Current State

Of
Indian Economy
May
2007

Federation of Indian Chambers of Commerce and Industry

New Delhi
 Report on Indian Economy

Overall Economy

The released by CSO shows that Indian economy grew by 9.4% during 2006-07. In absolute
terms the GDP of the country at constant prices stood at Rs 2848157 crores for 2006-07
showing an annual rise of 9.4% over the previous year. The revised annual rise in GDP was
slightly higher than the 9.2 % (for 2006-07) estimated in February 2007. In 2006-07 GDP
growth was mainly fueled by Industry and services that grew at 10.9% and 11.0 %
respectively contributed 26.6 % and 54.9 % to the total GDP growth. However, during the
year 2006-07 agriculture and allied services failed to maintain the growth momentum of
2005-06.

Industrial Growth

Indian industry achieved an impressive growth in the last fiscal 2006-07. The overall
industrial production grew at 11.3 % in 2006-07 as against the growth of 8.2 % in the
previous fiscal. The growth was more manufacturing sector led, which grew by 12.3 % in
2006-07 as compared to 9.1% a year ago. Mining and electricity sectors too pushed the
overall industrial growth posting a high growth of 5.1% and 7.2 % in 2006-07 respectively as
against the 1.0% and 5.3 % growth respectively in 2005-06.

Data as per the use-based classification shows that basic and capital goods – a proxy for
investment demand have clocked growths of 10.2% and 17.7% respectively in 2006-07 in
contrast to 6.7% and 15.8% registered during the previous fiscal. However, the consumer
durables saw a slight slowdown in 2006-07 on account of lower growths in both the
consumer durables and non-durables. During the last fiscal production of consumer goods
grew at 10 % as against the 12% growth in the previous fiscal.

In 2006-07, among the 16 industry sectors, 12 industry sectors swept past the growths
recorded in the previous fiscal. Production gr owth slid for 2 industry sectors and remained
low for the remaining sectors. The sectors that improved their performance were basic
metals, transport equipment, cotton textiles, machinery and equipment, wood, non metallic
mineral products, rubber, metal products and parts, manmade textiles, basic chemicals,
paper and food products.

Six core infrastructure industries

During the year 2006-07 the six core infrastructure industries grew at a high of 8.6% as
compared to the 6.2% increase a year before. This growth arrived on account of better
production numbers across the six core industries. The four infrastructure industries, crude
petroleum, petroleum refinery, power and coal posted growths of 5.6%, 12.6 %, 7.3% and
5.9% respectively exceeding the growths recorded in the previous fiscal, maintaining the
overall infrastructure growth.

1
However growth in the production of finished steel and cement slowed during the fiscal
2006-07. Production of finished steel was observed to speed-up in the last two months of
2006-07 compared to the corresponding months of 2005-06..

Telecommunication

Telephone connections in the country crossed the 200 million mark and an addition of about
67 million phones was made during the year 2006-07. Today the total telephone connections
in the country stand at 206.8 million, of which 139.8 million come from mobile phones and
the remaining 40.7 million connections from the landline connections. March 2007 saw
mobile phones making lowest ever addition during the year; additions of just 3.53 million
phone connections due to insistence by the Government to ensure verification of
subscribers

Tele density went up by 43 % touching 18.31 in March 2007 against the density recorded in
March 2006.

Stock Market Trends

The mood of the market is such that negative news triggers the adverse index movements
while the positives leave markets unchanged..

We have seen that the attempt of the central bank’s monetary tightening measures, hike in
the CRR and the lending rates to curb inflation rose concerns among the investor
community. The fall in both the indices BSE and NSE seen in the middle of March through
April 2007 was in response to the growing concern over the expensive funds. The BSE
index plunged by 4.7 percentage points during March end 2007over the previous month’s
close and NSE too slipped by 4.9 percentage points. However the stock markets have
shown resilience in May 2007 and the host of corrective measures by the Central Bank
resulted into bringing inflation to desired levels.

Inflation Trends

The overall WPI based inflation for 2006-07, averaged at 5.4% as against the 4.4 % in the
2005-06. The upper limit of the targeted inflation for 2006-07 was breached in the last
quarter of 2006-07, primarily on account of rising prices of primary articles and
manufactured items. However, inflation was found to average below the set range of 5-5.5 %
for 2006-07.

For the current fiscal (2007-08) RBI has kept the target inflation rate around 4.5 %. The
recent counter -inflation steps taken by the go vernment helped in cooling the inflation rate
that was soaring above 6%.

2
Past weeks saw YoY, WPI based inflation gr adually setting closer to 5%. The measures
applied by the RBI have checked the prices of some items falling under the broad
categories - primary articles and manufactured products, further helping in bringing down
the inflation rate.

The RBI employed monetary tightening measures to absorb the excess liquidity in the
market impacting the prices of the manufactured items. The government has regulated
exports of some identified commodities addressing the supply crunch in various primary
articles. Monsoon would also help in easing the pressures on the supply side of some
primary articles.

