Economic

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 Table of Contents

Abstract ..................................................................................................................................... 3

Strong Investment activity to drive growth in the coming years......................................... 5

Increase in Public Capex leading to crowding-in of Private Investment ........................... 6

Box 1: India’s Critical Mineral sector reforms ..................................................................... 9

Uneasiness in food inflation likely to subside aided by proactive Government

interventions ........................................................................................................................... 10

Box 2: Recent measures to contain the prices of essential food commodities .................. 12

Calibrated monetary policy to counter inflation while supporting growth ..................... 13

Price pressure in food commodities is likely to be transitory as the agriculture sector

gains momentum with significant improvement in monsoon and kharif sowing ............ 14

Global trade growth slowing down ...................................................................................... 17

India’s service exports remain robust ................................................................................ 18

Foreign investors trust India’s growth Potential ............................................................... 19

Despite the weak global growth forecast, new avenues for India to expand exports can
open up................................................................................................................................. 19

India achieved a great feat in slashing multidimensional poverty: 2019-21 vs. 2015-16 . 20

Global MPI Report by UNDP and OPHI further endorses India’s accomplishment in
reducing multidimensional poverty .................................................................................... 21

Box 3: MPI Methodology & its Utility in Addition to Consumption Expenditure .......... 22

Outlook.................................................................................................................................... 23

Performance of High-Frequency Indicators ....................................................................... 24

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 Abstract

Stronger-than-expected growth in the fourth quarter of FY23, driven by robust domestic

investment, drove the International Monetary Fund (IMF) to revise India’s real GDP growth
forecast for FY24 upward by 20 basis points in its July 2023 World Economic Outlook (WEO).
The robustness of domestic investment is the result of the government’s continued emphasis on
capital expenditure, which is expected to drive growth in the coming years. The Union
Government in FY24 Budget increased the capital outlay by 33.3 per cent, raising the share of
capital expenditure in total expenditure from 12.3 per cent in FY18 to 22.4 per cent in FY24
(BE). Measures implemented by the Union Government have also incentivised States to
increase their capex spending. States capital expenditure increased by 74.3 per cent YoY in Q1
of FY24 to complement Centre’s Capex increase of 59.1 per cent in the same quarter. Enhanced
provision for capital expenditure by the government is now leading to crowding in of private
investment, as evident in the performance of various high-frequency indicators and industry
reports which highlight the emergence of the green shoots of a private capex upcycle.

Though growth prospects have been strong, inflationary pressures have re-emerged, driven
primarily by global disruptions, along with domestic factors. Headline CPI-C inflation spiked
to 7.4 per cent in July 2023, with specific food commodities mainly driving the increase, while
core inflation stayed at a 39-month low. Russia’s decision to terminate the Black Sea Grain
deal, along with dry conditions in major wheat-growing areas, caused the price spike in
cereals. While domestic factors like white fly disease and uneven monsoon distribution exerted
pressure on vegetable prices in India.

In response to the developments in retail inflation and prices, the RBI’s Monetary Policy
Committee (MPC) has cautioned that the spike in food prices may lead to an increase in retail
headline inflation in the near term, emphasising that these prices are expected to correct in the
coming months. In this context, the committee decided to keep policy rates unchanged and
remained focused on the withdrawal of accommodation to ensure that inflation progressively
aligns with the target while supporting growth. Additionally, the RBI has implemented a
temporary Incremental in Cash Reserve Ratio (I-CRR) of 10 per cent on banks’ incremental
net demand and time liabilities between 19th May 2023 and 28th July 2023 to ensure that
liquidity levels do not hamper the policy rate transmission mechanism.

The price pressure in food items is expected to be transitory, as evident in the steady
performance of the agriculture sector, along with fresh arrivals in the market. The agricultural
sector is picking up momentum with significant advancement in monsoon and kharif sowing.
The procurement of wheat and rice has been progressing well, increasing the buffer stock levels
of food grains to ensure food security in the country. Rural demand has sustained sequential
momentum in Q1 of FY24, as seen in Fast Moving Consumer Goods and two-three-wheeler

3
sales, as a good rabi harvest strengthens purchasing power. Going forward, increased
minimum support prices and prospects of healthy kharif crops will further add strength to the
rural demand.

Persistent geopolitical concerns continue to shadow the world trade growth which is expected
to decline to 2 per cent in 2023 from 5.2 per cent in 2022. Yet, India’s external sector has
displayed resilience with strong services export growth and robust investment inflows
highlighting investors’ confidence in India’s growth story.

The robustness of India’s economic fundamentals is accompanied by strides made in human

development. The recently released National Multidimensional Poverty Index Report by Niti
Aayog demonstrates a remarkable decline in the prevalence of multidimensional poverty in
India, attributable to the government’s strategic focus on achieving universal access to basic
amenities. With the national MPI nearly halving between 2015-16 and 2019-21, India is likely
to achieve the SDG Target on multidimensional poverty much ahead of the stipulated timeline
of 2030. The results are reinforced by India-related findings in the Global MPI report by
UNDP and OPHI. From an economic growth perspective, the 13.5 crore Indians escaping
poverty between 2015-16 and 2019-21 and graduating to the middle class will boost the engine
of self-sustained growth through consumption, savings, and human capital accumulation.

Going forward, while domestic consumption and investment demand are expected to continue
driving growth, global and regional uncertainties and domestic disruptions may keep
inflationary pressures elevated for the coming months, warranting greater vigilance by
Government and the RBI. Monsoon rains in August have been deficient at the time of writing.
The government has already taken pre-emptive measures to restrain food inflation which, along
with the arrival of fresh stock, is likely to subside price pressure in the market soon. The
external sector requires a closer watch to strengthen merchandise export growth in the face of
slowing global demand. Services exports continue to do well and are likely to continue doing
so as the preference for remote working remains unabated, typically manifested in the
proliferation of Global Capability Centres.

We wrote in the Monthly Economic Report for June 2023 that elevated asset prices in financial
markets posed some risk. In August, stock prices began to correct as sovereign bond yields rose
in much of the advanced world. Geopolitical and geo-economic concerns have not abated, and
they may be an enduring reality for quite some time. Consequently, maintenance of
macroeconomic stability is paramount to keep interest rates from rising too much, to
underscore the relative attractiveness of India as a zone of performance and promise for
domestic and international investors and to maintain steady economic growth, thus. In the
given circumstances, policies that contribute to the maintenance of macroeconomic stability
constitute macroeconomic stimulus.

4
Strong Investment activity to drive growth in the coming years
1. The International Monetary Fund (IMF), in its latest World Economic Outlook (WEO)
of July 2023, has revised India’s real GDP growth forecast for FY24 by 20 basis points (bps),
raising it from 5.9 per cent (as per its April 2023 WEO) to 6.1 per cent. The positive revision is
due to the momentum gained from stronger-than-expected growth in the fourth quarter of FY23,
driven by robust domestic investment. The robustness of domestic investment is the result of the
government’s continued emphasis on capital expenditure that reflects the long-term strategy of
investing in productive assets and improving the business sentiment in the economy. An
increase in capital expenditure, investments in infrastructure and productive capacity have a
large multiplier impact on growth and employment. Strong investment activity is expected to
drive growth in the coming years.

