured products is likely to off- to 27.5 million tonnes. Crude oil production in In-
set this rise. We expect headline inflation to re- dia rose by marginal 56 basis points during April–
main steady at around 3.5 per cent till the end of November 2007. POL imports increased by 12.1
2007–08. per cent in USD terms. Domestic refinery through-
put increased by 5.2 per cent. Demand for petro–
products in India augmented by 4.5 per cent.
Interest rates
Railway revenue earning freight traffic grew by 8
per cent during April–November 2007 compared to
Interest rates are likely to remain stable in the near 10 per cent iin the same period of 2006. Cargo
term. Banks are unlikely to make any firm cuts in traffic was up by 13.2 per cent as against eight per
BPLRs anytime before the policy announcement, cent in the year–ago period. Passenger traffic at
but are likely to increase discounts to PLRs. High all airports was up by 26.7 per cent during the cur-
amounts of term deposits mobilised at high inter- rent year till October 2007. This is an impressive
est rates in the recent past are deterring banks from growth when reckoned over a 34.4 per cent increase
cutting lending rates. witnessed a year ago.
January 2008 Monthly Review of the Indian Economy, Centre for Monitoring Indian Economy
Executive Summary 3
Industry 2006. It was 63.8 per cent of budget estimates till

November 2007 as against 72.8 per cent a year ago.
Growth in industrial production fell to 5.3 per cent These favourable numbers reflect a higher 24.2 per
in November 2007. This is a rather unusually sharp cent growth in revenue receipts than the 22.2 per
fall given that the IIP growth has been averaging cent rise in expenditure.
close to ten per cent during the past two years, on
Tax collections grew by 25 per cent in the current
a year-over-year basis. The April–November 2007
fiscal year till November 2007, surpassing the an-
growth in the IIP stood at 9.2 per cent. Capital
nual budgeted growth of 17 per cent. Performance
goods production grew by an accelerated 20.8 per
of income tax and corporation tax was better than
cent during April–November 2007 indicating that
the custom and excise duties. Revenue from in-
investments continue to drive growth in IIP and
come tax was up by 38 per cent and corporation
GDP. A bounce back in the IIP growth rate is im-
tax saw a growth of 42 per cent.
minent.
Money & Banking

Corporate sector
Banks continued their robust mobilisation of funds.
We expect the Indian corporate sector to report a
Total deposits of scheduled commercial banks grew
sales growth of 13 per cent for the quarter ended
by more than 25 per cent for the third consecutive
31 December 2007. This is much slower than the
month. Non–deposit borrowings of banks are also
robust 24.7 per cent growth witnessed in the cor-
witnessing robust growth, particularly ‘other bor-
responding year–ago quarter. Corporate India had
rowings’ which grew by 28.7 per cent in Novem-
grown its net profits by 23.7 per cent in the Septem-
ber 2007 and crossed the one lakh crore rupees
ber 2007 quarter on the back of a 15.1 per cent
mark as on 30 November 2007. Bank credit contin-
growth in sales revenues.
ued to grow at around 22–24 per cent, slower than
deposits. During April–November 2007, banks in-
Capital Markets vested much more in securities than they did in the
corresponding year ago period. The investment–
The secondary equity market recovered in Decem- deposit ratio of banks for the business done by them
ber 2007. The COSPI gained 11.8 per cent. The during the April–December 2007 period stood at
BSE Sensex and the NSE Nifty gained 4.8 per 49.9 per cent compared to 22.1 per cent for the
cent and 6.5 per cent, respectively. Both the in- business done by them in the corresponding year–
dices touched their lifetime highs during the month. ago period.
FIIs and mutual funds were net buyers during
the month. Indian companies continued to raise External sector
resources from the primary market. Total re-
sources amounting to Rs.21,112.3 crore were raised Capital inflows spiked to USD 33,902 million dur-
in December 2007. Of the total amount raised, ing the July–September 2007 quarter. Net cap-
Rs.14,795.1 crore were raised through private place- ital inflows during the September 2007 quarter
ment of debt as well as equity. amounted to over 74 per cent of total net capital in-
flows for the entire year ended 31 March 2007. For-
Public Finance eign portfolio investments amounted to USD 10,876
million or nearly a third of total net capital inflows
Gross fiscal deficit was lower at Rs.96,274 crore into the country. FDI inflow amounted to USD two
during April–November 2007 as compared with billion during this period. The quarter saw USD
Rs.1,08,201 crore in the corresponding period of 33,841 million being added to its forex reserves.
4 Indicators: Annual
Units 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Population & National Income

Population (as on 1 Oct) mln. nos 1001 1019 1038 1055 1073 1090 1107 1122
GNP at current market prices Rs. bln. 19366 20796 22610 24414 27472 31042 35422
GDP at current market prices Rs. bln. 19520 21024 22811 24581 27655 31266 35672 41257
GDP at factor cost (current prices) Rs. bln. 17865 19254 21002 22653 25494 28559 32509 37435
GDP at factor cost (const. prices) % change 6.4 4.4 5.8 3.8 8.5 7.5 9.0 9.4 9.1
GNP: Per capita (current prices) Rupees 19347 20409 21782 23141 25603 28479 31998
GDP: Per capita (current prices) Rupees 19501 20632 21976 23299 25773 28684 32224 36771
GDP: Per capita (const. prices) Rupees 19501 19930 20584 21007 22388 23874 25677 27704
GDP: Per capita (const. prices) % change 5.5 2.2 3.3 2.1 6.6 6.6 7.6 7.9
Savings, Capital Formation & Consumption (current prices)

Gross domestic savings % of GDP 24.8 23.7 23.5 26.4 29.7 31.1 32.4
Gross domestic capital formation % of GDP 25.9 24.3 22.9 25.2 28.0 31.5 33.8
Pvt capital formation % of GDP 18.5 17.4 16.0 19.2 21.7 24.5 26.4
Public sector capital formation % of GDP 7.4 6.9 6.9 6.1 6.3 7.1 7.4
Consumption Expenditure % of GDP 77.4 76.7 76.7 74.7 73.2 70.9 69.4
Pvt. final cons. exp. % of GDP 64.4 64.0 64.3 62.9 62.0 59.9 58.1
Govt. final cons. exp. % of GDP 12.9 12.6 12.4 11.9 11.2 11.0 11.3 11.3
Per capita pvt. final cons. exp. Rupees 12563 13213 14127 14646 15969 17190 18718
Value Added (Constant prices)

Agriculture % change 2.7 -0.2 6.3 -7.2 10.0 6.0 2.7 3.9
Industry (incl. construction) % change 4.6 6.4 2.7 7.1 7.4 9.8 9.6 10.9 9.4
Service % change 9.5 5.7 7.2 7.4 8.5 9.6 9.8 11.0 10.7
GDP (PPP) bln. 2247 2375 2574 2773 2930

Per capita GDP (PPP) 2330 2420 2580 2730 2840
Industry
Index of industrial production % change 6.6 5.1 2.6 5.8 7.0 8.4 8.2 11.5 9.0
Mining & quarrying % change 1.0 3.7 0.5 5.8 5.3 4.4 1.0 5.3 6.0
Electricity % change 7.3 4.0 3.1 3.2 5.0 5.2 5.2 7.3 7.8
Manufacturing % change 7.2 5.4 2.9 6.0 7.4 9.1 9.1 12.5 9.5
Fertilisers % change 4.7 2.5 -1.0 -0.8 -1.6 8.1 1.3 2.8
Finished Steel % change 12.1 9.6 4.4 7.9 8.7 8.4 6.0 16.5
Cement % change 15.4 -0.6 9.4 8.7 5.5 8.6 11.2 9.5
Automobiles % change 21.0 -5.7 6.1 8.1 19.9 15.1 10.2 10.4
Basic goods % change 5.5 3.9 2.4 4.8 5.5 5.5 6.7 10.3
Capital goods % change 7.0 1.7 -3.4 10.5 13.6 13.9 15.7 18.2
Consumer goods % change 5.7 8.0 6.0 7.1 7.2 11.7 12.0 10.1
Intermediate goods % change 8.8 4.7 1.6 3.9 6.4 6.1 2.5 12.0
Value of Output(Organised sector) Rs. bln. 8945 10130 10759 12000 13701 15947 18047
Gross value added: Factory sector Rs. bln. 1730 1993 2137 2357 2653 3126 3604
Gross value added: Non-Fact. sector Rs. bln. 911 1011 1016 1103 1232 1410 1594
Transport
Railways: freight traffic mln. tns. 456.4 473.5 492.5 518.7 557.4 602.1 666.5 726.0
Cargo handled at major ports mln. tns. 271.9 281.1 287.6 313.5 344.8 383.6 423.6 463.8
(Continued. . . )
Indicators: Annual 5
Units 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Energy
Commercial energy production % change 1.5 3.0 3.1 3.8 5.0 4.9 3.4
Commercial energy availability % change 5.4 2.8 2.3 4.2 5.1 5.1 0.1
Coal Production (excl. lignite) mln. tns 304.1 313.7 327.8 341.3 361.2 382.6 407.0 430.9
Coal imports mln. tns 19.7 20.9 20.5 23.3 21.7 29.0 38.4 45.0
Power capacity MW 97,884 1,01,626 1,05,046 1,07,877 1,12,684 1,18,426 1,17,630 1,23,572
Electricity generation (Pub Ut.) bln. KwH 481.1 501.2 517.4 532.7 565.1 594.5 617.5 662.5
Thermal & nuclear bln. KwH 400.3 426.8 439.9 468.7 489.9 505.3 514.4 546.1
Hydel bln. KwH 80.8 74.4 73.1 64.0 75.2 84.6 101.3 113.4
T & D losses per cent 30.9 32.9
Crude oil production mln. tns. 31.9 32.4 32.0 33.0 33.4 34.0 32.2 34.0
Crude oil imports mln. tns. 57.8 74.1 78.7 82.0 90.4 95.9 99.4
Petroleum products imports mln. tns. 16.6 9.3 7.0 7.2 8.0 8.8 11.7
Consumption of petro. products mln. tns. 102.6 107.0 107.7 111.8 116.0 120.2 122.3 119.8
Consumption of petro. products % change 8.9 4.2 0.7 3.8 3.8 3.6 1.8 -2.0
Natural gas gross production bln cu. mtrs 28.4 29.5 29.7 31.4 32.0 31.8 32.2 31.6
Natural gas net production bln cu. mtrs 26.9 27.9 28.0 30.0 30.9 30.8 31.3
Agriculture
Production
Foodgrain mln. tns. 209.8 196.8 212.8 174.8 213.9 198.4 208.6 216.1 217.2
Rice mln. tns. 89.7 85.0 93.3 71.8 88.5 83.1 91.8 92.8 93.0
Wheat mln. tns. 76.4 69.7 72.8 65.8 72.2 68.6 69.3 74.9 75.0
Cereals mln. tns. 196.4 185.7 199.5 163.7 198.3 185.2 195.2 201.9 202.6
Pulses mln. tns. 13.4 11.1 13.4 11.1 14.9 13.1 13.4 14.2 14.6
Kharif foodgrains mln. tns. 105.5 102.1 111.6 87.2 117.0 103.3 109.9 110.5
Rabi foodgrains mln. tns. 104.3 94.7 100.5 87.5 96.2 95.0 98.7 105.6
Oilseeds mln. tns. 20.7 18.4 20.7 14.8 25.2 24.4 28.0 23.9 27.0
Sugar cane mln. tns. 299.3 296.0 297.2 287.4 233.9 237.1 281.2 345.3 365.0
Gross Irrigated Area/ gross crop area per cent 40.2 40.2 41.1 41.5 40.3
Fertilizer consumption Kg/hectares 95.2 88.9 91.1 91.4 88.1
Yield
Foodgrain kg/hectare 1704 1626 1746 1535 1735 1652
Kharif foodgrains kg/hectare 1441 1359 1510 1300 1557 1430
Rabi foodgrains kg/hectare 2091 2122 2091 1970 1997 1988
Agricultural production % change -0.4 -7.0 7.9 -16.1 22.4 -2.2 6.7 3.2 3.8
Foodgrain % change 2.7 -6.7 8.9 -18.6 22.5 -7.1 5.9 3.4 0.5
Non-Foodgrain % change -4.6 -7.6 6.3 -12.1 22.2 4.8 7.8 2.9 7.9
Per capita availability of foodgrain kg/p.a. 165.9 151.1
VOP Agriculture Rs. bln. 3828 3735 4062 3865 4529 4493 4945
VOP Livestock Rs. bln. 1295 1390 1471 1541 1629 1708 1852
VOP Fishing Rs. bln. 223 252 274 300 317 338 407
VOP Forestry Rs. bln. 199 214 232 234 249 254 268
Employment (Organised)
Public sector mln. nos. 19.3 19.1 18.8 18.6 18.2
Private sector mln. nos. 8.6 8.7 8.4 8.4 8.2
Registered jobseekers mln. nos. 40.3 41.2 41.6
(Continued. . . )
Units 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Corporate Sector (Non-financial Cos.)

Sales % change 15.42 12.23 1.19 9.80 15.00 19.67 16.13
Public Sector % change 20.84 17.46 0.04 11.68 13.85 17.03 17.00
Private Sector % change 11.86 8.76 2.03 8.38 15.87 21.66 15.51
Gross Fixed Assets % change 5.85 6.72 6.32 6.39 6.83 11.50 13.67
Private Sector % change 7.67 7.10 8.00 5.43 5.78 10.81 17.61
PBDIT % change 7.83 8.51 2.32 16.52 17.41 21.53 13.87
Private Sector % change 10.63 5.55 -1.09 12.50 20.39 25.85 19.37
Profit after tax % change 6.08 8.85 -11.88 80.40 74.51 58.31 22.05
Private Sector % change 10.24 -4.22 -51.00 123.25 110.80 73.42 36.23
PBDIT/Sales per cent 13.33 12.84 13.46 14.37 14.76 15.03 15.26
Public Sector per cent 13.66 12.72 14.78 16.13 16.49 16.50 16.07
Private Sector per cent 13.10 12.93 12.52 13.00 13.49 13.95 14.68
PAT/Sales per cent 2.04 1.99 1.86 2.82 4.44 5.83 6.52
Public Sector per cent 2.56 2.57 3.17 3.91 5.38 6.72 6.74
Private Sector per cent 1.66 1.58 0.93 1.98 3.74 5.19 6.37
Debt/Equity times 1.21 1.18 1.13 1.10 0.97 0.87 0.78
Public Sector times 1.13 1.13 1.01 0.98 0.83 0.75 0.66
Private Sector times 1.25 1.21 1.22 1.19 1.09 0.97 0.87
VOP/GFA times 1.19 1.26 1.16 1.17 1.28 1.37 1.35
Public Sector times 1.09 1.27 1.06 1.07 1.13 1.17 1.16
Private Sector times 1.27 1.25 1.24 1.26 1.41 1.55 1.53
Capital Markets
Capital Issues Rs. bln. 681.5 504.7 484.3 423.2 529.6 611.3 792.2 1158.6
Public Sector Rs. bln. 393.5 278.6 305.8 292.2 395.9 311.3 466.2 411.1
Private Sector Rs. bln. 288.1 226.1 178.5 131.0 133.7 300.0 326.0 747.6
Equity Rs. bln. 258.3 155.6 88.1 81.0 223.0 297.0 325.8 723.0
Debt Rs. bln. 413.9 349.2 396.2 342.3 306.6 314.2 466.4 435.7
GDRs/ADRs/ECBs/(floatations) mln. 921.7 6216.7 494.9 188.3 993.2 3406.4 9103.6 2436.1
GDRs/ADRs mln. 821.8 475.0 494.9 188.3 271.4 826.0 3640.6 896.3
ECBs/FRNs mln. 99.9 5741.7 721.9 2569.0 4882.9 1539.8
Secondary Market
No. of companies listed Number 5712 5779 5771 5661 5562 4844 4974 5040
Market cap. all listed companies Rs. bln. 11447 6420 7426 7246 13771 18785 32150 36849
Market Capitalisation % of GDP 58.4 30.5 32.6 29.6 49.9 60.2 90.1
Returns on the CMIE Overall Share Price

Index per cent 70.7 -43.4 8.8 5.4 115.7 28.1 71.2 10.2
Trading volumes on BSE Rs. bln. 6850 10000 3049 3136 5033 5185 8159 9497
Trading volumes on NSE Rs. bln. 8390 13395 5132 6180 10995 11401 15696 19453
Public Finance (Centre, State & UTs)

Government receipts Rs. bln. 5887 6166 6154 7220 8629 8972
Government expenditure Rs. bln. 5723 6157 6809 7251 8449 9023
Plan outlay Rs. bln. 1606 1857 1863 2102 2693 3612
(Continued. . . )
Indicators: Annual 7
Units 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Finances of Central Govt.

Revenue receipts Rs. bln. 1815 1926 2013 2308 2638 3060 3475 4233 4864
Tax receipt Rs. bln. 1718 1886 1871 2163 2543 3050 3662 4678 5481
Direct Tax Rs. bln. 578 682 691 829 1050 1320 1650 2290 2672
(% of GDP) 3.0 3.2 3.0 3.4 3.8 4.2 4.6
Indirect Tax Rs. bln. 1139 1204 1180 1333 1494 1729 2012 2388 2809
(% of GDP) 5.8 5.7 5.2 5.4 5.4 5.5 5.6
Expenditure Rs. bln. 2981 3256 3623 4132 4712 4983 5061 5816 6805
(% of GDP) 15.3 15.5 15.9 16.8 17.0 15.9 14.2
Plan expenditure Rs. bln. 762 827 1012 1115 1223 1323 1406 1727 2051
% of Exp. 25.6 25.4 27.9 27.0 26.0 26.6 27.8 29.7 30.1
Non-plan expenditure Rs. bln. 2219 2429 2611 3018 3489 3660 3655 4089 4754
% of Exp. 74.4 74.6 72.1 73.0 74.0 73.4 72.2 70.3 69.9
Subsidies Rs. bln. 245 268 312 435 443 460 475 535 543
(% of Exp) 8.2 8.2 8.6 10.5 9.4 9.2 9.4 9.2 8.0
Defence Rs. bln. 471 496 543 557 601 759 805 860 960
(% of Exp) 15.8 15.2 15.0 13.5 12.7 15.2 15.9 14.8 14.1
Interest Rs. bln. 902 993 1075 1178 1241 1269 1326 1462 1590
(% of Exp) 30.3 30.5 29.7 28.5 26.3 25.5 26.2 25.1 23.4
Budget Deficit Rs.Bln. 9 -12 -15

Revenue Deficit Rs.Bln. 676 852 1002 1079 983 783 923 834 715
Gross Fiscal Deficit Rs.Bln. 1047 1188 1410 1451 1233 1258 1464 1523 1509
(% of GDP) 5.4 5.7 6.2 5.9 4.5 4.0 4.1
Outstanding internal debt Rs. bln. 7143 8037 9131 10207 11417 12759 13559 15220
% of GDP 36.9 38.4 40.0 41.4
Money, Banking & Interest Rates

Money supply (M3) % change 14.6 16.8 14.1 14.7 16.7 12.3 21.2 21.3
SCB’s Deposits Rs. bln. 8516 9891 11034 13118 15423 17086 21090 26083
% change 19.3 16.2 11.5 18.9 17.6 10.8 23.4 23.7
SCB’s Credit Rs. bln. 4541 5293 5897 7464 8656 10920 15071 19289
% change 23.1 16.6 11.4 26.6 16.0 26.2 38.0 28.0
Non–food credit Rs. bln. 4291 4895 5357 6970 8291 10505 14664 18824
% change 21.9 14.1 9.4 30.1 18.9 26.7 39.6 28.4
Bank rate (March-end) per cent 8.0 7.0 6.5 6.3 6.0 6.0 6.0 6.0
Interest on deposits (maximum) per cent 10.5 10.0 8.5 6.3 5.5 6.3 7.0 9.0
Prime lending rates (maximum) per cent 12.5 12.0 12.0 11.5 11.0 10.8 10.8 12.5
Prices (Annual Averages)

Wholesale price index
All Commodities % change 3.3 7.1 3.7 3.4 5.4 6.4 4.4 5.4 3.5
Primary Articles % change 1.1 2.9 3.7 3.3 4.2 3.7 2.9 7.8
Fuel, Power & Lubricant % change 9.1 28.5 9.1 5.6 6.3 10.0 9.5 5.6
Manufactured Products % change 2.7 3.2 1.9 2.7 5.6 6.3 3.1 4.4
Prices (Annual Averages)

Consumer price index
IW-General Index % change 3.4 3.8 4.3 4.0 3.9 3.8 4.4 6.7
AL-General Index % change 4.4 -0.3 1.1 3.2 3.9 2.4 4.0 7.8
UNME-General Index % change 4.5 5.6 5.1 3.8 3.7 3.6 4.7 6.6
(Continued. . . )
Units 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
External Transactions
Exports mln. 36760 44147 43958 52823 63886 83502 103075 126246
% change 10.7 20.1 -0.4 20.2 20.9 30.7 23.4 22.5
Agro products mln. 5615 5983 5919 6723 7538 8471 10212 12506
Ores & minerals mln. 917 1155 1266 2000 2370 5076 6163 7028
Manufactured goods mln. 29751 34391 33469 40324 48525 60706 72552 82762
Imports mln. 49799 50056 51567 61533 78203 111472 149144 190438
% change 17.5 0.5 3.0 19.3 27.1 42.5 33.8 27.7
POL mln. 12627 15676 14042 17674 20584 29832 43957 57036
Non–POL mln. 37172 34381 37525 43859 57619 81640 105187 133402
Trade balance: DGCI&S mln. -13039 -5909 -7609 -8710 -14317 -27970 -46069 -64192
Trade balance: RBI mln. -17841 -12460 -11574 -10690 -13718 -33702 -51841 -64905
Gross invisible earnings mln. 30312 32267 36737 41925 53508 69533 92294 119163
Net invisibles mln. 13143 9794 14974 17035 27801 31232 42655 55296
Current account balance mln. -4698 -2666 3400 6345 14083 -2470 -9186 -9609
Exports % of GDP 8.2 9.6 9.2 10.4 10.6 12.0 12.8 13.9
Imports % of GDP 11.0 10.9 10.7 12.1 13.0 16.0 18.5 20.9
Current account balance % of GDP -1.0 -0.6 0.7 1.2 2.3 -0.4 -1.1 -1.1
Tourist arrivals mln. nos. 2.52 2.67 2.43 2.45
Foreign Capital Inflow (net) mln. 10184 8814 8551 10840 16736 28022 23400 44944
Foreign aid (net) mln. 891 410 1117 -3128 -2858 1923 1682 1770
External comm. borrowings (net) mln. 333 4303 -1585 -1692 -2925 5194 2723 16084
NRI deposits (net) mln. 1540 2316 2754 2978 3642 -964 2789 3895
FDI mln. 2167 4031 6125 5036 4322 5987 7661 19442
Portfolio investments mln. 3024 2760 2021 979 11356 9311 12494 7004
Others mln. 2229 -5006 -1881 6667 3199 6571 -3949 -3251
FDI approvals mln. 4153 5527 3043 1638 1358
Debt servicing mln. 11543 12821 11115 15239 19165 9155 19560 11795
Repayments mln. 7059 8359 6776 11530 14614 6117 14341 7327
Interest payments mln. 4484 4462 4339 3709 4551 3038 5219 4468
Outstanding external debt mln. 98263 101326 98843 104914 111645 124160 127623 156649
% of GDP 22.0 22.5 21.1 20.3 17.8 17.4 16.0 16.6
Debt service ratio per cent 17.10 16.60 13.70 16.00 16.10 6.00 9.90 4.80
Foreign exchange reserves (excl. gold
and SDRs): March-end mln. 35058 39554 51049 71890 107448 135571 145108 191924
Rupee exchange rate Rs/dollar 43.28 45.61 47.55 48.30 45.92 44.95 44.28 45.28
Units Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2006 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007
Agriculture
Actual rainfall mm 12.0 1.8 30.4 32.2 27.2 47.8 152.8 258.7 298.6 194.1
variation from normal per cent -23.6 -92.3 32.2 13.8 -20.0 -30.5 8.4 -0.3 -2.4 13.6
Stock of foodgrain mln. tns. 17.7 17.7 25.1 25.9
% change (yoy) -8.1 6.7 9.9 16.2
Energy/Infrastructure
Indicators: Monthly
Coal production mln. tns. 39.5 42.2 39.3 48.5 31.7 33.5 32.3 31.0 31.7 31.0 36.7 39.2
% change (yoy) 3.0 10.0 6.6 10.6 0.5 0.9 1.3 1.1 8.7 6.2 9.2 7.7
Crude oil production mln. tns. 2.92 2.90 2.67 2.93 2.79 2.82 2.77 2.89 2.88 2.79 2.92 2.82
% change (yoy) 10.7 4.7 4.9 3.2 1.4 -1.6 -1.8 0.9 6.5 -0.7 -0.1 0.3
Power generation bln. unit 59.0 58.4 51.9 58.9 58.0 60.8 57.1 58.3 59.0 56.5 59.9 56.9 59.3
% change (yoy) 12.9 8.5 3.4 7.6 8.7 9.3 6.8 8.3 8.7 4.0 4.2 9.4 0.6
Railways: freight traffic mln. tns. 63.6 65.7 61.7 72.1 60.7 63.9 60.5 61.8 61.8 60.8 66.1 65.7
% change (yoy) 7.5 6.5 6.8 8.9 4.5 7.2 3.9 7.7 11.7 9.0 12.4 7.5
Industry
Industrial Production Index 1993-94= 100 263.7 265.5 252.2 289.1 250.7 263.1 255.3 255.0 260.3 260.0 262.1 262.0
% change (yoy) 13.4 11.6 11.0 14.8 11.3 10.6 8.9 8.3 10.9 6.8 12.0 5.3
Basic goods 1993-94= 100 222.5 227.1 210.9 238.4 212.8 223.6 215.8 216.7 217.6 214.0 227.5 220.0
% change (yoy) 12.4 12.0 10.7 11.9 8.6 10.3 9.2 8.7 12.7 6.5 6.7 4.8
Capital goods 1993-94= 100 357.6 331.3 322.3 451.7 278.4 334.7 358.3 317.4 368.6 387.9 348.7 393.2
% change (yoy) 26.2 16.3 18.0 18.1 10.9 22.4 23.1 12.3 30.8 20.5 20.2 24.5
Monthly Review of the Indian Economy, Centre for Monitoring Indian Economy
Intermediate goods 1993-94= 100 252.6 246.9 239.0 266.3 249.2 264.2 260.1 264.1 273.3 265.5 260.7 259.9
% change (yoy) 12.7 13.7 13.3 15.3 10.6 8.8 8.6 7.7 13.8 10.4 13.9 7.3
Consumer durables 1993-94= 100 344.1 385.5 377.9 416.9 341.8 380.3 357.9 351.5 379.7 389.3 433.4 374.0
% change (yoy) 1.8 5.3 1.8 3.8 2.4 -0.7 -3.6 -2.7 -6.1 -7.2 9.3 -4.1
Consumer non-durables 1993-94= 100 284.0 291.8 274.0 298.9 279.2 267.7 246.0 256.8 240.8 244.3 243.3 251.5
% change (yoy) 13.5 9.1 9.3 20.2 18.7 12.1 6.3 10.5 2.4 1.6 14.7 -2.1
Industrial Production
Industrial Production Index % change (yoy) 13.4 11.6 11.0 14.8 11.3 10.6 8.9 8.3 10.9 6.8 12.0 5.3
Mining & quarrying % change (yoy) 6.1 7.7 7.5 8.0 2.6 3.8 1.5 3.2 14.7 4.9 5.7 3.5
Electricity % change (yoy) 9.1 8.3 3.3 7.9 8.7 9.4 6.8 7.5 9.2 4.5 4.2 5.8
Manufacturing % change (yoy) 14.5 12.3 12.0 16.0 12.4 11.3 9.7 8.8 10.7 7.1 13.3 5.4
Cement Lakh tonnes 135.0 140.9 130.4 149.9 140.1 142.6 136.6 133.7 128.5 127.5 138.1 130.6
% change (yoy) 8.3 7.8 6.4 6.0 6.4 10.3 6.0 9.8 17.4 5.3 7.4 4.7
Fertilisers ’000 tonnes 1,490.8 1,393.9 1,368.7 1,282.3 1,005.4 1,162.4 1,235.7 1,350.1 1,262.7 1,267.6 1,347.9 1,322.3
% change (yoy) 7.2 2.1 14.8 11.3 -9.7 -8.2 -1.4 1.0 -13.2 -7.8 -7.8
Finished Steel ’000 tonnes 4,356.0 4,350.0 4,228.0 4,938.0 4,079.0 4,171.0 3,976.0 4,668.0 4,310.0 4,272.0 4,445.0
% change (yoy) 10.0 8.3 13.4 14.6 8.5 11.8 5.0 6.6 8.5 8.6 4.9
Automobiles % change 9.0 12.9 12.5 5.5 9.0 6.4 14.7 7.6 12.6 6.8 18.1 -2.6 9.3
(Continued. . . )
January 2008
9
10
2006 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007
External Transactions
January 2008
Exports mln. 10,409 10,713 10,418 12,986 11,012 12,236 11,907 12,223 12,433 12,797 13,303 12,424
% change (yoy) 13.3 16.9 15.1 12.3 28.1 21.9 14.4 16.1 16.5 19.3 35.7 26.8
Imports mln. 15,013 13,792 14,089 17,188 17,733 19,185 19,469 18,044 19,701 17,218 20,786 19,830
% change (yoy) 26.3 10.2 22.4 20.1 41.6 34.3 39.0 24.3 33.7 2.3 24.3 29.2
Trade balance mln. -4,604 -3,079 -3,671 -4,202 -6,721 -6,949 -7,562 -5,821 -7,268 -4,421 -7,483 -7,406
Forex reserves bln. 170.2 173.1 187.2 191.9 196.9 200.7 206.1 219.8 221.5 240.0 256.4 264.7 266.8
FDI actuals excl. acquisition mln. 1,978 655 623 474 683 1,897 1,089 692 588 318
Exchange rate Rs / 44.63 44.33 44.16 44.03 42.15 40.78 40.77 40.42 40.82 40.34 39.51 39.44 39.44
Capital Markets
Capital Issue Rs. bln. 282.4 52.0 69.3 33.2 32.9 58.7 291.3 187.1 36.6 94.4 138.1 109.3 195.5
Public Issue Rs. bln. 60.5 26.7 42.6 4.8 6.8 4.9 224.2 35.5 6.5 38.9 2.7 33.9 17.5
Rights Issue Rs. bln. 5.5 4.0 0.2 1.6 0.0 1.4 2.0 0.0 3.5 2.3 1.1 39.6 30.1
Private Placements Rs. bln. 216.4 21.3 26.4 26.7 26.1 52.3 65.1 151.6 26.6 53.2 134.4 35.7 148.0
Monthly returns on CMIE
Overall Share Price Index per cent 1.0 3.5 -8.5 1.0 7.7 6.0 2.2 4.8 -0.9 14.5 20.2 -0.1 11.8
Avg.daily turnover on BSE Rs. bln. 41.0 41.7 44.5 34.5 37.2 45.1 42.5 54.3 45.2 59.3 88.5 76.1 84.8
Avg.daily turnover on NSE Rs. bln. 85.1 87.6 94.8 80.0 84.3 98.9 92.2 121.5 105.1 133.0 207.1 188.4 192.8
Industrial entrepreneurs Nos. 300 345 328 357 278 320 263 275 337 303
memoranda Rs. bln. 544.1 1,387.9 445.2 212.1 196.5 709.8 922.9 527.8 792.9 892.9
Money, Banking & Interest Rates