Monetary Indicators

The Broad money growth for the last fiscal 2006-07 stood at 20.7 % and was slightly lower
than the growth of M3 during the same period a year ago. Bank credit to the government
rose substantially during the year-end 2007 compared to the same period of last year. We
observed slowdown in the bank credit to the commercial sector. However, the net foreign
exchange assets of the banks spiked by 28.9% as against 11.1% in the same period a year
ago. Scale up in investments on government securities by 10 % was also seen during the
year.

Impact of the hike in the rates of long term deposits was reflected in the numbers on
aggregate deposits that went up by 23 % in 2006-07 compared to 18% in the corresponding
period of the previous year. Credit off take decelerated during the year compared to last
year.

Fiscal Management

Gross tax revenue collections grew at a rate much higher in 2006-07 than the previous year.
Data up to March 2007 shows gross collections increased at 29.3% as against the 20 %
increase in the previous year. Corporation tax and Income tax both contributed 45 % to the
total tax collected and grew at 41% and 35.4% respectively and this was much higher than
the increase in the tax collected a year ago.

Among the indirect taxes we saw collections from customs maintain the rise, growing at
32.7 %, although collections from the central excise was not as much as in the same period
of previous year.

In 2006-07 the Government was seen to achieve the targeted fiscal deficit. It touched a
level of Rs 146348 crore representing 100.10 % of the targeted. Comparing the numbers of
2006-07 with that of the previous year’s, we see numbers of 2006-07 close to the targeted
figure.

3
Foreign Trade

Indian trade numbers available for the year 2006-07 shows Indian exports growing at 20.9 %
as against the high growth of 24 % in 2005-06 in US dollar terms. Quarterly trends in trade
shows Indian exports strongly growing in the first two quarters of 2006-07, however exports
took a hit from the middle of quarter three. Indian merchandise exports was able to achieve
the targeted , USD 125 billion for 2006-07. Indian exports were reeling under pressure since
the third quarter of 2006-07 due to rising prices of raw materials and later due to
appreciating Indian Rupee hitting the Indian business community in quick succession.
However we saw that Indian imports soared at 26.4% during the year, further widening the
trade deficit.

The strong Indian Rupee against the green back came as a breather for the importer,
reducing the import bill, whereas the appreciating Rupee took exporters in its grip.

Capital Flows

Capital Inflows for the period April-February 2006-07 have swept past the inflows received
during the entire 2005-06. Direct investment contributed USD 17.1 billion during April-
February period of 2006-07; this was much higher than USD 7.7 billion received in the
entire 2005-06. Portfolio investments however remained lower in 2006-07 than the
investments in the previous year. During the year 2006-07, the amount raised by the Indian
corporates through GDR and ADR route has been much higher ( USD 3.7 billion) than that
was raised in the previous year (USD 2.5 billion ).

Foreign exchange reserves

Foreign exchange reserves crossed the USD 200 billion mark in the first week of April 2007.
Forex reserves stood at USD 180 billion in December 2006 and since then a surge in the
Forex was observed. The main constituent of the Forex, Foreign Currency Assets touched
USD 195.8 billion in the second week of April 2007. Gold , SDRs and reserve position in
IMF however did not show much movement. The increase in the foreign currency assets was
largely due to the effect of appreciation in the non – US currencies held in reserves ( Euro,
Yen and Sterling). The piling up of reserves is a strain for the central bank, as it is seen
that interest on securities exceeds the rate of return on reserves and therefore some steps
need to be taken to ease the pressure due to forex buildup.

Trends in Exchange rate

Appreciation in Indian Rupee against the greenback started in March 2007. This rise in
Rupee value was on account of an inflow in the foreign capital, in the form of FDI, ECB and
Portfolio investments. To maintain the exch ange rate within a range the central bank has
been buying dollars from the market but due to inflationary pressures, RBI slightly

4
distanced itself from the forex market. RBI’s adoption of passive approach has made Rupee
appreciate to levels that are pro imports.

Indian Rupee began to appreciate since the middle of March 2007, it continued to slide
below Rs 44.00 and slip to an alarming below-forty one level towards the end of April 2007,

It has been found that Indian Rupee against the Euro too behaved similar to its movement
vis-à-vis USD, Indian Rupee attained a level of Rs 55-54 in June 2007 from 58-57 in March
2007, appreciating by 6.5% . Indian Rupee against the Euro averaged at Rs 55.11 in May
2007 up from an average of Rs 57.00 in the previous month.