2. A study by the National Institute of Public Finance and Policy highlights that every
Rupee spent on capex leads to a cumulative multiplier effect of ₹4.8 in the economy, while for
the revenue expenditure, every rupee of outlay leads to a cumulative multiplier of 0.96. Morgan
Stanley, in its report, ‘How India has transformed in Less than a Decade’, featured that the steady
increase in manufacturing and capex as a percentage of GDP is likely to result in a new cycle
in manufacturing and capex. It has estimated the share of both in GDP to rise by approximately
5 per cent by 2031”1.

The recent increase in capital expenditure of the Government is reflected in an increase in Gross Fixed
Capital Formation (GFCF). GFCF as per cent of GDP (at Constant Prices) stood at 34 per cent in FY23,
the highest since FY14. The increase in GFCF supported India’s GDP growth even during the uncertain
global economic scenario. Continuing its emphasis on capex, the share of the Union Government’s
capital expenditure in total expenditure has increased from 12.3 per cent in FY18 to 22.4 per cent in
FY24 (BE). A study by CRISIL showcases that supported by an increase in Government spending;
infrastructure capex is expected to register a compound annual growth rate (CAGR) of 11 per cent
between FY23 and FY27, 67 per cent higher compared to CAGR between FY18 and FY222. Union
Government’s capital expenditure rose by 59 per cent in Q1 of FY24, signifying a marked improvement in
the quality of the Centre’s overall spending.

Apart from Union Government, States and CPSEs also raising their capital expenditure

3. Measures implemented by the Union Government to incentivise States to increase their

capex spending appear to bear fruit, as evident in their rising capital expenditure. The early release
of funds by the Centre to State governments under ‘The Scheme for Special Assistance to States
for Capital Investment’ ensures that investments by States are spread evenly throughout the

1
https://static-ai.asianetnews.com/common/01h1rj9k9vhjggvtnwcbdhp42t/india-equity-strategy-and-
economics30may23---ms.pdf
2
https://www.crisil.com/en/home/our-analysis/reports/2023/03/rider-in-the-storm.html

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year, contributing to a substantial growth multiplier3. Sustaining the capital expenditure growth
by the States in the coming months, along with rationalisation of revenue expenditure, will help
them in achieving the overall fiscal deficit target of 3.5 per cent of GDP for FY24. The focus of
the central government on capex also pushed its departmental arms and Central Public Sector
Enterprises (CPSEs) to accelerate their capital expenditure.

The data released by the Controller and Auditor General (CAG) for 23 States (which roughly account for
92 per cent of the Union Budget size of all the States) reflects that their capital expenditure has jumped by
74.3 per cent in Q1 of FY24, compared to the corresponding period of the previous year. Out of ₹1.3 lakh
crore interest-free loans for States for FY24, a sum of ₹600 billion has been sanctioned so far. Of this,
₹300 billion has been disbursed. Further, 54 large CPSEs and five departmental arms have collectively
met around 35 per cent of their annual capex target of ₹7.3 lakh crore in Apr-Jul 20234.

An increase in Union Government’s share States witnessed a robust pick-up in capital

of capital expenditure in total expenditure expenditure in Q1 of FY24
Capital Expenditure Loans and Advances
22.2
1.2
₹Lakh Crore

0.8
12.3

0.4

0.0
FY18 FY19 FY20 FY21 FY22 FY23 FY24 Apr-Jun 22 Apr-Jun 23
Source: Union Budget Documents Source: O/o CAG States’ Monthly Fiscal Accounts data

Increase in Public Capex leading to crowding-in of Private Investment

4. Realising the importance of private investment in accelerating economic growth, the

Government has been making various attempts to raise investment by the private sector. The
Production-Linked Incentive (PLI) scheme is providing capital expenditure-linked incentives
to 14 key sectors. The PM Gatishakti scheme, coupled with the National Infrastructure Pipeline
(NIP), is expected to encourage private-sector participation in creating new infrastructure and
help in onboarding major private-sector infrastructure players. Research by CRISIL highlights
that the industrial investment by the private sector between FY18 and FY22 registered a CAGR
of 7 per cent. This augurs well for still higher growth in the upcoming years.

3
https://www.financialexpress.com/economy/centre-expedites-rs-1-trillion-loan-to-states-nearly-half-of-capex-
facility-to-reach-states-by-july-end/3173262/
4
https://www.business-standard.com/economy/news/capex-by-cpses-touches-35-of-rs-7-33-trillion-target-in-
apr-july-123080900725_1.html

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5. Going forward, the PLI and new-age sectors (such as green hydrogen, semiconductors,
wearables and solar modules) are expected to account for nearly 17 per cent of the capex
between FY13 and FY275. The healthy balance sheet of the private sector, with increased capex
by the government, is anticipated to increase the opportunities for the private sector to
participate in myriad infrastructure initiatives such as highways, construction of new roads,
housing, and drinking water projects, among others. The capacity utilisation in the
manufacturing sector is now above its long-run average, signalling the need for additional
capacity creation as demand sustains the domestic economy. A pick-up in capex expenditure
has ensured that infrastructure-linked sectors, such as roads, railways, telecom etc., have seen
a jump in the disbursement of bank credit. Further, government has been opening up new
avenues for private sector to participate and contribute further to growth. One such avenue is
critical mineral sector (Box 1).

As per the data released in National Accounts Statistics 2021-22, GFCF by the Private sector rose from
₹17.4 lakh crore in FY18 to ₹23.7 lakh crore in FY22. Multiple high-frequency indicators and industry
report point towards the emergence of the green shoots of a private capex upcycle. The IIP data shows
that the capital goods index and infrastructure/construction goods index saw robust growth of 12.9 per
cent and 8.4 per cent, respectively, in FY23. The indices have carried forward their momentum thus far
into FY24 and have grown by 6.5 per cent and 14.5 per cent, respectively, on a cumulative basis till May
2023. Robust investment activity is also evident in the increasing imports of capital goods, which grew
by 20.3 per cent in FY23 and are up by 4.2 per cent on a YoY basis in Q1 of FY24.

Growth in Capital Goods and A Rise in Capital Goods Imports

Construction Goods Index
Construction Goods Index 20
185 Capital Goods Index (RHS) 125

175 115 15
USD Billion
Index

Index

165 105 10

155 95
5

145 85
Nov-22
May-22

Jul-22

Sep-22

May-23
Jan-23

Mar-23

0
Q1: FY22 Q1: FY23 Q1: FY24

Source: Union Budget Documents Source: DGCIS, M/o Commerce

CMIE Capex database shows that new investment project announcements by the Private sector in Q1 of
FY24 were 11.6 per cent higher than that in the corresponding period of the previous year and the highest
in Q1 in 14 years. Of the new projects announced, the transport services industry saw huge project

5
https://www.crisil.com/en/home/our-analysis/reports/2023/03/rider-in-the-storm.html

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announcements accounting for 72 per cent of the total new investment projects announced, followed by
electricity and chemicals.