Net RBI credit to Rs. bln. -941 121 -1 21 180 55 -197 210 -643 -753 -1,374 -1,421
Central government % change (yoy) 0.0 -55.7 0.0 -58.6 5.9 -28.9 0.0 0.0 0.0 0.0 0.0 0.0
Bank credit to commercial Rs. bln. 19,302 19,633 20,043 21,234 20,893 20,762 20,915 21,119 21,631 22,319 22,323 22,834
sector % change (yoy) 26.8 26.9 26.6 25.4 24.9 23.6 22.5 21.6 22.7 20.5 20.9 21.7
Money supply (M3) Rs. bln. 30,163 30,717 31,446 33,103 33,218 33,274 33,865 34,539 34,756 35,744 36,082 36,761
% change (yoy) 19.3 21.1 21.9 21.3 19.8 19.7 21.6 21.8 20.7 21.0 22.5 22.8
SCB’s Credit Rs. bln. 17,700 17,807 18,188 19,289 18,878 18,837 19,175 19,145 19,623 20,254 20,259 20,911
% change (yoy) 30.3 29.8 29.2 28.0 27.1 26.1 23.6 23.0 24.3 21.9 22.5 24.2
Non–food credit Rs. bln. 17,279 17,387 17,749 18,824 18,380 18,389 18,747 18,735 19,238 19,884 19,900 20,521
% change (yoy) 31.3 30.4 29.9 28.4 26.9 26.4 23.9 23.2 24.7 22.1 23.0 24.4
Bank rate (Month-end) per cent 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0
Prime lending rates (maximum) per cent 11.5 12.0 12.5 12.5 13.3 13.3 13.3 13.3 13.3 13.3 13.3 13.3 13.3
Yield on 91-day T bills per cent 7.17 7.37 7.75 7.96 7.33 7.62 7.37 4.45 7.08 7.17 7.00 7.50 7.33
Central government
market borrowings (net) (Rs.bln.) 124.0 68.8 133.3 71.6 -125.5 161.4 543.1 168.4 300.6 -106.8 66.1 144.6
(Continued. . . )
Indicators: Monthly
2006 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007 2007
Prices
Wholesale price index
All Commodities 1993–94=100 208.4 208.8 208.9 209.8 211.5 212.3 212.3 213.6 213.8 215.1 215.2 215.5
% change (yoy) 5.7 6.4 6.3 6.6 6.3 5.5 4.5 4.7 4.1 3.5 3.1 3.1
Primary Articles 1993–94=100 213.0 214.2 215.0 214.6 219.2 220.9 220.6 224.5 223.8 226.0 223.8 223.6
% change (yoy) 9.0 10.0 11.4 11.8 11.9 10.1 7.6 10.7 9.2 6.7 4.9 4.5
Fuel, Power & Lubricant 1993–94=100 322.3 322.1 319.8 319.8 320.4 322.1 322.0 321.9 322.4 321.9 323.7 325.9
Indicators: Monthly
% change (yoy) 3.7 3.6 1.8 1.4 1.1 0.6 -0.8 -1.6 -2.0 -2.6 -1.6 -0.2
Manufactured Products 1993–94=100 181.5 181.7 182.0 183.5 184.6 184.8 184.9 185.7 186.1 187.5 188.0 188.1
% change (yoy) 5.2 6.1 6.2 6.8 6.2 5.6 5.5 4.9 4.6 4.7 4.3 3.9
Consumer price index

IW-General Index 2001 = 100 127.0 127.0 128.0 127.0 128.0 129.0 130.0 132.0 133.0 133.0 134.0 134.0
% change (yoy) 6.9 6.7 7.6 6.7 6.7 6.6 5.7 6.5 7.3 6.4 5.5 5.5
AL-General Index 1986–87=100 390.0 391.0 392.0 392.0 394.0 395.0 399.0 404.0 408.0 410.0 413.0 414.0
% change (yoy) 8.9 9.5 9.8 9.5 9.4 8.2 7.8 8.6 8.8 7.9 7.0 6.2
UNME-General Index 1984–85=100 493.0 496.0 497.0 498.0 501.0 503.0 506.0 514.0 515.0 516.0 520.0 519.0
% change (yoy) 6.9 7.4 7.8 7.6 7.7 6.8 6.1 6.9 6.4 5.7 5.5 5.1
RL-General Index 1986–87=100 391.0 391.0 393.0 393.0 395.0 396.0 400.0 404.0 408.0 410.0 413.0 414.0
% change (yoy) 8.3 8.9 9.5 9.2 9.1 7.9 7.5 8.0 8.5 7.6 6.7 5.9
January 2008
11
12 GDP Growth
Investments to drive economic growth December 2007. This is the second large amount
of fresh investments captured in a quarter in at
The Indian economy has been growing at a impres- least the past 12 years. Outstanding investments
sive pace of nine per cent per annum in recent years. at the end of December 2007 stood at Rs.55.6 lakh
We believe that this pace would be sustained in crore, implying a robust 38.3 per cent rise over the
the coming quarters and in the next fiscal as well. corresponding level a year ago. 2007 is the fourth
Our confidence is based on the outcome of our close consecutive year of rapid growth in investments.
monitoring of the investments scenario in the coun- It is this momentum of fresh investments that has
try. fuelled the economic boom seen in the GDP esti-
mates of the recent past. And, it is the same that
The CMIE CapEx service captured fresh invest-
sustains the optimism regarding the future.
ments worth Rs.4,89,139 crore in the quarter ended
Figure 4.1 Trend in growth of GDP and gross Figure 4.2 Gross capital formation as a percent-
capital formation (%) age of GDP (%)
20 32.2
30.6
30 28.4
15 26.0
23.9 24.8
25 23.2
10 20
15
5
10
0
5
-5 0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
GDP Gross capital formation
Table 4.1 GDP by expenditure or demand (at constant 1999–00 prices)

Private final Government final
consumption consumption Gross capital
GDP expenditure % share in expenditure % share in formation % share in
(Rs.crore) (Rs.crore) GDP (Rs.crore) GDP (Rs.crore) GDP
1998–99 18,17,752 11,90,267 65.5 2,23,521 12.3 4,07,811 22.4
1999–00 19,52,036 12,57,541 64.4 2,52,744 12.9 5,09,518 26.1
2000–01 20,30,867 12,86,314 63.3 2,53,952 12.5 4,84,951 23.9
2001–02 21,36,635 13,63,797 63.8 2,58,943 12.1 4,95,113 23.2
2002–03 22,16,260 13,93,435 62.9 2,58,030 11.6 5,48,554 24.8
2003–04 24,02,247 14,89,043 62.0 2,64,464 11.0 6,24,680 26.0
2004–05 26,02,235 15,69,130 60.3 2,78,757 10.7 7,37,823 28.4
2005–06 28,42,478 16,75,025 58.9 3,06,087 10.8 8,70,619 30.6
2006–07 31,08,360 17,78,697 57.2 3,33,713 10.7 10,02,379 32.2
Apr–Sep 2007 15,51,412 8,84,396 57.0 1,72,954 11.1 5,36,144 34.6
GDP Growth 13
Real GDP grew by over–nine per cent in 2005–06 The individual projects are larger in size and are
and 2006–07. During both these years, gross capi- financed largely from internal accruals. The share
tal formation grew by over 15 per cent. The share of the private sector in investments has increased –
of capital formation in GDP crossed 30 per cent in from 23 per cent as of March 2003 to 59 per cent
these years. as of December 2007.
In the first half of 2007–08, gross capital formation Indian corporates are back into investing into build-
rose again by 15 per cent and GDP again by nine ing gross fixed assets. This is seen in their audited
per cent. The share of capital formation in GDP accounts. And, this is a confirmation of the return
(the rate of investments) rose to 34.6 per cent. This of the investments boom in India.
is a quick sharp increase since its level of 23 per cent
in 2001–02. Figure 4.3 Growth in GFA of manufacturing com-
With fresh investment proposals continuing to pour panies (weighted average %)
in, we expect the current economic growth to be
sustained in the near future. Around 47 per cent of 20
the outstanding investments as of December 2007

are under implementation. These amount to a sub- 15
stantial Rs.26 lakh crore. While these investments
would generate demand for capital goods and con- 10
struction industry in the near term, their eventual
commissioning would ensure sustained growth in 5
the medium term.
0
The current investment boom is larger and more 1993-94 1996-97 1999-00 2002-03 2006-07
credible than the one witnessed in the mid–1990s.
Table 4.2 Quarterly real GDP growth and forecast for 2007–08 (%)
Agri- Indus- Min- Manu- Elec., Con- Service Trade, Fin., Comm GDP
culture try ing, factur- gas & struc- hotels, insur., social, at
quarrying water tion transp., real perso. factor
ing comm. est. serv cost
Apr–Jun 05 4.0 10.5 6.1 10.7 7.4 12.7 9.2 10.2 8.9 7.5 8.4
Jul–Sep 05 4.0 7.7 0.1 8.1 2.6 11.3 9.3 9.5 10.6 7.9 8.0
Oct–Dec 05 8.7 9.6 2.7 8.2 5.0 16.6 9.5 10.0 9.8 8.3 9.3
Jan–Mar 06 6.2 10.4 5.2 9.4 6.1 16.1 11.1 11.8 14.2 7.2 10.0
Apr–Jun 06 2.8 10.6 3.7 12.3 5.8 10.5 11.7 12.4 10.8 11.3 9.6
Jul–Sep 06 2.9 11.3 3.9 12.7 8.1 11.1 11.8 14.2 11.1 8.3 10.2
Oct–Dec 06 1.6 10.6 5.5 11.8 9.1 10.0 11.0 13.1 11.2 6.7 8.7
Jan–Mar 07 3.8 11.2 7.1 12.4 6.9 11.2 9.9 12.4 9.3 5.7 9.1
Apr–Jun 07 3.8 10.6 3.2 11.9 8.3 10.7 10.6 12.0 11.0 7.6 9.3
Jul–Sep 07 3.6 9.1 7.7 8.6 7.3 11.1 10.2 11.4 10.6 7.8 8.9
2005–06 6.0 9.6 3.6 9.1 5.3 14.2 9.8 10.4 10.9 7.7 9.0
2006–07 2.7 10.9 5.1 12.3 7.4 10.7 11.0 13.0 10.6 7.8 9.4
2007–08* 3.9 9.4 6.0 9.5 7.8 10.5 10.7 12.0 11.0 8.0 9.1
* CMIE forecast
14 GDP Growth
Consumption expenditure growth accel- continued rise in capital formation and a continu-
erates ation of the more–than–six per cent growth in pri-
vate final consumption expenditure. These are very
The rapidly rising share of investments in GDP has likely because of the build–up of investment propos-
led to a decline in the share of private final con- als during the current year. Low inflation and an
sumption expenditure in GDP. This fell from 64 per apparent perception of low inflation is expected to
cent in 2001–02 to 57 per cent in 2006–07. But, this keep domestic consumer spending buoyant.
fall in its share does not reduce the importance of
consumption expenditure in the economic growth The rising rupee aides this growth story as it re-
seen today. duces the cost of imports of capital goods and also
intermediates. India has a trade deficit and there-
Private final consumption expenditure (PFCE) fore the rising rupee helps a larger number of im-
grew by an impressive 6.2 per cent in 2006–07 and porters than it hurts exporters.
6.7 per cent in 2005–06. This is way above the
growth rates of the 1990s (4.6 per cent per an- This prediction of a 9.1 per cent growth in real
num) and the early years of the current decade (3.5 GDP is based on the assumption of an adequate
per cent per annum). This accelerated growth in precipitation during the monsoon, and a slight fall
PFCE is what is sustaining the investment boom. in interest rates in the early months of the coming
As domestic consumption demand keeps rising, en- year.
trepreneurs continue to have reason to invest. This
creates additional demand for labour and feeds the Finance Minister, P.Chidambaram has advised
virtuous cycle of growth. banks to reduce interest rates in the interest of
growth. The Minister is also quite sanguine about
Interestingly, the capital formation is financed growth. The Minister was quoted as “I am not
largely through domestic savings. The domestic changing my growth forecast for 2007–08. My
savings rate has increased from 23.5 per cent in growth forecast continues to be close to nine per
2001–02 to 32.4 in 2005–06. Foreign investments cent... For the next year, I am confident that with
have played a marginal role in the current invest- more investments taking place, we can aim to grow
ment boom. at nine per cent” in the newspapers on 31 Decem-
Indian households are using their additional income ber 2007. We agree with the Minister’s optimism.
to consume a lot more than they did earlier and si-
multaneously save a lot more than they did before. Figure 4.4 Annual Real GDP growth (%)
Evidently, the households are earning a lot more 12
(CMIE Forecast)
than earlier. We expect this virtuous cycle to con-
10 9.4
tinue into 2008–09. 9.0 9.1 9.1
8 7.5
Real GDP to grow by 9.1 per cent in 6

2008–09
4
In spite of the recent slowdown in industrial pro- 2

duction (as reflected in the IIP), we expect the In-
0
dian economy to register a growth of 9.1 per cent 2004-05 2005-06 2006-07 2007-08 2008-09
in 2008–09. The growth would be fuelled by the
Inflation 15
Inflation to remain stable to continue to rise in the coming months, that in

the administered fuels such as diesel and petrol is
also expected to go up a tad because of the low
Average monthly inflation, measured in the WPI,
base last year.
rose to 3.6 per cent in December 2007 from its five–
year low of 3.1 per cent in November 2007. This While the appreciation of Indian rupee vis–a–vis
rise in headline inflation came mainly on account of the USD is offsetting the impact of the rise in the
the continuous rise in prices of the fuel group and international crude oil prices to some extent, the ro-
its lower base last year. bust rise in tax collection and reducing fiscal deficit
have put the government in a comfortable position
After peaking in November, the international crude to help the Indian oil companies reduce their losses
oil prices sustained their high levels in December. without hurting the interest of the common man.
Both, the Brent and the Dubai, ruled 47–48 per
cent above their year–ago levels in December 2007. Figure 5.1 Wholesale Price Index (% change)
Following the upsurge in the international crude
oil prices, the Indian companies hiked the prices 6.5
of the non–administered crude derivatives such as 6.0
aviation turbine fuel, naphtha, bitumen and fur- 5.5
nace oil. These price hikes along with the low base 5.0
last year turned inflation in fuels positive. Aver-
4.5
age monthly inflation in the fuel group ruled at 2.1
4.0
per cent in December 2007 after remaining in the
negative zone for six consecutive months. This was 3.5
also the highest monthly inflation measured in the 3.0
fuel group in the last 11 months. While we expect Dec 05 Jul 06 Feb 07 Sep 07 Dec 07
inflation in the non–administered crude derivatives
Table 5.1 Wholesale Price Index: Major Groups

All All Primary Primary Fuel group Fuel group Mfd. Mfd.
Commodities Commodities Articles Articles products products
(avg. (% chg.) (avg. (% chg.) (avg. (% chg.) (avg. (% chg.)
index) index) index) index)
Dec 2006 208.4 5.7 213.0 9.0 322.3 3.7 181.5 5.2
Jan 2007 208.8 6.4 214.2 10.0 322.1 3.6 181.7 6.1
Feb 2007 208.9 6.3 215.0 11.4 319.8 1.8 182.0 6.2
Mar 2007 209.8 6.6 214.6 11.8 319.8 1.4 183.5 6.8
Apr 2007 211.5 6.3 219.2 11.9 320.4 1.1 184.6 6.2
May 2007 212.3 5.5 220.9 10.1 322.1 0.6 184.8 5.6
Jun 2007 212.3 4.5 220.6 7.6 322.0 -0.8 184.9 5.5
Jul 2007 213.6 4.7 224.5 10.7 321.9 -1.6 185.7 4.9
Aug 2007 213.8 4.1 223.8 9.2 322.4 -2.0 186.1 4.6
Sep 2007 215.1 3.5 226.0 6.7 321.9 -2.6 187.5 4.7
Oct 2007 215.2 3.1 223.8 4.9 323.7 -1.6 188.0 4.3
Nov 2007 215.5 3.1 223.6 4.5 325.9 -0.2 188.1 3.9
Dec 2007 215.8 3.6 222.9 4.7 329.0 2.1 188.2 3.7
Apr 06–Dec 06 205.1 5.1 206.7 6.7 325.0 6.7 177.9 3.8
Apr 07–Dec 07 213.9 4.3 222.8 7.8 323.2 -0.6 186.4 4.8
Apr 06–Mar 07 206.1 5.4 208.6 7.8 323.9 5.6 179.0 4.4
16 Inflation
Although the government has not ruled out a price With no spike expected in prices of any of the
hike completely, it is considering other options such manufactured products, the high base is going to
as excise duty cut (suggested by left parties) and play a major role in bringing inflation down in the
cut in sales tax on petroleum products by the state WPI of manufactured products. We expect infla-
governments. Thus, it appears unlikely that the tion in manufactured products to fall in the coming
government would hike the prices of administered months from its current level of 3.7 per cent (De-
petroleum products. cember 2007). Manufactured products carry the
highest weight of 63.75 per cent in the WPI and
any fall in inflation in the same has a major impact
We believe that the current spike in the interna-
on the headline inflation. We expect the headline
tional crude oil prices lacks any fundamental sup-
inflation in the WPI to remain stable in the coming
port. Demand–supply balances have not changed
months. The fiscal 2007–08 is expected to end with
so dramatically over the past one year to warrant
an annual inflation of 3.5 per cent, much below the
the hike in crude oil prices. Thus, a moderation in
RBI’s target of containing inflation close to five per
the prices is expected in the coming months. The
cent.
likely rise in inflation in the fuel group is expected
to get offset by the fall in inflation in the primary Inflation is expected to remain low at the consumer
articles and manufactured products. Inflation in level also. Inflation for the urban consumers, mea-
primary articles ruled at an average 4.7 per cent sured in the CPI–IW, has already come down to 5.5
in December 2007. Prices of primary articles have per cent in November 2007 from a high 7.3 per cent
been falling for the last three months with supply in August 2007. Although inflation for the agricul-
side constraints easing off. This coupled with the tural labourers and rural labourers remained a little
higher base last year is expected to bring down in- higher than that for the industrial workers, it has
flation in primary articles further. also eased substantially since August 2007.
Table 5.2 Consumer Price Indices

CPI-IW CPI-IW CPI-AL CPI-AL CPI-RL CPI-RL CPI-UNME CPI-UNME
(Index base (% change) (Index base (% change) (Index base (% change) (Index base (% change)
2001) 86–87) 86–87) 84–85)
Nov 2006 127 6.3 390 8.3 391 8.0 494 6.7
Dec 2006 127 6.9 390 8.9 391 8.3 493 6.9
Jan 2007 127 6.7 391 9.5 391 8.9 496 7.4
Feb 2007 128 7.6 392 9.8 393 9.5 497 7.8
Mar 2007 127 6.7 392 9.5 393 9.2 498 7.6
Apr 2007 128 6.7 394 9.4 395 9.1 501 7.7
May 2007 129 6.6 395 8.2 396 7.9 503 6.8
Jun 2007 130 5.7 399 7.8 400 7.5 506 6.1
Jul 2007 132 6.5 404 8.6 404 8.0 514 6.9
Aug 2007 133 7.3 408 8.8 408 8.5 515 6.4
Sep 2007 133 6.4 410 7.9 410 7.6 516 5.7
Oct 2007 134 5.5 413 7.0 413 6.7 520 5.5
Nov 2007 134 5.5 414 6.2 414 5.9 519 5.1
2006–07 124 6.6 375 7.0 376 6.8 482 6.2
2007–08 132 6.3 405 8.0 405 7.6 512 6.3
2006–07 125 6.7 380 7.8 382 7.5 486 6.6
Inflation 17
Table 5.3 Inflation as measured by Wholesale Price Index: Major Commodity Groups (Per cent)
weight Apr06 Apr07 24 Nov 01 Dec 08 Dec 15 Dec 22 Dec
–Oct06 –Oct07 2007 2007 2007 2007 2007
22.03 Primary articles 6.30 8.78 4.50 5.28 4.79 4.70 4.27
15.40 Food articles 6.61 7.24 2.78 3.73 2.92 2.98 2.93
5.01 Food grains 9.47 6.30 2.17 1.64 1.26 1.02 0.70
2.92 Fruits & vegetables 1.02 7.65 -4.03 -0.52 -3.09 -2.67 -1.74
4.37 Milk 5.22 7.96 9.42 10.20 10.20 10.20 10.20
2.21 Eggs, meat & fish 5.33 7.34 5.06 5.40 4.19 4.65 3.10
0.66 Condiments & spices 26.62 9.03 -3.65 -1.91 -0.86 -0.90 0.16
0.24 Other food articles 22.81 0.28 -6.11 -6.11 -6.11 -6.11 -4.51
6.14 Non-food articles 1.45 13.46 10.12 10.53 10.77 10.39 8.54
1.52 Fibres 5.44 12.29 12.79 16.05 16.43 15.80 16.84
2.67 Oil seeds -4.95 28.60 16.45 16.26 17.20 17.85 13.01
1.95 Other non-food articles 6.32 -0.71 1.75 1.28 0.70 -0.43 -0.69
0.48 Minerals 37.09 6.75 0.59 0.59 0.59 0.59 1.90
0.30 Metallic minerals 43.32 7.36 0.85 0.85 0.85 0.85 2.33
0.19 Other minerals 2.22 2.00 -1.41 -1.41 -1.41 -1.41 -1.49
14.23 Fuel, power, light & lubricant 7.45 -0.98 -0.18 1.92 1.86 1.77 2.58
1.75 Coal minning 0.00 -0.00 0.00 0.00 0.00 0.00 0.00
6.99 Minerals oils 11.59 -2.27 0.64 4.31 4.17 4.01 4.88
5.48 Electricity 2.48 1.14 -1.73 -1.73 -1.73 -1.73 -0.73
63.75 Manufactured products 3.35 5.14 3.75 3.86 3.92 3.58 3.52
11.54 Food products 2.33 3.33 2.07 2.24 3.01 3.50 3.76
1.34 Beverages tobacco & tobacco products 6.65 11.14 6.30 5.87 5.87 9.35 9.35
9.80 Textiles 2.07 0.49 -0.38 0.23 0.30 -2.80 -3.25
0.17 Wood & wood products 9.35 6.46 7.15 7.15 0.37 0.37 0.37
2.04 Paper & paper products 6.76 2.28 1.35 1.46 1.25 1.25 1.25
1.02 Leather & leather products -5.97 6.28 5.02 5.02 5.02 1.09 1.09
2.39 Rubber & plastic products 5.55 7.29 4.98 5.19 5.19 5.61 6.73
11.93 Chemicals & chemical products 3.20 4.85 5.41 5.73 5.68 5.62 5.57
2.52 Non-metallic mineral products 12.58 9.29 9.30 8.63 8.68 8.68 8.79
8.34 Basic metals alloys & metals products 2.82 7.57 3.56 3.81 3.34 2.49 2.40
8.36 Machinery & machine tools 4.02 8.54 6.75 6.21 6.14 6.14 5.41
4.29 Transport equipment & parts 1.54 1.72 1.72 1.72 1.72 1.90 2.15
100.00 All commodities 4.90 4.55 3.01 3.75 3.65 3.45 3.50
18 Interest Rates
Interest rates outlook stable to declining Union Bank believes banks have begun reducing
deposit rates and that interest rates are bound to
Interest rates are likely to remain stable in the come down. Bank of Baroda CMD A K Khandel-
near term. Any major cuts in benchmark lending wal believes short-term interest rates are likely to
rates by banks look unlikely until the next policy remain stable on comfortable liquidity position.
announcement by the banking regulator. An im-
portant reason for banks not cutting interest rates Although most banks believe that interest rates
is the large amounts of term deposit mobilisation are unlikely to soften in the immediate future, the
by them at high interest rates in the recent past. downward pressure on interest rates is quite strong.
Banks will not be willing to take a hit on their Inflation has remained below four per cent for 19
net interest margins by reducing lending rates when consecutive weeks. Credit growth has slowed down
their average cost of deposits remains high. from over 30 per cent to about 23 per cent.
In the first week of January 2008 State Bank of In- Figure 6.1 Interest Rates (%)
dia revised interest rates on domestic term deposits
and reset the maturity period. The maximum in- 8.0
terest rate on deposits in different maturity peri- 7.5
ods in the 46 days to less than a year duration was 7.0
6.5 per cent. The bank revised it to 7.5 per cent,
6.5
payable on deposits in the 181 days to less than
6.0
year bucket.
5.5
State Bank of India believes that interest rates will 5.0
remain stable in the near term. HDFC bank too 4.5
opined that interest rates will not come down im-
Dec06 Mar07 Jun07 Sep07 Dec07
mediately. While it is experiencing satisfactory de-
91-day T-bills 364-day T-bills Reverse Repo Rate Bank Rate
mand levels for car loans, demand for two-wheeler
loans is almost nil due to high interest rates. The
bank believes that auto loans will not become
cheaper but will remain stable for now.
Table 6.1 Interest Rates and Yield on T-Bills (Per cent)

91-day 182-day 364-day
T-bills T-bills T-bills
auction auction auction Reverse Bank
1st 2nd 3rd 4th 5th 6th 7th 1st 2nd 3rd 4th 1st 2nd 3rd Repo Rate PLR
Jan 2007 7.12 7.12 7.12 7.37 7.13 7.73 7.17 7.25 6.00 6.00 11.50-12.00
Feb 2007 7.54 7.50 8.08 7.75 7.60 7.71 7.68 7.82 6.00 6.00 12.25-12.50
Mar 2007 7.46 7.46 7.46 7.96 7.96 7.73 8.18 7.71 7.81 7.96 6.00 6.00 12.25-12.50
Apr 2007 7.91 7.33 7.46 7.33 7.97 7.73 7.68 7.72 6.00 6.00 12.75-13.25
May 2007 7.66 7.58 7.62 7.62 7.71 7.73 7.75 7.78 6.00 6.00 12.75-13.25
Jun 2007 7.37 7.21 7.71 7.75 7.17 7.12 7.37 7.60 7.79 7.79 7.64 7.67 7.63 6.00 6.00 12.75-13.25
Jul 2007 6.17 5.10 4.49 4.45 6.04 5.80 7.15 6.56 6.00 6.00 12.75-13.25
Aug 2007 6.46 6.55 6.71 6.79 7.08 7.25 7.45 7.23 7.47 7.50 6.00 6.00 12.75-13.25
Sep 2007 7.04 7.08 6.96 7.17 7.38 7.23 7.45 7.48 6.00 6.00 12.75-13.25
Oct 2007 7.12 6.96 7.08 7.00 7.30 7.43 7.35 7.34 6.00 6.00 12.75-13.25
Nov 2007 7.29 7.29 7.50 7.50 7.50 7.55 7.58 7.68 7.74 7.72 6.00 6.00 12.75-13.25
Dec 2007 7.50 7.42 7.33 7.33 7.58 7.58 7.69 7.64 6.00 6.00 12.75-13.25
Interest Rates 19
High inflation and robust credit growth were the wards the end of the month. From 7.50 per cent
two main reasons why the Reserve Bank of India during the second half of November 2007, yields on
had pushed up interest rates by consecutive CRR 91–day T-bills fell to 7.33 per cent during the third
hikes and increases in the reverse repo and repo and the fourth auction in December 2007. Simi-
rates. Both these factors are now well within the larly, the 364–day T-bill auctiuon saw yields easing
RBI’s comfort zone. from 7.72–7.74 per cent in November to 7.64–7.69
per cent in December. Call money rates, another
Surplus liquidity in the banking system crossed the
indicator of short term rates, hardened during De-
one lakh crore rupees mark in August 2007 and
cember 2007. The weighted average call money rate
more than doubled to cross the two lakh rupees
rose from 7.06 per cent in November to 7.43 per
mark in October 2007. As foreign inflows continue
cent in December. Yields on the 182-day T-bills,
to remain robust liquidity in the banking system is
however, remained strong at 7.58 per cent.
also expected to remain at these very robust levels.
As a result although banks will look to the RBI
The average turnover in the call money market also
for interest rate signals they are likely to increase
fell from Rs.8,783 crore in November to Rs.7,877
their discounts to their PLRs on loans to corporates
crore in December. Activity on the LAF win-
as cited in media reports. At present, benchmark
dow was dull too. Average outstanding auction on
prime lending rates of banks range between 12.75
the reverse repo window dropped to Rs.1,003 crore
per cent to 13.5 per cent.
from Rs.4,521 crore in the preceeding month. sim-
In December 2007, short term lending rates as in- ilarly, on the repo window too average outstanding
dicated by 91–day T-bill auctions eased a tad to- auctions fell from Rs.5,167 crore to Rs.1,253 crore.
Table 6.2 Call Money Market and Repo Auction

Call money Call money rates(%) Term money Reverse repo Repo
Avg. Low High Weighted Avg. Avg. of Avg. of Avg. of Avg. of
turnover avg. turnover out- auctions. out- auctions.
standing standing
(Per (Per (Per
(Rs.crore) cent) cent) cent) (Rs.crore) (Rs.crore) (Rs.crore) (Rs.crore) (Rs.crore)
Dec 2006 10954 5.00 19.00 8.47 275.00 8185 10081 8383 10478
Jan 2007 10570 5.75 19.00 8.06 278.00 1921 2305 10578 12693
Feb 2007 10209 3.00 8.25 7.07 331.00 4934 6031 2887 3528
Mar 2007 10261 2.50 75.00 13.00 549.00 3454 4105 12186 14335
Apr 2007 13391 1.50 20.00 8.70 271.00 1042 1207 8279 9586
May 2007 9084 0.10 9.50 6.60 170.00 1159 1380 6827 7190
Jun 2007 7336 0.05 9.00 2.48 186.00 2114 2616 745 922
Jul 2007 8457 0.01 4.75 0.59 141.00 2517 2997 0 0
Aug 2007 10731 0.05 50.00 6.41 154.00 19292 20470 0 0
Sep 2007 10343 0.00 7.95 6.06 146.00 16821 19344 475 546
Oct 2007 8468 3.00 6.60 6.01 77.00 31700 37464 0 0
Nov 2007 8783 1.00 9.75 7.06 62.00 4521 5167 6973 7969
Dec 2007 7877 5.50 7.85 7.43 272.00 1003 1253 66 82
Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec

2006–07 9573 0.00 19.00 6.29 299.00 28620 34233 1067 1186
2007–08 9455 0.00 50.00 5.46 152.00 9834 8453 2740 3465
20 Balance of Payments
Capital inflows spike in Sep ’07 quarter driven by portfolio investments of foreign insti-
tutional investors. Foreign portfolio investments
Quarterly data on balance of payments statistics amounted to USD 10,876 million or nearly a third
released by the Reserve Bank of India for the July– of total net capital inflows into the country.
September 2007 quarter reveals that capital in-
flows spiked to USD 33,902 million during the quar-
As much as 65 per cent of the foreign portfo-
ter. Net capital inflows during the September 2007
lio investments that came into India during the
quarter amounted to over 74 per cent of total net
July–September 2007 quarter were in the month of
capital inflows for the entire year ended 31 March
September itself. Of the USD 10,876 million, about
2007.
USD 7,057 million flowed into India in September
These strong capital inflows are largely being itself.
Figure 7.1 Net capital inflows (USD million) Figure 7.2 Rupees per dollar exchange rate
35000 46.0
30000 45.0
25000 44.0
20000 43.0
15000 42.0
10000 41.0
5000 40.0
0 39.0
Jun 2003 Jun 2004 Jun 2005 Jun 2006 Sep 2007 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07
Table 7.1 Foreign Investments & NRI Deposits (US Million)

FDI excl. FII net Acquisition of Foreign equity Offshore Total NRI deposits
acquisition of investments shares issues funds Investment
shares
Sep 2006 419 1,064 497 174 0 2,154 615
Oct 2006 1,295 1,703 403 52 0 3,453 549
Nov 2006 1,105 2,159 46 77 0 3,387 794
Dec 2006 1,978 -507 3,152 78 0 4,701 1,055
Jan 2007 655 24 1,266 1,578 0 3,523 162
Feb 2007 623 2,385 75 245 0 3,328 78
Mar 2007 474 -2,433 129 25 2 -1,803 792
Apr 2007 683 1,963 868 11 0 3,525 1,344
May 2007 1,897 1,847 223 5 0 3,972 1
Jun 2007 1,089 3,279 149 292 85 4,894 18
Jul 2007 692 4,685 13 2,028 0 7,418 482
Aug 2007 588 -3,323 243 448 0 -2,044 -340
Sep 2007 318 7,057 395 1 23 7,794 898
Apr–Sep Apr–Sep Apr–Sep Apr–Sep Apr–Sep Apr–Sep Apr–Sep