5
 Contents

Title Page

1 Overall Economy and Industrial Growth 7

2 Core Infrastructure Industries 9

3 Telecom 10

4 Trends in inflation 11

5 Monetary indicators 14

6 Stock Market trends 17

7 Fiscal management 18

8 Foreign trade 20

9 Capital inflows 26

10 Foreign exchange reserves 27

11 Trends in exchange rates 28

6
 LIST OF TABLES

Table 1.1 Overall Economy and Industrial Growth 8

Table-1.2 Growth Rate of sectors by industry activity 8

Table-2.1 Growth in six core infrastructure industries-1 9

Table-2.2 Growth in six core infrastructure industries-2 9

Table-3.1 Growth of telecommunication network 10

Table-3.2 Monthly addition to the mobile phone network 10

Table-4.1 Monthly trends in Wholesale Price Index: 1-.9 11

Table-4.10 Monthly trends in consumer prices 13

Table-5.1 Monetary indicators 14-16

Table-6.1 Month trends in major stock market indices 17

Table-7.1 Trends in tax collections of central government 18

Table-7.2 Trends in central government finances 19

Table-8.1 Monthly trends in growth of merchandize trade 20

Table-8.2 Export growth of important commodities 20
Table-8.3 Growth of imports of important commodities 21
Table-8.4 Growth in major export markets 23
Table-8.5 Growth of imports from major markets 24

Table-9.1 Monthly trends in foreign investments 26

Table-9.2 Growth of non resident deposits with commercial banks 26

Table-10.1 Monthly trends in foreign exchange reserves 27

Table-11.1 Monthly trends in exchange rate of Rupee 28

7
1 Overall Economy and Industrial Growth

1.1 – GDP growth ( at 1999-2000 prices )

Annual growth ( in %) % share in GDP

2005-06 2006-07 2005-06 2006-07
Agriculture 6.0 2.7 19.7 18.5
Industry 9.6 10.9 26.2 26.6
Services 9.8 11.0 54.1 54.9

1.2 - GROWTH OF INDUSTRY: RECENT TRENDS - April- March (in percentage)

Weights 2005-06 2006-07

Industry 100 8.2 11.3

Mining 10.2 1.0 5.1
Manufacturing 79.4 9.1 12.3
Electricity 10.5 5.3 7.2

Basic 35.6 6.7 10.2

Intermediate 26.5 2.5 11.7
Capital 9.3 15.8 17.7

Consumer Goods 28.7 12.0 10.0

Consumer non Durables 23.3 11.0 10.3
Consumer Durables 5.4 15.3 9.0

Textile Products 2.5 16.3 11.2

Beverages & Tobacco 2.4 15.7 11.3
Basic Metals 7.5 15.8 22.8
Basic Chemicals 14 8.3 9.2

Machinery & Equipment 9.6 12.0 14.0

Transport Equipment 3.9 12.7 14.9
Cotton Textiles 5.5 8.5 14.8
Leather 1.1 -4.8 0.3

Paper 2.6 -0.9 8.3

Food Products 9.1 2.0 8.2
Non metallic mineral products 2.8 11.0 12.8
Rubber , Plastic , Petrol and Coal 9.1 4.3 12.7

Jute and Other fibre textiles 0.6 0.5 -17.2

Wood 2.7 -5.7 29.1
Manmade textiles, wool and silk 2.3 0.0 8.2
Metal Products and parts 2.8 -1.1 11.4
Source: Central Statistical Organization

8
2 Core Infrastructure Industries

Table-2.1: Growth in six-core infrastructure industries (% change) April- March

All
infrastructure Finished steel Cement Crude petroleum
industries
2005- 2006- 2005- 2006- 2005- 2006- 2005-
06 07 06 07 06 07 06 2006-07
April 6.0 6.7 16.9 8.6 7.9 11.7 -0.4 -1.9
May 8.1 5.1 11.1 6.4 15.3 6.3 -1.9 1.0
June 8.3 6.2 21.9 5.6 13.3 11.2 0.4 1.2
July 2.3 9.0 10.4 8.0 3.6 13.3 -4.0 4.1
August 5.7 5.5 7.8 6.3 17.8 2.2 -16.1 11.9
September 1.8 9.9 5.9 8.4 4.9 15.9 -7.3 9.3
October 7.4 9.0 6.9 7.1 8.6 9.1 -7.1 9.3
November 5.7 9.5 14.8 9.0 7.8 11.5 -8.6 10.1
December 7.5 8.3 16.7 9.7 13.4 7.6 -8.1 10.6
January 8.2 8.7 14.3 10.4 15.4 6.8 -4.7 4.7
February 9.1 7.2 12.4 13.5 16.3 5.8 -2.0 4.9
March 7.1 10.0 10.9 15.0 17.0 5.5 2.5 3.2
April-March 6.2 8.6 11.2 10.9 12.4 9.1 -5.3 5.6
Source: Ministry of Industry

Table-2.2: Growth in six-core infrastructure industries (% change)

Petroleum refinery Coal Power

2005-06 2006-07 2005-06 2006-07 2005-06 2006-07
April -7.7 13.5 8.2 3.4 3.0 5.6
May -6.0 11.9 11.2 8.1 10.3 4.7
June -1.1 10.4 3.2 12.3 9.3 4.5
July 3.6 12.6 -1.7 10.6 -1.0 8.6
August 2.5 12.2 10.6 0.2 7.9 3.7
September 5.0 13.5 4.6 -0.6 -0.6 11.5
October -2.5 18.0 5.8 6.1 7.4 9.7
November 1.3 16.4 6.4 4.9 3.4 8.8
December 9.2 6.1 6.6 2.9 3.4 9.1
January 5.5 9.0 8.2 10.0 6.4 8.5
February 6.5 6.8 6.9 6.6 9.1 3.3
March 9.4 13.4 7.4 10.6 3.4 8.0
April- March 2.4 12.6 6.6 5.9 5.1 7.3
Source: Ministry of Industry