As per RBI’s Order Books, Inventories and Capacity Utilisation Survey, capacity utilisation (CU) in the
manufacturing sector increased for the third successive quarter to 76.3 per cent in Q4 of FY23 from 74.3
per cent recorded in the previous quarter. Bank credit to the infrastructure sector was 1.7 per cent higher
in Q1 of FY24, compared to the corresponding period of the previous year, with the most remarkable
increase in credit availability to cargo ports and airports. Higher capacity utilisation along with double-
digit growth in non-food bank credit signals positive intent of the private sector to undertake fresh
investment going forward.

New Investment projects announced by the Private Sector highest in Q1 of FY24 in 14

years
6

5
₹Lakh Crore

0
FY20
FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY21

FY22

FY23

FY24
Source: CMIE Capex Database

Increasing capacity utilisation in the Rise in bank credit to the infrastructure

manufacturing sector sector
Infrastructure Sector Roads (RHS)
80
12.4 3.0

70 12.3 2.9
Per cent

₹Lakh Crore

₹Lakh Crore

12.2 2.9
60

12.1 2.8
50
12.0 2.8

40 11.9 2.7
Jun-20

Jun-21

Jun-22
Sep-20

Sep-21

Sep-22
Dec-20

Dec-21

Dec-22
Mar-21

Mar-22

Mar-23

Jun-22

Jun-23
Sep-22

Dec-22

Mar-23

Source: RBI

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 Box 1: India’s Critical Mineral sector reforms

• India produces around 95 minerals but has not been able to unearth its mineral capital
completely. With our enhanced ambitions for Atmanirbhar Bharat and net zero
emissions, the need for minerals would expand only exponentially in the coming
decades. Many of the minerals that are crucial for clean energy technologies, defence
and manufacturing sectors, are globally concentrated in a handful of countries, China
being the predominant of all. The lack of availability of the critical minerals or the
concentration of their extraction or processing in a few geographical locations may lead
to supply chain vulnerabilities and even disruption of supplies.

Share of top three producing countries in total production for selected resources
and minerals, 2022

Notes: DRC = Democratic Republic of the Congo. Graphite extraction is for natural flake graphite. Graphite
processing is for spherical graphite for battery grade. Source: IEA analysis in Critical Minerals Market
Review 2023

• The Economic Survey 2022-23 (Box VII.2) stressed the need for a carefully crafted
multi-dimensional mineral policy to reduce India’s dependence. Recently, in June 2023,
the Ministry of Mines released the Report of the Committee on Identification of Critical
Minerals. This report defines critical minerals for India as those ‘minerals which are
essential for economic development and national security; the lack of availability of these
minerals or even the concentration of existence, extraction or processing of these
minerals in a few geographical locations may lead to supply chain vulnerability and
disruption’. The committee has identified a total of 30 minerals to be most critical for
India, depending on our net import reliance and the resource/reserve position of the
country. These are Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium,
Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel,
PGE, Phosphorous, Potash, REE, Rhenium, Silicon, Strontium, Tantalum, Tellurium,
Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium. Further, the

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 committee suggests that India needs to develop capacity at each stage of the mineral
value chain, as exhibited below.

Midstream- Downstream
Upstream - Upstream -
processing, component Recovery and
geoscience and mining and
refining and manufacturin recycling
exploration extraction
metallurgy g

• Furthering these efforts, the Mines and Minerals (Development and Regulation)
(MMDR) Act was amended in the Monsoon session of parliament in August 2023.
Before this amendment, many of the critical minerals were a part of the list of atomic
minerals, meaning that their mining and exploration were reserved for government
entities. Now, these minerals have been removed from the list of atomic minerals and
added to a new list of ‘Critical minerals’ (schedule 7 of the Act) along with other critical
minerals. The new list contains 24 minerals, like cobalt, graphite, lithium, nickel etc.
With this change in the act, the exploration and mining of these minerals will be opened
up for the private sector as well through the issuance of a new exploration licence. An
exploration licence granted through auction shall permit the private sector licensee to
undertake reconnaissance and prospecting operations for critical minerals in India.

• The mines explored by the Exploration Licence holder can be directly auctioned for
mining lease. The amendment in the MMDR now also empowers the Central
Government to exclusively auction mining leases and composite licences for certain
critical minerals while the responsibility of granting the mining lease and composite
licence lies with the State Governments. Accordingly, the auction premium and other
statutory payments will be received by the State Governments.

• With these amendments, the government expect to build a regime that would incentivise
technological transfers from across the world into the exploration and mining sector,
boosting India’s participation in critical mineral supply chains.

Uneasiness in food inflation likely to subside aided by proactive Government

interventions
6. Amidst global uncertainties, domestic economic activity is maintaining resilience with
a healthy balance sheet of the private sector and increased capex spending of the government,
crowding in private investment. However, global disruptions, along with domestic factors, may
lead to elevated inflationary pressures, posing a challenge to the path of macroeconomic
stability. On the global front, as per the latest ‘FAO food price index’, food inflation has shown
an uptick in July 2023 after a continuous decline since April 2022 (except in April 2023). The
rebound in the food price index in July is mainly been driven by a sharp rise in the prices of
vegetable oils (sunflower, palm, soy, and rapeseed oils) and cereals (wheat and rice). With

10
global uncertainties continuing, the termination of the Black Sea Grain Initiative created
disorderly conditions around the supply of wheat and sunflower oil. Continued dry conditions
in Canada and the USA caused wheat prices to rise, while subdued production growth of oil
palm in Malaysia and concern over the production outlook of soybeans and rape seed in the
USA and Canada has led to a spike in vegetable oils price.

Sharp rise in FAO Vegetables Oil Index

Food Price Index Cereals Price Index Vegetables Oil Index
260
240
220
200
Index

180
160
140
120
100
Jan-22

Jan-23
Oct-21

Dec-21

Jul-22

Oct-22

Dec-22
Aug-22

Jul-23
Aug-21

Nov-21

Apr-22

Nov-22

Apr-23
May-22
Jun-22

May-23
Jun-23
Mar-22

Mar-23
Sep-21

Feb-22

Sep-22

Feb-23
Source: FAO

7. The impact of the global disruptions was clearly evident in India’s inflation numbers.
Headline CPI-C inflation spiked to 7.4 per cent in July 2023, with specific food commodities
mainly driving the increase, while core inflation stayed at a 39-month low of 4.9 per cent.
Cereals, pulses and vegetables exhibited double-digit growth in July compared to the
corresponding period last year. Disruption in domestic production also aggravated the
inflationary pressures. Interruption in the supply chain of tomatoes due to white fly disease in
Kolar district, Karnataka and the swift arrival of monsoon in northern India caused a surge in
tomato prices. Tur dal price also inflated due to deficient production in Kharif season FY23.