2006–07 3,177 -106 1,207 1,721 0 5,999 1,528
2007–08 5,267 15,508 1,891 2,785 108 25,559 2,403
Balance of Payments 21
Other capital inflows, which mainly comprise ‘leads The swelling reserves and robust capital inflows are
and lags’ in export receipts, spiked to USD 7.1 bil- keeping up the pressure of appreication on the ru-
lion during the quarter thereby contributing to the pee vis–a–vis the dollar. The rupee appreciated
robust increase in capital inflows. These were the against the dollar from 41.23 in the June 2007
highest ever. quarter to 40.5 in the September 2007 quarter. It
further appreciated to 39.5 in the December 2007
Foreign direct investments continued to be robust.
quarter indicating inflows remained robust even in
More than USD two billion flowed into the country
the December quarter. The rupee averaged 40.39
during the September 2007 quarter.
during the current financial year till end-December
Foreign currency reserves continue to rise. The compared to 45.63 in the corresponding year–ago
September 2007 quarter saw the country add USD period representing an appreciation of about 13 per
33,841 million to its forex reserves, a whopping 51 cent.
per cent year–on–year rise. This is the highest ad-
dition to the forex reserves in any quarter.
Table 7.2 Balance of Payments Statistics (US million)

2005– 2006– Apr Jul Oct Jan Apr Jul
06 07 06– 06– 06– 07– 07– 07–
Jun Sep Dec Mar Jun Sep
06 06 06 07 07 07
Trade balance -51,904 -63,171 -16,946 -16,757 -16,865 -15,232 -20,690 -21,711
Exports 1,05,152 1,28,083 29,674 31,836 30,664 34,052 35,790 37,875
Imports 1,57,056 1,91,254 46,620 48,593 47,529 49,284 56,480 59,586
Net invisibles earnings 42,002 53,405 12,379 10,482 14,090 17,795 15,493 16,195
Tourist earnings 1,215 2,438 220 -16 792 1,207 207 169
Miscellaneous 24,236 28,983 7,972 6,802 6,849 8,861 8,245 7,147
Income account -5,855 -6,573 -1,278 -1,821 -1,221 -885 -863 -581
Remittances 24,493 27,941 5,713 5,371 7,654 8,611 8,340 10,080
Official transfers 194 227 -21 14 190 42 -13 36
Transportation -2,012 -18 -314 32 -255 -188 -639 -675
Insurance -54 560 111 161 92 194 232 81
GNIE -215 -153 -24 -61 -11 -47 -16 -62
Current account balance -9,902 -9,766 -4,567 -6,275 -2,775 2,563 -5,197 -5,516
Per cent to GDP -1.2 -1.1 -2.3 -3.1 -1.1 0.3 -2.0 -2.1
Capital inflow (net) 25,470 45,779 10,564 8,780 10,482 17,134 16,506 33,902
Foreign assistance 1,702 1,767 49 337 633 751 276 453
External commercial
borrowing 2,508 16,155 3,959 1,761 3,994 6,673 6,963 3,594
NRI Deposits 2,789 4,321 1,231 908 1,236 631 -447 369
IMF 0 0 0 0 0 0 0 0
Short term 3,699 6,612 417 2,683 -316 1,620 2,153 3,558
Foreign investments 15,528 15,541 911 5,062 6,127 3,883 9,196 13,018
FDI 3,034 8,479 1,416 2,912 2,558 2,037 1,738 2,142
Portfolio investments 12,494 7,062 -505 2,150 3,569 1,846 7,458 10,876
Other bank capital -1,416 -2,408 3,759 -2,626 -4,576 1,634 -472 5,813
Other capital 1,232 3,953 305 655 3,386 2,035 -1,120 7,098
Rupee debt servicing -572 -162 -67 0 -2 -93 -43 -1
Currency reserves (March-end) 1,45,108 1,91,924 1,55,968 1,58,340 1,70,187 1,91,924 2,06,114 2,39,955
22 Public Finance: Central Government Finance
Gross fiscal deficit down During April–November 2007, Department of Fer-

tilisers spent Rs.25,731 crore which was 14 per cent
During April–November 2007, gross fiscal deficit more than the Rs.22,532 crore budgeted for the en-
was lower at Rs.96,274 crore as compared with tire fiscal year. Subsidies on fertilisers account for
Rs.1,08,201 crore in the corresponding period of almost the entire budgeted amount of the the de-
2006. The deficit till November was also lower at partment’s expenditure.
63.8 per cent of budget estimates as against 72.8
per cent a year ago. These favourable numbers re- Interest payments rose by 18 per cent during April–
flect a higher 24.2 per cent growth in revenue re- November 2007 as against nine per cent increase
ceipts than the 22.2 per cent rise in expenditure. budgeted for the entire fiscal year. This reflects in
part, hardening of interest rates and growing lia-
However, the growth in revenue receipts in the cur-
bilities under MSS.
rent fiscal year was lower than the 27.3 per cent in-
crease witnessed in the same period of 2006. On the
Net liabilities under MSS swelled by Rs.96,743
other hand, the growth in expenditure was higher
crore to Rs.1,59,717 crore as of December 2007
than the 14.9 per cent increase witnessed a year
from Rs.62,972 crore as of March 2007. In the
ago.
corresponding period a year ago, the increase
The higher growth in expenditure, till November was Rs.8,252 crore only–from Rs.29,062 crore to
2007, is largely attributed to a one time payment of Rs.37,314 crore. According to the Mid-year Re-
Rs.35,531 crore made by the government to RBI to view released by Ministry of Finance, the weighted
acquire its share in SBI. In addition to this, higher average interest rate of Central government securi-
expenditure growth was partly due to increased re- ties was up at 8.2 per cent during April–October
quirements of fertiliser and food subsidy and on 2007 as compared with 7.91 per cent for those is-
interest payments as a result of higher borrowing sued during the corresponding period of previous
under MSS. year.
Table 8.1 Gross Fiscal Deficit and Its Sources of Financing (Rs.crore)
Gross External Market Small PPF State Special Other Revenue
fiscal financing borrowings Savings provident Deposits financing deficit
deficit fund
Nov 2006 21101 785 19314 3676 434 -146 -50 -2912 17184
Dec 2006 -13347 1107 12397 3041 426 543 -46 -30815 -17706
Jan 2007 16182 -424 6885 1266 780 43 -18 7650 14059
Feb 2007 10781 1366 13327 -263 939 -135 -85 -4368 1575
Mar 2007 20976 2459 7157 1809 8795 4377 705 -4326 -2001
Apr 2007 27814 175 -12549 -428 -755 505 -111 40977 25975
May 2007 34321 339 16143 -802 -21 -459 -21 19142 33360
Jun 2007 50269 282 54309 -2190 48 353 -126 -2407 9311
Jul 2007 17004 239 16841 -1721 175 -298 1148 620 13754
Aug 2007 -26070 454 30059 -1720 198 -325 -34 -54702 -28885
Sep 2007 -22138 989 -10682 -887 301 416 9 -12284 7609
Oct 2007 1056 621 6608 -1334 232 -238 -23 -4810 -3562
Nov 2007 14018 708 14464 -709 285 -47 27 -710 12412
Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

2005–06 108201 3965 92074 31691 7311 205 -352 -26693 84483
2006–07 96274 3807 115193 -9792 463 -94 870 -14173 69974
%Change -11.02 -3.98 25.11 -35.18 -93.67 -77.65 0.00 -46.90 -17.17
Public Finance: Central Government Finance 23
A large part of the expenditure, till November 2007, tax was up by 38 per cent and corporation tax saw
was in the form of transfers. The largest, 25 per a growth of 42 per cent. The growth in income tax
cent of total expenditure was interest payments. It was an improvement over 28 per cent increase wit-
was followed by transfers to State governments & nessed in the corresponding period of 2006 while
UTs (11.3 per cent), payments to financial institu- that in corporate tax it was a deceleration from 54
tions (8.4 per cent), expenditure incurred by the per cent, yet a robust growth.
Department of Fertilisers (6.3 per cent) and De-
partment of Food and Public Distribution (4.7 per Table 8.2 Major heads of Central government ex-
cent). The expenditure under the last two heads penditure during April–November 2007
are mostly subsidies. Rs. Share Change
crore in over
Department of Road Transport and Highways total 2006
spent Rs.11,256 crore during April–November (%) (%)
2007. This amount was 30 per cent higher than Interest payments 1,03,648 25.2 17.9
Transfer to states & UTs 46,418 11.3 5.3
the Rs.8,628 crore spent in the corresponding pe-
Defence services 40,328 9.8 -6.6
riod of 2006. Payments to financial inst. 34,528 8.4 6108.8
Department of fertilisers 25,731 6.3 54.7
Gross tax collections continued to grow more than Ministry of rural dev. 22,289 5.4 28.6
the 17 per cent growth budgeted for the fiscal Dept of food & public dist. 19,220 4.7 4.9
year. Till November 2007, 25 per cent increase was Ministry of human resource dev. 14,144 3.4 -17.9
recorded in gross tax revenue. Performance of in- Pension (defence and others) 13,578 3.3 6.7
Dept of road trans. & highways 11,256 2.7 30.5
come tax and corporation tax was better than the
Police 10,861 2.6 7.2
custom and excise duties. Other expenditure 69,026 16.9 133.9
Total expenditure 4,11,375 100.0 22.2
During April–November 2007, revenue from income
Table 8.3 Central Government Expenditure (Rs.crore)

Non-plan Expenditure Plan Expenditure
Interest Other rev. Revenue Capital Total Revenue Capital Total Total
Payments expendi. expendi. expendi. expendi. expendi. Expenditure
Nov 2006 13,793 15,669 29,462 1,914 31,376 12,438 3,456 15,894 47,270
Dec 2006 4,691 18,972 23,663 3,147 26,810 18,356 2,016 20,372 47,182
Jan 2007 22,830 18,636 41,466 1,729 43,195 7,555 1,245 8,800 51,995
Feb 2007 10,505 5,913 16,418 3,117 19,535 13,330 2,263 15,593 35,128
Mar 2007 23,584 36,385 59,969 18,058 78,027 27,695 6,426 34,121 1,12,148
Apr 2007 11,449 15,105 26,554 672 27,226 7,527 1,479 9,006 36,232
May 2007 14,772 24,550 39,322 1,067 40,389 11,831 2,298 14,129 54,518
Jun 2007 8,053 19,591 27,644 36,740 64,384 20,196 4,570 24,766 89,150
Jul 2007 14,662 19,912 34,574 1,671 36,245 10,043 1,875 11,918 48,163
Aug 2007 14,103 15,125 29,228 1,570 30,798 10,679 1,827 12,506 43,304
Sep 2007 9,781 20,406 30,187 1,905 32,092 11,295 3,138 14,433 46,525
Oct 2007 17,163 19,125 36,288 2,127 38,415 8,740 3,855 12,595 51,010
Nov 2007 13,665 15,137 28,802 405 29,207 11,697 1,569 13,266 42,473
Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

2006–07 87,943 1,42,185 2,30,128 15,265 2,45,393 75,545 15,601 91,146 3,36,539
2007–08 1,03,648 1,48,951 2,52,599 46,157 2,98,756 92,008 20,611 1,12,619 4,11,375
(%Change) 17.86 4.76 9.76 202.37 21.75 21.79 32.11 23.56 22.24
24 Public Finance: Central Government Finance
The impressive performance continued in Decem- ceipts) to the budget estimates. This stood at 44.8
ber also. Till 15 December, the growth in corpo- per cent as against the FRBM target of 40 per cent.
rate tax collections had inched up 42.4 per cent Even excluding the transfer of the RBI stake in SBI
while income tax growth moved up to 42.8 per cent. to the government, non-debt receipts were 41.8 per
Growth in securities transaction tax was 74.4 per cent of BE 2007–08. Fiscal deficit at 53.8 per cent
cent and fringe benefit tax was 16.1 per cent. Bank- of BE 2007–08 compared to 58.2 per cent of BE
ing cash transaction tax grew by 17 percent (Rs.376 2006–07 also shows some improvement. However,
crore against Rs.322 crore). it shows a slippage of nine percentage points from
the 45 per cent prescribed in the FRBM. There
was also a slippage in terms of revenue deficit as
Fiscal performance vis-a-vis FRBM a proportion to BE 2007–08 at 85.5 per cent, vis-
a-vis 81.8 per cent in the corresponding period of
In the first half of 2007–08, fiscal performance of previous year. The benchmark in FRBM is 45 per
Central government showed a mixed outcome vis- cent.
a-vis benchmarks stipulated in the FRBM. Accord-
According to the Review, the exchequer control
ing to Mid-year Review released by Ministry of Fi-
based cash management system which has been ex-
nance, the fiscal and revenue deficit indicators at
tended to cover 23 demands for grants during 2007–
the end of second quarter were higher than the tar-
08 and expenditure management guidelines that
gets prescribed under the FRBM.
stipulate restricting expenditure to not more than
The Union government has met the half yearly tar- 33 per cent of the BE during the last quarter has
get on the proportion of total non-debt receipts had some effect in causing Ministries/Departments
(tax, non-tax revenues plus capital receipts like to “front load” expenditure resulting in higher re-
repayment of loans and miscellaneous capital releases during the first half of the year.
Table 8.4 Non–debt receipts (Rs.crore)

Tax Non-tax Revenue Recoveries Other Total
revenue revenue receipt of loans receipt Receipts
Nov 2006 21,296 3,420 24,716 1,453 26,169
Dec 2006 55,215 4,510 59,725 804 60,529
Jan 2007 24,284 10,678 34,962 846 5 35,813
Feb 2007 20,477 7,696 28,173 -3,826 24,347
Mar 2007 74,562 15,103 89,665 978 529 91,172
Apr 2007 5,448 2,658 8,106 312 8,418
May 2007 16,277 1,516 17,793 37 2,367 20,197
Jun 2007 35,745 2,784 38,529 352 38,881
Jul 2007 22,441 8,422 30,863 296 31,159
Aug 2007 19,445 49,347 68,792 582 69,374
Sep 2007 61,144 -27,271 33,873 451 34,339 68,663
Oct 2007 34,839 13,751 48,590 370 994 49,954
Nov 2007 25,033 3,054 28,087 368 28,455
Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

2006–07 1,76,956 44,234 2,21,190 7,148 2,28,338
2007–08 2,20,372 54,261 2,74,633 2,768 37,700 3,15,101
Public Finance: Central Government Finance 25
The Review further points out that the deficit tar- first half of the year, the government is confident
gets envisaged under the FRBM Rules at the end of successfully navigating through the FRBM road
of the second quarter were based on the historical map and ensuring compliance of the end-of-the-
trends. However, with various cash management year fiscal targets on the strength of determined
initiatives being introduced for achieving greater pursuit of various fiscal consolidation measures in
evenness in the spread of expenditure over the fi- conjunction with growth dividends.”
nancial year, the fiscal deficit target as a propor-
tion to BE at the end of the second quarter, should Table 8.5 Outcome versus mid-year benchmarks
be optimally closer to 50 per cent. Thus the re- under FRBM Rules (% of BE)
view suggested that the slippage in target as com- Variable Performance bench April-September
pared to FRBM prescriptions need not necessarily marks under FRBM 2006 2007
be viewed as a result of poor fiscal management. Non-debt Not less than
receipts 40 per cent 39.9 44.8
The Ministry of Finance is more optimistic in the Fiscal Not more than
second half of the year than anticipated at the time deficit 45 per cent 58.2 53.8
of budget estimates. As mentioned in the review Revenue Not more than
deficit 45 per cent 81.8 85.5
“notwithstanding the deviations witnessed in the
Table 8.6 Gross tax revenue

Corporation Income Custom Excise Other Total Total
Tax tax duties duties taxes tax tax
revenue revenue
(Rs.crore) (Rs.crore) (Rs.crore) (Rs.crore) (Rs.crore) (Rs.crore) (% chg.)
Nov-06 4,442 3,552 7,949 9,466 3,894 29,303 41.44
Dec-06 33,256 9,909 6,847 9,693 3,965 63,670 39.77
Jan-07 4,306 4,643 6,914 10,973 5,548 32,384 31.01
Feb-07 3,545 4,727 6,871 9,749 3,915 28,807 10.10
Mar-07 41,689 19,997 8,889 25,163 9,867 1,05,605 28.12
Apr-07 2,333 3,471 7,099 766 2,051 15,720 5.45
May-07 3,739 4,484 8,224 6,569 3,619 26,635 61.67
Jun-07 18,710 5,385 8,053 9,599 4,393 46,140 22.40
Jul-07 4,935 5,636 8,334 8,928 5,009 32,842 19.86
Aug-07 3,657 4,767 8,597 9,335 4,488 30,844 18.12
Sep-07 36,802 11,703 7,790 9,692 5,323 71,310 25.36
Oct-07 10,170 8,899 9,685 9,815 6,628 45,197 32.63
Nov-07 5,575 5,996 8,497 10,110 5,239 35,417 20.86
Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

2006–07 60,595 36,516 56,808 62,123 26,816 2,42,858 31.07
2007–08 85,921 50,341 66,280 64,814 36,749 3,04,105 25.22
Note: Data in the above table are net of the refunds but before the transfer of states’ share
26 Public Finance: Government Debt Floatations
Sharp spike in 91–day T-bill borrowings Rs.2,963 crore compared to an unusually high
in Dec ’07 Rs.10,512 crore in the preceeding month.
Total government borrowings in December 2007
Government borrowings by way of treasury bills stood at Rs.27,788 crore, lower than the Rs.28280
were higher in December 2007 compared to the bor- crore in November 2007 but higher than the
rowings in November 2007. The borrowings were Rs.21,243 crore in December 2006.
higher in December than in November across all Total government borrowings for the April–
maturities viz. 91 days, 182 days and 364 days. In December 2007 period stood at Rs.3,22,613 crore,
case of 91–day T-bill borrowings, there was a sharp about 41 per cent higher than in the corresponding
spike from Rs.4,767 in November to Rs.14,450 in year ago period.
December.
Total state government borrowings for the April–
Dated borrowings were, however, lower at Rs.7,000 December 2007 period stood at Rs.33,838 crore,
crore compared to Rs.10,000 crore in November. about 161 per cent higher than in the correspond-
State government borrowings were even lower at ing year ago period.
Table 8.7 Central and State Government Market Borrowings (Rs.crore)

Central Government Borrowings State Total
91 Days 182 Days 364 Days Dated Govt. Govt.
T-Bills T-Bills T-Bills Securities: Borrowings Borrowings
Total
Dec 2006 7030 1000 2250 9000 1963 21243
Jan 2007 5100 1400 3657 9000 1515 20672
Feb 2007 10855 1000 2096 9000 3600 26551
Mar 2007 14800 1825 4721 7000 3021 31368
Apr 2007 4800 1524 2430 16000 1837 26591
May 2007 6804 1862 2000 18000 1750 30416
Jun 2007 40643 7000 5614 20000 3566 76823
Jul 2007 9850 1900 2583 19000 1389 34723
Aug 2007 8103 3000 3033 17000 3484 34621
Sep 2007 16500 1855 2375 3000 3074 26804
Oct 2007 9281 2000 2024 18000 5263 36568
Nov 2007 4767 1000 2000 10000 10512 28280
Dec 2007 14450 1125 2250 7000 2963 27788
Apr 06–Dec 06 52599 16562 25501 121000 12989 228652
Apr 07–Dec 07 115199 21266 24310 128000 33838 322613
Note: Dated securities auctioned includes amount devolved on Primary Dealers
Agriculture: Prospects 27
Rabi sowing is about to end soon. Till 28 De- that farmers have responded favourably to increase
cember 2007, rabi acreage was lower at 519.3 lakh in the minimum support price and higher prices of
hectares as compared with 543 lakh hectares a year wheat prevailing in the open market.
ago. Sowing was lagging behind in all three major
Wheat has become a remunerative crop for the
groups of crops. Cereal sowing was down by 3.7
farmers. Therefore, even in Uttar Pradesh and
per cent, pulses by 2.4 per cent and oilseeds by 9.6
Madhya Pradesh, acreage of wheat is expected to
per cent.
improve in the subsequent weeks. With the im-
Wheat is the largest rabi cereal crop, accounting provement in sowing in these two states, the to-
for 72 per cent of the normal rabi area sown of ce- tal acreage is expected to touch 284 lakh hectares,
reals. Its sowing gained momentum in December. higher than the 280 lakh hectare sown in rabi 2006.
Yet, area sown under wheat stood at 249.3 lakh With this level of sowing, wheat production is pro-
hectares, lower than the 263.3 lakh hectares sown jected to reach 75.5 million tonnes as compared to
in the corresponding period a year ago. 74.9 million tonnes in the previous year.
Wheat acreage was lower in Madhya Pradesh and Among the oilseeds, sowing of mustard was the ma-
Uttar Pradesh. Compared to the previous rabi jor disappointment as it fell short by 8.9 per cent
season, area sown was down by 5.4 lakh hectares till 27 December 2007 as compared to the acreage in
and 8.5 lakh hectares in these two states respec- the same period of last year. Lack of adequate soil
tively. In Rajasthan, the loss was marginal 0.29 moisture in Rajasthan, a major mustard produc-
lakh hectares. These losses were due to moisture ing state, is reported to be the main reason behind
stress and initial higher temperature in Madhya the dismal progress of sowing. As a result, rape-
Pradesh (Gwalior, Rewa and Sagar divisions), Ut- seed/mustard production is projected to fall to 6.5
tar Pradesh (Bundelkhand region) and rainfed ar- million tonnes in 2007–08 from 7.1 million tonnes in
eas of Rajasthan. 2006–07. The drop would largely be concentrated
in Rajasthan which accounts for more than 50 per
The poor progress of sowing in the above mentioned
cent of total production of the crop.
states was partly compensated by higher acreage
reported from Gujarat, Haryana and Punjab. Till Progress of rabi groundnut sowing was satisfactory.
December area sown under wheat in these states As reported till 27 December area sown stood at
was up by 2.06 lakh hectares, 0.15 lakh hectares 4.5 lakh hectares, higher than the 4.4 lakh hectares
and 1.55 lakh hectares respectively. This suggests sown a year ago.
Table 10.1 Progress of Rabi 2007 Sowing (lakh hectares): Major crops
Crops As on Normal Sown Sown % of % of % change
Area Area Area normal normal 2008
2007 2008 area area over
2007 2008 2007
Cereals 28 Dec 2007 363.0 328.2 316.2 90.4 87.1 -3.7
Wheat 28 Dec 2007 262.0 263.3 249.3 100.5 95.2 -5.3
Pulses 27 Dec 2007 122.6 124.3 121.3 101.4 98.9 -2.4
Gram 27 Dec 2007 66.3 76.5 75.1 115.4 113.3 -1.8
Masoor 27 Dec 2007 14.3 14.7 13.6 103.4 95.2 -7.8
Oilseeds 27 Dec 2007 91.0 90.5 81.8 99.5 89.9 -9.6
Rapeseed & Mustard 27 Dec 2007 59.3 65.4 59.5 110.3 100.5 -8.9
Total 576.6 543.0 519.3 94.2 90.1 -4.4
28 Agriculture: Prospects
Kharif 2007 harvesting is over. Area sown under to grow by 0.8 per cent in 2007–08. In quantity,
foodgrain, oilseeds, sugarcane and cotton in the wheat production is placed at 75.5 million tonnes.
kharif 2007 was more than in kharif 2006. Be-
Overall agricultural crops production is estimated
cause of this, production of all major crops is esti-
to grow by 3.8 per cent during 2007–08. This is
mated to be higher in the current agricultural year
a robust growth, which would come on top of the
than in the previous year. However, the growth
2.9 per cent increase recorded in the previous year.
would be more pronounced in non–food crops such
Moreover, it would be the third consecutive year
as oilseeds, cotton and sugarcane. Higher prices of
of healthy growth after a 2.2 per cent decline wit-
these commodities and satisfactory rainfall had en-
nessed in 2004–05.
couraged farmers to bring more area under these
crops. Livestock, fishing and forestry & logging is esti-
mated to grow by four per cent during 2007–08.
Non-food crops production is estimated to grow by With this, the GDP from agriculture and allied
an impressive 7.9 per cent during 2007–08 as com- activities would be higher by 3.8 per cent in the
pared with 3.1 per cent increase achieved in the current fiscal year.
previous year. This impressive growth would come
from 19 per cent increase in sugarcane production In spite of estimated higher production, rice pro-
and 11.7 per cent increase in oilseeds production. curement by the government agencies was expected
Growth in oilseeds would be a recovery over a 16 to fall short of the target fixed by the government.
per cent decline recorded in 2006–07. In the first three months, the procurement was at
11.56 million tonnes till 24 December 2007 as com-
On the other hand, foodgrain is estimated to see a pared with 11.91 million tonnes procured in the
marginal rise of 0.5 per cent in 2007–08 as against same period of 2006. According to official sources,
a 3.4 per cent increase recorded in the preceding total procurement could reach to 25 million tonnes
year. After showing an impressive eight per cent in the current marketing season. The target for the
increase in 2006–07, wheat production is projected year is 27.6 million tonnes.
Table 10.2 Estimates of Production of Major Crops

Million tonnes % change
2004–05 2005–06 2006–7 2007–08 2004–05 2005–06 2006–07 2007–08
(cmie proj) (cmie proj)
Foodgrain 198.4 208.6 216.1 217.2 -7.1 5.9 3.4 0.5
Cereals 185.2 195.2 201.9 202.6 -6.4 6.3 3.1 0.3
Pulses 13.1 13.4 14.2 14.6 -12.5 2.0 6.1 2.2
Oilseeds 24.4 28.0 23.9 27.0 -1.0 13.6 -16.0 11.7
Cotton (million bales) 16.4 18.5 22.7 27.0 19.7 12.6 22.7 19.0
Sugarcane 237.1 281.2 345.3 365.0 1.4 18.6 22.8 5.7
All commodities index -2.2 6.7 3.2 3.8
Foodgrains index -7.1 5.9 3.4 0.5
Non-food crop index 4.8 7.8 2.9 7.9
Energy: Coal 29
Coal stocks rise in November in the corresponding period last year.

During April–August 2007, coal imports increased
At 39.2 million tonnes, coal production in India to 21.6 million tonnes. This is 20.1 per cent higher
rose by a sharp 7.7 per cent during November 2007 than 12.5 per cent rise witnessed during the year–
over the corresponding month last year. This is ago level.
the highest production recorded in the last eight
months. While coal output recorded a sharp rise, Figure 11.1 Coal production (Million tonnes)
increase in coal despatches was proportionately
50
lower. This led to a rise in coal stocks to 27.5 mil-
lion tonnes as at the end of November 2007. Coal
45
stocks were 4.6 per cent higher than the year–ago
level. 40
Cumulative production of coal recorded a 4.3 per

35
cent increase to 266.7 million tonnes during April–
November 2007. Growth in coal production picked
30
up since August 2007. However, growth in coal
despatches was higher indicating increased demand Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
for coal. Coal despatches rose by a sharper 7.7 per 2006-07 2007-08
cent as compared to 5.9 per cent increase registered
Table 11.1 Coal Statistics: Production, despatches, stocks and imports

Coal Coal Coal Coal Coal Coal Coal Coal
Prod. Prod. Imports Imports Stocks Stocks Despatches Despatches
(Million (% chg) (Million (% chg) (Million (% chg) (Million (% chg)
tonnes) tonnes) tonnes) tonnes)
Nov 2006 36.40 4.7 4.30 15.4 26.27 41.8 35.03 7.4
Dec 2006 39.50 3.0 3.21 -20.3 29.03 37.9 36.65 2.7
Jan 2007 42.15 10.0 3.99 14.6 33.17 46.2 37.79 5.6
Feb 2007 39.35 6.6 4.30 60.0 36.75 36.4 35.31 8.4
Mar 2007 48.49 10.6 5.92 34.5 44.89 30.9 40.12 10.3
Apr 2007 31.69 0.5 4.96 33.0 40.59 25.1 35.77 6.3
May 2007 33.54 0.9 4.74 15.9 37.08 17.0 36.21 6.4
Jun 2007 32.34 1.3 3.97 5.9 34.16 11.8 35.39 7.8
Jul 2007 31.04 1.1 3.56 10.6 30.54 9.7 34.70 3.3
Aug 2007 31.74 8.7 4.33 39.5 27.37 6.7 35.02 12.9
Sep 2007 31.02 6.2 25.46 3.8 32.81 7.6
Oct 2007 36.67 9.2 25.41 1.7 36.62 10.8
Nov 2007 39.20 7.7 27.48 4.6 36.95 5.5
Apr–Nov Apr–Nov Apr–Aug Apr–Aug Apr–Nov Apr–Nov Apr–Nov Apr–Nov

2006–07 255.70 4.7 18.00 12.5 263.33 5.9
2007–08 266.70 4.3 21.63 20.1 283.50 7.7
Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar

2006–07 425.11 5.9 48.10 16.7 413.50 6.2
Monthly figures may not add up to the total due to revisions
30 Energy: Crude Oil
Crude oil prices remain firm POL imports increased by 16.7 per cent to USD
5,823 million in November. Despite appreciation of
Benchmark international prices of crude oil in the Indian rupee by 12.1 per cent against USD, POL
London market remained firm during December imports recorded a 2.6 per cent rise to Rs.22,966
2007. They averaged 47 per cent higher than the crore during the month on account of surge in price
year–ago levels. Consequently, the Indian basket of Indian basket of crude oil.
of crude oil averaged at USD 88.32 per barrel as
compared to USD 59.94 a barrel during the corre- Figure 11.2 Crude Oil Production (Lakh tonnes)
sponding month last year. In line with crude oil, 29.5
global petro–products prices also became dearer by

29.0
42–47 per cent.
28.5
During April–November 2007, the upstream oil
companies registered a production rise of 56 ba- 28.0
sis points over the year–ago level. The growth 27.5

rate receded this year as compared to 5.5 per cent
recorded in the corresponding period last year. 27.0
Output by private and joint venture companies rose 26.5

by 1.95 lakh tonnes to 32.1 lakh tonnes. This rise Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
was marginally offset by a 3.9 per cent decline in 2006-07 2007-08
cumulative production witnessed by Oil India. Pro-
duction by ONGC remained constant at 226.9 lakh
tonnes.
Table 11.2 Crude Oil Production, Crude Throughput and Imports

Crude Oil Crude Oil Crude Crude POL POL
Prod. Prod. Throughput Throughput imports imports
(Lakh tonnes) (% change) (Lakh tonnes) (% change) (US million) (% change)
Nov 2006 28.14 9.8 123.31 16.4 4,989 48.3
Dec 2006 29.24 10.7 122.83 6.2 4,393 18.2
Jan 2007 29.01 4.7 127.46 9.2 3,758 -9.8
Feb 2007 26.66 4.9 120.87 11.3 4,496 9.4
Mar 2007 29.34 3.2 135.24 13.4 4,919 17.0
Apr 2007 27.91 1.4 125.18 15.1 5,488 38.2
May 2007 28.18 -1.6 133.26 14.9 5,612 15.6
Jun 2007 27.74 -1.8 129.32 9.9 5,888 21.2
Jul 2007 28.88 0.9 127.98 4.7 5,440 6.2
Aug 2007 28.76 6.5 130.95 8.2 6,205 11.9
Sep 2007 27.94 -0.7 127.40 6.9 5,557 9.3
Oct 2007 29.24 -0.1 126.79 2.8 6,126 14.6
Nov 2007 28.22 0.3 129.73 5.2 5,823 16.7
Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

2006–07 225.62 5.5 951.53 13.5 39,339 41.7
2007–08 226.89 0.6 1,030.61 8.3 43,349 10.2
Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar