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3 Telecommunications

Table-3.1 - Growth of the telecommunication network (in million) April- March

Fixed line (including WLL Cellular mobile phones Total phones

fixed) (including WLL mobile)
1996-97 14.5 0.3 14.9
1997-98 17.8(3.3) 0.9(0.5) 18.7(3.8)
1998-99 21.6(3.8) 1.2(0.3) 22.8(4.2)
1999-00 26.8(5.2) 1.9(0.7) 28.7(5.8)
2000-01 33.0(6.2) 3.6(1.7) 36.6(7.9)
2001-02 39.1(6.2) 6.4(2.9) 45.6(9.0)
2002-03 41.5(2.4) 13.0(6.6) 54.5(8.9)
2003-04 42.6(1.1) 33.6(20.6) 76.2(21.7)
2004-05 45.9(3.3) 52.2(18.6) 98.1(21.9)
2005-06 49.7(3.8) 90.0(37.8) 139.8(41.7)
2006-07
(April-March) 40.71(-9.0) 166.0(76.0) 206.8(67.0)
Source: Telecom Regulatory Authority of India

Table-3.2: Monthly addition to the mobile phone network (in million)

2002 2003 2004 2005 2006 2007

January 0.73 1.64 1.77 4.69 6.78
February 0.79 1.67 1.67 4.28 6.20
March 0.95 1.91 0.73 5.03 3.53
April 0.28 0.64 1.37 1.44 3.88
May 0.29 2.26 1.33 1.70 4.25
June 0.35 1.42 1.43 1.98 4.78
July 0.36 2.31 1.74 2.44 5.28
August 0.49 1.79 1.67 2.74 5.90
September 0.37 1.61 1.84 2.48 6.07
October 0.53 1.67 1.51 2.90 6.71
November 0.72 1.90 1.56 3.51 6.79
December 0.80 1.90 1.95 4.46 6.40
Source: Telecom Regulatory Authority of India

1
WLL subscribers of all the service providers are now counted as mobile subscribers by TRAI

10
4. Inflation Trends

Table-4.1: Trends in wholesale prices-1 (% change)

All commodities (100) Primary food articles (15.4)

Growth Contribution Growth Contribution
2006- 2007- 2006- 2007- 2006- 2007- 2006- 2007-
07 08 07 08 07 08 07 08
April 3.9 6.0 100 100 4.7 10.3 18.9 26.5

Table-4.2: Trends in wholesale prices –2 (% change)

Food grains (5.0) Vegetables (1.5)

Growth Contribution Growth Contribution
2006- 2007- 2006- 2007- 2006- 2007- 2006- 2007-
07 08 07 08 07 08 07 08
April 8.6 8.8 11.2 7.9 -2.4 24.8 -0.8 6.2

Table-4.3: Trends in wholesale prices-3 (% change)

Primary non food articles (6.1) Minerals (0.5)

Growth Contribution Growth Contribution
2006- 2007- 2006- 2007- 2006- 2007- 2006- 2007-
07 08 07 08 07 08 07 08
April -1.6 16.1 -2.5 16.4 49.1 12.8 6.4 1.1

Table-4.4: Trends in wholesale prices-4 (% change)

Fuel (14.2) Mineral oil (7)

Growth Contribution Growth Contribution
2006- 2007- 2006- 2007- 2006- 2007- 2006- 2007-
07 08 07 08 07 08 07 08
April 8.2 1.1 30.4 2.6 11.8 0.6 21.5 0.7

Table-4.5: Trends in wholesale prices-5 (% change)

Manufactured goods (62.7) Food products (11.5)

Growth Contribution Growth Contribution
2006- 2007- 2006- 2007- 2006- 2007- 2006- 2007-
07 08 07 08 07 08 07 08
April 1.9 5.7 31.7 59.5 1.7 5.9 5.1 11.3

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Table-4.6: Trends in wholesale prices-6 (% change)

Sugar, khandsari, gur (3.9) Edible oil (2.8)

Growth Contribution Growth Contribution
2006- 2007- 2006- 2007- 2006- 2007- 2006- 2007-
07 08 07 08 07 08 07 08
April 6.3 -12.3 6.4 -8.0 -2.7 14.7 -1.9 6.9

Table-4.7: Trends in wholesale prices-7 (% change)

Textiles (9.8) Chemical products (11.9)

Growth Contribution Growth Contribution
2005- 2006- 2005- 2006- 2005- 2006- 2005- 2006-
06 07 06 07 06 07 06 07
April -0.1 1.1 -0.3 1.8 3.1 2.9 9.7 5.8

