It was encouraging to know that Industrial production grew faster than 7% for the fourth month running in February while consumer inflation moderated to a five-month low in March, providing a double boost for the economy and the government. High industrial growth suggests a strengthening economic recovery while lower inflation reduces the chances of the Reserve Bank of India raising interest rates soon.
Industrial output as measured by the index of industrial production (IIP) rose 7.1% in February while the Consumer Price Index (CPI) showed retail inflation at 4.28% in March, the fourth successive month of decline. With IIP growth exceeding 7% for January-February 2018, the outlook for the GVA (Gross Value Added) growth for Q4 FY2018 has become brighter.
As expected, RBIGovernor left all key rates unchanged. It is imperative in the global scenario to hold the horses of reaction to rates. Two continents are going to tighten the economy, in that situation to keep status quo is the best way, and observe the changes. From the Indian context, we are at a reasonably good base rate and financial sector is now passing on the benefits of lower rates slowly, in the economy. Economy is projected to accelerate to 7.4% in FY19 from 6.6% in FY18 while the quarterly retail inflation is forecast at a maximum 4.7% in the next fiscal. Higher crude prices and threats to exports from disruptions in global trade are new risks to growth.
Top-gear growth in sales of cars and SUVs has led to India becoming the fourth largest passenger vehicle (PV) market globally for the first time ever, unseating Germany. As a result, India is now behind China, US and Japan in the global pecking order with Germany in the fifth position, followed by Brazil and France. The PV market is expected to witness 8-10% growth in FY18, helped by new model launches and favorable macroeconomic environment, with GDP growth rate expected to improve in the second half of FY18, and recovery in rural income.
We Welcome the RBI's move to explore introduction of an official virtual currency in India but extreme care be taken to ensure safety of the data trail that crypto currency transactions can leave behind. Placing a ban on all regulated entities, including banks, from dealing in virtual currencies like bitcoins, the Reserve Bank of India is exploring a" fiat digital currency". Of course the inter-departmental study group of the RBIwould examine all the safety aspects when it starts working on exploration of the crypto currency which has been introduced by private parties in several parts of the world and has attracted a lot of attention. A high level of coordination among all the central banks would be required along setting up some kind of a global oversight to guard against misuse of the new currency by the anti-social elements, terrorists, enemy countries
Assocham always remain in the forefront to facilitate its members when it comes to the issues related to the industry. Steel, Cement, Mining, Power sector are considered to be the core industrial sectors to drive the economic growth of the nation. Incidentally, all these industries are heavily dependent on coal, which is major raw material for all these sectors. ASSOCHAM has organized a round table meeting with Hon'ble Minister of Coal & Railways Mr. Piyush Goyal, where senior officials/ CEOs of many member companies have interacted with the minister with their issues. The meeting was also attended by Chairman Coal India and Senior officials of Coal ministry. It was indeed a very fruitful meeting and many issues were resolved or promised to be resolved soon by the Minister.
ASSOCHAM congratulate all their members for adding yet another feather to their wings by laying foundation stone for regional headquarter in Mohali, Punjab to give its services more effectively to the industry in the states like Himanchal Pradesh, Punjab, Haryana, Uttarakhand, J&K etc.
ASSOCHAM has registered a significant presence in East Asia by opening its office in Seoul, South Korea recently. This initiative will help in ASSOCHAM's engagement not only in South Korea but also in East Asian Region .