2006–07 339.87 5.6 1,465.52 12.6 57,036 29.8
Monthly figures may not add up to the total due to revisions
Energy: Crude Oil 31
At 129.7 lakh tonnes, refinery throughput in India Petro–products demand in line with our
witnessed a 5.2 per cent increase during Novem- estimate
ber. During April–November 2007, refineries regis-
tered an output of 1,030 lakh tonnes, up by 8.3 per During April–November 2007, consumption for
cent over the year–ago level. Cumulative produc- petro–products in India rose to 816 lakh tonnes,
tion surpassed the planned target by seven per cent. up by 4.5 per cent over the year–ago level. De-
Indian Oil Corporation which accounts for close to mand for petrol and diesel also surged by 11.8 per
30 per cent of the total domestic throughput mainly cent and 9.7 per cent, respectively. Consumption of
led to the rise in total cumulative production by ex- LPG continued to increase for the fifth consecutive
isting refineries. Its refinery at Panipat witnessed month in November and registered a cumulative
a 62.9 per cent growth to 87.2 lakh tonnes. The growth of 10.2 per cent. The pick–up in demand
growth in total output was also contributed by the for petro–products during October and November
newly setup refinery by Essar Oil. Refinery util- 2007 by 10.2 per cent and 7.5 per cent, respectively
isation by all refineries declined sharply to 103.8 pulled up the growth in cumulative consumption.
per cent as compared to 107.5 per cent registered
during the first eight months of 2007–08.
Table 11.3 Consumption of Major Petroleum Products (’000 tonnes)

LPG % chg. Petrol % chg. Diesel % chg. Kero- % chg. Naphtha % chg. Total % chg.
sene
Nov 2006 928 -9.2 738 5.3 3,721 8.4 788 -15.9 1,214 41.5 10,051 5.8
Dec 2006 976 4.8 803 9.5 3,969 7.7 699 -11.6 1,969 82.7 10,147 0.4
Jan 2007 973 5.9 775 8.8 3,683 7.4 844 6.6 900 -16.0 10,297 5.7
Feb 2007 953 8.5 750 4.5 3,470 1.2 802 3.1 959 -10.2 9,737 3.6
Mar 2007 972 11.6 883 15.6 3,993 11.6 788 0.6 1,155 10.7 11,572 13.2
Apr 2007 911 13.3 821 11.7 3,965 8.4 768 0.7 1,052 4.8 10,273 5.0
May 2007 917 6.9 918 1.9 4,124 1.0 782 -0.3 1,134 -5.9 10,782 -1.5
Jun 2007 880 6.3 854 20.5 3,929 19.9 775 -7.0 1,003 -22.2 10,263 4.6
Jul 2007 945 9.6 856 17.6 3,691 14.0 772 -2.8 887 -13.3 9,621 2.9
Aug 2007 992 10.3 825 8.8 3,311 5.7 776 -5.0 1,201 19.9 9,646 5.8
Sep 2007 1,000 10.5 813 8.4 3,334 2.8 793 -0.4 1,061 8.6 9,500 2.1
Oct 2007 1,026 14.4 851 11.2 4,004 17.2 780 1.8 1,170 7.7 10,711 10.2
Nov 2007 1,025 10.5 864 17.1 4,115 10.6 790 0.3 1,133 -6.7 10,807 7.5
Apr– Apr– Apr– Apr– Apr– Apr– Apr– Apr– Apr– Apr– Apr– Apr–
Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov
2006–07 6,981 1.8 6,084 6.4 27,769 6.5 6,341 -0.9 8,801 10.9 78,092 5.9
2007–08 7,696 10.2 6,802 11.8 30,473 9.7 6,236 -1.7 8,641 -1.8 81,603 4.5
Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
2006–07 10,855 3.8 9,295 7.5 42,884 6.7 9,474 -0.7 13,784 13.0 1,19,845 5.9
32 Energy: Electricity
Power generation up 6.6% cent during the year–ago period. However, peak
power deficit rose from 12.2 per cent to 12.9 per
The healthy rise in total power generation in In- cent. Power shortage in India is likely to decline
dia continued during April–December 2007. Ris- on account of increase in total power generation,
ing by 6.6 per cent over the year–ago level, total higher PLF and slower growth in demand from the
power generation rose to 525.9 billion kwh. While agricultural sector on account of higher reservoir
hydel power generation recorded highest growth of levels.
9.8 per cent to 100.8 billion kwh, output by ther-
mal and nuclear power plants recorded a rise of 5.3 Figure 11.3 Power Generation (billion kwh)
per cent over the corresponding year–ago period.
61
While higher PLF at 76.7 per cent accounted for
60
the rise in thermal power generation, output by 59
nuclear power plants dipped. However, both the 58
sources of power accounted for 64 per cent increase 57
in cumulative power generation during the said pe- 56
riod. 55
54
With availability of power increasing by 7.5 per 53
cent and requirement augmenting by seven per 52
51
cent, power shortage in India during April– Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
November 2007 witnessed an improvement. Power 2006-07 2007-08
deficit stood at 7.9 per cent as compared to 8.4 per
Table 11.4 Power Generation Statistics

Therm. & Therm. & Hydel Hydel Total Total PLF of Power
nuc. nuc. power power power power therm. shortages
power power generation generation generation generation plants
generation generation
(Billion (% (Billion (% (Billion (% (%) (%)
kWh) change) kWh) change) kWh) change)
Dec 2006 49.99 10.9 8.72 22.6 58.97 12.9 79.10 12.17
Jan 2007 50.61 8.6 7.56 6.1 58.35 8.5 82.60 12.51
Feb 2007 46.86 7.9 5.83 -14.1 51.91 3.4 82.20 11.71
Mar 2007 50.67 5.7 7.96 17.7 58.86 7.6 82.70 10.36
Apr 2007 48.96 6.8 8.72 16.7 58.01 8.7 82.30 11.66
May 2007 50.84 8.9 9.57 8.8 60.78 9.3 83.50 8.05
Jun 2007 46.59 6.0 10.01 8.3 57.08 6.8 76.80 6.41
Jul 2007 42.25 -1.2 15.35 42.0 58.32 8.3 70.00 5.37
Aug 2007 42.50 7.7 15.64 8.1 59.04 8.7 73.10 5.35
Sep 2007 41.94 2.4 13.73 4.8 56.55 4.0 71.40 5.14
Oct 2007 47.83 4.4 11.35 0.9 59.89 4.2 76.70 10.14
Nov 2007 47.87 9.4 8.65 9.6 56.86 9.4 79.60 10.40
Dec 2007 51.40 2.8 7.73 -11.3 59.33 0.6
Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Nov Apr–Nov

2006–07 399.20 6.0 91.75 13.8 493.38 7.5 74.10 8.39
2007–08 420.19 5.3 100.75 9.8 525.86 6.6 76.70 7.87

2006–07 546.15 6.2 113.36 11.9 662.51 7.3 76.80 9.57
Infrastructure: Railways 33
Indian Railways freight traffic up 7.5% other domestic users, container service and other
goods, grew by 11.6 per cent to 82.6 million tonnes.
After growing by a robust 12.4 per cent in Oc- It had a share of 16.5 per cent in total railway traf-
tober, Indian Railways’ (IR) monthly revenue– fic. Foodgrain traffic dipped by 13.9 per cent to
earning freight traffic grew by 7.5 per cent to 65.7 22.3 million tonnes during the period.
million tonnes in October 2007. This growth was During April–November 2007, IR carried a total of
also lower than its year ago growth of 11 per cent. 501.4 million tonnes of revenue earning traffic, up
However, the IR was successful in meeting its tar- eight per cent over its year–ago levels. Its freight
get of 65.3 million tonnes during the month. IR’s earnings during the period grew by a faster 11 per
freight earnings during November were higher by cent to Rs.29,416.4 crore
10.7 per cent to Rs.3,992.8 crore on a year–on–year
basis. Figure 12.1 Revenue-Earning Freight Traffic on
Railways (Million tonnes)
Coal was the major commodity handled during the
period April–November 2007 with a share of 42.9 72
per cent in total traffic. Coal traffic grew by 8.4 70
per cent to 215.1 million tonnes during the period. 68
Cement which had a share of 10 per cent in total 66

64
railway traffic during the period rose by 5.4 per
62
cent to 50.4 million tonnes.
60
Iron ore for export was the fastest growing com- 58
modity handled by the IR during the April– 56

54
November 2007. It grew by 35 per cent to 33.7 mil- Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
lion tonnes. Other goods which included pig iron 2006-07 2007-08
and finished steel from other points, iron ore for
Table 12.1 Monthly Revenue-Earning Freight Table 12.2 Commodity-wise Railway Freight Traf-
Traffic On Railways fic: April–November 2007
Million % change Million % chg. % share
tonnes tonnes over
Nov 2006 61.06 11.0 06–07
Dec 2006 63.56 7.5 Coal 215.05 8.4 42.9
Jan 2007 65.74 6.5 Cement 50.37 5.4 10.0
Feb 2007 61.67 6.8 Raw material to
Mar 2007 72.07 8.9 steel plants 35.22 2.8 7.0
Apr 2007 60.68 4.5 Iron ore for export 33.71 35.0 6.7
May 2007 63.85 7.2 Fertilisers 24.54 6.4 4.9
Jun 2007 60.46 3.9 POL 23.27 1.7 4.6
Jul 2007 61.80 7.7 Foodgrain 22.27 -13.9 4.4
Aug 2007 61.84 11.7 Pig iron and finished steel
Sep 2007 60.77 9.0 from steel plants 14.38 9.0 2.9
Oct 2007 66.05 12.4 Other goods 82.57 11.6 16.5
Nov 2007 65.67 7.5 Total 501.38 8.0 100.0
Apr 06–Nov 06 464.39 10.1
Apr 07–Nov 07 501.38 8.0
Apr 06–Mar 07 728.41 9.2
34 Infrastructure: Ports & Shipping
Cargo traffic growth slows down to 8.9% cent in cargo traffic to 1.4 million tonnes in Novem-
ber 2007. Though cargo traffic at the port was sig-
Cargo traffic at major ports grew by 8.9 per cent to nificantly lower on a year–on–year basis, it was the
44.8 million tonnes in November 2007. This growth highest handled since March 2007. The increase
was the slowest recorded in the last five months. came on the back of a larger quantity of POL traf-
POL was the largest commodity handled at major fic handled during November compared to the pre-
ports with a share of 30.9 per cent in total port vious months.
traffic during the month. Iron ore cargo followed During April–November 2007, cargo traffic at ma-
with a share of 19 per cent. jor ports grew by 13.2 per cent to 333.5 million
Cargo traffic at JNPT port grew the fastest by tonnes. CMIE projects cargo traffic at major ports
25.4 per cent in November 2007. It handled 4.6 to grow by 10 per cent during 2007–08.
million tonnes of cargo traffic during the month.
Table 12.4 Traffic at Major Ports
Container cargo had the largest share of 93.6 per
cent in total cargo traffic handled by JNPT dur- ’000 %
tonnes change
ing the month. Mormugao port came next with a
Nov 2006 41,140 17.0
growth of 23.8 per cent in total cargo traffic han- Dec 2006 42,124 10.6
dled in November. It handled the highest iron ore Jan 2007 42,183 13.2
cargo of 3.3 million tonnes among all major ports Feb 2007 39,127 14.1
in November. Vishakhapatnam port handled the Mar 2007 45,224 11.6
Apr 2007 40,538 23.6
largest cargo traffic of 5.7 million tonnes in Novem-
May 2007 43,064 12.4
ber 2007, up by a robust 22 per cent over the corre- Jun 2007 39,390 7.6
sponding month of the previous year. Kandla port Jul 2007 41,439 16.4
came a close second by handling a cargo traffic of Aug 2007 40,032 11.5
5.3 million tonnes. However, it registered a slower Sep 2007 39,668 11.3
Oct 2007 44,491 14.7
growth of 11.6 per cent in cargo traffic.
Nov 2007 44,816 8.9
Apr 06–Nov 06 2,94,605 8.0
Table 12.3 Port-wise Traffic: April–November Apr 07–Nov 07 3,33,509 13.2
2007 Apr 06–Mar 07 4,63,839 9.5
’000 % change % Share
tonnes
Kandla 41,895 25.6 12.6
Visakhapatnam 42,127 17.2 12.6 Figure 12.2 Cargo Handled at Major Ports (Mil-
Mumbai 38,163 13.3 11.4 lion tonnes)
Chennai 37,796 8.6 11.3 46
Jawaharlal Nehru 35,168 23.2 10.5
Haldia 28,977 4.4 8.7 44
Paradip 26,857 9.7 8.1
42
New Mangalore 24,270 14.7 7.3
Mormugao 19,692 0.2 5.9 40
Tuticorin 13,482 14.4 4.0
38
Cochin 10,399 0.5 3.1
Ennore 7,628 18.0 2.3 36
Kolkata 7,055 6.4 2.1
34
Total 3,33,509 13.2 100.0
32
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2006-07 2007-08
Kolkata port recorded the sharpest fall of 26.3 per
Infrastructure: Civil Aviation 35
Air passenger traffic up 22.5% in October achieved a year ago. Domestic passenger traffic at
the busiest airports of Mumbai and Delhi grew by
Air passenger traffic growth which slowed down to 18 per cent and 22 per cent, respectively during the
21.8 per cent in September 2007 continued to grow month.
at a slow pace even in October. Passenger traffic
at all airports grew by 22.5 per cent to 93.9 lakh International passenger traffic grew by a healthy
during the month. 17.5 per cent to 22.9 lakh passengers during Octo-
ber 2007. International passenger traffic at Mum-
The moderation in growth came on the back of a bai and Delhi airport grew by 10 per cent each dur-
subdued growth in domestic passenger traffic which ing October 2007. Kolkata airport witnessed the
formed a major 75.6 per cent of the total air pas- fastest rise of 40 per cent in international passen-
senger traffic in October 2007. Domestic air pas- ger traffic among all airports during the month.
senger traffic growth slowed down to around 24
per cent during September and October 2007 com- During the period April–October 2007, total pas-
pared to the robust growth achieved in the past senger traffic grew by 26.7 per cent to 655.7 lakh
few months. Domestic passenger traffic at Hyder- passengers. CMIE projects passenger traffic at all
abad airport grew by 29 per cent in October 2007, airports to grow by 23 per cent during the year
much slower than the 48 per cent growth achieved 2007–08. ATF price ex–Mumbai was lowered by
during the same month a year ago. Similarly, Ban- 4.1 per cent to Rs.47,045/kilolitre for January 2008.
galore airport too recorded a slower 27 per cent However, airlines did not decide on any cut in the
growth in traffic as compared to 29 per cent growth fuel surcharge.
Table 12.5 Airport Performance All India

Domestic Traffic International Traffic Total Traffic
Pass- Pass- Pass- Pass- Pass- Pass-
Aircraft Aircraft engers engers Aircraft Aircraft engers engers Aircraft Aircraft engers engers
(’000) (% chg) (Lakh) (% chg) (’000) (% chg) (Lakh) (% chg) (’000) (% chg) (Lakh) (% chg)
Oct 2006 73.9 36.4 57.2 34.6 17.5 10.6 19.5 12.7 91.4 30.6 76.6 28.2
Nov 2006 76.4 36.5 59.0 30.6 18.1 9.3 21.3 13.3 94.5 30.3 80.3 25.5
Dec 2006 79.4 33.3 69.4 39.0 19.6 6.6 25.4 13.3 99.0 27.0 94.8 31.0
Jan 2007 80.0 33.0 68.2 37.5 20.1 11.0 26.4 16.8 100.1 27.9 94.5 31.0
Feb 2007 75.2 28.0 64.4 32.6 17.4 8.2 22.3 13.4 92.6 23.7 86.7 27.1
Mar 2007 83.3 27.6 66.2 28.3 19.7 12.1 23.6 16.6 103.0 24.3 89.8 25.0
Apr 2007 82.1 30.2 70.8 31.0 19.2 12.8 22.8 18.6 101.4 26.5 93.6 27.7
May 2007 86.1 32.3 76.1 29.9 19.4 12.9 23.3 17.0 105.5 28.3 99.4 26.7
Jun 2007 83.0 31.5 71.8 34.2 18.8 11.3 23.0 15.3 101.8 27.3 94.8 29.1
Jul 2007 86.0 30.4 68.9 34.7 19.7 12.6 23.7 16.2 105.7 26.7 92.5 29.5
Aug 2007 87.0 30.4 69.4 34.1 19.9 14.3 24.3 18.8 107.0 27.1 93.7 29.7
Sep 2007 85.0 24.6 65.5 24.0 19.6 14.3 22.2 15.6 104.6 22.5 87.6 21.8
Oct 2007 89.9 21.7 71.0 24.2 20.6 17.6 22.9 17.5 110.5 20.9 93.9 22.5
Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct
2006–07 466.1 34.1 378.9 43.0 120.7 15.8 138.5 15.5 586.8 29.8 517.4 34.4
2007–08 599.3 28.6 493.5 30.2 137.4 13.8 162.2 17.1 736.7 25.6 655.7 26.7
Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
2006–07 860.0 32.8 706.1 38.5 215.5 12.9 257.5 15.1 1,075.5 28.3 963.6 31.4
36 Infrastructure: Telecommunications
Wireless segment adds highest sub- Tamil Nadu made the highest addition of 8.34 lakh
scribers subscribers in November 2007. Andaman & Nico-
bar, Delhi, Madhya Pradesh, Maharashtra, Mum-
In November 2007, 8.22 million subscribers were bai and Uttar Pradesh (E) were the other circles
added taking the total outstanding telephone sub- adding more than five lakh subscribers each.
scriber base to 264.77 million. The overall teleden-
sity reached 23.2 per cent in November 2007.
Table 12.6 GSM Cellular Services
Wireless services providers added 8.32 million sub-
New Cellular Outstanding Cellular
scriber in November 2007, the highest monthly Subscribers Subscribers
addition ever made. The total wireless sub- (Lakh nos.) (% chg.) (Lakh nos.) (% chg.)
scribers base comprising of GSM, CDMA and Nov 2006 50.44 116.7 1007.86 82.2
WLL(F)reached 225.46 million Dec 2006 46.39 45.5 1054.25 80.2
Jan 2007 49.94 42.1 1104.20 78.0
In November 2007, GSM service providers added Feb 2007 48.77 53.9 1152.97 76.9
6.14 million subscribers representing a growth of Mar 2007 61.35 21.0 1214.31 72.8
21.8 per cent over the year–ago period. This is the Apr 2007 41.34 121.7 1255.66 74.1
May 2007 50.42 59.2 1306.08 73.5
slowest growth in subscriber addition since April
Jun 2007 51.79 62.1 1357.87 73.0
2007. Growth in cellular subscriber base at 46.5 Jul 2007 60.61 54.2 1418.47 72.1
for the period April–November 2007 is slower when Aug 2007 62.41 48.4 1480.89 71.0
compared to the 113.6 per cent growth in the year– Sep 2007 59.03 34.3 1539.91 69.2
ago period. Total GSM subscriber base stood at Oct 2007 60.22 27.4 1600.14 67.1
166.16 million subscribers, higher by 64.9 per cent Nov 2007 61.44 21.8 1661.57 64.9
over the year–ago period. Apr-Nov Apr-Nov Nov Nov

2006–07 305.28 113.6 1007.86 82.2
In November 2007, wireline subscriber base de- 2007–08 447.26 46.5 1661.57 64.9
clined by one lakh subscribers to 39.31 million sub-
Apr-Mar Apr-Mar Mar Mar
scribers. This is a decline of 2.6 per cent in the
2006–07 511.73 75.1 1214.31 72.8
subscriber base over the year–ago period.
Table 12.7 Total Outstanding Subscribers

Total % chg. Total % chg. Mobile % chg. Mobile % chg.
Subs- Land- GSM WLL
cribers line (F+M)
(excl. WLL(F))
(’000 nos.) (%) (’000 nos.) (%) (’000 nos.) (%) (’000 nos.) (%)
Nov 2006 1,83,459.0 52.89 40,348.5 -2.00 1,00,786.0 82.20 42,324.5 80.07
Dec 2006 1,89,921.9 52.10 40,327.4 -1.97 1,05,425.2 80.20 44,169.3 75.12
Jan 2007 1,96,708.7 51.54 40,322.9 -1.91 1,10,419.6 78.04 45,966.2 72.28
Feb 2007 2,02,916.8 51.00 40,386.8 -1.90 1,15,296.6 76.87 47,233.4 68.52
Mar 2007 2,06,827.7 46.15 40,777.7 -2.03 1,21,431.2 72.84 44,618.8 50.53
Apr 2007 2,11,754.1 46.84 40,539.9 -2.10 1,25,565.5 74.10 45,648.7 48.83
May 2007 2,18,056.4 46.76 40,266.4 -2.83 1,30,608.0 73.47 47,182.0 48.12
Jun 2007 2,25,010.2 46.90 40,088.0 -2.50 1,35,786.7 73.01 49,135.5 46.35
Jul 2007 2,32,878.3 47.04 39,893.2 -2.44 1,41,847.5 72.11 51,137.6 45.82
Aug 2007 2,41,035.6 46.91 39,734.2 -2.33 1,48,088.6 70.96 53,212.8 44.73
Sep 2007 2,48,667.4 46.26 39,579.1 -2.28 1,53,991.3 69.20 55,097.0 43.10
Oct 2007 2,56,549.8 45.12 39,413.6 -2.72 1,60,013.6 67.13 57,122.6 40.97
Nov 2007 2,64,773.6 44.32 39,311.9 -2.57 1,66,157.4 64.86 59,304.3 40.12
Industry: Industrial Production 37
IIP unusually slows to 5.3 per cent clined. Both these have relatively small weights
in the IIP. The significant decline besides food is
Growth in industrial production, as measured by transport equipment. This index declined by 0.7
the changes in the Index of Industrial Production per cent. This largely reflects the decline in the
(IIP), fell sharply to 5.3 per cent in November 2007. production of commercial vehicles. This is partly
This is a rather unusually sharp fall given that the the result of a shift in production in favour of higher
IIP growth has been averaging close to ten per cent tonnage vehicles.
during the past two years, on a year-over-year ba-
Growth in the IIP and also the GDP have been
sis.
driven by growth in investments. This has been
We believe that this decline in the growth of IIP reflected in the acceleration in the index for capi-
is partly the result of a cyclical fall in sugar pro- tal goods. During April-November 2007, the index
duction. During the first few months of its crush- for capital goods increased by 20.8 per cent com-
ing season, growth in sugar production is suscep- pared to 17.4 per cent in the corresponding period
tible to wide variations in growth rates because of of the previous year. This acceleration is main-
small production levels during these months. As tained in the November 2007 IIP as well. The cap-
a result, growth rates are often abnormal. For ex- ital goods index grew by a robust 24.5 per cent in
ample, in November 2007, sugar production was the month. We also see that the imports of capital
down by 40.2 per cent. This does not have any goods grew by an equally robust 30 per cent during
significant impact upon the annual sugar produc- April-August 2007. The continued growth in the
tion since November production has less than five the capital goods segment implies that the growth
per cent share in total production. However, sugar dynamics of the industrial sector are in place.
continues to have a significant share in the IIP even
The stray nature of the decline in the food index
during this month. As a result, its 40 per cent de-
and the continuation of the growth in the capi-
cline leads to a 15 per cent decline in the index for
tal goods index implies that the decline in the IIP
food products and this drags the IIP growth down.
in November is not a cause for concern. The IIP
Besides the decline in the food index, the indices is likely to bounce back with robust growth rates
for jute textiles and metal products have also de- again in the coming months.
Figure 13.1 Index of Industrial Production (% Figure 13.2 Index of Industrial Production:
change over previous year) Growth forecast
16 12 11.3 (CMIE Forecast)
14 10
9.0
8.4 8.2
12 8
7.0
10 6 5.8
8 4
6
2
4
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2006-07 2007-08
38 Industry: Industrial Production
However, the 4.1 per cent fall in the consumer There are other reasons to believe that the fall of
durables production index is worrisome. This index the IIP in November is an aberation and not a
had recovered in October with a handsome increase trend. Demand for coal has accelerated since Au-
of 9.3 per cent. Its fall back to the negative zone gust. Power generation and shortages have both
indicates that its recovery is not complete. We be- increased. Shortages shot up to over ten per cent in
lieve that the demand for consumer durables was October and November 2007 indicating an increase
adversely affected by the sharp increase in inter- in demand. Petroleum products consumption in-
est rates earlier in the current fiscal. As interest creased sharply in October and November to 10.2
rates stabilise and decline, the demand for con- and 7.5 per cent respectively again indicating a rise
sumer durables is expected to pick up again. in demand.
Table 13.1 % Change in Index of Industrial Production by Industry Group

Weight May Jun Jul Aug Sep Oct Nov Apr 05– Apr 06– Apr 07–
(%) 2007 2007 2007 2007 2007 2007 2007 Nov 05 Nov 06 Nov 07
Mining & quarrying 10.47 3.8 1.5 3.2 14.7 4.9 5.7 3.5 0.5 4.2 4.8
Manufacturing 79.36 11.3 9.7 8.8 10.7 7.1 13.4 5.4 9.4 11.8 9.8
Food products 9.08 23.4 0.5 -4.4 1.1 -2.4 1.7 -15.1 -4.6 2.5 6.8
Beverages & tobacco 2.38 11.6 12.2 8.8 8.3 5.1 18.1 7.5 17.4 13.0 9.5
Cotton textiles 5.52 5.4 7.0 6.3 3.9 4.8 7.2 0.6 11.3 13.0 5.5
Wool, silk & man–made
textiles 2.26 8.6 1.8 5.6 8.6 4.6 8.4 0.0 -0.8 7.6 4.5
Jute textiles 0.59 40.4 35.2 16.1 9.5 4.7 1.2 -3.4 2.6 2.3 13.3
Textile products 2.54 2.9 2.5 4.0 -2.1 0.3 15.4 4.8 20.6 12.2 4.8
Wood products 2.70 118.1 103.8 66.7 62.1 72.5 73.7 37.7 -3.5 2.4 72.6
Paper products 2.65 0.6 3.3 -5.8 4.0 2.4 5.8 1.9 5.2 8.9 1.6
Leather products 1.14 6.5 7.7 8.8 10.5 13.4 31.6 10.8 -0.1 -3.4 12.2
Chemical products 14.00 5.9 7.7 15.8 9.2 6.8 15.4 7.6 11.7 9.2 9.4
Rubber, plastic, petroleum &
coal prod. 5.73 11.2 11.2 8.4 18.1 7.3 8.0 7.1 2.8 11.9 10.8
Non-metallic mineral prod. 4.40 8.6 3.7 10.6 14.4 7.5 14.5 0.8 8.3 13.6 8.4
Basic metals 7.45 21.4 21.3 17.7 19.0 14.1 11.0 5.1 15.6 20.5 15.6
Metal products 2.81 5.4 -7.8 -6.2 -3.6 4.2 -19.8 -5.7 -2.2 7.0 -4.4
Machinery & equipments 9.57 19.5 11.0 8.9 10.5 5.9 19.6 11.2 10.8 15.0 12.2
Transport equipment 3.98 -0.8 0.9 -2.8 11.0 -1.4 11.4 -0.7 12.5 16.3 2.7
Miscellaneous industries 2.56 -3.0 33.4 3.5 22.7 28.1 32.9 43.9 23.0 10.8 19.1
Electricity 10.17 9.4 6.8 7.5 9.2 4.5 4.2 5.8 5.0 7.3 7.0
General 100.00 10.6 8.9 8.3 10.9 6.8 12.0 5.3 8.3 10.9 9.2
Basic goods 35.56 10.3 9.2 8.7 12.7 6.5 6.7 4.8 6.1 9.5 8.4
Capital goods 9.26 22.4 23.1 12.3 30.8 20.5 20.2 24.5 16.2 17.4 20.8
Intermediate goods 26.51 8.8 8.6 7.7 13.8 10.4 13.9 7.3 2.5 11.1 10.1
Consumer goods 28.66 8.7 3.6 7.1 0.0 -0.9 13.1 -2.6 13.2 9.9 5.2
Consumer durables 5.37 -0.7 -3.6 -2.7 -6.2 -7.2 9.3 -4.1 14.2 12.4 -1.7
Consumer non-durables 23.30 12.1 6.3 10.5 2.4 1.6 14.7 -2.1 12.9 8.9 7.8
Industry: Industrial Production 39
Table 13.2 Index of Industrial Production by Major Industry Group (Base 1993–94=100)
Weight May Jun Jul Aug Sep Oct Nov Apr 05– Apr 06– Apr 07–
(%) 2007 2007 2007 2007 2007 2007 2007 Nov 05 Nov 06 Nov 07
Mining & quarrying 10.47 168.1 158.6 157.0 156.0 154.0 170.5 169.6 148.2 154.4 161.9
Manufacturing 79.36 280.5 273.6 272.9 279.2 280.4 279.4 280.8 225.4 252.1 276.7
Electricity 10.17 225.6 211.7 216.2 219.9 210.1 221.4 210.9 188.5 202.2 216.4
Basic goods 35.56 223.6 215.8 216.7 217.6 214.0 227.5 220.0 184.2 201.6 218.5
Capital goods 9.26 334.7 358.3 317.4 368.6 387.9 348.7 393.2 245.7 288.5 348.4
Intermediate goods 26.51 264.2 260.1 264.1 273.3 265.5 260.7 259.9 214.2 238.1 262.1
Consumer goods 28.66 288.8 266.9 274.5 266.8 271.4 278.9 274.4 239.3 262.9 276.6
Consumer durables 5.37 380.3 357.9 351.5 379.7 389.3 433.4 374.0 340.2 382.4 376.0
Consumer non-durables 23.30 267.7 246.0 256.8 240.8 244.3 243.3 251.5 216.0 235.3 253.7
General 100.00 263.1 255.3 255.0 260.3 260.0 262.1 262.0 213.6 236.8 258.6
40 Industry: Sugar
Sugar prices to remain weak a–half years. In December 2007, average price of
small grade sugar in Mumbai weakened further to
Rs.1,356 per quintal from Rs.1,358 per quintal in
Sugar production plummeted by 34.9 per cent dur-
November 2007. We expect the demand–supply sit-
ing October–November 2007 because of the delay
uation to deteriorate further and maintain down-
in crushing in many states on cane pricing issues.
ward pressure on the domestic sugar prices in the
However, we do not expect the weak trend in pro-
coming months.
duction to continue for long. With the Allahabad
High Court directing the UP government to reduce Figure 13.3 Sugar Production (’000 tonnes)
the SAP for 2007–08 season to Rs.110 per tonne
from Rs.125–130 per quintal, we expect all–India 5000
sugar production to start showing a recovery from
December 2007. The current sugar year (October– 4000
September 2007–08) is expected to end with a 5.5 3000

per cent rise in production to 299 lakh tonnes.
2000
This yet another bumper production of sugar is

1000
likely to lead to a further rise in inventories of sugar
in absence of any significant rise in the domestic 0
consumption or exports. The demand–supply mis- Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
match in the sugar industry has been pushing the 2006-07 2007-08
domestic sugar prices down for the last one–and–
Table 13.3 Sugar Statistics: Production, Exports and Prices