Table-4.8: Trends in wholesale prices-8 (% change)

Drugs & medicines (2.5) Cement (6.2)

Growth Contribution Growth
2006- 2007- 2006- 2007- 2006- 2007- 2006- 2007-
07 08 07 08 07 08 07 08
April 7.2 5.8 4.7 2.4 16.3 10.5 26.3 10.9

Table-4.9: Trends in wholesale prices-9 (% change)

Iron and steel (3.6) Machinery & equipment (8.4)

Growth Contribution Growth Contribution
2006- 2007- 2006- 2007- 2006- 2007- 2006- 2007-
07 08 07 08 07 08 07 08
April -5.5 7.7 -5.1 4.6 3.3 7.9 7.1 11.2
Source : Reserve Bank of India

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Table-4.10: Monthly trends in consumer prices (% change)

CPI-IW CPI-UNME CPI-AL CPI-RL

2005- 2006- 2005- 2006- 2005- 2006- 2005- 2006-
06 07 06 07 06 07 06 07
April 5.0 5.0 4.2 5.2 3.0 5.6 3.0 5.2
May 3.7 6.3 4.2 5.8 3.0 6.4 3.0 6.4
June 3.3 7.7 3.9 6.5 2.7 7.2 2.7 7.2
July 4.1 6.7 4.8 5.7 3.6 6.3 3.8 5.9
August 3.4 6.3 4.3 6.1 3.2 6.5 3.2 6.2
September 3.6 6.8 4.8 6.6 3.2 7.3 3.2 7.0
October 4.2 7.3 4.5 7.2 3.2 8.4 3.2 8.1
November 5.3 6.3 5.5 6.7 4.7 8.3 4.6 8.0
December 5.6 6.9 5.7 6.9 4.7 8.9 4.9 8.3
January 4.7 6.7 5.0 7.4 4.7 9.5 4.7 8.9
February 4.9 7.6 4.8 7.8 7.2 9.8 4.7 9.5
March 4.9 6.7 5.0 NA 5.3 9.5 5.3 9.2
April-March 4.4 6.7 NA NA 4.0 7.8 3.9 7.5

Source: Ministry of Labor, Center for Monitoring Indian Economy

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5 MONETARY INDICATORS

Table-5.1: Monetary sector indicators

Variation in M3 (Rs crore) Variation in M3 (%)

2005-06 2006-07 2005-06 2006-07
April 84800 65099 3.8 2.4
May 95649 51126 4.2 1.9
June 108666 57542 4.8 2.1
July 43080 109799 1.8 4.0
August 68428 150820 3.0 5.5
September 149905 212882 6.4 7.8
October 156396 261161 6.7 9.6
November 172224 222433 7.4 8.1
December 195009 289087 8.4 10.6
January 230189 380403 9.9 13.9
February 277448 458241 11.9 16.8
March 478098 566096 21.2 20.7
Variation in net bank credit to Variation in net bank credit to
government (Rs crore) government (%)
2005-06 2006-07 2005-06 2006-07
April 19058 28641 2.5 3.7
May 12453 18429 1.6 2.4
June 9339 15609 1.2 2.0
July 22108 34489 3.0 4.5
August 15557 27852 2.1 3.6
September 12382 32819 1.7 4.3
October 23990 39678 3.2 5.2
November 24811 37129 3.3 4.8
December 6660 20264 0.9 2.6
January 38648 39672 5.2 5.2
February 34935 50355 4.7 6.5
March 9828 59108 1.3 7.7
Variation in bank credit to Variation in bank credit to
commercial sector (Rs crore) commercial sector (%)

2005-06 2006-07 2005-06 2006-07

April 28389 -10573 2.2 2.5
May 40236 -8743 3.1 -0.5
June 61245 21898 4.8 1.3
July 10073 25894 0.6 1.9
August 48223 76854 3.6 4.5
September 128947 155980 9.7 9.2
October 138885 157597 10.4 9.8
November 159316 186019 12.0 11.0
December 190678 236849 14.3 14.0
January 240169 302764 18.0 17.9
February 275797 352913 20.7 20.9
March 412755 430287 32.2 25.4
Variation in net foreign Variation in net foreign
exchange assets of banks (Rs exchange assets of banks (%)
crore)

14
 2005-06 2006-07 2005-06 2006-07
April 301 -46064 - 6.5
May -10474 63959 -1.6 9.0
June -13378 71845 -2.1 10.1
July -20195 87888 -3.1 12.1
August 7593 92075 1.7 12.7
September 12036 69479 1.9 9.6
October 30310 66333 4.7 9.1
November 33548 85678 5.2 11.8
December 39738 105533 6.1 14.5
January 7910 113834 1.2 15.7
February 24651 181829 3.8 25.0
March 76939 204124 11.1 28.9
Variation in non-monetary Variation in non-monetary
liabilities of banks (Rs crore) liabilities of banks (%)
2005-06 2006-07 2005-06 2006-07
April -39065 -968 -8.8 -0.2
May -53387 22520 -12.1 4.9
June -51077 51810 -11.5 11.3
July -14531 63504 -3.6 13.6
August 2680 46025 0.7 9.9
September 4753 45573 1.2 9.8
October 38017 41352 9.4 8.9
November 46620 47843 11.6 10.3
December 43260 72859 10.7 15.7
January 57755 75166 14.3 16.1
February 59183 126156 14.7 27.1
March 22730 126898 5.1 27.0