Though food inflation in July is perhaps the third highest since the new CPI series began in 2014, only
48 per cent of food items have inflation of above 6 per cent, and this includes 14 food items with inflation
in double digits. Items like tomato, green chilli, ginger and garlic witnessed inflation of more than 50
per cent. Hence, the abnormal increase in prices of certain specific items led to high food inflation in
July 2023.

8. However, the recent price spike of certain food items is expected to be transitory.
Tomato prices are likely to decline with the arrival of fresh stocks by the end of August or early
September. Further enhanced imports of tur dal are expected to moderate pulses inflation.
These factors, along with the recent Government efforts, can soon materialise moderation in
food inflation in the coming months.

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Retail headline inflation is driven by food Specific food items drive the current rate
Items (%) of high inflation
Headline Inflation Core inflation Total no. of items in CPI-C is 299
Food Inflation All items Food items
12

Number of items
9
Per cent

3
Aug-22

Nov-22

Jun-23
Oct-22

Apr-23
May-23
Sep-22

Jul-23
Dec-22

Feb-23
Jan-23

Mar-23

>6% > 10 % > 20 % > 30 %

Inflation Rate (%)
Source: MoSPI

Box 2: Recent measures to contain the prices of essential food commodities

• The Government directed NAFED and NCCF to procure tomatoes from the mandis in
Andhra Pradesh, Karnataka and Maharashtra for disposal in major consumption centres.
• Under the Price Stabilization Fund (PSF), a dynamic buffer stock of pulses (tur, urad,
moong, Masur and gram) and onion are being maintained to the calibrated release of
stocks to ensure availability and affordability of pulses and onion to the consumers.
• To ensure continuous availability of onion to consumers at affordable prices, the
Government raised the quantity of onion buffer to 5 lakh metric tonne in 2023-24, after
achieving the initial procurement target of 3 lakh metric tonne. In this regard, NCCF and
NAFED were entrusted to procure 1 lakh tonne each to achieve the additional
procurement target alongside calibrated disposal of the procured stocks in major
consumption centres. Further, the Government imposed a 40 per cent export duty on
onion till 31st December 2023.
• To augment domestic availability and moderate the prices of pulses, the import of tur and
urad has been kept under 'Free Category' till 31.03.2024, and import duty on masur has
been reduced to zero till 31.03.2024.
• Import duty of 10 per cent on tur has been removed to facilitate smooth and seamless
imports.
• To prevent hoarding, stock limits have been imposed on tur and urad under the Essential
Commodities Act, 1955, on 2nd June 2023 for a period till 31st October 2023.
• Bharat Dal initiative: The Government introduced the mechanism to convert chana stock
into chana dal for retail disposal under the brand name of “Bharat Dal” at a highly
subsidized rate of Rs.60 per kg for 1 kg pack and Rs.55 per kg for 30 kg pack in order to

12
 make pulses available to consumers at affordable prices by converting chana stock of the
government into chana dal.
• To prevent hoarding and unscrupulous speculation, the Government of India has imposed
stock limits on Wheat from 12th June 2023 for a period till 31st March 2024.
• The Government is also continuously offloading the wheat and rice from the central pool
under Open Market Sale Scheme to augment availability in the market and control retail
prices.
• Further, the export of non-basmati white rice is prohibited w.e.f. 20th July 2023 to check
the prices.

Calibrated monetary policy to counter inflation while supporting growth

10. In response to the developments in retail inflation and prices, the RBI’s Monetary Policy
Committee (MPC) has cautioned that the spike in food prices may lead to an increase in retail
headline inflation in the near term. The MPC noted that these prices are expected to correct in
the coming months. In this context, the committee decided to keep policy rates unchanged and
remained focused on the withdrawal of accommodation to ensure that inflation progressively
aligns with the target while supporting growth.

At its bi-monthly meeting in August 2023, the RBI’s MPC left the repo rate, the standing deposit facility
(SDF) and the Marginal Standing Facility (MSF) unchanged at 6.5 per cent, 6.25 per cent and 6.75 per
cent, respectively. The committee took note of the elevated prices of vegetables, cereals and pulses and
expected them to contribute to higher headline retail inflation in August 2023. While it expected
vegetable prices to correct in the coming months, the committee flagged the presence of uncertainties
on the domestic food price outlook due to sudden weather events, possible El Nino conditions in August
and beyond, and the firming up of global food prices. In this context, the MPC revised its inflation
projection for FY24 from 5.1 per cent to 5.4 per cent, with inflation in Q2, Q3 and Q4 of FY24 projected
at 6.2 per cent, 5.7 per cent, and 5.2 per cent, respectively, with risks evenly balanced. The committee
also stated that frequent incidences of recurring food shocks pose a threat to the anchoring of inflation
expectations. It advocated the role of continued and timely supply-side interventions in restraining the
effects of such shocks and emphasized the need to be watchful of emerging trends and their effects on
price stability.

11. Additionally, the RBI took note of the increased liquidity in the system and has
implemented a temporary Incremental Cash Reserve Ratio (I-CRR) of 10 per cent on banks’
incremental net demand and time liabilities between 19th May 2023 and 28th July 2023 to ensure
that liquidity levels do not hamper the policy rate transmission mechanism.

The level of surplus liquidity has increased since June 2023. The average daily net liquidity absorption,
a measure of surplus liquidity, increased from ₹1.28 lakh crore in May 2023 to ₹2.46 lakh crore in the
first ten days of August. The return of the ₹2000 banknotes to the banking system, sustained public
capital expenditure, and transfer of the RBI’s surplus to the government are factors that have contributed
to this increase in surplus liquidity.

13
Despite the presence of such surplus liquidity, the RBI noted that banks’ response to the 14-day Variable
Reverse Repo (VRR) was lukewarm, and banks preferred to place their surplus liquidity in the less
remunerative SDF. This risk-averse behaviour meant that the weighted average call rate (WACR), a
measure of overnight borrowing cost, trended away from the repo rate and closer to the SDF. Therefore,
if excessive liquidity were allowed to remain, it would hamper the interest rate transmission mechanism,
thereby causing price and financial instability.

Increase in surplus liquidity since LAF Corridor

Jun’23
1.5 WACR Repo Rate
1.0 MSF SDF
0.5 7.3
0.0
₹ lakh crore

7
-0.5 6.7

Per cent
-1.0
6.4
-1.5
6.1
-2.0
5.8
-2.5
-3.0 5.5

3-Mar-23

2-Apr-23

16-Jun-23
2-Jan-23

17-May-23
17-Apr-23

1-Jun-23

16-Jul-23
31-Jul-23
16-Feb-23
17-Jan-23
1-Feb-23

18-Mar-23

2-May-23

1-Jul-23
11-Jun-23
26-Jun-23

10-Aug-23
11-Feb-23
26-Feb-23

12-May-23
27-May-23

11-Jul-23
26-Jul-23
12-Apr-23
27-Apr-23
13-Mar-23
28-Mar-23
12-Jan-23
27-Jan-23

Source: RBI
Note: Liquidity represented by Net liquidity injected (+)/ Absorbed (-) including outstanding operations

Recognising this, the RBI has implemented the I-CRR to impound the element of excess liquidity.
Effective 12th August 2023, the I-CRR will impound 10 per cent of banks’ incremental net demand and
time liabilities between 19th May 2023 and 28th July 2023. As per RBI’s calculations, the I-CRR will
remove excess liquidity of about ₹ 1 lakh crore from the system6. The RBI has stated that this is a
temporary measure to address the liquidity overhang. It will be reviewed on 8th September 2023, with
a view to returning the funds to the banking system before the festival season.