Prodn. Prodn. Exports Exports Imports Imports Prices Prices
(Small (Small
grade) grade)
Mumbai Mumbai
(’000 tns) (% chg.) (’000 tns) (% chg.) (’000 tns) (% chg.) (Rs./Quintal) (% chg.)
Dec 2006 4,643.80 19.75 9.81 -75.23 0.01 -99.33 1,643.69 -10.52
Jan 2007 4,969.30 18.85 46.95 9.92 0.01 -97.98 1,558.38 -17.45
Feb 2007 4,628.10 29.20 121.59 51.61 0.01 -95.50 1,476.33 -24.58
Mar 2007 4,768.50 58.74 331.05 217.17 0.04 -84.73 1,511.56 -19.26
Apr 2007 3,626.60 171.66 266.48 28.17 0.02 -76.24 1,443.78 -25.59
May 2007 1,757.80 444.21 311.60 -10.79 0.23 139.58 1,336.58 -31.28
Jun 2007 475.40 171.66 381.23 54.01 0.01 -91.86 1,334.31 -29.82
Jul 2007 244.40 31.40 311.49 62.11 0.05 24.32 1,372.51 -26.75
Aug 2007 210.00 2.44 380.86 1,515.06 0.04 -93.75 1,327.72 -29.00
Sep 2007 261.00 26.70 1,356.49 -24.94
Oct 2007 326.00 6.29 1,379.02 -22.52
Nov 2007 1,451.00 -40.15 1,358.04 -22.71
Dec 2007 1,356.28 -17.49
Oct–Nov Oct–Nov Oct–Aug Oct–Aug Oct–Aug Oct–Aug Oct–Dec Oct–Dec

2005–06 2,194.00 35.10 1,306.79 1,775.88 7.41 -99.31 1,841.35 11.89
2006–07 2,731.20 24.48 2,203.94 68.65 0.45 -93.94 1,726.92 -6.21
2007–08 1,777.00 -34.94 1,364.45 -20.99

2006–07 24,170.90 35.55 1,636.31 409.43 1.05 -99.81 1,755.38 -5.02
Industry: Tea 41
Tea prices scale to one–year high in De- pee vis–a-vis the USD, payment problems in Iraq
cember and the shifting consumer preference from CTC to
Orthodox variety have all taken a toll on tea ex-
After witnessing a decline (y–o–y) in production for ports.
the last four months, tea production rose by 5.5 per
cent in November 2007. During January–November The government is taking various steps to ensure
2007, production of tea declined by 1.8 per cent to the revival of the tea gardens. As per media re-
894.5 million kgs as compared to the modest 3.6 ports, a Special Purpose Tea Fund has been an-
per cent growth in the corresponding year–ago pe- nounced by the Union Minister of State, to impart
riod. Fall in production, increased domestic con- loans and subsidies to the gardens.
sumption and less carry over stock are pushing tea
prices up. In December 2007, all–India tea auction Table 13.4 Tea Production by Major Producing
price scaled to its one–year high of Rs.71.7 per kg. States: January–November
As compared to the previous month, the average
Tonnes % change
auction price remained stagnant in North India at 2006 2007 2006 2007
Rs.75 per kg in December 2007. However, it was Northern India 703763 692607 5.15 -1.59
up by 13.4 per cent as compared to the year–ago Assam 470334 462719 2.54 -1.62
level. In South India prices recovered marginally West Bengal 221271 217179 11.18 -1.85
by 0.5 per cent to Rs.50 per kg. Others 12158 12709 4.96 4.53
Southern India 207513 201906 -1.16 -2.70
In August 2007, tea exports declined by 4.8 per Tamil Nadu 139541 140457 -2.33 0.66
cent to 19.2 million kgs as against the robust 30 Kerala 63145 56768 1.74 -10.10
Karnataka 4827 4681 -4.02 -3.02
per cent growth witnessed in the year–ago month.
India 911276 894513 3.64 -1.84
Bumper crop in Kenya, appreciation of Indian ru-
Table 13.5 Tea Statistics: Production, Exports and Prices

Prodn. Prodn. Export Export Export Export Prices* Prices*
(Qty) (Qty) (Val) (Val)
(Tonnes) (% chg.) (Tonnes) (% chg.) (Rs.crore) (% chg.) (Rs./kg) (% chg.)
Dec 2006 46,825 -3.92 16,046 -8.98 156.68 -3.04 63.29 3.89
Jan 2007 21,004 -12.29 13,823 12.48 121.50 1.18 61.12 5.28
Feb 2007 15,018 -5.53 12,915 17.96 122.15 -0.82 58.58 1.27
Mar 2007 50,656 -12.84 30,024 164.87 96.25 -31.68 54.82 7.48
Apr 2007 65,371 15.85 7,977 -13.71 85.93 -15.50 65.07 7.08
May 2007 74,370 2.11 7,493 -28.95 90.79 -32.84 67.93 8.53
Jun 2007 1,08,291 0.79 11,790 -7.93 122.56 -24.35 67.91 -2.16
Jul 2007 1,25,083 -1.67 10,348 -44.38 133.08 -35.61 70.13 -0.13
Aug 2007 1,16,275 -4.54 19,236 -4.79 210.55 -8.74 66.46 -3.46
Sep 2007 1,13,195 -9.07 65.10 -8.28
Oct 2007 1,13,297 -2.27 64.47 -3.66
Nov 2007 91,953 5.47 68.32 6.85
Dec 2007 71.70 13.30
Jan–Nov Jan–Nov Jan–Aug Jan–Aug Jan–Aug Jan–Aug Jan–Dec Jan–Dec

2006–06 9,11,276 3.64 1,05,979 -1.71 1,220.36 9.81 63.65 12.28
2007–07 8,94,513 -1.84 1,13,606 7.20 982.80 -19.47 65.13 2.33

2006–07 9,46,814 1.72 64.29 12.71
Monthly figures may not add up to the total due to revisions. *Average prices in Auction centres.
42 Industry: Edible Oils & Vanaspati
Edible oil prices continue to rise world edible oil market and the consequent rise in
the international edible oil prices. Around 40 per
cent of the demand for edible oils in India is met by
We expect edible oil production to rise by 13 per
imports and hence the international prices of edi-
cent to 66 lakh tonnes during November–October
ble oils have a strong bearing on the domestic price
2007–08. This improvement in the domestic pro-
movement.
duction is expected to reduce India’s reliance on
imports of edible oils. We expect imports to fall by Figure 13.4 Groundnut Oil Prices (Rs.per 10-kg)
nine per cent to 48.8 lakh tonnes during November–
October 2007–08.
750
In December, the government banned imports of

700
palm oil from all ports in Kerala in order to arrest
the downward trend in the coconut oil prices wit- 650
nessed for the last three years. Unlike coconut oil,
prices of other variants of edible oils such as palm 600
oil, soyabean oil and rapeseed oil have been rising
for quite some time. In December, average domes- 550
tic prices of each of these three varieties scaled to Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
their at least four–year highs. This rise can be at- 2006-07 2007-08
tributed to the demand–supply mismatch in the
Table 13.6 Edible Oil and Vanaspati Statistics

Edible hy- Edible hy- Edible oil Edible oil Vanaspati Vanaspati Ground- Ground-
drogenated drogenated nut oil nut oil
oil oil
Prodn. Prodn. Import Import Prices Prices Prices Prices
(Tonnes) (% chg.) (Tonnes) (% chg.) (Rs./15 kg) (% chg.) (Rs./10 kg) (% chg.)
Dec 2006 1,01,289 43.34 2,84,707 130.57 739 19.31 563 26.23
Jan 2007 1,06,153 11.19 2,78,220 36.49 748 21.34 610 38.58
Feb 2007 1,03,551 1.39 2,36,389 -33.64 726 12.02 645 48.28
Mar 2007 1,03,385 14.19 3,07,307 -24.97 730 7.59 639 44.51
Apr 2007 1,11,847 18.08 2,88,713 -25.29 777 9.36 660 40.53
May 2007 1,07,694 6.45 3,80,303 4.05 787 8.45 649 38.60
Jun 2007 1,07,594 9.19 6,47,561 76.27 797 12.30 695 44.17
Jul 2007 1,13,197 0.81 3,59,167 -26.71 801 8.10 751 45.97
Aug 2007 1,07,124 -7.55 6,96,008 186.59 782 -0.05 719 34.53
Sep 2007 1,22,688 -10.22 780 4.46 716 33.91
Oct 2007 1,26,254 22.13 786 8.18 678 23.05
Nov 2007 797 7.42 653 16.53
Dec 2007 789 6.84 644 14.36
Nov–Oct Nov–Oct Nov–Aug Nov–Aug Nov–Dec Nov–Dec Nov–Dec Nov–Dec

2005–06 11,87,880 -31.69 31,67,117 -16.97 623 -7.12 455 -8.31
2006–07 13,19,235 11.06 38,03,140 20.08 740 18.74 562 23.37
2007–08 793 7.13 648 15.45

2006–07 12,85,458 -4.60 42,16,856 -1.66 736 16.83 548 18.12
Vanaspati prices: Calcutta market Groundnut oil prices: Mumbai market
Industry: Textiles 43
Firm trend in spun yarn and fabric pro- to witness a slowdown during the month. The rise
duction in output of synthetic fabrics halved to 3.2 per cent,
after rising by 11.6 per cent and six per cent in Au-
Spun yarn production grew by 7.7 per cent in Octo- gust and September 2007, respectively.
ber 2007. Cotton yarn production, which accounts
for over 70 per cent of the total spun yarn out-
Figure 13.5 Production of Fabrics (Mln.sq.mtrs)
put, grew by six per cent. On the other hand,
synthetic and blended yarn production rose by a
healthy double–digit 11.4 per cent and 13.7 per 4800
cent, respectively. 4700
After posting a meagre growth in last two months, 4600
output of fabrics grew by a decent nine per cent in 4500
October. Output of cotton fabrics and hosiery (to- 4400
gether accounts for over 51 per cent of total fabrics 4300

production) increased in excess of 11 per cent dur- 4200
ing the month. Blended fabrics production posted 4100
a healthy recovery, after declining steadily in the 4000
last four months. Output of blended fabrics rose Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
by an impressive 16.5 per cent. On the other hand, 2006-07 2007-08
growth in production of synthetic fabrics continue
Table 13.7 Textile Statistics: Production of Yarn & Fabrics and Cotton Yarn Prices
Cotton Textile Spun Spun Fabrics Fabrics Yarns, Yarns, Ready- Ready-
textiles products Yarn Yarn fabrics, fabrics, made made
madeups madeups gar- gar-
ments ments
Prodn. Prodn. Prodn. Prodn. Prodn. Prodn. (Ex- (Ex- (Ex- (Ex-
Index Index ports) ports) ports) ports)
(% chg.) (% chg.) (’000 tns) (% chg.) (Mln.sq.mtrs) (% chg.) US Mln. (% chg.) US Mln. (% chg.)
Oct 2006 9.47 -0.92 312.04 7.99 4,000.58 -2.17 527.3 -0.82 548.0 -15.83
Nov 2006 18.22 9.69 318.96 14.25 4,746.01 23.90 541.6 19.41 630.4 23.02
Dec 2006 19.83 7.00 331.46 17.24 4,605.69 7.61 550.8 -7.29 759.1 -7.03
Jan 2007 21.36 4.32 325.73 21.72 4,451.00 8.77 568.6 4.95 823.9 1.03
Feb 2007 11.69 14.56 307.94 8.67 4,315.52 9.93 539.4 0.72 827.9 1.68
Mar 2007 20.66 15.75 331.17 19.17 4,708.86 14.11 646.9 -3.71 852.1 -13.70
Apr 2007 9.57 12.36 320.35 7.82 4,283.60 3.30 471.8 -7.61 691.9 -14.05
May 2007 5.39 2.94 331.59 4.87 4,664.49 6.48 597.0 9.62 791.6 5.35
Jun 2007 7.02 2.47 328.89 6.51 4,472.81 1.73 554.2 -5.49 743.2 -3.23
Jul 2007 6.32 4.01 340.24 5.91 4,677.08 5.28 581.8 0.70 798.2 9.73
Aug 2007 3.95 -2.10 343.48 6.55 4,667.70 1.25 819.3 35.42 725.8 4.30
Sep 2007 4.80 0.35 338.37 5.63 4,387.64 2.28
Oct 2007 6.63 11.93 336.18 7.74 4,360.68 9.00
Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Aug Apr–Aug Apr–Aug Apr–Aug
2006–07 12.31 12.55 2,198.10 10.77 30,267.21 8.69 2,828.2 13.19 3,743.4 12.00
2007–08 6.19 4.39 2,339.10 6.41 31,514.00 4.12 2,943.0 4.06 3,635.2 -2.89
Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar
2006–07 14.81 11.55 3,813.36 12.98 53,094.29 10.38
44 Industry: Man-made Fibre
Healthy rise in polyester and viscose pro- to rise at a slow pace for the second consecutive
duction month. Output in September increased by a mod-
est 2.2 per cent to 22,840 tonnes. However, the
In September 2007, production of polyester staple robust growth witnessed during May–July 2007 re-
fibre (PSF) continued to rise at a healthy pace for sulted in cumulative output rising by a healthy 25.3
the second month in a row. Output rose by a per cent during the first half of 2007–08.
strong 23 per cent during the month. Aggregate
production during the first half of 2007–08 grew by Figure 13.6 Production of Polyester Filament
13.7 per cent, over and above the growth of 27 per Yarn (Tonnes)
cent witnessed during the corresponding period last
120000
year.
115000
Similarly, production of polyester filament yarn
(PFY) maintained its double–digit rise for the 110000
fourth consecutive month. Output grew by a
105000
healthy 14.1 per cent in September. Aggregate pro-
duction during the first half of 2007–08 rose by a 100000
strong 15.1 per cent over and above the growth of
95000
11.2 per cent registered during the corresponding
period last year. Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2006-07 2007-08
Production of viscose staple fibre (VSF) continued
Table 13.8 Production Statistics: Polyester Filament Yarn, Polyester & Viscose Staple Fibre
Polyester Polyester Polyester Polyester Viscose Viscose
Filament Filament Staple Fibre Staple Fibre Staple Fibre Staple Fibre
Yarn Yarn
Prodn. Prodn. Prodn. Prodn. Prodn. Prodn.
(Tonnes) (% chg.) (Tonnes) (% chg.) (Tonnes) (% chg.)
Sep 2006 1,01,847 21.59 67,157 36.17 22,344 14.16
Oct 2006 1,01,362 19.92 70,963 33.33 22,829 14.70
Nov 2006 1,12,373 28.41 63,780 20.76 22,503 10.08
Dec 2006 1,19,493 35.00 67,263 20.69 23,452 9.00
Jan 2007 1,19,152 27.34 65,286 20.42 23,270 5.12
Feb 2007 1,04,269 24.21 57,092 22.37 20,912 5.07
Mar 2007 1,15,077 18.45 71,122 32.14 23,591 4.54
Apr 2007 1,11,386 15.29 71,735 11.11 22,574 5.01
May 2007 1,13,765 9.23 73,883 3.20 23,409 62.28
Jun 2007 1,12,480 12.24 71,416 2.91 22,571 143.46
Jul 2007 1,16,624 13.32 65,081 1.06 23,463 16.83
Aug 2007 1,21,189 27.55 85,197 45.52 23,375 3.18
Sep 2007 1,16,190 14.08 82,580 22.97 22,840 2.22
Apr–Sep Apr–Sep Apr–Sep Apr–Sep Apr–Sep Apr–Sep

2006–07 6,00,758 11.24 3,95,654 26.99 1,10,276 7.57
2007–08 6,91,634 15.13 4,49,892 13.71 1,38,232 25.35

2006–07 12,72,484 18.34 7,91,160 25.98 2,46,833 7.80
Industry: Chemicals 45
Growth in production of chemicals & period. Barring June and October 2007, produc-
chemical products up 15.6% tion of soda ash had declined on a year–on year
basis.
Production of chemicals & chemical products grew
Production of chemicals such chlorine, caustic
by a healthy 15.6 per cent in October 2007 com-
soda, calcium carbide, ethylene and phenol in-
pared to the meagre 0.1 per cent growth clocked in
creased during April–October 2007 on a year–on–
the year–ago month. After slowing down in August
year comparison.
and September 2007, growth once again revived in
October 2007. Consequently, production of chem-
Figure 13.7 Production Index of Chemicals &
icals & chemical products for the April–October
Chemical Products (% change over previous year)
2007 period grew by 9.6 per cent on top of a nine
per cent growth in the year–ago period. 16
Production of caustic soda grew marginally by 1.3 14

12
per cent in October 2007 on top of a 4.7 per cent
10
growth in the year–ago period. During the April–
8
October 2007 period, production grew by a healthy
6
8.9 per cent after declining by 0.5 per cent during
4
the year–ago period.
2
Production of soda ash grew by 11 per cent in Oc- 0
tober 2007 compared to the 23.4 per cent decline Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
in the year–ago month. Production, however, de- 2006-07 2007-08
clined by seven per cent for the April–October 2007
Table 13.9 Production Statistics of Selected Chemical Products

Chlorine Sul- Caustic Soda ash Tita- Calcium Ethylene Phenol
phuric soda nium carbide Methanol
acid dioxide
Prodn. Prodn. Prodn. Prodn. Prodn. Prodn. Prodn. Prodn. Prodn.
(’000 tns) (Tonnes) (’000 tns) (’000 tns) (Tonnes) (Tonnes) (Tonnes) (Tonnes) (Tonnes)
Oct 2006 109.9 6,07,594 167.6 149.8 5,340 8,106 2,38,335 33,375 4,534
Nov 2006 107.3 5,81,907 163.6 154.1 5,196 8,065 2,37,238 33,924 6,221
Dec 2006 110.5 6,21,952 171.9 164.3 4,837 8,399 2,33,813 36,008 6,166
Jan 2007 115.7 6,19,374 171.1 194.3 5,638 7,908 2,22,819 35,499 6,301
Feb 2007 103.0 6,06,267 159.7 193.7 4,772 7,779 2,18,327 33,570 6,309
Mar 2007 114.4 6,09,425 172.1 196.6 5,309 8,208 2,35,969 34,987 7,468
Apr 2007 111.0 5,38,255 160.1 175.1 5,741 6,840 2,22,521 25,433 3,410
May 2007 116.9 5,43,370 171.1 183.4 5,163 8,498 2,17,909 27,505 4,357
Jun 2007 114.3 5,77,299 168.6 167.2 5,184 8,473 2,32,413 34,436 6,600
Jul 2007 115.0 5,90,864 169.9 151.5 4,651 8,699 2,42,649 28,543 5,840
Aug 2007 116.6 5,61,867 170.4 123.2 5,024 8,072 2,48,912 26,553 6,721
Sep 2007 117.4 5,62,923 177.8 133.7 4,651 7,903 2,21,369 30,863 6,755
Oct 2007 118.1 5,76,550 169.7 166.3 4,890 8,663 2,27,260 30,401 7,479
Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct

2006–07 734.5 41,16,600 1,090.5 1,182.0 36,072 51,592 15,35,235 2,17,978 38,808
2007–08 809.1 39,51,128 1,187.7 1,100.4 35,304 57,148 16,13,033 2,03,734 41,162
Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar

2006–07 1,285.5 71,55,525 1,928.8 2,085.0 61,824 91,951 26,83,401 3,91,966 71,273
46 Industry: Fertilisers
Fertiliser production declines in Novem- In December 2007, the GOI announced its plans of
ber releasing subsidies to the working capital starved
industry. It plans to issue fertiliser bonds to 22
different companies along the same lines as that of
Production of fertilisers declined by 7.8 per cent in the oil bonds. These bonds would carry a coupon
November 2007 to 13.2 lakh tonnes. This comes rate of 8.3 per cent, have a face value of Rs.3,890
after a modest 3.4 per cent growth reported dur- crore and mature in 16 years.
ing the corresponding month last year. Produc-
tion of phosphatic fertiliser continued its double– Figure 13.8 Production of Fertilisers (’000 tonnes)
digit fall for the fourth consecutive month. It de-
clined by 16.8 per cent as against a miniscule 1.2 1500
per cent growth reported during the corresponding
month year–ago. Nitrogenous fertiliser production 1400
declined by 4.2 per cent in November 2007 as com- 1300

pared to the modest 4.3 per cent growth witnessed
in the year–ago month. 1200
1100
Cumulative production during April–November
2007 declined by 5.7 per cent to 99.7 lakh tonnes. 1000
This fall was on account of a 10.8 per cent fall in Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
phosphatic fertiliser production and a 3.7 per cent 2006-07 2007-08
fall in nitrogenous fertiliser production.
Table 13.10 Fertiliser Statistics: Production and Imports

Fertilisers Fertilisers Fertilisers Fertilisers Phos- Phos- Nitroge- Nitroge-
phatic phatic nous nous
Fertilisers Fertilisers Fertilisers Fertilisers
Prodn. Prodn. Import* Import* Prodn. Prodn. Prodn. Prodn.
(’000 tns) (% chg.) (’000 tns) (% chg.) (’000 tns) (% chg.) (’000 tns) (% chg.)
Nov 2006 1,434.40 3.40 1,611.28 58.57 411.20 1.18 1,023.20 4.31
Dec 2006 1,490.80 7.15 1,045.07 60.65 418.90 1.13 1,071.90 9.70
Jan 2007 1,393.90 2.11 600.22 -3.88 381.10 -5.67 1,012.80 5.38
Feb 2007 1,368.70 14.81 646.54 29.84 390.50 9.02 978.20 17.30
Mar 2007 1,282.30 11.35 375.41 -2.33 358.60 -4.22 923.70 18.85
Apr 2007 1,005.40 -9.72 457.72 54.57 329.80 5.50 675.60 -15.66
May 2007 1,162.40 -8.21 631.12 7.62 318.60 -2.63 843.80 -10.16
Jun 2007 1,235.70 964.82 55.32 308.60 -0.13 927.10 0.04
Jul 2007 1,350.10 -1.45 1,428.38 72.69 375.90 4.24 974.20 -3.48
Aug 2007 1,262.70 0.97 1,411.41 28.70 300.70 -24.62 962.00 12.95
Sep 2007 1,267.60 -13.23 329.60 -25.40 938.00 -7.96
Oct 2007 1,347.90 -7.77 342.60 -20.18 1,005.30 -2.62
Nov 2007 1,322.30 -7.82 342.30 -16.76 980.00 -4.22
Apr–Nov Apr–Nov Apr–Aug Apr–Aug Apr–Nov Apr–Nov Apr–Nov Apr–Nov

2006–07 10,570.40 5.52 3,427.71 41.62 2,976.40 11.48 7,594.00 3.35
2007–08 9,965.90 -5.72 4,894.19 42.78 2,653.80 -10.84 7,312.10 -3.71

2006–07 16,093.70 6.46 10,603.62 45.40 4,516.60 7.01 11,577.10 6.24
*Imports of Manufactured fertiliser
Industry: Cement 47
Tepid consumption growth in November during April–December 2007, y-o-y. While prices
rose by 12 per cent in Mumbai and Kolkata, Chen-
Cement production and consumption grew by a nai and Hydrabad observed the sharpest rise of 24
modest 4.7 per cent and four per cent, respectively per cent each, y–o–y. The recent hike of 10 per cent
in November 2007. This was the lowest growth in coal prices, announced by Coal India Limited, is
recorded in any of the months during 2007–08, so expected to put cost pressure on cement companies.
far. Similarly, cement consumption growth was Considering this, there exist a strong possibility of
outpaced by the production growth for the first cement companies passing on the burden to con-
time in the year. During April-November 2007, sumers in a buoyant demand scenario.
cement consumption grew by 10.3 per cent. The
Western zone recorded the fastest cement consump- Figure 13.9 Cement Production (Lakh tonnes)
tion growth of 16 per cent. The South and North
150
regions followed with 13.5 per cent and 11.2 per
145
cent growth, respectively. While these two regions
140
posted a surplus, the Western and Eastern zones
135
experienced deficit . Aggregate production growth
130
decelerated to 8.4 per cent as against a 10.6 per
125
cent growth posted in the year ago period. 120
Lack of significant capacity additions and strong 115
cement demand enabled a firm trend in cement 110

105
prices. Barring Delhi and Kolkata, cement prices Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
across the major cities evidenced a rise in Decem- 2006-07 2007-08
ber 2007. Similarly, prices showed an upward trend
Table 13.11 Cement Statistics: Production, Consumption and Prices

Prodn. Prodn. Consump- Consump- Capacity Prices*
tion tion Utilisation (Mumbai)
(Lakh tonnes) (% chg.) (Lakh tonnes) (% chg.) (%) (Rs./50 kg bag)
Jan 2007 140.93 7.81 135.65 8.41 102.43 224
Feb 2007 130.37 6.36 126.69 8.22 94.47 224
Mar 2007 149.93 5.97 146.50 7.87 108.64 229
Apr 2007 140.09 6.41 133.85 7.56 101.45 233
May 2007 142.56 10.26 138.00 13.61 102.58 234
Jun 2007 136.57 5.99 132.89 7.83 95.89 237
Jul 2007 133.65 9.78 131.07 14.50 93.20 242
Aug 2007 128.47 17.41 124.14 18.61 89.59 240
Sep 2007 127.55 5.33 123.59 7.27 88.44 239
Oct 2007 138.08 7.38 133.61 10.90 95.74 239
Nov 2007 130.55 4.74 124.89 3.98 90.52 239
Dec 2007 245
Jan 2008 247
Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Jan

2006–07 994.11 10.63 944.96 10.10 90.37 215
2007–08 1,077.13 8.35 1,042.38 10.31 93.96 239

2006–07 1,553.14 9.53 1,489.89 9.90 93.82 217
*Average retail price based on CMIE’s independent polling of traders
48 Industry: Steel
Rising input costs prompt steel compa- with the last revision coming in October. Prices
nies to hike prices were rolled back in the subsequent two months.
In the light of rising iron ore and coal prices, com-
In view of the capacity constraints faced by major
panies hiked prices in the beginning of 2008. As
steel producers, growth in steel production halved
per media reports, Tata Steel, JSW Steel, Essar
year–on–year from 13.8 per cent to 7.1 per cent
Steel and Ispat Industries increased product prices
during April–November 2007. Growth in steel
in the region of Rs.600–900 per tonne.
consumption at 12 per cent outpaced production
growth.
Figure 13.10 Production of Finished Steel (’000
Robust demand from the construction sector and a tonnes)
strong rupee led to a sharp 77 per cent rise in im- 5000
ports during April–October 2007. Comparatively,
4800
steel exports grew by a slower 7.5 per cent to 2.8
million tonnes. Robust demand from the steel in- 4600
dustry and a strong rupee made imports attractive 4400

for traders, thus making India a net importer of 4200
steel.
4000
Although hot rolled coil prices softened in Decem-
3800
ber, they were ruling atleast 5–6 per cent higher
3600
as compared to price levels prevailing in the cor- Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
responding year ago period. Between January– 2006-07 2007-08
December 2007, steel companies hiked prices twice
Table 13.12 Production Statistics of Selected Finished Steel

Steel Bars & HR HR CR GP/GC Finished Finished
struc- rods coils/skelp Sheets sheets/coils sheets steel steel
turals
Prodn. Prodn. Prodn. Prodn. Prodn. Prodn. Prodn. Prodn.
(’000 tns) (’000 tns) (’000 tns) (’000 tns) (’000 tns) (’000 tns) (’000 tns) (% chg.)
Nov 2006 361.0 1,622.0 931.0 59.0 376.0 355.0 4,191.0 8.94
Dec 2006 323.0 1,304.0 1,140.0 49.0 663.0 372.0 4,356.0 9.97
Jan 2007 351.0 1,297.0 1,105.0 46.0 661.0 379.0 4,350.0 8.26
Feb 2007 345.0 1,247.0 1,044.0 53.0 651.0 370.0 4,228.0 13.38
Mar 2007 376.0 1,487.0 1,253.0 57.0 766.0 428.0 4,938.0 14.62
Apr 2007 321.0 1,219.0 1,041.0 43.0 631.0 353.0 4,079.0 8.54
May 2007 334.0 1,323.0 987.0 40.0 631.0 354.0 4,171.0 11.76
Jun 2007 310.0 1,271.0 927.0 35.0 589.0 364.0 3,976.0 5.05
Jul 2007 328.0 1,304.0 1,153.0 59.0 921.0 379.0 4,668.0 6.62
Aug 2007 378.0 1,266.0 970.0 62.0 697.0 381.0 4,310.0 8.51
Sep 2007 447.0 1,588.0 931.0 65.0 350.0 365.0 4,272.0 8.56
Oct 2007 428.0 1,735.0 937.0 65.0 365.0 373.0 4,445.0 4.91
Nov 2007 387.0 1,635.0 959.0 60.0 431.0 343.0 4,344.0 3.65
Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

2006–07 2,625.0 10,455.0 7,607.0 351.0 4,406.0 2,806.0 31,988.0 13.88
2007–08 2,933.0 11,341.0 7,905.0 429.0 4,615.0 2,912.0 34,265.0 7.12

2006–07 4,020.0 15,790.0 12,149.0 556.0 7,147.0 4,355.0 47,999.0 16.54
Industry: Non-ferrous Metals 49
Aluminium & copper prices remain weak Global aluminium prices have also displayed a weak
trend in 2007–08 so far. Since April 2007, inter-
national prices at the LME have corrected by 18
Among the non–ferrous metals, production growth
per cent. Cheap imports and weak global prices
of copper slipped into single digits since Septem-
wielded downward pressure on domestic aluminium
ber 2007. However, healthy growth recorded in the
ingot prices, falling by 19 per cent between April–
earlier months resulted in production growth rising
December 2007.
by a healthy 15 per cent during April–November
2007. Capacity constraints faced by major alu- Figure 13.11 Aluminium Prices (Rs.per kg)
minium producers restricted the production growth
145
to 8.9 per cent during the same period. This com-
pares poorly to the healthy 21.6 per cent produc- 140
tion rise recorded in April–November 2006.
135
Global copper prices were hammered on the LME
on concerns of a slowdown in the US economy. 130
Amongst the base metals, copper was the worst
performer, touching a nine month low of USD 6,588 125
in December. The red metal registered a sharp 21

120
per cent decline over the last two months. Follow- Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
ing the international trend, domestic copper cath- 2006-07 2007-08
ode prices also softened.
Table 13.13 Production Statistics: Aluminium, Copper, Lead and Zinc

Alu- Alu- Copper Copper Zinc Lead Alu- Alu- Alu- Alu-
minium minium minium minium minium minium
Prodn. Prodn. Prodn. Prodn. Prodn. Prodn. Prices Prices Prices Prices
(Ingot) (Ingot)
(Tonnes) (% chg.) (Tonnes) (% chg.) (Tonnes) (Tonnes) (Rs./kg) (% chg.) ( /tonne) (% chg.)
Dec 2006 1,02,477 28.23 62,885 60.29 38,983 5,089 140.84 23.29 2,813.63 25.19
Jan 2007 1,01,998 27.98 62,049 35.16 34,647 4,515 143.36 15.03 2,809.34 18.15
Feb 2007 93,380 13.14 57,157 11.69 32,211 4,408 143.48 11.34 2,832.20 15.35
Mar 2007 1,03,320 10.69 62,556 18.05 36,174 3,676 142.46 11.08 2,761.73 13.56
Apr 2007 99,417 7.27 50,616 25.92 32,753 4,739 143.88 9.14 2,814.79 7.37
May 2007 1,02,728 9.80 59,156 38.41 34,888 5,103 141.44 -1.73 2,796.78 -2.26
Jun 2007 1,01,255 16.27 59,418 23.96 32,606 3,827 137.86 2.88 2,678.25 8.11
Jul 2007 1,03,518 11.96 63,234 18.76 34,089 4,162 135.54 3.74 2,732.91 8.76
Aug 2007 1,03,705 9.87 60,540 11.16 35,138 3,904 132.86 2.16 2,515.77 2.27
Sep 2007 1,01,593 7.92 54,718 6.91 33,218 4,997 125.64 -2.25 2,391.25 -3.30
Oct 2007 1,05,006 5.45 57,398 2.04 34,231 5,315 123.20 -6.39 2,442.37 -7.99
Nov 2007 1,01,017 3.63 51,776 1.49 34,864 4,068 123.85 -10.75 2,506.89 -7.25
Dec 2007 121.42 -13.79 2,381.69 -15.35
Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Dec Apr–Dec Apr–Dec Apr–Dec
2006–07 7,51,355 21.59 3,97,019 20.50 2,38,943 26,867 134.47 29.60 2,619.66 38.04
2007–08 8,18,239 8.90 4,56,877 15.08 2,71,787 36,115 131.74 -2.03 2,584.52 -1.34
2006–07 11,52,530 14.89 6,41,668 23.66 3,80,924 44,436 136.63 24.63 2,665.02 31.37
Monthly figures are provisional in nature and are subject to revisions. *Ingot prices in Mumbai market.
Production of lead relates to Hindustan Zinc.
50 Industry: Capital Goods
Capital goods production index up 20.5% Higher demand and a weaker dollar have led to a
in October sharp rise in imports. Dollar depreciated by 12.3
per cent to Rs.40.8 per USD in August. During
the month, capital good imports grew by 37.9 per
Demand for capital goods continued to remain
cent over and above a 30.5 per cent jump in the
buoyant. For the period April–October 2007, cap-
year-ago month. The import value for the month
ital index production index was up by 20 per cent
stood at USD 2,745.7 million.
over a 15.7 per cent increase in the year-ago period.
In October, production index of capital goods in- Figure 13.12 Production Index of Capital Goods
creased sharply by 20.5 per cent as compared to a (Base: 1993–94)
6.5 per cent rise in the year-ago month.
450
In machinery and equipment segment, production
of insulated cables/wires surged by 619 per cent in
400
October. HT Insulators, agricultural implements,
industrial machinery, electric motors, ship building 350
and repair, medical and surgical instruments and
steam and hydro turbines grew over 50 per cent. 300
In transport equipment segment, production of lo-
comotives rose by 19.4 per cent. Output of broad 250
gauge passenger carriage and commercial vehicles Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
rose by 16.9 per cent and 18.7 per cent respectively 2006-07 2007-08
during the month.
Table 13.14 Capital Goods: Production and Imports