Variation of aggregate deposits Variation in aggregate deposits

of SCB (Rs crore) of SCB (%)

2005-06 2006-07 2005-06 2006-07

April 73013 49275 4.3 2.4
May 78671 27214 4.6 1.3
June 92886 36450 5.5 4.7
July 47204 96469 2.6 4.6
August 59281 125612 3.3 6.0
September 137732 193333 7.7 9.2
October 128652 183476 7.2 8.7
November 135396 222323 7.6 10.5
December 156130 279343 8.7 13.2
January 185283 317655 10.4 15.1
February 212488 383805 11.9 18.2
March 323913 485210 18.1 23.0
Variation in investments of SCB Variation in investments of SCB
(Rs crore) (%)
2005-06 2006-07 2005-06 2006-07
April 1742 23452 0.2 3.2
May 9677 29354 1.3 4.1
June -879 26319 -0.1 3.7
July 7213 48309 1.0 6.7
August 21265 38911 2.9 5.4
September 16326 35309 2.2 4.9

15
October 14443 42882 2.0 6.0
November 1971 47906 0.3 6.7
December -39829 27600 -5.4 3.8
January -19190 40103 -2.6 5.6
February -30212 84481 -4.1 11.8
March -22809 74706 -3.1 10.4
Variation in total credit of SCB Variation in total credit of SCB
(Rs crore) (%)
2005-06 2006-07 2005-06 2006-07
April 27553 -9303 2.5 -0.6
May 40644 -13962 3.7 -0.9
June 60975 16091 5.5 1.1
July 33730 49840 2.9 8.3
August 49622 79042 4.3 5.2
September 124029 147657 10.8 9.8
October 135115 148490 11.7 9.9
November 155032 176653 13.5 11.7
December 205710 259267 17.9 17.2
January 234054 289038 20.3 19.2
February 270150 339326 23.4 22.5
March 354868 416115 30.8 27.6
Variation in food credit of SCB
(Rs crore)

2005-06 2006-07
April 644 -3433
May 4606 -1628
June 3683 607
July -461 -4615
August 97 -4325
September -467 -7233
October -211 -4058
November 2439 -2011
December 1904 1470
January -64 2812
February 1432 4299
March 675 5930
Variation in non-food credit of
SCB (Rs crore)
2004-05 2005-06
April 26909 -5870
May 36038 -12334
June 57092 15484
July 34191 54455
August 49525 83367
September 124496 154889
October 135326 152548
November 152593 178664
December 203806 257797
January 234118 286226
February 268718 334027
March 354193 410285
Source: Reserve Bank of India

16
6 STOCK MARKET TRENDS

Table-6.1: Monthly trends in stock market indices (beginning of month figures)

Date BSE Sensex % Change S&P CNX NIFTY %

Change
1.1.05 6679 7.2 2115 7.8
1.2.05 6552 -1.9 2058 -2.7
1.3.05 6651 1.5 2084 1.3
1.4.05 6605 -0.7 2068 -0.8
1.5.05 6195 -6.2 1917 -7.3
1.6.05 6730 8.6 2088 8.9
1.7.05 7210 7.1 2211 5.9
1.8.05 7669 6.4 2318 4.8
1.9.05 7876 2.7 2406 3.8
1.10.05 8492 7.8 2574 6.9
1.11.05 7944 -6.5 2387 -7.3
1.12.05 8944 12.5 2699 4.8
2.01.06 9390 5.0 2835 5.0
1.02.06 9859 5.0 2971 4.8
1.03.06 10566 7.7 3123 5.1
3.04.06 11564 9.4 3473 11.2
1.05.06 12128 4.9 3605 3.8
1.06.06 10071 -17.0 2962 -17.8
3.07.06 10695 6.1 3150 6.3
1.08.06 10751 0.5 3147 -0.1
1.09.06 11778 9.5 3435 9.1
3.10.06 12366 5.0 3569 3.9
1.11.06 13033 5.4 3767 5.5
1.12.06 13844 6.2 3997 6.1
2.01.07 13942 0.7 4007 0.3
1.02.07 14267 2.3 4137 3.2
1.03.07 13159 -7.7 3811 -7.8
30.03.07 13072 -0.7 3821 0.3
2.04.07 12455 -4.7 3633 -4.9
Source: Reserve Bank of India

17
7 FISCAL TRENDS

Table-7.1: Trends in cumulative tax collections of central government (%)