Price pressure in food commodities is likely to be transitory as the

agriculture sector gains momentum with significant improvement in
monsoon and kharif sowing
12. The steady performance of the agriculture sector, along with fresh arrivals in the market,
would aid in curbing the inflationary pressures caused by supply disruptions and elevated
international food prices. Despite the fear of El Niño, the progress of monsoon has been quite
active so far, with uneven distribution. The agricultural sector is picking up momentum with
the significant advancement in monsoon and kharif sowing. As of 18th August 2023, kharif crop
sowing has been at similar levels corresponding period last year and was higher than the
‘average of the previous five years. The procurement of wheat and rice has been progressing
well, increasing the buffer stock levels of food grains. Hence, ensuring sufficient food

6
https://rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1378

14
availability in the country. Reservoir levels above average decadal levels, adequate availability
of fertiliser and seeds, and growing tractor sales augur well for the ongoing sowing activity.

The Southwest Monsoon covered the entire country on July 2, according to India Meteorological
Department, six days early from the normal date of July 8. For the country, cumulative rainfall during
this year’s Southwest Monsoon season till 18 August 2023 has been deficient by about 6 per cent
compared to Long Period Average. Around 75 per cent of the country’s area has received normal or
excess rains. As on 18th August 2023, farmers have sown 102.3 million hectares, which is similar to the
corresponding period last year’s level and 1.1 per cent higher than the ‘average of the last five years.
The sowing of cereals has been 3.4 per cent higher compared to the previous year, while that of pulses
has been 9.2 per cent lower compared to the previous year. The lower sowing of pulses can be attributed
to uneven rainfall in three prime-producing States, viz., Madhya Pradesh, Maharashtra and Karnataka.
Further, higher sowing of rice will ensure adequate availability of the harvested crop and alleviate price
pressures in the upcoming months. As on 8th August 2023, kharif onion sowing has been lower compared
to last year by 32 per cent, while there has been an increase in tomato and potato sowing by 5 per cent
and 12 per cent, respectively.

Progress of Kharif Sowing Healthy Procurement of Wheat and Rice

120 2022 2023 Wheat Rice
Million Hectares

80
Miilion Tonnes

60
52
40 35 38 44
38 58 57
34 32 32 34

0 38 36 34 39 43
25 28 28 23 31 19 22
Pulses
Cereals
Total

Sugarcane

Oilseeds

FY19
FY12
FY13
FY14
FY15
FY16
FY17
FY18

FY20
FY21
FY22
FY23

Source: Ministry of Agriculture and Farmers Welfare Source: FCI

Note: Kharif Sowing as of 18 Aug Note: Procurement for FY23 as of 15 Aug 2023

As on 15 August, wheat procurement has passed the previous year's level by 39 per cent during Rabi
Marketing Season (RMS) 2023-24. At the same time, rice procurement under Kharif Marketing Season
(KMS) 2022-23 stood at 570.5 Lakh Metric Tons (LMT), expected to cross the previous year's level
with one more month of procurement remaining. About 1.3 crore farmers have benefitted from the
ongoing procurement operations. This augurs well for adding strength to rural demand in the coming
months. Overall, total foodgrain stocks with Food Corporation of India are maintained at an adequate
level of 1.6 times the buffer norm requirement for the July-Sept period, ensuring the food security
requirements of the country. Central Government, through FCI, has been releasing wheat and rice from
the stocks available through the Open Market Sale Scheme to enhance the availability and moderate the
prices.

15
 Monsoon Coverage up to 18th August Robust growth in Fertiliser Sales
Deficient -59% to -20% 80
Normal -19% to 19%
Excess 20% to 59%

Lakh MT
40

Jun-22

Aug-22

Jun-23
Oct-22
Apr-22

Apr-23
Dec-22

Feb-23
Source: IMD Source: Dept of Fertilisers

Current water levels in reservoirs are seen at comfortable levels sufficient to irrigate the rain-fed swathes
of the agriculturally important regions. As on 17th August 2023, total live storage in 146 important
reservoirs is nearly 82 per cent of the last year's storage and 99 per cent of the average of the last ten
years. Surplus water availability in reservoirs spread across the Northern, Central and Western Region
augurs well for ongoing sowing activity. Fertiliser sales are picking up both on a monthly and yearly
basis in June 2023 by 7.5 per cent and 1.7 per cent, respectively. Availability of fertilisers is in a
comfortable position, with closing stock up to 14th August 2023 being three times, on average, the
requirement during August 2023. Additionally, a sufficient quantity of quality seed will continue to
ensure the smooth sowing of the kharif crops. The seed availability stands at 180.1 lakh quintals against
the requirement of 166.4 lakh quintals in the country for Kharif 2023. Further, tractor sales continue to
grow in July 2023 by 6.1 per cent on a YoY basis. Credit support to agriculture also expanded further
in June 2023, registering 19.7 per cent growth on a YoY basis and a month-on-month increase of 4.5
per cent.

Robust tractor sales Growth of bank credit to agriculture in

double-digit
Domestic Tractor Sales 20 Bank Credit Growth (RHS) 24%
150 YoY Growth (RHS) 60%

18
120 40% 20%
₹ Lakh Crore

90 20% 16
Thousands

16%
60 0% 14

12%
30 -20% 12

0 -40% 10 8%
Oct-22
Apr-22

Apr-23
Jul-22

Jul-23
Jan-23

Jun-21
Aug-21

Jun-22
Aug-22

Jun-23
Oct-21

Feb-22

Oct-22
Apr-21

Apr-22

Feb-23
Apr-23
Dec-21

Dec-22

Source: Tractor and Mechanisation Association Source: RBI

16
13. Rural demand has sustained sequential momentum in Q1 of FY24 on the back of a good
rabi harvest and moderation in inflation. Several indicators, such as fast-moving consumer
goods (FMCG) sales, and two-three-wheelers sales, point towards improvement in rural
demand. Going ahead, increased minimum support prices and prospects of healthy kharif crops
will further add strength to the rural demand.

Volume sales of FMCG in rural areas increased to 4.0 per cent in Q1 of FY24, as per the NielsenIQ
report7. Sales of two and three-wheelers grew by double-digits in Q1 of FY24 on year on year (YoY)
basis. However, a mixed trend was observed during July 2023, with three-wheelers rising by 79 per
cent on a YoY basis, while two-wheeler sales moderated by 7.2 per cent.