Machin- Machin- Transport Transport Capital Capital Capital Capital
ery and ery and equip- equip- goods goods goods goods
equip. equipment ment (Imports) (Imports)
ments
(Index) (% chg.) (Index) (% chg.) (Index) (% chg.) ( mln.) (% chg.)
Oct 2006 332.7 4.16 373.6 4.42 290.1 6.54 2,000.0 33.84
Nov 2006 355.1 19.56 392.4 22.01 315.7 29.44 2,594.0 60.16
Dec 2006 368.8 11.55 340.8 11.19 357.6 26.18 2,369.6 38.67
Jan 2007 377.5 12.82 388.7 13.42 331.3 16.33 2,215.5 16.79
Feb 2007 371.7 12.67 376.2 12.26 322.3 18.02 2,165.7 39.42
Mar 2007 455.7 13.56 429.7 13.56 451.7 18.06 2,732.3 9.69
Apr 2007 333.6 12.40 333.3 4.71 278.4 10.92 2,698.8 57.53
May 2007 382.3 19.51 361.0 -0.77 334.7 22.38 2,448.6 18.15
Jun 2007 382.1 11.04 351.8 0.92 358.3 23.08 2,463.2 22.12
Jul 2007 357.3 8.93 347.8 -2.77 317.4 12.27 2,413.9 25.61
Aug 2007 393.5 10.38 376.1 10.91 366.6 30.05 2,745.7 37.88
Sep 2007 400.4 5.90 378.7 -1.35 387.9 20.50
Oct 2007 398.3 19.72 415.5 11.22 349.6 20.51
Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Aug Apr–Aug

2006–07 336.6 14.38 355.0 15.47 284.6 15.74 9,779.4 41.47
2007–08 378.2 12.37 366.3 3.19 341.8 20.11 12,743.8 30.31

2006–07 357.1 14.16 367.7 15.02 314.2 18.24 36,757.6 51.39
Industry: Consumer Durables 51
Consumer durables index reverses declin- year. During the period April–October 2007, only
ing trend in October a few segments namely passenger cars, scooters &
mopeds, bicycles, refrigerators, washing machines
have clocked decent growth of over 10 per cent in
After declining for the past five months, produc-
their cumulative production.
tion index of consumer durables turned around on
a small base in October 2007. Index increased by Figure 13.13 Production Index of Consumer
9.3 per cent as compared to a rise of 23 basis points Durable Goods (% change over previous year)
in the year-ago month. Production of passenger
cars, scooters & mopeds, two wheeler tyres, refrig- 20
erators, washing machines, television receivers and
wrist watches registered growth in excess of 15 per 15
cent during the month. Even output of utensils 10

(excluding pressure cookers) and giant tyres grew
by over 10 per cent in October. 5
0
On account of production downfall in the initial
months, the consumer durables production index -5
was lower by 1.3 per cent for the period April– Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
October 2007. The index had registered a 12.7 2006-07 2007-08
per cent growth in the corresponding period last
Table 13.15 Production Statistics of Selected Consumer Durable Goods

Pressure Washing Air condi- Refrigera- Electric TV Wrist Bicycles
cookers machines tioners tors fans receivers watches
Prodn. Prodn. Prodn. Prodn. Prodn. Prodn. Prodn. Prodn.
(Nos.) (Nos.) (Nos.) (’000 nos) (Lakh nos) (’000 nos) (’000 nos) (’000 nos)
Oct 2006 304168 188571 26851 559.6 8.2 533.1 959.0 855.5
Nov 2006 293910 192302 21528 444.9 8.8 301.8 1144.0 802.2
Dec 2006 268300 135459 20377 396.8 9.4 265.5 1111.0 857.0
Jan 2007 250945 175939 41418 581.5 10.5 431.7 1093.0 1035.0
Feb 2007 243173 130191 54634 644.8 10.9 399.8 1088.0 994.1
Mar 2007 263726 112221 68904 762.0 11.1 440.5 1362.0 1044.2
Apr 2007 344884 121076 103317 767.2 10.1 421.2 721.0 841.1
May 2007 350323 168734 92582 808.3 11.4 445.9 1184.0 998.6
Jun 2007 318964 176117 55249 593.1 10.8 456.9 1188.0 951.0
Jul 2007 346613 214365 41352 442.8 9.7 448.8 947.0 913.1
Aug 2007 305971 216896 30367 508.3 8.8 537.5 1119.0 835.7
Sep 2007 323567 201491 35005 650.8 8.4 543.1 1125.0 963.4
Oct 2007 311891 233950 44373 721.0 8.2 636.7 1152.0 818.0
Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct Apr–Oct

2006–07 2165800 1198609 285185 3660.0 64.5 4014.0 8174.0 5866.5
2007–08 2302213 1332629 402245 4491.5 67.3 3490.1 7436.0 6321.0

2006–07 3485854 1944721 492046 6490.0 115.2 5853.2 13972.0 10598.8
Official statistics underestimate the production of pressure cookers, washing machines, refrigerators and TV receivers.
52 Industry: Transport Equipment
Cars sales continues to remain buoyant demand continues to remain strong amid firm in-
terest rates. Backed by new launches, facelifts and
Commercial vehicle (CV) sales rose by 2.9 per cent refurbishment of old models coupled with lucrative
to 48,049 vehicles in December 2007. However, CV discounts offered car makers have managed to rake
production grew by a better 8.8 per cent during in higher volumes month–after–month. Passenger
December. Cumulative CV sales was up 4.8 per car & MUVs sales rose by 7.1 per cent to 1.3 lakh
cent to 3,80,214 vehicles during April–December vehicles in December 2007. Cumulative sales till
2007 on a y–o–y basis. Stung by poor truck off- December was up 12 per cent to 12.6 lakh vehicles.
take, M&HCV sales fell by 2.3 per cent to two lakh
vehicles during April–December 2007. LCV sales Figure 13.14 Production Index of Transport
on the other hand grew by 14 per cent to 1.8 lakh Equipment (% change over previous year)
vehicles during the same period.
25
Two–wheeler sales continued to decline amid firm
20
interest rates and shift in customer preference in
favour of four–wheelers. Two–wheeler sales de- 15
clined by 4.9 per cent to 6.1 lakh vehicles in Decem- 10

ber 2007. Cumulative two–wheeler sales was down
5
5.2 per cent to 60.7 lakh vehicles during April–
December 2007. Sales of motorcycles, the largest 0
two–wheeler segment declined by 8.5 per cent dur- -5

ing April–December 2007. Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2006-07 2007-08
Unlike other automobile segments, passenger car
Table 13.16 Commercial Vehicles: Production, Sales and Exports

Prodn. Prodn. Sales Sales Export Export
(Nos.) (% chg.) (Nos.) (% chg.) (Nos.) (% chg.)
Dec 2006 44,230 55.45 46,711 46.26 4,804 23.43
Jan 2007 51,872 40.30 50,925 35.83 3,649 5.80
Feb 2007 46,540 29.50 48,297 25.39 3,975 14.62
Mar 2007 51,883 22.24 55,220 13.04 5,975 11.72
Apr 2007 41,385 11.15 34,812 -1.27 3,976 39.61
May 2007 41,791 10.05 37,278 2.74 4,016 19.13
Jun 2007 34,251 -10.96 40,673 6.91 5,283 29.96
Jul 2007 38,054 -9.79 37,539 1.97 4,043 -2.44
Aug 2007 43,230 6.92 41,122 4.08 4,713 11.08
Sep 2007 45,604 2.44 47,729 1.90 4,959 10.79
Oct 2007 48,060 18.65 48,697 13.06 5,052 22.77
Nov 2007 47,083 -1.23 44,564 0.86 4,098 5.81
Dec 2007 48,106 8.76 48,049 2.86 5,541 15.34
Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec

2006–07 3,69,696 34.08 3,62,863 36.01 35,938 26.83
2007–08 3,87,564 4.83 3,80,214 4.78 41,663 15.93

2006–07 5,20,000 32.96 5,17,648 32.17 49,766 22.58
Cumulative total in both the tables may not tally as monthly figures are subject to revision
Industry: Transport Equipment 53
Table 13.17 Two-wheelers: Production, Sales and Exports

Dec 2006 6,38,052 4.72 6,45,294 7.28 50,695 29.60
Jan 2007 7,08,411 9.60 7,18,371 10.89 40,981 2.89
Feb 2007 6,79,323 4.41 6,76,601 5.77 45,087 2.46
Mar 2007 6,76,103 -5.03 6,95,820 0.27 51,963 11.10
Apr 2007 6,18,161 -4.78 6,28,372 -3.98 57,991 20.94
May 2007 6,59,244 -9.84 6,71,349 -7.50 65,162 22.69
Jun 2007 6,30,808 -7.89 6,35,254 -8.03 70,283 20.45
Jul 2007 5,90,078 -11.73 5,77,862 -7.19 74,506 17.01
Aug 2007 6,73,150 7.25 6,19,579 -1.29 76,075 43.33
Sep 2007 7,20,875 -10.27 7,44,875 -11.27 65,109 15.19
Oct 2007 8,31,447 4.11 8,61,157 -1.65 67,737 31.62
Nov 2007 6,77,783 -14.94 7,24,268 -0.25 59,087 26.01
Dec 2007 6,30,795 -1.14 6,13,847 -4.87 68,363 34.85

2006–07 63,98,272 13.86 64,07,754 14.35 4,81,737 25.92
2007–08 60,28,900 -5.77 60,73,725 -5.21 6,04,313 25.44

2006–07 84,44,168 10.98 84,76,686 12.04 6,19,138 20.65
Table 13.18 Passenger Cars and Multi-utility Vehicles: Production, Sales and Exports
Dec 2006 1,07,822 17.45 1,23,719 22.98 18,064 32.33
Jan 2007 1,46,612 19.44 1,51,582 22.86 15,994 19.29
Feb 2007 1,42,362 22.12 1,32,108 36.05 15,444 -3.20
Mar 2007 1,60,368 16.32 1,68,333 7.38 18,259 29.18
Apr 2007 1,34,761 18.01 1,20,220 8.68 14,258 -10.01
May 2007 1,39,393 7.74 1,36,802 7.92 15,059 -8.09
Jun 2007 1,31,693 14.68 1,37,339 12.77 17,501 -4.01
Jul 2007 1,47,368 12.46 1,36,009 14.19 20,055 32.34
Aug 2007 1,48,703 16.43 1,45,699 15.30 20,043 4.81
Sep 2007 1,37,414 13.44 1,49,152 7.68 15,832 -6.55
Oct 2007 1,53,862 29.30 1,55,084 15.93 16,580 9.97
Nov 2007 1,43,585 9.67 1,46,697 16.70 15,770 13.14
Dec 2007 1,27,656 18.40 1,32,446 7.05 17,346 -3.97

2006–07 10,96,041 17.59 11,26,374 19.84 1,48,759 13.95
2007–08 12,58,497 14.82 12,61,387 11.99 1,52,883 2.77

2006–07 15,44,850 17.99 15,78,176 19.68 1,98,478 13.05
54 Corporate Sector: Financial Performance
Corporate India to slow down further Earnings growth of companies is expected to re-
main robust. This is vindicated by the 39.8 per
cent growth in corporate tax collections up to De-
We expect the Indian corporate sector to report a cember 2007. The corporate sector is also likely
sales growth of 13 per cent for the quarter ended to hold on to its double digit net margin in the
31 December 2007. This is much slower than the December 2007 quarter.
robust 24.7 per cent growth witnessed in the corre-
sponding year–ago quarter. It may be recalled that corporate India had grown
its net profits by 23.7 per cent in the September
The December 2007 quarter results of companies 2007 quarter on the back of a 15.1 per cent growth
have begun flowing in. A sample of early re- in sales revenues. The manufacturing sector had
sults comprising just 26 companies indicated a sales grown profits by 18.8 per cent on the back of a
growth of 26.6 per cent and a net profit growth of slower 9.3 per cent sales growth. The financial ser-
36.1 per cent. However, the sample it too small to vices had improved the overall growth averages of
be indicative in any sort of way and we need to wait the corporate sector by reporting a robust 32.2 per
and watch to understand how the quarter shapes cent growth in net profits on the back of a 36.9 per
up. cent growth in income.
Figure 14.1 Corporate sector: Growth in sales Figure 14.2 Growth in sales, raw material and
(%) wages(%)
27.3 27.2 35
25 24.7
30
20 19.7
18.2 25
16.9
15.8 15.2
15 13.0 20
10 15
5 10
0 5
D05 M06 J06 S06 D06 M07 J07 S07 D07 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07
Net sales Raw Material Personnel cost
Table 14.1 Growth: Overall Corporate Sector (% chg. over corresponding Qtr.)
Net Sales (Growth) Net Profit (Growth)
Groups Sep06 Dec06 Mar07 Jun07 Sep06 Dec06 Mar07 Jun07
Overall 27.18 24.75 19.66 18.20 44.35 65.67 18.25 38.59
Non-Financial 28.17 26.62 19.78 15.81 50.01 76.14 15.13 35.51
Manufacturing 28.25 23.83 17.80 14.19 65.08 107.39 7.55 32.19
Mining 5.39 27.06 2.47 -0.43 -2.23 23.03 -1.46 16.73
Electricity 12.72 17.23 17.24 20.05 29.98 19.00 17.84 44.82
Services (Other Than Financial) 35.80 43.06 30.31 23.50 49.85 61.35 44.93 47.23
Financial Services 20.59 12.60 18.87 36.32 20.86 26.43 35.18 56.71
Corporate Sector: Corporate Debt 55
Corporate debt floatations rise in Dec ’07 Rs.500 crore each. However, it was Tamil Nadu
Electricity Board that bagged the best deal in
December 2007 witnessed a rise in corporate debt terms of interest rates. The board raised Rs.200
floatations. Indian corporates made 16 issues dur- crore at the rate of 8.45 per cent.
ing the month compared to 5 issues in the preceed-
ing month and 4 issues in the year–ago month.
Table 14.2 Monthly Corporate Debt Floatations
The amount mopped up in December 2007 stood
No. of Amount Interest
at Rs.3,855 crore compared to Rs.1,475 crore in issues raised (Rs.cr) rate (%)
November 2007 and Rs.950 crore in December Dec 2006 4 950 8.50-9.45
2006. Jan 2007 5 720 8.03-9.60
Feb 2007 5 1,500 9.20-9.90
The monies were raised in December 2007 in the Mar 2007 6 1,435 9.55-10.00
interest rate band of 8.45–10.40 per cent compared Apr 2007 4 800 9.95-10.75
to 9.10–10.30 per cent in November 2007. May 2007 9 3,093 9.96-10.60
Jun 2007 13 2,825 8.03-10.80
A total of Rs.31,837 crore were mobilised by Jul 2007 14 4,898 8.13-11.10
corporates through debt floatations in December Aug 2007 7 820 9.05-12.00
2007. This was about 25 per cent lower than Sep 2007 12 3,965 9.10-10.75
Oct 2007 14 10,106 7.47-10.28
the Rs.39,911 crore mobilised in the corresponding
Nov 2007 5 1,475 9.10-10.30
year–ago period. Dec 2007 16 3,855 8.45-10.40
Apr 06–Dec 06 102 39,911 8.00-11.50
Punjab National Bank and Bank of Baroda made
Apr 07–Dec 07 94 31,837 7.47-12.00
the largest issuances during the month. Both raised
Table 14.3 Major Debt Papers Floated during November 2007

Company Amount Type Tenure Coupon
(Rs.crore) (Mths) (%)
Tamil Nadu Electricity Board 200.00 NCD (Fixed) 84 8.45
Punjab National Bank 500.00 NCD (Fixed)
Union Bank Of India 400.00 NCD (Fixed) 124 9.35
Punjab National Bank 300.00 NCD (Fixed) 10.25
Union Bank Of India 200.00 NCD (Fixed) 9.90
10.40
Export-Import Bank Of India 200.00 NCD (Fixed) 60 9.25
National Bank For Agriculture
& Rural Development 200.00 NCD (Fixed) 36 9.50
Uco Bank 320.00 NCD (Fixed) 180 9.35
180 9.85
Global Trade Finance Ltd. 15.00 NCD (Fixed) 67 10.30
State Bank Of Patiala 300.00 NCD (Fixed) 180 9.80
Power Finance Corpn. Ltd. 200.00 NCD (Fixed) 36
60
120
Welspun-Gujarat Stahl Rohren
Ltd. 120.00 NCD (Fixed) 60 10.40
Dena Bank 100.00 NCD (Fixed) 120 10.05
Vijaya Bank 200.00 NCD (Fixed) 120 9.35
Bank Of Baroda 500.00 NCD (Fixed) 180 9.30
180 9.80
P N B Housing Finance Ltd. 100.00 NCD (Fixed) 60 9.30
56 Capital Markets: Primary Capital Market
Increase in resource mobilisation to Rs.2,137.6 crore. Hindustan Oil Exploration Co.

will be raising around Rs.610.9 crore from its rights
The robust performance of the secondary market issue. Other major rights issues were Exide Indus-
along with a rise in valuations prompted many In- tries, Khaitan Weaving Mills, Nandan Exim and
dian companies to raise resources from the pri- Indfrag.
mary market. Indian companies mobilised a to-
tal of Rs.21,112.3 crore from the primary markets In December 2007, Indian corporates favoured
in December 2007. Domestic resource mobilisation the private placement route for raising resource
amounted to Rs.19,490.1 crore and the balance was requirements. During the month, a total of
from the overseas market. From the domestic mar- Rs.14,795.1 crore, debt as well as equity, were
ket companies raised around Rs.15,635.1 crore by raised through private placements. A total of
issuing shares and around Rs.3,855 crore through Rs.10,940.1 crore was raised through private place-
debts. ment of equity shares. GMR Infrastructure mo-
bilised a total of Rs.3965.7 crore through private
In December 2007, eight new companies raised a
placement of its equity. Suzlon Energy raised
total of Rs.1,746.2 crore through public issue of eq-
Rs.2,182.7 crore through private equity placement.
uity shares. The biggest IPO was of Brigade Enter-
A total of Rs.3,855 crore was raised through private
prises which raised a total of Rs.648.4 crore through
placement of domestic debt in December 2007.
its initial public offer. BGR Energy Systems raised
Rs.438.5 crore from its issue in the primary market.
During the period April–December 2007, total re-
Other companies that came out with their public
sources raised amounted to Rs.1,44,104.4 crore, a
offers were Eclerx Services, Transformers & Recti-
rise of 30 per cent over the corresponding year–
fiers (India), Aries Agro, Manaksia, Porwal Auto
ago period. Domestic market accounted for 79.3
Components and Precision Pipes & Profiles Co..
per cent of the total resource mobilised. Re-
A total of Rs.2,948.8 crore will be mobilised from sources raised through equity shares increased to
six rights issue that opened in December 2007. Fed- Rs.82,483.7 crore, a rise of 35.8 per cent over the
eral Bank’s rights issue is the biggest aggregating corresponding year–ago period.
Table 15.1 Resources raised from capital markets: By issue types (Rs.crore)
Total Domestic Domestic Domestic Public* Rights PPL Overseas
Floatations Floatations Shares Debt Floatations
Dec 2006 28,238.02 28,238.02 27,288.02 950.00 6,046.76 553.05 21,638.21 0.00
Jan 2007 5,196.38 5,196.38 4,476.38 720.00 2,673.78 395.50 2,127.10 0.00
Feb 2007 6,984.15 6,926.62 5,426.62 1,500.00 4,262.64 24.93 2,639.05 57.53
Mar 2007 3,602.73 3,318.94 1,883.94 1,435.00 480.76 164.87 2,673.32 283.79
Apr 2007 3,461.39 3,288.59 2,488.59 800.00 682.58 0.00 2,606.01 172.80
May 2007 7,094.32 5,868.23 2,775.23 3,093.00 494.11 144.28 5,229.84 1,226.09
Jun 2007 48,642.92 29,125.81 26,300.81 2,825.00 22,418.40 199.76 6,507.65 19,517.10
Jul 2007 23,719.38 18,711.22 13,813.22 4,898.00 3,547.98 0.48 15,162.76 5,008.15
Aug 2007 3,659.71 3,659.71 2,839.71 820.00 652.63 350.79 2,656.29 0.00
Sep 2007 9,504.75 9,435.37 5,475.17 3,965.00 3,891.03 225.26 5,319.09 69.37
Oct 2007 14,358.79 13,811.15 3,705.15 10,106.00 268.85 106.33 13,435.96 547.64
Nov 2007 12,550.86 10,925.74 9,450.74 1,475.00 3,393.20 3,958.99 3,573.55 1,625.13
Dec 2007 21,112.26 19,490.06 15,635.06 3,855.00 1,746.16 2,948.80 14,795.10 1,622.21
Apr 06–Dec 06 1,10,861.35 1,00,633.84 60,722.96 39,910.89 21,828.72 2,030.87 76,774.25 10,227.51
Apr 07–Dec 07 1,44,104.37 1,14,315.87 82,483.67 31,837.00 37,094.94 7,934.68 69,286.25 29,788.50
Apr 06–Mar 07 1,26,644.61 1,16,075.78 72,509.89 43,565.89 29,245.90 2,616.17 84,213.71 10,568.83
Capital Markets: Secondary Capital Markets 57
Secondary markets recover in December earnings (P/E) ratio witnessed a rise during the
2007 month. The P/E ratio increased from 30.7 times in
November 2007 to 35 times at the end of December
In December 2007, the secondary markets recov- 2007. The market capitalisation of all listed com-
ered from a decline in November 2007. During panies, in COSPI, increased to Rs.71.66 lakh crore
the month, COSPI, consisting of 2,706 companies, at the end of December 2007. Volatility as well as
gained 11.8 per cent. Mutual funds purchased eq- liquidity for the month remained at the same level
uity worth Rs.20,445.5 crore and sold Rs.17,693.3 as in November 2007.
crore remaining net buyers for the month. FIIs
too were net buyers at Rs.4,896.7 crore. During Figure 15.1 CMIE Overall Share Price Index
the month, FII’s purchased equity worth Rs.80,988 (Cum. Daily Returns (%): November 2007
crore and sold equities worth Rs.76,091 crore.
4.0
The BSE Sensex and the NSE Nifty gained 4.8 per
3.0
cent and 6.5 per cent, respectively, in December
2.0
2007. During the month, the BSE Sensex crossed
1.0
the 20,000 mark while the NSE Nifty crossed the
0.0
6,000 mark. The BSE Sensex recorded a high of
-1.0
20,375 on 12 December and a low of 19,079 on 18
-2.0
December. It closed the month at 20,287. The
-3.0
COSPI returns of the top decile companies, gained
-4.0
10.2 per cent in December 2007.
1Nov07 8Nov07 15Nov07 22Nov07 30Nov07
The equity valuations measured by the price–to–
Table 15.2 COSPI and key secondary market indicators

No. of Mkt. P/E of Returns Volatility Liquidity Returns Mkt Cap. No. of
Cos Cap. of COSPI on on of all Listed
COSPI COSPI Cos COSPI Equally listed Cos Cos
Cos Wtd.
COSPI
(Rs.crore) (Times) (%) (%) (Times) (%) (Rs.crore)
Dec 2006 2,433 35,83,929 25.61 0.96 1.58 0.77 5.97 38,01,331 5,010
Jan 2007 2,522 37,44,996 23.91 3.54 1.00 0.74 13.80 39,70,688 5,020
Feb 2007 2,547 34,44,109 21.91 -8.48 1.49 0.82 -10.03 36,70,250 5,033
Mar 2007 2,437 35,12,750 22.12 0.97 1.77 0.79 -7.10 36,92,485 5,040
Apr 2007 2,363 37,89,223 21.74 7.66 1.45 0.73 8.11 39,86,101 5,047
May 2007 2,399 40,22,810 23.11 6.05 0.77 0.69 4.63 42,27,457 5,061
Jun 2007 2,439 41,42,494 23.76 2.23 0.82 0.68 5.38 43,42,901 5,076
Jul 2007 2,525 45,40,711 24.33 4.80 1.07 0.66 4.23 47,11,744 5,087
Aug 2007 2,545 45,23,296 24.07 -0.92 1.92 0.69 3.88 46,96,399 5,104
Sep 2007 2,599 51,92,881 27.59 14.45 0.83 0.64 11.94 53,57,566 5,110
Oct 2007 2,608 63,33,716 30.89 20.20 2.19 0.59 1.51 65,04,515 5,107
Nov 2007 2,581 63,37,182 30.70 -0.09 1.60 0.64 10.82 65,52,518 5,119
Dec 2007 2,706 71,66,260 34.95 11.83 1.58 0.60 38.18 73,51,059 5,125
58 Capital Markets: Secondary Capital Markets
Table 15.3 Transactions by Mutual Funds Table 15.4 Transactions by Foreign Institutional
(Rs.crore) Investors (Rs.crore)
Equity Equity Equity All India All India All India
Purchase Sales Net Purchases Sales Net Equity
investment Equity Equity
Dec 2006 13,181.43 11,554.37 1,627.06 Dec 2006 39,685.9 43,279.5 -3,593.6
Jan 2007 11,643.60 12,985.74 -1,342.14 Jan 2007 43,563.7 43,403.4 160.3
Feb 2007 12,697.09 12,971.14 -274.05 Feb 2007 58,852.6 53,257.2 5,595.4
Mar 2007 9,484.12 11,368.86 -1,884.74 Mar 2007 50,552.6 49,149.3 1,403.3
Apr 2007 12,216.40 11,184.60 1,031.80 Apr 2007 46,776.1 41,242.4 5,533.7
May 2007 15,418.30 13,529.30 1,889.00 May 2007 51,574.9 47,000.4 4,574.5
Jun 2007 11,305.20 11,107.90 197.30 Jun 2007 53,820.4 46,651.0 7,169.4
Jul 2007 17,258.80 18,105.50 -846.70 Jul 2007 80,948.9 62,480.0 18,468.9
Aug 2007 16,411.20 12,027.30 4,383.90 Aug 2007 58,223.2 65,750.0 -7526.8
Sep 2007 15,847.00 1,961.10 13,885.90 Sep 2007 70,694.6 51,746.1 18,948.5
Oct 2007 23,760.60 25,706.20 -1,945.60 Oct 2007 1,30,925.4 1,13,600.0 17,325.4
Nov 2007 19,181.60 16,204.90 2,976.70 Nov 2007 89,510.0 94,107.4 -4,597.4
Dec 2007 20,445.50 17,693.30 2,752.20 Dec 2007 80,988.1 76,091.4 4,896.7
Data is provisional and subject to revision Source: SEBI
correction. Source: SEBI
Table 15.5 Bombay Stock Exchange and National Stock Exchange

BSE Sensex Avg. Daily Vol.(Rs.crore) NSE 50 Index Avg. Daily
(1978–79=100) (% change) A-Group B-Group Total (3rd Nov95=1000) (% change) Vol (Rs.crore)
Dec 2006 13,787 0.66 2,027 2,078 4,105 3,966 0.30 8,505
Jan 2007 14,091 2.21 1,844 2,326 4,170 4,083 2.93 8,757
Feb 2007 12,938 -8.18 1,961 2,488 4,450 3,745 -8.26 9,483
Mar 2007 13,072 1.04 1,775 1,677 3,452 3,822 2.04 7,998
Apr 2007 13,872 6.12 1,838 1,885 3,724 4,088 6.97 8,428
May 2007 14,544 4.84 2,073 2,438 4,510 4,296 5.09 9,885
Jun 2007 14,651 0.73 1,965 2,287 4,252 4,318 0.52 9,221
Jul 2007 15,551 6.15 2,768 2,627 5,433 4,529 4.88 12,147
Aug 2007 15,319 -1.49 2,401 2,119 4,521 4,464 -1.43 10,511
Sep 2007 17,291 12.88 2,786 3,147 5,933 5,021 12.49 13,302
Oct 2007 19,838 14.73 5,447 3,408 8,855 5,901 17.51 20,709
Nov 2007 19,363 -2.39 4,269 3,291 7,612 5,763 -2.34 18,837
Dec 2007 20,287 4.77 3,643 4,803 8,475 6,139 6.52 19,283
Capital Markets: Mutual Funds 59
Mutual funds raise Rs.3.6 lakh crore Mutual fund sales more than doubled between
April–November 2007 to Rs.26.06 lakh crore as
In November 2007, mutual fund industry collected against Rs.10.91 lakh crore in the corresponding
a total of Rs.3.55 lakh crore. Of this, Rs.3.37 lakh year–ago period. The number of new schemes
crore has been raised through existing schemes. launched almost doubled to 373 over the corre-
During the month, 51 new schemes were launched sponding year–ago period. Redemption during the
with a total collection of Rs.18,303 crore. Of the month doubled to Rs.24.71 lakh crore. Net invest-
total 51 new schemes, 17 schemes were open ended ment for the period grew by 35 per cent to Rs.1.35
collecting a total of Rs.5,290 crore and the balance lakh crore over the year–ago period.
were close ended which raised Rs.13,013 crore.
At the end of November 2007, there were a total Figure 15.2 New schemes launched during April–
of 813 schemes of which 546 were open ended. Of November (Number)
the total mobilised amount of Rs.3.55 lakh crore in 373
November 2007, 96 per cent was raised from open
ended schemes.
Total assets under management (AUM) at the end
of November 2007 stood at Rs.5.37 lakh crore, lower 176
than Rs.5.56 lakh crore at the end of October 2007.
The decline was on account of higher redemption
of Rs.3.77 lakh crore as against a sale of Rs.3.55 73
55
lakh crore. Redemption in open ended schemes ac- 24
counted for almost 97 per cent of the total redemp- 2003 2004 2005 2006 2007
tion.
Table 15.6 Mutual fund mobilisation

Schemes New Existing Total Total Total Net Assets
Launched Schemes Schemes Sales Redemption investments under
Sales Sales Management
(in Nos.) (Rs.crore) (Rs.crore) (Rs.crore) (Rs.crore) (Rs.crore) (Rs.crore)
Nov 2006 35 11,277 1,75,890 1,87,167 1,61,666 25,501 3,29,162
Dec 2006 36 15,179 1,55,907 1,71,086 1,92,203 -21,117 3,37,310
Jan 2007 34 10,745 1,48,497 1,59,242 1,46,124 13,118 3,39,734
Feb 2007 55 15,856 1,82,772 1,98,628 1,72,953 25,675 3,58,233
Mar 2007 112 34,880 2,19,578 2,54,458 2,78,879 -24,421 3,26,388
Apr 2007 45 11,896 2,14,928 2,26,824 2,11,904 14,920 3,50,467
May 2007 61 15,473 2,74,073 2,89,546 2,34,418 55,128 3,86,383
Jun 2007 56 11,284 2,62,200 2,73,484 2,92,082 -18,598 4,00,842
Jul 2007 28 7,762 3,78,462 3,86,224 3,06,910 79,314 4,64,755
Aug 2007 42 10,865 3,15,073 3,25,938 3,43,875 -17,937 4,67,623
Sep 2007 59 13,326 3,10,011 3,23,337 3,30,550 -7,213 4,76,989
Oct 2007 31 6,496 4,19,144 4,25,640 3,73,832 51,808 5,56,730
Nov 2007 51 18,303 3,37,097 3,55,400 3,77,698 -22,298 5,37,943
Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