Gross tax revenue Corporation tax Income tax

2005-06 2006-07 2005-06 2006-07 2005-06 2006-07
April 46.4 128.3 -30.0 238.6 -20.8 40.5
May 29.6 40.0 -71.0 271 -15.3 35.4
June 25.9 32.1 182.2 50.0 -21.7 29.3
July 22.4 35.0 117.3 80.6 -15.4 31.9
August 23.2 32.0 120.1 71.2 -9.9 27.3
September 21.9 30.5 66.8 49.2 -16.8 24.3
October 20.8 29.8 49.8 47.5 -4.5 28.5
November 19.6 31.1 17.1 53.8 22.1 27.8
December 18.8 32.2 21.7 55.2 14.7 27.0
January 20.7 31.5 20.5 50.1 24.5 27.8
February 21.6 29.6 26.9 44.1 19.4 29.9
March 20.0 29.3 20.3 41.6 16.8 35.4
Customs Excise duties Other taxes
2005-06 2006-07 2005-06 2006-07 2005-06 2006-07
April 33.8 17.9 85.6 -42.7 -2.6 69.6
May 38.0 25.8 2.5 0.51 25.6 75.1
June 38.6 31.9 4.0 6.6 43.7 81.0
July 31.6 32.7 6.5 6.2 78.4 69.3
August 29.1 33.1 6.3 6.9 87.6 66.4
September 24.1 32.7 10.4 7.4 97.0 63.7
October 21.0 31.3 6.3 7.1 107.7 58.4
November 18.8 33.6 7.9 6.7 105.3 61.7
December 16.0 32.9 8.7 6.8 95.9 64.3
January 14.8 33.4 9.9 7.7 101.6 60.9
February 13.1 34.4 11.7 5.8 100.3 59.7
March 12.9 32.7 12.2 5.8 100.2 NA
Source: Controller General of Accounts

18
Table-7.2 Trends in central government finances: April-March

Actual to budget estimates

(%) Growth (%) YoY
2005-06 2006-07 2005-06 2006-07
Revenue receipts 343883 433715 12.7 26.1
Tax revenue 269992 351494 20.1 30.2
Non tax revenue 73891 82221 -8.0 11.3
Non debt capital
13677 6484 -79.1 -52.6
receipts
Recovery of loans 12097 5950 -80.1 -50.8
Other receipts 1580 534 -64.3 -66.2
Total receipts 357560 440199 -3.5 23.1
Non plan expenditure 363770 412960 -0.7 13.5
On revenue account 326635 371644 9.9 13.8
On capital account 37135 41316 -46.2 11.3
Plan expenditure 140138 170032 6.0 21.3
On revenue account 111892 142481 27.9 27.3
On capital account 28246 27551 -36.8 -2.5
Total expenditure 503908 582992 1.1 15.7
Fiscal deficit 146348 142793 14.4 -2.4
Revenue deficit 94644 80410 19.0 -15.0
Primary deficit 14591 -6760 916.8 -146.3
Source: Controller General of Accounts

19
8 FOREIGN TRADE

Table-8.1: Monthly trends in growth of merchandize trade (% change)

Exports Oil imports Non-oil imports Total imports

2005- 2006- 2005- 2006- 2005- 2006- 2005- 2006-
06 07 06 07 06 07 06 07
April 17.2 27.0 41.4 34.6 56 14.5 51.5 20.5
May 22.3 29.6 29.8 27.3 50.1 19.2 35.5 21.6
June 18.9 40.1 28.8 55.6 17.8 9.8 30 23.9
July 26.8 40.6 29.7 32.8 31.8 20.4 33.2 42.8
August 24.9 41.1 53.9 27.2 33.3 4.4 32.4 32.2
September 7.5 41.2 71.1 25.8 -6.5 24.3 17.2 49.1
October 27.5 19.0 53.2 55.4 24 28.9 35.9 39.3
November -11.3 57.0 34.9 48.3 -2.6 40.4 8.6 36.5
December 16.1 7.7 63.9 43.3 1.5 31.2 8.4 21.9
January 21.4 5.5 58.9 15.0 9.5 27.3 10.6 23.2
February 12.3 7.8 72.5 -1.1 21.3 39.7 21.3 25.1
March 20.6 8.8 26.7 9.3 16.5 16.5 18.6 14.4
April-March 24.7 20.9 46.8 30.3 25.5 24.7 31.5 26.4
Source: Ministry of Commerce

Table-8.2: Growth of major export products

Exports in Exports in Growth in Growth in

April – April – April – April –
December December December December
2005-06 2006-07 2005-06 2006-07
($ Million) ($ Million) (%) (%)
Primary Products 8,355.50 9,717.10 34.7 16.3
Agriculture & allied
products 5,247.70 6,355.50 24.9 21.1
1. Tea 233.6 269.1 –1.5 15.2
2.Coffee 203.8 260.7 62.3 27.9
3. Rice 799.7 828.6 34.3 3.6
4. Wheat 120.2 6.8 –50.9 –94.3
5. Cotton 151.4 366.6 214.3 142.1
6. Tobacco 171.7 196.6 14 14.5
7. Cashew 358.7 319.6 25.9 –10.9
8. Spices 272.5 356.2 14 30.7
9. Oil meal 361.4 441.1 10 22
10. Marine products 882.1 937.7 29.7 6.3
11. Sugar & molasses 19.2 525 11 2637