Two and Three-Wheeler Sales FMCG Volume Sales

Two Wheeler Three Wheelers (RHS)
18 60 Rural Urban
10
8

Per cent (YoY)

6
Lakh

4
Thousands

14 40 2
0
-2
-4
-6
10 20
Q4:FY22

Q1:FY23

Q2:FY23

Q3:FY23

Q4:FY23

Q1:FY24
Oct-22
Apr-22

Apr-23
Jul-22

Jul-23
Jan-23

Source: SIAM Source: NielsenIQ

Global trade growth slowing down

14. An analysis of external stability measures indicates that falling commodity prices,
notably of crude oil, and signalling by major central banks of raising interest rates further to
keep a check on inflation poses a concern for global trade numbers. Recent instances of
monetary policy tightening by the United States, the United Kingdom and Russia confirm that
inflation is yet to be tamed. Concerns about the prolonged ongoing geopolitical events, trade
restrictions such as on critical minerals, etc., may also drive a slowdown in trade. Other
developments, including the European Union’s new regulations in the name of protecting the
environment, need to be observed for their possible implications, if any, for global trade
patterns.

According to the IMF, WEO of July 2023, the world trade growth is projected to decline from 5.2 per
cent in 2022 to 2 per cent in 2023. Trade would, however, as per projections, rise to 3.7 per cent in
2024, but it will be well below the 2000–19 average of 4.9 per cent. The decline in world trade growth
in 2023 follows the slowing of global demand resulting from higher interest rates slowing credit growth

7
https://www.bqprime.com/business/fmcg-industry-grows-at-fastest-pace-in-18-months-on-higher-demand-
nielseniq

17
and, consequently, slowing industrial activity as well. The Kiel Trade Indicator for July 2023 estimates
the global trade to decline by 1.6 per cent (MoM), with the United States, the European Union, Germany
and China reporting a decline in exports as well as imports.8

India’s service exports remain robust

15. Amidst the weak global growth outlook, India’s exports performed well during the
current financial year (FY24 till July 23), mainly led by the services export growth, which is
in line with the global trend of resilient services demand post-pandemic. The resulting increase
in services trade surplus has significantly contributed to improving the overall trade balance
during this period. During July 2023, India’s trade deficit has almost halved compared to a year
ago, reflecting the robustness of services exports and a greater decline in the value of
merchandise imports than exports.

In July 2023, services exports performed spectacularly, growing by 12 per cent over July 2022, way
above the growth of 0.7 per cent experienced in June 2023 (YoY). As a result, the services trade surplus
improved by 20.8 per cent in July 2023 YoY.9

During the same month, India’s merchandise exports and imports declined by 15.9 per cent and 17 per
cent respectively on a YoY basis. Sectoral analysis reveals that 11 sectors out of 30 commodity groups
contributed towards positive export growth during July 2023 (YoY), including iron ore (962.8 per cent),
oil meals (34.2 per cent), oil seeds (32.8 per cent), and ceramic products (20.8 per cent). As regards
merchandise imports, products like project goods, coal, coke & briquettes, fertilisers, crude &
manufactured, petroleum crude & products witnessed a decline in July 2023 from their July 2022 levels.

Improvement in Merchandise Trade Services trade surplus contributing to an

Deficit improvement in the overall trade balance
Exports Imports Trade Balance Services export Services Import Net of Services
60 30

40
USD Billion

20
USD Billion

20

10
0

-20 0
April May June July Apr-23 May-23 Jun-23 Jul-23
Source: DGCIS, M/o Commerce Source: RBI
Note: Data for July 2023 is provisional

8
Keil Institute, https://www.ifw-kiel.de/topics/international-trade/kiel-trade-indicator/?cookieLevel=not-set
9
The data for services trade for July 2023 is an estimation, which will be revised based on RBI’s subsequent
release.

18
Foreign investors trust India’s growth Potential

16. Improvement in external balance is further accompanied by relentless investor

confidence in India, which is evident in strong foreign investment inflows. This augurs well
for the economy as it allows for positive spillover effects associated with the incoming
investment, especially in sectors crucial for exports. India is the top FDI host economy in the
area of renewable energy in developing Asia and Oceania.

As per RBI data, India witnessed an increase of 4.7 per cent in FDI inflow during 2022 over the previous
year. Further, India also showed strong growth in project announcements during the same period, as
reported in World Investment Report, 2023. This is in contrast to the global FDI trend in 2022, which
saw a decline of 12 per cent to USD 1.3 trillion due to multiple reasons, including ongoing geopolitical
issues, high food and energy prices, lower volumes of financial flows and transactions in developed
countries and debt pressures on account of recessionary tendencies. Insofar as Foreign Portfolio
Investment (FPI) flows during FY24 (April 23-July 23) are concerned, net FPI inflows in India were
recorded at USD 20.2 billion as compared to net outflows of USD 14 billion during the first four months
of FY23.

17. As a result of robust foreign inflows and a decline in imports, India’s foreign exchange
reserves have strengthened over the past months and stood at USD 603.9 billion at the end of
July 2023, sufficient to provide an import cover of more than 10 months.

An increase in Foreign Portfolio Investment (FPI) flows

2021-22 2022-23 2023-24
8

4
USD Billion

-4

-8
April May June July
Source: NSDL, SEBI

Despite the weak global growth forecast, new avenues for India to expand exports can open
up

18. The WEO (July 2023) expressed optimism about inflation coming down faster than
expected, allowing for more liquidity through accommodative monetary policy, thereby
spurring world demand and, thus, trade. Continued recovery in supply chains can complement
this trend. For India, on the supply side, the RBI’s survey of the industrial outlook of the

19
manufacturing sector suggests that it is expected that production, as well as exports, are likely
to increase in Q2 of FY24. However, on the demand side, a review of the region-wise global
growth forecasts for the year 2023 by the WEO, in light of India’s destination-wise export
shares in FY23, suggests that demand for India’s exports is likely to be weaker during 2023 in
line with the general forecast of a decline in global growth. However, the decoupling of trade
between China and the United States can open up avenues for India to expand exports.
(UNCTAD, Global Trade Update, June 2023).

India achieved a great feat in slashing multidimensional poverty: 2019-21 vs.

2015-16

19. National Multidimensional Poverty Index Report, released recently by NITI Aayog,
presents results indicating a remarkable decline in the prevalence of multidimensional poverty
in India, majorly attributable to the government’s strategic focus on achieving universal access
to basic amenities. The national MPI has nearly halved from 0.117 in 2015-16 to 0.066 in 2019-
21, thereby setting India on the path of achieving SDG Target 1.2 (of reducing
multidimensional poverty by at least half), much ahead of the stipulated timeline of 2030.
Resultantly, 13.5 crore Indians are estimated to have escaped multidimensional poverty
between 2015-16 and 2019-21.

There has been a sharp decline in the headcount ratio of multidimensional poverty from 24.9 per cent
in 2015-16 to 15.0 per cent in 2019-21, accompanied by a decline in the intensity of poverty from 47.1
per cent to 44.4 per cent over the same period, driven by declining deprivations in nutrition, sanitation
facilities, cooking fuel, and housing. The largest improvements were reported in States like Bihar, MP,
UP, Odisha, and Rajasthan, with rural areas steering the plunge in the incidence of poverty. Notably,
the number of States with less than 10 per cent of people living in multidimensional poverty doubled
from 7 in 2016 to 14 in 2021.