2006–07 176 63,638 10,91,540 11,55,178 10,54,353 1,00,825
2007–08 373 95,405 25,10,988 26,06,393 24,71,269 1,35,124
Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar

2006–07 413 1,40,298 17,98,294 19,38,592 18,44,512 94,080
60 Money & Banking: Money Supply
Growth in money supply accelerates This accelerated growth in foreign exchange assets
of banks is one of the major sources of growth in
Foreign exchange assets of banks continue to grow money supply in the country. Money supply, as
at a robust pace. They grew by more than 30 per measured by M3, grew by 22.8 per cent as on 21
cent for the third consecutive month. As on 21 De- December 2007 indicating that there are no signs
cember 2007, growth in foreign exchange assets of of any let up.
banks stood at 30.74 per cent. A year ago, growth
in foreign exchange assets had stood at 23.3 per Commercial banks’ credit to government contin-
cent. Growth in foreign exchange assets witnessed ues to grow at an accelerated pace. It reported
continuous acceleration since May 2007. a growth of 23.8 per cent as on 21 December 2007.
Figure 16.1 Money Supply (% change over previ- Figure 16.2 Foreign Exchange Assets of Banks (%
ous year) change over previous year)
23.0 35
22.0 30
21.0 25
20.0 20
19.0 15
18.0 10
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2006-07 2007-08 2006-07 2007-08
Table 16.1 Components of Money Supply

Outstanding (Rs.crore) % change over previous year
Currency Deposit M1 Time Broad Currency Deposit M1 Time Broad
with money of deposits money with money of deposits money
public the with (M3) public the with (M3)
public banks public banks
24 Nov 06 4,52,180 4,03,464 8,55,644 21,37,615 29,93,258 16.62 22.28 19.22 19.61 19.50
22 Dec 06 4,61,624 4,04,736 8,66,360 21,49,947 30,16,307 16.97 17.97 17.43 20.11 19.33
19 Jan 07 4,71,981 4,03,584 8,75,565 21,96,166 30,71,731 16.96 17.16 17.05 22.81 21.12
16 Feb 07 4,82,581 4,38,993 9,21,574 22,22,998 31,44,572 17.39 21.91 19.50 22.90 21.89
31 Mar 07 4,83,471 4,81,724 9,65,195 23,45,083 33,10,278 17.03 16.57 16.80 23.22 21.28
27 Apr 07 5,03,423 4,36,608 9,40,032 23,81,767 33,21,799 16.63 4.20 10.51 23.94 19.82
25 May 07 5,04,109 4,17,262 9,21,371 24,06,038 33,27,409 15.58 10.14 13.05 22.49 19.72
22 Jun 07 5,00,996 4,38,747 9,39,743 24,46,729 33,86,473 14.67 18.82 16.57 23.65 21.60
20 Jul 07 4,95,721 4,48,132 9,43,852 25,10,016 34,53,868 13.91 20.13 16.78 23.75 21.77
31 Aug 07 4,86,916 4,40,190 9,27,106 25,48,475 34,75,580 11.20 14.75 12.86 23.86 20.72
28 Sep 07 4,87,059 4,89,824 9,76,884 25,97,543 35,74,427 12.22 18.46 15.26 23.35 21.03
26 Oct 07 5,06,539 4,59,354 9,65,893 26,42,291 36,08,184 12.15 13.85 12.95 26.35 22.46
23 Nov 07 5,25,712 4,85,776 10,11,488 26,64,606 36,76,093 16.26 20.40 18.21 24.65 22.81
21 Dec 07 5,34,209 4,89,226 10,23,435 26,79,359 37,02,794 15.72 20.88 18.13 24.62 22.76
Money & Banking: Money Supply 61
Within components of money supply, deposits con- posits registered a growth of 24.6 per cent as on 21
tinue to grow robustly. Deposit money of the public December 2007.
reported a growth of 21 per cent while term de-
Table 16.2 Sources of Money Supply (% change over previous year)

RBI Comm. Net RBI Comm. Bank Foreign Govt NNML* Net
credit banks bank credit banks credit exch. currency of NNML*
to govt. credit credit to credit to assets liab. to RBI
to govt. to govt. comm. to comm. of public
sector comm. sector banks
sector
24 Nov 06 0.00 3.26 4.75 -0.22 25.89 25.87 20.43 -5.94 37.51 16.18
22 Dec 06 0.00 3.03 4.72 -0.46 26.85 26.83 23.27 -5.65 44.29 25.75
19 Jan 07 -55.20 5.55 3.43 -18.47 26.98 26.91 29.86 -5.47 41.31 22.47
16 Feb 07 0.00 7.75 4.33 -17.23 26.60 26.55 34.55 -5.37 41.30 26.02
31 Mar 07 -29.30 9.75 9.34 10.81 25.43 25.42 25.75 -5.35 45.44 23.17
27 Apr 07 3.44 7.54 7.44 -0.07 24.96 24.94 14.62 8.04 -7.89 8.47
25 May 07 -18.49 8.79 8.53 -0.07 23.61 23.59 10.46 8.77 -26.77 -0.06
22 Jun 07 0.00 12.91 9.24 -0.07 22.48 22.46 14.15 8.90 -24.76 -6.60
20 Jul 07 0.00 11.04 13.93 -0.07 21.58 21.56 15.67 8.76 -7.85 -0.89
31 Aug 07 0.00 17.59 9.90 -0.07 22.72 22.70 20.23 9.62 -26.16 9.36
28 Sep 07 0.00 19.41 8.51 -6.05 20.52 20.50 26.13 8.84 -22.48 7.38
26 Oct 07 0.00 23.87 5.31 -0.07 20.96 20.95 33.17 7.95 -19.43 6.59
23 Nov 07 0.00 24.60 6.53 23.12 21.71 21.71 34.92 7.25 -13.40 12.37
21 Dec 07 0.00 23.76 6.30 -2.84 20.77 20.75 30.74 6.62 -21.68 4.50
*NNML: Net non monetary liabilities
Table 16.3 Sources of Money Supply (Rs.crore)

RBI Comm. RBI Comm. Foreign Govt NNML* Net M3
credit banks credit banks exch. currency of RBI NNML*
to govt. credit to comm. credit assets liab.
to govt. sector to comm. of banks
sector
24 Nov 06 3,426 8,06,862 1,384 18,74,771 8,20,675 8,106 1,74,894 5,21,967 29,93,258
22 Dec 06 -1,738 7,92,735 1,515 19,28,722 8,47,637 8,154 1,79,716 5,60,718 30,16,307
19 Jan 07 12,242 7,97,120 1,907 19,61,411 8,51,487 8,190 1,75,649 5,60,626 30,71,731
16 Feb 07 -32 8,13,139 1,441 20,02,862 8,95,051 8,229 1,74,035 5,76,117 31,44,572
31 Mar 07 5,752 8,32,425 1,537 21,21,825 9,13,179 8,286 1,80,348 5,72,727 33,10,278
27 Apr 07 18,546 8,46,392 1,386 20,87,922 8,85,156 8,342 1,41,187 5,25,944 33,21,799
25 May 07 6,304 8,55,768 1,386 20,74,812 8,77,660 8,457 1,25,195 4,96,978 33,27,409
22 Jun 07 -19,731 8,82,740 1,386 20,90,103 8,95,234 8,530 1,34,206 4,71,790 33,86,473
20 Jul 07 21,884 8,95,065 1,383 21,10,497 9,25,714 8,576 1,73,693 5,09,251 34,53,868
31 Aug 07 -62,939 9,41,574 1,383 21,61,701 9,67,296 8,694 1,36,372 5,42,130 34,75,580
28 Sep 07 -74,426 9,47,104 1,383 22,30,497 10,14,665 8,694 1,37,368 5,53,490 35,74,427
26 Oct 07 -1,37,066 9,89,828 1,383 22,30,916 10,67,124 8,694 1,38,427 5,52,694 36,08,184
23 Nov 07 -1,42,122 10,05,359 1,704 22,81,697 11,07,291 8,694 1,51,458 5,86,530 36,76,093
21 Dec 07 -1,40,213 9,81,078 1,472 23,29,377 11,08,164 8,694 1,40,749 5,85,935 37,02,794
*NNML: Net non monetary liabilities
62 Money & Banking: Money Supply
Table 16.4 Sources of Reserve Money

Outstanding(Rs.crore) % change over previous year
RBI RBI Foreign Others Reserve RBI RBI Foreign Reserve
credit credit exch money credit credit exch money
to to banks assets to to banks assets
central & comm. of RBI central & comm. of RBI
govt. sector govt. sector
24 Nov 06 -46,051 5,283 7,72,419 -1,66,632 6,14,341 0.00 -4.45 19.84 17.33
22 Dec 06 -94,136 9,219 7,83,471 -1,71,547 6,19,390 0.00 52.78 21.14 18.47
19 Jan 07 12,124 9,711 7,87,321 -2,36,359 6,41,815 -55.69 15.29 28.05 19.98
16 Feb 07 -88 4,380 8,30,884 -2,39,893 6,69,426 0.00 -43.53 33.08 23.42
31 Mar 07 2,136 9,173 8,66,153 -2,63,494 7,09,016 -58.60 27.72 28.70 23.72
27 Apr 07 17,991 6,708 8,38,129 -2,08,315 7,30,538 5.85 75.28 16.56 22.73
25 May 07 5,530 5,817 8,30,634 -2,03,383 7,26,017 -28.87 110.38 12.05 23.34
22 Jun 07 -19,689 2,723 8,63,408 -2,08,434 7,20,725 0.00 -32.73 15.92 22.88
20 Jul 07 21,011 1,394 8,93,888 -2,49,372 7,52,048 0.00 -65.90 17.48 28.97
31 Aug 07 -64,271 1,475 9,35,470 -2,33,687 7,46,328 0.00 -54.26 22.27 26.44
28 Sep 07 -75,277 1,466 9,82,839 -2,70,167 7,81,205 0.00 -79.51 29.97 29.08
26 Oct 07 -1,37,368 1,383 10,35,297 -3,27,543 7,69,881 0.00 -79.68 37.48 26.86
23 Nov 07 -1,42,103 1,878 10,75,465 -1,42,783 7,92,457 0.00 -64.45 39.23 28.99
21 Dec 07 -1,40,355 2,314 10,77,520 -1,31,950 8,07,529 0.00 -74.90 37.53 30.37
Money & Banking: Scheduled Commercial Banks 63
Rise in non–deposit borrowings Demand deposits grew by 25.8 per cent in Novem-
ber and 22.7 per cent in December 2007. For De-
cember 2007, data is available only till the 21.
Data on liabilities of scheduled commercial banks of
India reveals that non–deposit borrowings of banks Figure 16.3 Non-food Credit (% change over pre-
spurted sharply in November 2007 and December vious year)
2007. Other borrowings of banks were growing at
single digit rates till the end of October 2007. In 40
November 2007, they grew by 28.7 per cent and 38
by 19.1 per cent as on 21 December 2007. They 36
crossed the one lakh crore rupees mark as on 30 34

32
November 2007.
30
28
Deposit, on the other hand, continue to grow ro-
26
bustly. Total deposits of scheduled commercial 24
banks grew by more than 25 per cent for the third 22
consecutive month. While term deposits are driv- Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
ing the growth in total deposits, in November and 2006-07 2007-08
December even demand deposits picked up pace.
Table 16.5 Assets of Scheduled Commercial Banks (% change over previous year)
Cash in Balance Assets Invst. Invst. Food Loans Inland Foreign Non- Total
hand with RBI with govt. oth. credit bills bills food bank
banking secu. secu. purch. purch. credit credit
system & disc. & disc.
24 Nov 06 21.59 20.11 5.35 3.56 -16.55 -21.19 31.18 14.86 18.92 30.44 28.76
29 Dec 06 25.79 31.16 45.06 6.74 -16.45 0.57 31.99 12.98 25.88 31.30 30.35
26 Jan 07 21.25 32.96 45.37 7.26 -12.60 8.74 30.93 16.01 26.23 30.41 29.80
23 Feb 07 25.15 35.72 50.45 11.59 -11.58 7.40 30.50 14.58 23.15 29.90 29.25
30 Mar 07 23.47 41.84 41.68 10.59 -7.55 14.33 29.17 7.96 21.84 28.37 27.99
27 Apr 07 29.14 42.72 36.98 8.66 -14.01 33.90 27.83 5.34 13.39 26.88 27.06
25 May 07 27.09 51.96 37.25 9.79 -15.78 14.85 27.49 6.23 5.86 26.44 26.13
29 Jun 07 23.96 58.24 -18.07 12.77 -8.62 12.73 24.94 5.61 0.76 23.86 23.59
27 Jul 07 30.73 93.42 27.67 15.08 -9.52 13.81 24.10 13.76 -2.10 23.23 23.01
31 Aug 07 36.44 74.97 10.32 19.84 -11.88 5.84 25.44 17.51 3.78 24.74 24.31
28 Sep 07 25.88 81.39 2.26 20.90 22.10 10.61 23.08 10.24 -3.75 22.13 21.90
26 Oct 07 6.21 83.98 23.31 25.40 21.55 -2.09 23.60 8.03 15.38 23.03 22.48
30 Nov 07 34.26 89.44 27.46 25.95 25.58 16.47 24.86 12.88 16.46 24.38 24.23
21 Dec 07 28.48 82.81 21.66 25.25 22.18 -3.27 23.44 4.02 19.64 22.87 22.24
64 Money & Banking: Scheduled Commercial Banks
April–Nov ’07 ID ratio 49.9 per cent from them in the corresponding year–ago period. This
22.1 per cent year ago means that of the deposits mobilised by banks dur-
ing the first eight months of the current financial
year banks invested about half of these deposits
During April–November 2007, banks invested much into SLR and non–SLR investments. This is be-
more in securities than they did in the correspond- cause the slowdown in credit due to higher interest
ing year ago period. The investment–deposit ratio rates forced them to deploy the mobilised deposit
of banks for the business done by them during the funds into investments. Only 47 per cent of the
April–December 2007 period stood at 49.9 per cent deposits went towards lending compared to 79 per
compared to 22.1 per cent for the business done by cent in the year–ago period.
Figure 16.4 CD & ID ratios of SCBs (%) Figure 16.5 Growth in deposits (%)
27.0
75
70 26.0
65 25.0
60 24.0
55
23.0
50
45 22.0
40 21.0
35 20.0
30
19.0
2000.01.28 2001.09.28 2003.05.30 2005.01.28 2006.09.292007.12.21 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Investment-Deposit ratio Credit deposit ratio 2006-07 2007-08
Table 16.6 Liabilities with Scheduled Commercial Banks (% change over previous year)
Demand Time Total Liab. to Other demand Other
deposits deposits deposits bank & time borrowings
liab.
24 Nov 06 23.59 21.00 21.39 -7.43 18.35 3.83
29 Dec 06 22.07 23.21 23.02 14.18 23.64 3.87
26 Jan 07 18.52 24.39 23.46 3.76 16.85 6.11
23 Feb 07 24.93 24.66 24.70 11.91 16.18 4.74
30 Mar 07 17.69 24.92 23.67 17.68 28.19 3.24
27 Apr 07 1.62 25.66 21.47 27.29 20.85 9.83
25 May 07 11.08 24.19 22.16 18.70 15.46 7.55
29 Jun 07 15.69 24.95 23.48 12.54 22.73 -0.85
27 Jul 07 28.73 25.32 25.83 15.41 25.07 -2.48
31 Aug 07 19.07 25.05 24.17 4.83 27.50 2.65
28 Sep 07 19.97 24.65 23.90 12.14 17.93 4.46
26 Oct 07 14.89 27.87 25.85 6.30 22.47 5.81
30 Nov 07 25.80 26.83 26.67 3.49 22.31 28.68
21 Dec 07 22.69 25.99 25.49 3.48 21.30 19.11
Money & Banking: Scheduled Commercial Banks 65
Table 16.7 Assets of Scheduled Commercial Banks (Rs.crore)

Cash in Balance Assets Invst. Invst. Food Loans Inland Foreign Non- Total
hand with RBI with govt. oth. credit bills bills food bank
banking secu. secu. purch. purch. credit credit
system & disc. & disc.
24 Nov 06 13,244 1,31,749 59,647 7,49,167 15,716 33,458 15,74,266 40,457 35,075 16,49,799 16,83,257
29 Dec 06 14,009 1,53,079 65,752 7,27,770 15,551 42,161 16,47,289 43,107 37,458 17,27,854 17,70,015
26 Jan 07 13,748 1,52,871 63,787 7,39,428 15,416 42,071 16,58,290 43,215 37,149 17,38,654 17,80,725
23 Feb 07 13,767 1,57,306 63,764 7,72,537 15,321 43,898 16,94,519 43,162 37,263 17,74,945 18,18,843
30 Mar 07 16,108 1,80,222 77,060 7,74,980 15,451 46,521 17,95,105 47,212 40,075 18,82,392 19,28,913
27 Apr 07 14,938 1,91,200 69,865 7,92,260 15,207 49,887 17,58,929 42,802 36,219 18,37,950 18,87,837
25 May 07 15,652 1,86,236 68,917 7,99,712 14,687 44,864 17,62,870 41,583 34,402 18,38,856 18,83,720
29 Jun 07 16,923 1,99,587 69,332 8,32,775 15,026 42,787 17,96,691 42,393 35,586 18,74,669 19,17,456
27 Jul 07 16,245 2,32,827 67,286 8,57,024 14,954 41,059 17,95,162 43,671 34,623 18,73,455 19,14,514
31 Aug 07 16,875 2,21,733 65,660 8,89,428 14,364 38,490 18,41,691 45,105 37,023 19,23,819 19,62,309
28 Sep 07 17,615 2,54,569 68,611 8,88,279 19,666 37,008 19,06,587 45,216 36,588 19,88,391 20,25,398
26 Oct 07 16,704 2,24,932 77,569 9,29,559 19,732 35,866 19,05,560 43,440 41,013 19,90,013 20,25,878
30 Nov 07 17,781 2,49,589 76,029 9,43,542 19,736 38,967 19,65,580 45,667 40,848 20,52,095 20,91,062
21 Dec 07 16,762 2,33,923 75,718 9,20,958 19,250 40,268 19,94,692 44,786 42,019 20,81,497 21,21,766
Table 16.8 Liabilities with Scheduled Commercial Banks (Rs.crore)

Demand Time Total Borrowing Liab to bank Other demand Other
deposits deposits deposits from RBI & time borrowings
liab.
24 Nov 06 3,56,491 19,74,781 23,31,272 4 74,346 2,07,068 83,477
29 Dec 06 3,88,713 19,99,431 23,88,145 4,893 79,914 2,23,016 80,233
26 Jan 07 3,68,154 20,40,302 24,08,456 4,316 73,788 2,14,048 83,895
23 Feb 07 4,00,241 20,70,419 24,70,660 827 77,928 2,16,410 85,484
30 Mar 07 4,29,137 21,79,172 26,08,309 6,245 88,457 2,42,004 85,836
27 Apr 07 3,77,672 22,15,493 25,93,165 4,078 87,296 2,31,072 87,339
25 May 07 3,68,394 22,42,176 26,10,571 3,139 82,796 2,21,415 83,842
29 Jun 07 4,00,853 23,07,416 27,08,268 1,266 79,837 2,27,064 85,345
27 Jul 07 4,25,147 23,47,538 27,72,685 0 79,664 2,26,568 84,736
31 Aug 07 3,93,893 23,82,956 27,76,850 92 77,580 2,41,768 88,779
28 Sep 07 4,39,885 24,24,412 28,64,297 64 85,765 2,61,504 88,461
26 Oct 07 4,10,060 24,67,895 28,77,955 0 81,834 2,61,354 90,304
30 Nov 07 4,48,454 25,04,576 29,53,030 396 76,942 2,53,267 1,07,421
21 Dec 07 4,38,955 25,03,019 29,41,975 842 76,124 2,67,137 95,551
66 Foreign Trade
Exports witness robust growth in Novem- higher rate of 26.2 per cent during the same period
ber of 2006.
At this pace of growth, it is unlikely that the export
For the second month in a row, India’s merchan- target of usd 160 billion would be achieved.
dise exports witnessed robust growth. At usd 12.4
billion, exports grew by 26.8 per cent in November
2007. In the previous month, they had increased by
Figure 17.1 Exports (US Million)
35.7 per cent. Faster rise in exports of commodi- 13000
ties with a higher import content, like gems and
jewellery and petroleum products appeared to be 12000
driving up overall growth in exports. These com-

11000
modities benefitted from the steep rupee apprecia-
tion as against those with a lower import content. 10000
During the first six months of the 2007–08 fiscal,
exports growth had averaged lower at 18.5 per cent. 9000
8000
The slowdown in the first half dragged down cu- Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
mulative growth in exports to 22 per cent during 2006-07 2007-08
April–November 2007. Exports had increased at a
Table 17.1 Monthly Foreign Trade Statistics

Exports Imports Trade bal. Exports Imports Exports Imports Trade bal. Exports Imports
( mln) ( mln) ( mln) (% chg.) (% chg.) (% chg.) (% chg.)
(Rs.crore) (Rs.crore) (Rs.crore)
Nov 2006 9,798 15,343 -5,545 35.2 38.1 43,943 68,812 -24,868 32.6 35.4
Dec 2006 10,409 15,013 -4,604 13.3 26.3 46,468 67,018 -20,550 10.8 23.6
Jan 2007 10,713 13,792 -3,079 16.9 10.2 47,493 61,141 -13,648 16.7 10.0
Feb 2007 10,418 14,089 -3,671 15.1 22.4 46,005 62,218 -16,212 14.6 21.9
Mar 2007 12,986 17,188 -4,202 12.3 20.1 57,176 75,680 -18,503 11.2 18.9
Apr 2007 11,012 17,733 -6,721 28.1 41.6 46,414 74,743 -28,328 20.2 32.8
May 2007 12,236 19,185 -6,949 21.9 34.3 49,898 78,238 -28,340 9.5 20.6
Jun 2007 11,907 19,469 -7,562 14.4 39.0 48,543 79,373 -30,830 1.3 23.0
Jul 2007 12,223 18,044 -5,821 16.1 24.3 49,394 72,917 -23,523 0.9 8.1
Aug 2007 12,433 19,701 -7,268 16.5 33.7 50,752 80,418 -29,666 2.2 17.3
Sep 2007 12,797 17,218 -4,421 19.3 2.3 51,622 69,456 -17,834 4.3 -10.5
Oct 2007 13,303 20,786 -7,483 35.7 24.3 52,561 82,126 -29,565 17.9 8.0
Nov 2007 12,424 19,830 -7,406 26.8 29.2 49,000 78,209 -29,209 11.5 13.7
Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov
2006–07 80,614 1,19,054 -38,441 26.2 27.4 3,68,807 5,44,674 -1,75,867 31.0 32.3
2007–08 98,367 1,51,199 -52,832 22.0 27.0 3,98,386 6,12,357 -2,13,971 8.0 12.4
2005–06 1,03,075 1,49,144 -46,068 23.4 33.8 4,56,418 6,60,409 -2,03,991 21.6 31.8
2006–07 1,26,246 1,90,438 -64,192 22.5 27.7 5,71,642 8,62,302 -2,90,660 25.2 30.6
Note: Monthly data may not add up tothe cumulative data because of revisions in monthly data.
Monthly revisions are not released but are included in the cumulative data.
Foreign Trade 67
The commerce secretary expects exports earnings steep rise of 117 per cent during April–August 2007.
to be lower at usd 140–145 billion during the 2007– Both these items depend heavily on imported raw
08 fiscal year. This would translate into a modest material, and hence, benefitted due to the rupee
increase of 11–15 per cent for 2007–08 whereas in appreciation.
the past five years exports had increased by more
than 20 per cent.
Non–pol imports remain strong
Growth in rupee realisation from exports came un-
der pressure due to the strong rupee. During April– Proving unfounded the fears of a slowdown, im-
November 2007, it dropped sharply to a mere eight ports surged by 29 per cent in November 2007 after
per cent from 31 increase during April–November growing by 24 per cent in the previous month. In
2006. September, imports growth had dropped to 2.3 per
cent. This had raised fears of a possible slacken-
ing in domestic demand. In November, growth was
Slowdown remains widespread
driven by non–pol imports which grew by 35 per
cent to usd 14 billion. Growth in pol imports bill
As per the disaggregated data released by dgci&s,
remained lower at 16.7 per cent.
exports growth during April–August 2007 slowed to
18.8 per cent from 27 per cent increase witnessed During April–November 2007, at usd 151 billion,
during the same period of 2006. The slowdown was overall imports surged by 27 per cent. Non–pol
seen in a large number of commodities. Exceptions imports witnessed a hefty increase of 35 per cent.
were gems and jewellery, iron ore, non–basmati rice Growth in pol import bill remained subdued at
which bucked the overall trend of a slowdown. 10 per cent after growing by 41.7 per cent during
April–November 2006. The pol import bill is ex-
Of the major groups, growth in exports of manu-
pected to shoot up in the coming months, given the
factured goods slowed to 13.4 per cent as compared
steep rise in international crude oil prices.
to 16.8 per cent during April–August 2006. Within
manufacturing, the worst hit was readymade gar- The disaggregated data for April–August 2007
ments whose exports declined by 2.3 per cent. Tex- shows a surge in imports of gold, silver, pearls, pre-
tiles exports also grew at a modest rate of three per cious and semi-precious stones. Growth in imports
cent. The rupee appreciation had a more severe of capital goods and chemicals and related products
impact on the exports of these two groups as the also remained strong.
import content of exports was very negligible.
Table 17.2 Imports: April–November 2007
Engineering goods had witnessed a strong increase US million % change
of 34 per cent during 2006–07. However, during 2006 2007 2006 2007
April–August 2007, growth slowed sharply to 19 POL 39,339 43,349 41.7 10.2
per cent. Non-POL 79,715 1,07,850 21.3 35.3
Total 1,19,054 1,51,199 27.4 27.0
Growth in agricultural and allied products exports
also dropped to 12.6 per cent from 22.7 per cent
during April–November 2006.
Trade deficit deteriorates
Gems and jewellery exports was one of the few
commodities that witnessed a an impressive rise With imports rising faster than exports, trade
of 25 per cent during April–August 2007. Though deficit widened sharply to usd 52.8 billion during
petroleum and crude products exports grew at a April–November 2007 from usd 38.4 billion during
lower rate of 22 per cent, this increase came over a the same period of 2006.
68 Foreign Trade
Table 17.3: Commodity Composition of Exports: April–August

US million % change % share in total
2006 2007 2006 2007 2006 2007
All Commodities 50292.6 59758.9 27.05 18.82 100.00 100.00
Agricultural & allied products 4604.0 5186.2 22.66 12.65 9.15 8.68
Basmati rice 218.6 301.8 -24.38 38.04 0.43 0.51
Cashew 236.9 209.4 -13.84 -11.61 0.47 0.35
Cashewnut shell liquid 0.8 2.6 -6.47 221.68 – –
Castor oil 100.1 114.3 -16.53 14.24 0.20 0.19
Coffee 194.4 174.9 25.53 -10.00 0.39 0.29
Cotton raw incl. waste 324.3 227.7 168.56 -29.79 0.64 0.38
Floriculture products 29.0 34.1 20.16 17.72 0.06 0.06
Fresh fruits 129.5 125.6 26.55 -3.02 0.26 0.21
Fresh vegetables 113.8 123.5 44.76 8.57 0.23 0.21
Fruits/vegetable seeds 9.5 15.1 22.78 59.04 0.02 0.03
Groundnuts 77.0 62.3 136.39 -19.06 0.15 0.10
Guargum meal 103.3 94.6 21.15 -8.45 0.21 0.16
Marine products 587.6 558.9 0.11 -4.88 1.17 0.94
Meat & preparations 263.6 364.8 22.27 38.37 0.52 0.61
Misc. processed items 99.3 123.3 16.14 24.14 0.20 0.21
Non-basmati rice 313.6 660.1 3.79 110.47 0.62 1.10
Oil meals 297.8 337.0 13.23 13.18 0.59 0.56
Other cereals 46.0 40.2 3.22 -12.65 0.09 0.07
Poultry and dairy products 52.2 71.5 -37.70 36.94 0.10 0.12
Dairy products 35.3 33.7 -36.90 -4.64 0.07 0.06
Poultry products 16.9 37.8 -39.31 123.98 0.03 0.06
Processed fruits and juices 66.8 69.9 36.07 4.72 0.13 0.12
Processed vegetables 60.9 50.2 50.48 -17.61 0.12 0.08
Pulses 95.9 58.5 -20.46 -38.93 0.19 0.10
Sesame & niger seeds 71.4 77.6 22.04 8.62 0.14 0.13
Niger seeds 5.3 8.1 -6.36 53.44 0.01 0.01
Sesame seeds 66.2 69.5 25.06 5.05 0.13 0.12
Shellac 10.9 11.9 -31.18 9.27 0.02 0.02
Spices 250.2 391.3 31.90 56.40 0.50 0.65
Spirit & beverages 25.5 34.6 56.13 35.55 0.05 0.06
Sugar & mollases 480.7 510.8 3784.68 6.27 0.96 0.85
Mollases 10.6 24.6 403.54 132.23 0.02 0.04
Sugar 470.1 486.2 4478.38 3.43 0.93 0.81
Tea 182.1 156.4 18.62 -14.12 0.36 0.26
Tobacco manufactured 34.1 41.6 57.19 21.96 0.07 0.07
Tobacco unmanufactured 122.6 141.6 27.34 15.43 0.24 0.24
Wheat 5.5 – -94.82 -99.37 0.01 –
Ores & minerals 2454.5 2786.8 7.13 13.54 4.88 4.66
Coal 18.7 17.1 22.69 -8.40 0.04 0.03
Iron ore 1283.1 1526.0 -9.61 18.93 2.55 2.55
Mica 6.9 7.8 -7.99 11.80 0.01 0.01
Processed minerals 576.4 510.7 37.21 -11.40 1.15 0.85
Other ores & minerals 569.5 725.2 32.77 27.36 1.13 1.21
Manufactured goods 33294.1 37767.0 16.78 13.43 66.20 63.20
Leather & leather manufactures 1226.6 1312.8 8.02 7.04 2.44 2.20
Finished leather 301.6 274.8 12.16 -8.88 0.60 0.46
Footwear of leather 377.5 459.5 16.17 21.71 0.75 0.77
Leather goods 289.2 278.0 7.33 -3.87 0.58 0.47
(Continued. . . )
Foreign Trade 69

