Recent Trends in Indian Economy

• During the phase of demand contraction in the global market industrial growth is bound to suffer. Acute moderation in industrial growth started in September 2008, and although in November 2008 growth picked up but it was half of what was recorded in the same month of previous year. Growth in output of all the three main sectors namely manufacturing, mining and
electricity slowed compared to the previous year.The stimulus packages brought out from time to time have shown some impact on the industrial climate. Yet, it is still early days to comment on how the stimulus measures would work on the ground. It seems that the industry will take some more time to absorb the feeders.Going by the use based classification we see negative growth being posted by the capital goods segment. The remaining segments, the basic and intermediate were saw growth decelerating in November 2008. Growth in the consumer durables segment surpassed the growth rate recorded in the previous year. Higher growth in production could be on account of higher expected sales during the approaching festive season.
Few sectors that posted a surge in output were food products, beverages and tobacco, jute, textiles, rubber, non metallic items, and basic metals sectors . In 2008-09 the food grain production may fall short of the target 233 MT for 2008-09 , as the received rainfall is 32% below the normal (cumulatively,Oct 2008 to December 2008 ) during the North-east monsoon season.Further, rainfall received during the south west monsoon season too has been moderate.
• The laggards among the six core infrastructure industries in November 2008 included finished steel, crude petroleum, petroleum refinery and power. Growth was seen to accelerate in November 2008 in the coal sector compared to the corresponding period of previous year.
• The headline inflation rate dropped to an average of 6.5% in December 2008 compared to 8.66% posted in the same month of previous year. The falling oil prices mainly contributed to softening of inflation.