A sharp decline in the Headcount Ratio Deline in Intensity of Multidimensional

of MPI driven by Rural Areas Poverty
2015-16 2019-21 2015-16 2019-21
35 48 47.4
47.1
30

25 45.3
Per cent

Per cent

20
44
15

10

0 40
India Rural Urban India Rural Urban
Source: NITI Aayog MPI Report 2023

20
 A decline in MPI Headcount Ratio is broadbased across states
2015-16 2019-21
60

40
Per cent

20

0
Kerala

Mizoram

Tripura

Uttar pradesh
Goa

Bihar
Punjab

Andhra Pradesh
Haryana
Tamil Nadu

Karnataka

Gujarat

Nagaland

Assam

Jharkhand
Chhattisgarh
Odisha

Meghalaya
Telangana
Sikkim

Manipur
Uttarakhand

West Bengal

Rajasthan
Himachal Pradesh

Arunachal Pradesh
Maharashtra

Madhya Pradesh
Source: NITI Aayog MPI Report 2023

Global MPI Report by UNDP10 and OPHI11 further endorses India’s accomplishment in
reducing multidimensional poverty

20. According to the Global MPI report12 by UNDP, 25 countries successfully halved their
global MPI values within 15 years, including Cambodia, China, Congo, Honduras, India,
Indonesia, Morocco, Serbia, and Vietnam. Yet, across 110 developing countries, 18 per cent of
the population is estimated to live in acute multidimensional poverty. Spatially, 47.8 per cent
of all poor people live in Sub-Saharan Africa, while 34.9 per cent live in South Asia. With
nearly two-thirds of all the poor people living in middle-income countries, digging deeper into
sub-national levels becomes crucial to identify pockets of deprivation, exemplified by the
National MPI report by NITI Aayog.

According to the Global MPI report, India has seen a remarkable reduction in poverty, with more than
139 million people exiting poverty between 2005-6 and 2019-21. The headcount ratio has declined from
27.7 per cent in 2015-16 to 16.4 per cent in 2019-21, while the intensity of deprivation has declined
from 42.0 per cent to 44.0 per cent over the same period. Consequently, the MPI value has nearly halved
from 0.069 in 2015-16 to 0.122 in 2019-21. India has outshone its South Asian peers in reducing
multidimensional poverty, despite a relatively similar prevalence of income-based poverty13.

10
United Nations Development Programme
11
Oxford Poverty and Human Development Initiative
12
Data is compiled from 110 developing countries-22 low-income countries, 85 middle-income countries and 3
high-income countries, covering 6.1 billion people, accounting for 92 per cent of the population in developing
countries.
13
Estimated using a monetary poverty line of 2017 PPP US$2.15 per day

21
 Box 3: MPI Methodology & its Utility in Addition to Consumption
Expenditure
To capture the true reality of expenditure and consumption disparities in the country,
focusing solely on income is not enough, as it may conceal the exact deprivations. Here, the
measurement of multidimensional poverty is valuable to gauge the incidence and intensity
of poverty as it is lived by revealing who is deprived of a decent standard of living and the
different disadvantages they experience.

The National Multidimensional Poverty Index (MPI) by Niti Aayog is prepared along the
lines of the UNDP methodology14, based on the globally-accepted Alkire-Foster
methodology. The index has three equally weighted dimensions: health, education, and
standard of living, split across 12 weighted indicators/deprivations. It is calculated as the
product of the headcount ratio (i.e., the incidence of poverty) and deprivation score (i.e., the
intensity of poverty, which is defined as the number of deprivations experienced). For a
household to qualify as MPI-poor, a minimum weighted deprivation score of 0.33 is
required. The index ranges from 0 to 1, with higher values implying higher poverty.

While the consumption expenditure is a telling statistic, poverty is more than having x
amount of money. The deprivations covered in MPI are very basic and hence emblematic
of real poverty, besides informing policymaking on the necessities that are lacking in the
country. Santos and Alkire (2011)15 give four main reasons for the inadequacy of relying
solely on income poverty. Firstly, income is not always a good guide to whether people have
access to bare necessities because of market imperfections. Secondly, different households
(for example, households with low education attainment or remotely located) have different
capacities to convert income into satisfaction of needs. Thirdly, income is merely a means
to ends; hence it is crucial to measure the ends itself. Fourthly, while income poverty is
unidimensional and only reveals the income/expenditure of individuals, multidimensional
poverty takes the next step to see how an individual is poor and can thereby inform
policymaking and public discourse. A mismatch between the two kinds of poverty is very
much possible and varies across countries (Alkire and Santos, 2010).16

21. Looking forward, 13.5 crore Indians escaping multidimensional poverty and graduating
to the middle class would provide a fillip to demand, generating self-sustained growth through

14
This is largely same as Global MPI by UNDP & OPHI, with 2 additional indicators, i.e., maternal health and
bank account, using the data from the National Family Health Survey.
15
Maria Emma Santos and Sabina Alkire (2011), “Alkire Training Material for Producing National Human
Development Reports: The Multidimensional Poverty Index (MPI)”, OPHI
16
Sabina Alkire and Maria Emma Santos (2010), “Acute Multidimensional Poverty: A New Index for
Developing Countries.” Background paper for the 2010 Human Development Report. UNDP (United Nations
Development Programme).

22
consumption, savings, and human capital accumulation. As per estimates from PRICE17, the
share of middle-class (with an annual household income of between 5 to 30 lakhs) in the total
population is expected to rise from 31 per cent currently to 61 per cent by 2046-47, indicating
a broad-basing of domestic demand.

Outlook

22. Going forward, while domestic consumption and investment demand are expected to
continue driving growth, global uncertainty and domestic disruptions may keep inflationary
pressures elevated for the coming months, warranting greater vigilance by Government and the
RBI. The government has already taken pre-emptive measures to restrain food inflation which,
along with the arrival of fresh stock, is likely to subside price pressure in the market soon.

23. The external sector requires monitoring for further strengthening the prospects in the
face of active pursuit of industrial policies globally. Services exports continue to do well and
are likely to continue doing so as the preference for remote working remains unabated, typically
manifested in the proliferation of Global Capability Centres. At the same time, from a medium-
term perspective, it is important to monitor the impact of new technologies, such as Artificial
Intelligence, on the external demand for Indian services exports and the consequent impact on
employment.

24. As mentioned in our last MER, downside risks to global stock markets on account of
rising bond yields and anticipation of further monetary tightening do affect stock markets in
emerging economies. Maintenance of macroeconomic stability may be returning as an
important policy objective after about a year of relative abatement of macroeconomic
headwinds.

For feedback and queries, one may write to: [email protected]

17
People Research on India's Consumer Economy (PRICE) is a not-for-profit think tank on India’s Macro
Consumer Economy and Citizen’s Environment. In the 2021 PRICE ICE360 pan-India survey, 40,000 households
were selected out of a sample of 2,00,000.