2006 2007 2006 2007 2006 2007
Leather garments 136.1 134.1 -9.75 -1.43 0.27 0.22
Leather footwear component 90.9 124.0 1.74 36.47 0.18 0.21
Saddlery & harness 31.3 42.4 -2.33 35.50 0.06 0.07
Chemicals & related products 4713.9 5297.5 23.84 12.38 9.37 8.86
Cosmetics/toiletries 226.9 258.6 15.94 13.97 0.45 0.43
Drugs, pharm. & fine chemicals 2267.1 2378.1 22.88 4.90 4.51 3.98
Dyes, intermediates etc. 985.8 1152.0 59.85 16.86 1.96 1.93
Inorg/org/agro chemicals 786.2 939.1 8.07 19.45 1.56 1.57
Paints/enamels/varnishes 157.9 232.0 -0.89 46.95 0.31 0.39
Residual chem. & allied prod. 290.1 337.8 10.54 16.45 0.58 0.57
Engineering goods 11356.0 13564.7 35.23 19.45 22.58 22.70
Aluminium other than products 100.8 207.3 57.07 105.75 0.20 0.35
Electronic goods 1133.9 1191.9 47.43 5.11 2.25 1.99
Ferro alloys 125.4 307.1 29.14 144.85 0.25 0.51
Iron & steel bar/rods 282.7 550.1 19.50 94.59 0.56 0.92
Machine tools 99.1 116.2 14.55 17.22 0.20 0.19
Machinery & instruments 2659.6 3187.7 39.67 19.86 5.29 5.33
Manufactures of metals 1964.9 2463.5 18.32 25.38 3.91 4.12
Non-ferrous metals 1259.5 1320.6 197.98 4.85 2.50 2.21
Prim. & semi-fin. iron & steel 1657.5 1531.8 36.48 -7.58 3.30 2.56
Project goods 31.8 14.7 -38.01 -53.79 0.06 0.02
Residual engineering items 31.9 37.1 13.44 16.37 0.06 0.06
Transport equipment 2009.0 2636.7 7.87 31.25 3.99 4.41
Textiles (excl. RMG) 3441.4 3552.5 13.84 3.23 6.84 5.94
Yarns, fabrics, madeups 2828.2 2943.0 13.19 4.06 5.62 4.92
Cotton yarn fab. madeups etc. 1761.5 1737.5 15.14 -1.36 3.50 2.91
Manmade yarn fab. madeups 852.2 1021.4 13.69 19.85 1.69 1.71
Natural silk yarn fab. madeups 179.1 150.5 -2.06 -16.01 0.36 0.25
Woollen yarn fab. madeups etc. 35.3 33.7 -2.35 -4.69 0.07 0.06
Jute mnfg. excl. floor coverings 100.2 95.6 -3.77 -4.60 0.20 0.16
Jute hessian 44.0 41.5 -14.68 -5.60 0.09 0.07
Jute yarn 26.8 17.8 2.69 -33.61 0.05 0.03
Other jute manufactures 29.5 36.3 11.07 23.23 0.06 0.06
Carpets 365.4 337.1 16.34 -7.74 0.73 0.56
Carpet handmade 358.7 332.1 16.71 -7.40 0.71 0.56
Silk carpets 6.7 5.0 -0.57 -25.52 0.01 0.01
Other textiles excl. RMG 147.6 176.7 39.00 19.73 0.29 0.30
Coir & coir manufactures 58.6 59.6 8.55 1.73 0.12 0.10
Floor covering of jute 30.3 25.3 28.20 -16.67 0.06 0.04
Manmade staple fibre 56.7 90.5 104.88 59.65 0.11 0.15
Silk waste 2.0 1.4 126.84 -31.89 – –
Readymade garments (RMG) 3743.4 3635.2 12.00 -2.89 7.44 6.08
RMG of cotton incl. accessories 2886.0 2692.4 13.70 -6.71 5.74 4.51
RMG of manmade fibres 416.0 324.6 1.47 -21.97 0.83 0.54
RMG of silk 102.7 118.2 7.80 15.03 0.20 0.20
RMG of wool 158.8 265.0 -1.51 66.87 0.32 0.44
RMG of other textile materials 179.8 235.0 30.91 30.70 0.36 0.39
Other manufactured goods 8812.8 10404.2 0.09 18.06 17.52 17.41
Computer software 17.1 49.3 -56.05 188.86 0.03 0.08
Footwear of rubber/canvas etc. 21.7 25.5 4.76 17.20 0.04 0.04
(Continued. . . )
70 Foreign Trade

2006 2007 2006 2007 2006 2007
Gems & jewellery 6125.7 7672.4 -3.41 25.25 12.18 12.84
Glass/glassware/ceramics/cement 337.3 379.0 27.58 12.36 0.67 0.63
Handicrafts excl. handmade carpets 188.6 106.3 -10.25 -43.65 0.37 0.18
Paper/wood products 393.8 462.3 14.64 17.41 0.78 0.77
Plastic & linoleum products 1236.4 1209.6 3.45 -2.16 2.46 2.02
Rubber manufactured products 432.4 445.8 28.28 3.10 0.86 0.75
Sports goods 59.9 54.2 12.77 -9.64 0.12 0.09
Petroleum & crude products 8364.9 10240.0 117.58 22.42 16.63 17.14
Other commodities 1575.1 3778.9 32.87 139.92 3.13 6.32
Foreign Trade 71
Table 17.4: Commodity Composition of Imports: April–August

2006 2007 2006 2007 2006 2007
All Commodities 70359.8 94481.5 20.86 34.28 100.00 100.00
Petroleum crude & products 24366.0 28762.9 44.16 18.04 34.63 30.44
Non-POL items 45993.8 65718.6 11.33 42.89 65.37 69.56
Food & related items 1362.4 1992.0 -2.71 46.22 1.94 2.11
Cereal preparations 14.4 12.7 24.63 -11.67 0.02 0.01
Fruits & nuts 129.2 138.3 50.11 7.04 0.18 0.15
Milk & cream 2.2 3.5 100.30 60.33 – –
Other cereals 0.9 1.4 145.12 43.34 – –
Pulses 213.4 472.8 6.61 121.52 0.30 0.50
Rice 0.1 – 3598.96 -49.27 – –
Spices 75.0 82.2 14.70 9.64 0.11 0.09
Sugar 0.6 0.4 -99.43 -30.64 – –
Tea 12.6 13.4 13.09 6.81 0.02 0.01
Vegetable oils (edible) 893.1 1246.2 -3.03 39.53 1.27 1.32
Wheat 20.8 21.1 1.17 0.03 0.02
Textile yarn fab., madeup articles 927.8 1001.5 10.35 7.95 1.32 1.06
Cotton yarn & fabrics 125.0 137.3 9.91 9.82 0.18 0.15
Madeup textile articles 27.2 32.6 28.09 19.87 0.04 0.03
Manmade filament/spun yarn/waste 263.1 237.1 14.29 -9.88 0.37 0.25
Silk yarn & fabrics 86.7 99.4 -19.11 14.67 0.12 0.11
Woollen yarn & fabrics 15.8 25.0 -52.28 58.37 0.02 0.03
Other text. yarn, fab., madeups
artls. 386.5 434.0 21.53 12.29 0.55 0.46
Readymade garments (woven & knit) 23.5 36.1 36.21 53.86 0.03 0.04
Chemicals and related products 5441.3 7287.1 22.13 33.92 7.73 7.71
Chemical material & products 566.5 629.5 36.42 11.12 0.81 0.67
Dyeing tanning & colouring matrls 256.1 301.7 24.44 17.80 0.36 0.32
Essential oil & cosmetic prepn. 70.3 87.7 21.01 24.87 0.10 0.09
Fertiliser manufactured 895.6 1528.8 64.63 70.70 1.27 1.62
Inorganic chemicals 904.4 1136.6 14.04 25.67 1.29 1.20
Medicinal & pharm. products 461.3 694.9 17.46 50.64 0.66 0.74
Organic chemicals 2287.1 2907.9 11.77 27.14 3.25 3.08
Capital goods 9779.4 12743.8 41.47 30.31 13.90 13.49
Electrical machinery 771.9 984.7 34.54 27.57 1.10 1.04
Machine tools 516.7 793.9 29.77 53.64 0.73 0.84
Non-electrical machinery 5285.1 6759.8 39.37 27.90 7.51 7.15
Professional inst, optical goods etc. 931.0 1233.5 21.13 32.50 1.32 1.31
Project goods 746.7 502.4 118.38 -32.72 1.06 0.53
Transport equipment 1528.0 2469.5 47.21 61.61 2.17 2.61
Other non-POL items 26683.7 40116.1 4.28 50.34 37.92 42.46
Artfcl. resins, plastic matrls. etc. 1060.6 1450.3 17.91 36.74 1.51 1.54
Cashew nuts 223.6 198.4 -14.10 -11.25 0.32 0.21
Cement 2.7 11.2 157.02 312.30 – 0.01
Coal, coke & briquettes 1739.7 2373.8 15.03 36.45 2.47 2.51
Computer software 350.7 364.0 4.47 3.79 0.50 0.39
Cotton raw & waste 77.2 110.4 10.87 43.04 0.11 0.12
Crude fertiliser 148.0 173.5 8.83 17.22 0.21 0.18
Electronic goods 6441.8 8226.1 36.26 27.70 9.16 8.71
Gold & silver 4629.2 10610.7 -25.79 129.21 6.58 11.23
Gold 4618.5 9936.5 -22.85 115.14 6.56 10.52
(Continued. . . )
72 Foreign Trade
Table 17.4: Commodity Composition of Imports: April–August

2006 2007 2006 2007 2006 2007
Silver 10.6 674.1 -95.78 6257.22 0.02 0.71
Iron & steel 2177.1 3624.9 7.47 66.50 3.09 3.84
Jute raw 14.8 18.1 12970.56 22.42 0.02 0.02
Leather 122.3 152.2 28.38 24.42 0.17 0.16
Manufactures of metals 585.7 819.9 19.34 39.99 0.83 0.87
Metaliferrous ores & metal scrap 2710.5 3617.1 78.10 33.45 3.85 3.83
Natural rubber 55.8 75.8 28.68 35.66 0.08 0.08
Newsprint 254.2 224.4 48.19 -11.73 0.36 0.24
Non metallic mineral mnfs. 305.5 378.0 23.35 23.72 0.43 0.40
Non-ferrous metals 1044.6 1316.4 46.04 26.02 1.48 1.39
Oilseeds 2.6 8.3 -38.78 217.58 – 0.01
Other crude minerals 106.7 129.3 29.52 21.23 0.15 0.14
Paper board & manufactures 295.6 363.7 31.18 23.01 0.42 0.38
Pearls precious & semiprecious
stones 2874.7 3999.9 -36.02 39.14 4.09 4.23
Primary steel pig iron based items 170.2 196.8 109.37 15.65 0.24 0.21
Printed books, newspapers, etc. 169.4 261.7 2.90 54.49 0.24 0.28
Pulp & waste paper 262.6 299.6 6.95 14.10 0.37 0.32
Raw hides & skins 25.6 34.8 -10.08 35.81 0.04 0.04
Silk raw 53.5 86.2 -19.53 61.02 0.08 0.09
Sulphur & unroasted iron pyrites 38.1 80.7 -38.90 112.18 0.05 0.09
Synthetic & reclaimed rubber 187.3 228.7 26.55 22.15 0.27 0.24
Synthetic & regenerated fibres 44.8 45.6 23.86 1.87 0.06 0.05
Vegetable & animal fats 1.2 1.1 -6.37 -11.30 – –
Wood & wood products 386.2 510.6 12.76 32.21 0.55 0.54
Wool raw 105.2 112.9 11.41 7.28 0.15 0.12
Woollen & cotton rags 16.1 10.9 -20.65 -31.95 0.02 0.01
Other commodities 1799.1 2578.1 -14.95 43.29 2.56 2.73
Foreign Trade 73
Table 17.5 India’s Exports by Countries: April–August

2006 2007 2006 2007 2006 2007
World 50292.6 59758.9 27.05 18.82 100.00 100.00
Africa 4053.9 5698.4 54.47 40.57 8.06 9.54
Egypt 265.7 530.2 4.90 99.58 0.53 0.89
Kenya 660.2 442.5 231.79 -32.97 1.31 0.74
Mauritius 202.8 387.7 143.84 91.19 0.40 0.65
Nigeria 329.2 414.3 11.45 25.86 0.65 0.69
South Africa 1019.7 1102.1 72.74 8.08 2.03 1.84
America 9696.5 10649.6 17.32 9.83 19.28 17.82
Brazil 580.6 860.9 -0.54 48.29 1.15 1.44
Canada 471.5 490.7 14.82 4.07 0.94 0.82
Mexico 210.3 232.0 25.33 10.32 0.42 0.39
USA 7630.5 8109.1 16.31 6.27 15.17 13.57
Asia (excl. Middle East) 15346.0 17296.3 21.55 12.71 30.51 28.94
Bangladesh 675.8 817.1 5.13 20.92 1.34 1.37
China 2849.3 3099.3 16.81 8.77 5.67 5.19
Hong Kong 1775.3 2332.4 -4.60 31.38 3.53 3.90
Indonesia 781.2 654.1 66.55 -16.26 1.55 1.09
Japan 986.3 1309.3 0.91 32.76 1.96 2.19
Korea DPR (North) 79.9 357.0 509.86 346.55 0.16 0.60
Korea Republic (South) 841.9 918.8 31.59 9.13 1.67 1.54
Malaysia 480.1 772.1 18.05 60.83 0.95 1.29
Nepal 382.9 518.9 19.69 35.50 0.76 0.87
Philippines 280.2 219.5 29.02 -21.66 0.56 0.37
Singapore 3082.4 2550.0 32.65 -17.27 6.13 4.27
Sri Lanka 987.1 946.2 11.65 -4.14 1.96 1.58
Taiwan (Taipei) 328.2 780.2 28.61 137.70 0.65 1.31
Thailand 560.1 603.4 38.57 7.73 1.11 1.01
Viet Nam 328.5 396.8 37.09 20.78 0.65 0.66
Middle East 8923.9 11341.4 59.71 27.09 17.74 18.98
Iran 691.8 1079.2 53.39 56.00 1.38 1.81
Iraq 89.8 78.8 152.53 -12.28 0.18 0.13
Israel 518.5 625.9 4.07 20.71 1.03 1.05
Kuwait 236.1 260.8 15.52 10.49 0.47 0.44
Saudi Arabia 950.5 1361.9 29.20 43.29 1.89 2.28
UAE 5251.4 6303.9 73.83 20.04 10.44 10.55
Europe 11417.1 14180.4 14.12 24.20 22.70 23.73
European Union 9947.0 12057.8 14.74 21.22 19.78 20.18
Belgium 1261.3 1702.5 13.12 34.98 2.51 2.85
Denmark 190.2 186.6 17.81 -1.91 0.38 0.31
France 930.7 965.7 1.80 3.76 1.85 1.62
Germany 1579.7 1888.2 14.54 19.53 3.14 3.16
Italy 1401.2 1544.9 43.24 10.25 2.79 2.59
Netherlands 883.7 1625.8 0.90 83.98 1.76 2.72
Spain 729.6 851.2 23.20 16.67 1.45 1.42
Sweden 140.5 200.2 15.40 42.43 0.28 0.33
UK 2211.3 2444.4 10.82 10.54 4.40 4.09
Other European countries 1470.1 2122.6 10.12 44.39 2.92 3.55
Russia 336.3 331.6 19.91 -1.39 0.67 0.55
Switzerland 171.3 236.7 -14.60 38.20 0.34 0.40
Turkey 387.9 622.7 21.59 60.54 0.77 1.04
Oceania 817.8 491.5 91.47 -39.91 1.63 0.82
Australia 358.5 410.4 7.39 14.49 0.71 0.69
74 Foreign Trade
Table 17.6 India’s Imports by Countries: April–August

2006 2007 2006 2007 2006 2007
World 70359.8 94481.5 20.86 34.28 100.00 100.00
Africa 6036.9 8802.6 191.59 45.81 8.58 9.32
Egypt 797.8 786.0 541.36 -1.47 1.13 0.83
Kenya 23.3 30.3 -0.07 29.68 0.03 0.03
Mauritius 5.1 5.2 81.46 1.50 0.01 0.01
Nigeria 3171.3 3100.0 9072.86 -2.25 4.51 3.28
South Africa 987.0 1837.6 -11.42 86.19 1.40 1.94
America 6525.1 8726.6 48.17 33.74 9.27 9.24
Brazil 294.8 425.0 -31.44 44.14 0.42 0.45
Canada 420.7 673.6 26.31 60.12 0.60 0.71
Mexico 257.8 312.5 626.86 21.25 0.37 0.33
USA 4101.7 5360.5 30.61 30.69 5.83 5.67
Asia (excl. Middle East) 19718.7 27235.7 46.18 38.12 28.03 28.83
Bangladesh 105.4 121.6 239.84 15.38 0.15 0.13
China 6502.9 10431.7 61.48 60.42 9.24 11.04
Hong Kong 1014.0 1118.6 15.09 10.32 1.44 1.18
Indonesia 1412.5 2014.9 14.98 42.65 2.01 2.13
Japan 1824.4 2459.6 28.78 34.81 2.59 2.60
Korea DPR (North) 244.7 91.3 -62.69 0.35 0.10
Korea Republic (South) 1878.0 2296.6 11.68 22.29 2.67 2.43
Malaysia 1971.2 2483.2 99.62 25.97 2.80 2.63
Nepal 110.3 158.5 -27.64 43.70 0.16 0.17
Philippines 75.9 77.6 -18.25 2.19 0.11 0.08
Singapore 2253.5 2902.3 84.31 28.79 3.20 3.07
Sri Lanka 230.5 183.4 1.56 -20.43 0.33 0.19
Taiwan (Taipei) 664.7 1061.0 11.33 59.62 0.94 1.12
Thailand 652.9 995.1 30.56 52.40 0.93 1.05
Viet Nam 77.1 68.3 35.24 -11.42 0.11 0.07
Middle East 20778.1 23626.7 387.42 13.71 29.53 25.01
Iran 3276.8 3913.6 1095.10 19.43 4.66 4.14
Iraq 2355.2 2230.0 265837.85 -5.32 3.35 2.36
Israel 378.9 700.5 -8.45 84.88 0.54 0.74
Kuwait 2619.9 2516.1 2067.18 -3.96 3.72 2.66
Saudi Arabia 5989.5 6399.1 918.08 6.84 8.51 6.77
UAE 3733.9 5299.6 68.72 41.93 5.31 5.61
Europe 14284.3 21858.1 -2.64 53.02 20.30 23.13
European Union 10021.1 13126.6 8.11 30.99 14.24 13.89
Belgium 1529.3 2197.4 -29.81 43.69 2.17 2.33
Denmark 151.8 177.7 -0.25 17.05 0.22 0.19
France 796.2 946.7 28.47 18.89 1.13 1.00
Germany 2936.6 3640.2 24.04 23.96 4.17 3.85
Italy 1032.8 1388.7 42.10 34.46 1.47 1.47
Netherlands 411.7 654.7 -9.64 59.03 0.59 0.69
Spain 249.9 377.5 10.43 51.02 0.36 0.40
Sweden 719.4 909.7 57.84 26.44 1.02 0.96
UK 1538.2 2107.6 -7.51 37.02 2.19 2.23
Other European countries 4263.2 8731.5 -21.08 104.81 6.06 9.24
Russia 663.4 836.6 -21.11 26.11 0.94 0.89
Switzerland 2492.4 5689.7 -31.72 128.28 3.54 6.02
Turkey 80.4 832.1 -15.59 934.71 0.11 0.88
Oceania 2961.9 4128.5 27.97 39.39 4.21 4.37
Australia 2658.8 3913.6 19.37 47.19 3.78 4.14
World Economy 75
Table 18.1: Real GDP Growth and Consumer Prices (% change over a year ago)
Real GDP Consumer Prices
2005 2006 2007 2008 2005 2006 2007 2008
World 4.8 5.4 5.2 4.8
Advanced economies
Australia 2.8 2.7 4.4 3.8 2.7 3.5 2.3 2.8
Austria 2.0 3.3 3.3 2.5 2.1 1.7 1.9 1.9
Belgium 1.4 3.0 2.6 1.9 2.5 2.3 1.8 1.8
Canada 3.1 2.8 2.5 2.3 2.2 2.0 2.2 1.9
Denmark 3.1 3.5 1.9 1.5 1.8 1.9 1.9 2.0
Finland 2.9 5.0 4.3 3.0 0.8 1.3 1.5 1.8
France 1.7 2.0 1.9 2.0 1.9 1.9 1.6 1.8
Germany 0.8 2.9 2.4 2.0 1.9 1.8 2.1 1.8
Greece 3.7 4.3 3.9 3.6 3.5 3.3 3.0 3.2
Hong Kong 7.5 6.9 5.7 4.7 0.9 2.0 2.0 3.2
Israel 5.3 5.2 5.1 3.8 1.3 2.1 0.5 2.5
Italy 0.1 1.9 1.7 1.3 2.2 2.2 1.9 1.9
Japan 1.9 2.2 2.0 1.7 -0.3 0.3 0.5
Korea South 4.2 5.0 4.8 4.6 2.8 2.2 2.6 2.7
Netherland 1.5 3.0 2.6 2.5 1.5 1.7 2.0 2.2
New Zealand 2.7 1.6 2.8 2.3 3.0 3.4 2.4 2.7
Norway 2.7 2.8 3.5 3.8 1.6 2.3 0.8 2.3
Portugal 0.5 1.3 1.8 1.8 2.1 3.0 2.5 2.4
Singapore 6.6 7.9 7.5 5.8 0.5 1.0 1.7 1.7
Spain 3.6 3.9 3.7 2.7 3.4 3.6 2.5 2.8
Sweden 2.9 4.2 3.6 2.8 0.8 1.5 1.9 2.0
Switzerland 2.4 3.2 2.4 1.6 1.2 1.0 1.0 1.0
Taiwan 4.1 4.7 4.1 3.8 2.3 0.6 1.2 1.5
UK 1.8 2.8 3.1 2.3 2.0 2.3 2.4 2.0
USA 3.1 2.9 1.9 1.9 3.4 3.2 2.7 2.3
Euro area 1.5 2.8 2.5 2.1 2.2 2.2 2.0 2.0
Selected Asian countries
Bangladesh 6.3 6.4 5.8 6.0 7.0 6.5 7.2 6.3
China 10.4 11.1 11.5 10.0 1.8 1.5 4.5 3.9
INDIA 9.0 9.7 8.9 8.4 4.2 6.1 6.2 4.4
Indonesia 5.7 5.5 6.2 6.1 10.5 13.1 6.3 6.2
Malaysia 5.2 5.9 5.8 5.6 3.0 3.6 2.1 2.4
Pakistan 7.7 6.9 6.4 6.5 9.3 7.9 7.8 7.0
Philippines 4.9 5.4 6.3 5.8 7.6 6.2 3.0 4.0
Thailand 4.5 5.0 4.0 4.5 4.5 4.6 2.0 2.0
Selected Latin American countries
Argentina 9.2 8.5 7.5 5.5 9.6 10.9 9.5 12.6
Brazil 2.9 3.7 4.4 4.0 6.9 4.2 3.6 3.9
Chile 5.7 4.0 5.9 5.0 3.1 3.4 3.9 4.1
Colombia 4.7 6.8 6.6 4.8 5.0 4.3 5.5 4.6
Ecuador 6.0 3.9 2.7 3.4 2.1 3.3 2.1 2.3
Mexico 2.8 4.8 2.9 3.0 4.0 3.6 3.9 4.2
Peru 6.7 7.6 7.0 6.0 1.6 2.0 1.5 2.3
Uruguay 6.6 7.0 5.2 3.8 4.7 6.4 8.0 6.8
Venezuela 10.3 10.3 8.0 6.0 16.0 13.7 18.0 19.0
(Continued. . . )
76 World Economy
Table 18.1: Real GDP Growth and Consumer Prices (% change over a year ago)
Real GDP Consumer Prices
2005 2006 2007 2008 2005 2006 2007 2008
Selected African countries
Algeria 5.1 3.6 4.8 5.2 1.6 2.5 4.5 4.3
Morocco 2.4 8.0 2.5 5.9 1.0 3.3 2.5 2.0
Tunisia 4.0 5.4 6.0 6.2 2.0 4.5 3.0 3.0
Cameroon 2.0 3.8 3.8 5.3 2.0 5.1 2.0 2.7
Cote d’Ivoire 1.8 0.9 1.7 3.8 3.9 2.5 2.5 3.0
Ghana 5.9 6.2 6.3 6.9 15.1 10.9 9.4 8.8
Kenya 5.8 6.1 6.4 6.5 10.3 14.5 6.9 7.2
Nigeria 7.2 5.6 4.3 8.0 17.8 8.3 5.3 7.4
Tanzania 6.7 6.2 7.1 7.5 4.4 7.3 5.6 5.0
South Africa 5.1 5.0 4.7 4.2 3.4 4.7 6.6 6.2
Uganda 6.7 5.4 6.2 6.5 8.0 6.6 7.5 5.1
Selected Other European countries
Bulgaria 6.2 6.1 6.0 5.9 5.0 7.3 8.2 7.9
Czech Republic 6.5 6.4 5.6 4.6 1.8 2.5 2.9 4.4
Estonia 10.2 11.2 8.0 6.0 4.1 4.4 6.0 7.0
Hungary 4.2 3.9 2.1 2.7 3.6 3.9 7.6 4.5
Latvia 10.6 11.9 10.5 6.2 6.7 6.5 9.0 8.9
Lithuania 7.6 7.5 8.0 6.5 2.7 3.8 5.2 4.6
Malta 3.3 3.3 3.2 2.6 2.5 2.6 0.6 2.0
Poland 3.6 6.1 6.6 5.3 2.1 1.0 2.2 2.7
Romania 4.1 7.7 6.3 6.0 9.0 6.6 4.3 4.8
Slovak Republic 6.0 8.3 8.8 7.3 2.8 4.4 2.4 2.0
Slovenia 4.1 5.7 5.4 3.8 2.5 2.5 3.2 3.1
Commonwealth of Independent States
Armenia 14.0 13.3 11.1 10.0 0.6 2.9 3.7 4.9
Azerbaijan 24.3 31.0 29.3 23.2 9.7 8.4 16.6 17.0
Belarus 9.3 9.9 7.8 6.4 10.3 7.0 8.1 10.0
Georgia 9.6 9.4 11.0 9.0 8.3 9.2 8.5 8.1
Kazakhastan 9.7 10.7 8.7 7.8 7.6 8.6 8.6 7.8
Kyrgyz Republic -0.2 2.7 7.5 7.0 4.3 5.6 7.0 7.0
Moldova 7.5 4.0 5.0 5.0 11.9 12.7 11.2 8.9
Russia 6.4 6.7 7.0 6.5 12.7 9.7 8.1 7.5
Ukraine 2.7 7.1 6.7 5.4 13.5 9.0 11.5 10.8
Tajikistan 6.7 7.0 7.5 8.0 7.3 10.0 9.9 12.6
Uzbekistan 7.0 7.3 8.8 7.5 10.0 14.2 12.2 9.8
Note: All the data given in the table are sourced from World Economic
Outlook: October 2007, IMF
References
Monthly Economic Report, Ministry of Finance, Selected Monthly Indicators, Ministry of Finance, Quick Es-
timate, cso, Weekly Statistical Supplement, rbi, Monthly Bulletin, rbi, Monthly Abstract of Statistics, cso,
National Accounts Statistics, cso, Indian Ports Association, Index Numbers of Wholesale Prices, Ministry of
Industry, Consumer Price Index Numbers for Industrial Workers, Ministry of Labour, Consumer Price Index
Numbers for Urban Non-manual Employees, cso, Director General of Commercial Intelligence & Statistics, Min-
istry of Commerce, Indian Sugar, Indian Sugar Mills Association, Tea Board, Jute Statistics, Indian Jute Mills
Association, Monthly Bulletin, Association of Synthetic Fibre Industry, Fertiliser News, Fertiliser Association of
India, Cement Manufacturers’ Association, Flash Report, Society of Indian Automobile Manufacturers, Office
of the Textile Commissioner, Petrochemical Data Service, Joint Plant Committee, Rubber News, Rubber Board,
Minerals & Metals Review, Steel Scenario, Spark Steel, All India Sponge Iron Production, Sponge Iron Man-
ufacturers Association, Indian Electrical & Electronics Manufacturers’ Association, Company News & Notes,
sebi Newsletter, sebi, sebi Market Review, sebi, bse Daily Bulletin, bse, bse Key Statistics on Mumbai Stock
Exchange, bse, International Financial Statistics, imf, Commodity Price Data, World Bank, Financial Times,
Economic Times, Business Standard, Financial Express, Hindu Business Line, Times of India, Indian Express,
The Hindu, Free Press Journal, Newstime, Deccan Herald, Rajasthan Patrika, Dainik Jagran, Punjab Kesari,
Press Information Bureau, Press Releases, rbi, bse, sebi, Company, Annual Reports of Cos., Prospectuses of
Cos., House Journals of Cos.
EIS
Economic Intelligence Service features a series of
documents which provide you with detailed and up-to-date
information on the Indian economy. The documents are
presented in a simple and analytical framework which
reveal the current trends in the economy and future
prospects.
Centre for Monitoring Indian Economy is a Mumbai

based economic and business information and research
organisation. Established in 1976, it is widely regarded
as an authoritative and independent think-tank. Economic
Intelligence Service is one of the several services offered
by the Centre. The Monthly Review of Indian Economy
is issued every month under the EIS. Besides, documents
issued annually are listed below.
Agriculture Money & Banking
Energy National Income
Infrastructure Public Finance
Industry: Financial Aggregates Foreign Trade & BoP
Industry: Market Size & Shares Profiles of Districts
Corporate Sector Capital Markets
C ENTRE F OR M ONITORING I NDIAN E CONOMY P VT LTD

Mumbai

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Economic Intelligence Service

Monthly Review of the Indian Economy

Ranchi: Tel: (0651) 233072 Fax: (0651) 233072

1. Executive Summary 2 12. Industry

2. Annual Indicators 4 Industrial Production 37

9. Agriculture Financial Performance 54

Coal 29 Primary Capital Market 56

15. Money & Banking

Railways 33 Money Supply 60

GDP Growth Agriculture

Industry 2006. It was 63.8 per cent of budget estimates till

Money & Banking

Population & National Income

Savings, Capital Formation & Consumption (current prices)

Value Added (Constant prices)

GDP (PPP) bln. 2247 2375 2574 2773 2930

Corporate Sector (Non-ﬁnancial Cos.)

Returns on the CMIE Overall Share Price

Public Finance (Centre, State & UTs)

Finances of Central Govt.

Budget Deﬁcit Rs.Bln. 9 -12 -15

Money, Banking & Interest Rates

Prices (Annual Averages)

Prices (Annual Averages)

Money, Banking & Interest Rates

Consumer price index

GDP Gross capital formation

Table 4.1 GDP by expenditure or demand (at constant 1999–00 prices)

the outstanding investments as of December 2007

Real GDP to grow by 9.1 per cent in 6

In spite of the recent slowdown in industrial pro- 2

Inﬂation to remain stable to continue to rise in the coming months, that in

also the highest monthly inflation measured in the 3.0

Table 5.1 Wholesale Price Index: Major Groups

Table 5.2 Consumer Price Indices

Table 6.1 Interest Rates and Yield on T-Bills (Per cent)

Table 6.2 Call Money Market and Repo Auction

Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec Apr–Dec

Table 7.1 Foreign Investments & NRI Deposits (US Million)

Apr–Sep Apr–Sep Apr–Sep Apr–Sep Apr–Sep Apr–Sep Apr–Sep

Table 7.2 Balance of Payments Statistics (US million)

Gross ﬁscal deﬁcit down During April–November 2007, Department of Fer-

Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

Table 8.3 Central Government Expenditure (Rs.crore)

Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

Table 8.4 Non–debt receipts (Rs.crore)

Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

Table 8.6 Gross tax revenue

Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

Table 8.7 Central and State Government Market Borrowings (Rs.crore)

Table 10.2 Estimates of Production of Major Crops

Coal stocks rise in November in the corresponding period last year.

Cumulative production of coal recorded a 4.3 per

Table 11.1 Coal Statistics: Production, despatches, stocks and imports

Apr–Nov Apr–Nov Apr–Aug Apr–Aug Apr–Nov Apr–Nov Apr–Nov Apr–Nov

Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar

global petro–products prices also became dearer by

sis points over the year–ago level. The growth 27.5

Output by private and joint venture companies rose 26.5

Table 11.2 Crude Oil Production, Crude Throughput and Imports

Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov Apr–Nov

Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar Apr–Mar

Table 11.3 Consumption of Major Petroleum Products (’000 tonnes)