23
 Performance of High-Frequency Indicators

YTD
Year to Date Year to Date (YoY Growth, Per cent)
Data Title Unit Period/As at
the end of
2021-22 2022-23 2023-24 2021-22 2022-23 2023-24
Agriculture
Fertiliser Sales Mn Tonnes Apr-Jun 52.6 52.2 50.7 7.3 -0.8 -2.8
Domestic Tractor Sales Lakhs Apr-Jul 2.95 3.21 3.19 29.1 8.9 -0.5
Kharif Sowing Mn Hectare 11th Aug 99.7 97.3 98.0 -0.6 -2.4 0.7
Kharif Production Mn Tonnes 3rd AE 154.9 155.1 - 4.4 0.1 -
Reservoir Level Bn Cu. Metres 17th Aug 104.8 135 111.3 -4.6 28.8 -17.6
Wheat Procurement (RMS) LMT NA 433.4 187.9 262.0 11.2 -56.6 39.4
Rice Procurement (KMS) LMT 15-Aug-23 575.9 570.5 - -4.4 -0.9 -
Rainfall (Monsoon) Millimetres 16th Aug 559.3 652.9 554.7 -13.8 16.7 -15.0
Industry
8-Core Industries Index Apr-Jun 128.2 146 154.5 26.1 13.9 5.8
IIP Index Apr-Jun 121.3 136.9 143.0 44.4 12.8 4.5
Domestic Auto sales Lakh Apr-Jul 45.5 62.5 69.7 55.5 37.5 11.5
PMI Manufacturing Index Apr-Jul 52.4 54.9 57.9 38.5 4.7 5.4
Power consumption Billion kWh Apr-Jul 465.7 532.1 545.3 14.8 14.3 2.5
Natural gas production Bn Cu. Metres Apr 2.7 2.8 2.7 22.7 6.6 -2.9
Cement production Index Apr-Jun 148.2 167.3 192.1 46.5 12.9 14.8
Steel consumption Mn Tonnes Apr-Jul 330.3 364.2 406.1 65.8 10.3 11.5

24
 Year to Date Year to Date (YoY Growth, Per cent)
YTD
Data Title Period/As at
the end of 2021-22 2022-23 2023-24 2021-22 2022-23 2023-24

Inflation
CPI-C Index Apr-July 160.5 172 181.1 5.6 7.1 5.3
WPI Index Apr-July 133.4 154.2 150.4 11.9 15.6 -2.5
CFPI Index Apr-July 160 172.3 182.2 4.0 7.7 5.7
CPI-Core Index Apr-July 159.9 169.9 178.5 5.9 6.2 5.1
Services
Average Daily ETC Collection ₹ Crore Apr-Jul 85.9 138.4 169.8 112.1 61.0 22.7
Domestic Air Passenger Traffic Lakh Apr-Jun 210.4 644.4 767.3 371.1 206.2 19.1
Port Cargo Traffic Million tonnes Apr-Jul 235.1 260.4 266.5 21.5 10.7 2.4
Rail Freight Traffic Million tonnes Apr-Jul 452.1 501.6 507.7 34.3 10.9 1.2
PMI Services Index Apr-Jul 46.8 57.9 61.0 117.7 23.8 5.4
Fuel Consumption Million tonnes Apr-Jul 62.9 73.1 76.8 11.6 16.2 5.1
UPI (Value) ₹ Lakh crore Apr-Jul 21.4 41.0 59.1 131.9 91.9 44.2
UPI (Volume) Crore Apr-Jul 1123.6 2368.9 3761.3 121.7 110.8 58.8
E-Way Bill Volume Crore Apr-Jul 21.8 29.9 34.3 72.8 37.4 14.7
Fiscal Indicators
Gross tax revenue (Central Govt) ₹ Lakh crore Apr-Jun 5.3 6.5 6.7 97.1 22.4 3.3
Revenue Expenditure ₹ Lakh crore Apr-Jun 7.1 7.7 7.7 -2.4 8.8 -0.1
Capital Expenditure ₹ Lakh crore Apr-Jun 1.1 1.8 2.8 26.3 57.0 59.1
Total Expenditure ₹ Lakh crore Apr-Jun 8.2 9.5 10.5 0.7 15.4 10.8
Fiscal Deficit ₹ Lakh crore Apr-Jun 2.7 3.5 4.5 -58.6 28.3 28.3
Revenue Deficit ₹ Lakh crore Apr-Jun 1.7 2.0 1.8 -70.5 20.4 -10.4
Primary Deficit ₹ Lakh crore Apr-Jun 0.9 1.2 2.1 -82.1 37.0 68.5
GST Collection ₹ Lakh crore Apr-Jul 4.5 6.0 6.7 63.7 33.8 11.3

25
 YTD Year to Date Year to Date (YoY Growth, Per cent)
Data Title Period/As at
2021-22 2022-23 2023-24 2021-22 2022-23 2023-24
the end of
External Sector
Merchandise exports USD Billion Apr-Jul 131.1 159.3 136.2 74.2 21.6 -14.5
Non-oil exports USD Billion Apr-Jul 112.3 124.2 112.5 63.9 10.6 -9.4
Merchandise imports USD Billion Apr-Jul 173.1 247.3 213.2 91.5 42.9 -13.8
Non-oil non-gold imports USD Billion Apr-Jul 117.7 160.3 144.7 74.3 36.2 -9.7
Net FDI USD Billion Apr-June 11.6 13.4 5 -2288.3 15.9 -62.7
Net FPI USD Billion Apr-Jul -0.7 -14.0 20.2 - - -
Exchange Rate INR/USD Apr-Jul 73.9 77.8 82.2 -2.2 5.2 5.7
Foreign Exchange Reserves USD Billion 4 Aug 621.5 573.0 601.5 15.5 -7.8 5.0
Import Cover Months Aug 15.0 9.5 10.0 - - -
Monetary and Financial
Total Bank Credit ₹ Lakh crore 28th July 109.1 123.7 148 6.1 13.4 19.6
Non-Food Credit ₹ Lakh crore 28th July 108.3 123.4 147.8 6.1 13.9 19.8
10-Year Bond Yields Per cent Apr-July 6.03 7.31 7.08 -0.06 1.28 -0.23
Repo Rate Per cent 18th Aug 2023 4 5.4 6.5 0 1.4 1.1
Currency in Circulation ₹ Lakh crore July 29.5 31.9 33.3 10.4 8.1 4.4
M0 ₹ Lakh crore July 37.2 41.3 43.6 17 11 5.6
Employment
Net payroll additions under EPFO Lakh Apr-Jun 19.9 35 45.7 -544.2 75.9 30.8
Number of persons demanded
Crore July 4.2 2.5 2.3 -3 -39.4 -6.8
employment under MGNREGA
Urban Unemployment Rate Per cent Jan-Mar 9.4 8.2 6.8 0.3 -1.2 -1.4
Subscriber Additions: National
Lakh Apr-May 1.1 1.3 1.3 -2 18.2 -0.2
Pension Scheme (NPS)

26