Ores & minerals 3,107.80 3,361.60 55.5 8.2

1.Iron ore 1,928.70 1,776.50 62 –7.9
2.processed minerals 591.3 762.2 42.8 28.9

Manufactured goods 40,692.60 46,336.10 29.8 13.9

A Leather & mfrs. 1,559.50 1,625.00 18.1 4.2
B Chemicals & related 7,926.30 9,088.10 29.3 14.7

20
 1.Basic chemicals
Pharmaceuticals 4,780.80 5,583.20 35.8 16.8
2.plastics & linoleum 1,620.10 1,766.60 9.3 9
3.Rubber, glass 1,149.10 1,310.00 31.5 14
4.Residual chemicals &
allied 376.3 428.4 49.9 13.8
C. Engineering goods 11,761.50 16,045.00 37.4 36.4
1.Manufacture of metals 2,320.10 2,783.30 33.3 20
2. Machinery &
instruments 2,739.20 3,640.00 53.7 32.9
3. Transport equipments 2,407.20 2,722.70 57.9 13.1
4. Iron & steel 1,981.80 2,934.80 10.8 48.1
5. Electronic goods 1,153.60 1,537.90 17 33.3
D. Textiles 9,037.60 9,533.80 23.7 5.5
1. Cotton, yarn, fabrics 2,197.90 2,366.60 16.6 7.7
2. natural Silk 257.4 239.7 14.8 –6.9
3. Manmade Yarn,
fabrics, made ups 1,101.20 1,205.60 –2.0 9.5
4. Manmade staple 43.5 93.8 62.3 115.9
5. Woolen yarn 50.8 49.4 32.6 –2.8
6. Ready made
Garments 4,667.50 4,820.20 34.2 3.3
7 Jute 173.7 169.2 17.4 –2.6
8. Coir 78.6 80.9 40.7 2.9
9. Carpets 467 508.4 44 8.9
E. Gems & jewelry 9,547.80 9,132.30 29.6 –4.4
F handicrafts 288.9 190.7 27.3 –34.0
G Petroleum products 6,119.00 11,308.50 67 84.8
Others 1,502.10 3,633.10 33.2 141.9
Total exports 56,669.20 70,994.80 33.9 25.3

Table-8.3: Growth of imports of important commodities ($ million)

Imports in Imports Growth Growth in

April – in April – in April – April –
December 2005- December 2006- December December
06 ($ Million) 07 ($ Million) 2005-06 2006-07
(%) (%)
1. Bulk imports 34,700.60 49,389.40 45.5 42.3
A. Petroleum & products 24,392.20 35,120.80 41.4 44

B. Bulk consumption goods 1,881.50 1,964.70 5.1 4.4

1. Wheat 0 189.3 — —
2.Cereals & preparations 16.3 21.2 13.8 29.9
3. Edible oil 1,374.50 1,359.40 -6.1 -1.1
4. Pulses 344.1 394.1 50.8 14.5

21
5. Sugar 146.6 0.7 — —

C. Other bulk items 8,426.90 12,304.00 74.9 46

1. Fertilizers 1,214.50 1,896.90 80.9 56.2
(a) Crude 191.7 212.8 23.6 11
(b) Sulphur & Un-roasted 85.7 61.3 21.9 -28.5
(c) Manufactured 937.1 1,622.80 110.1 73.2
2. Non ferrous metals 1,024.70 1,473.40 49.1 43.8
3. Paper board & mfrs. 555.3 750.9 41.2 35.2
4. Crude rubber including
synthetics 265.7 337.8 18.5 27.1
5. Pulp & waste paper 345.9 362.4 26.7 4.8
6. Metal scrap and ores 2,183.00 4,049.20 75.3 85.5
7. Iron & steel 2,837.90 3,433.40 114.5 21

11. Non Bulk imports 47,670.50 54,730.70 43.6 14.8

A. Capital goods 16,928.10 23,162.80 48.6 36.8

1. Manufacture of metals 691.6 840.8 45.7 21.6
2. Machine tools 569.6 800.8 103.1 40.6
3. Machinery 5,380.50 7,466.80 67.9 38.8
4. Electrical machinery 811.1 1,115.20 26.8 37.5
5. Electronic goods 7,536.20 9,735.60 33.2 29.2
6. Transport equipment 1,479.00 2,204.70 64.9 49.1
7. Project goods 460.1 998.8 92.3 117.1

B. Mainly export related items 11,857.50 10,390.80 40.5 -12.4

1. Pearls, precious & 6,197.00 4,254.50 36.8 -31.3
2. Organic & inorganic
chemicals 4,120.00 4,544.70 43.5 10.3
3. Textile yarn fabric 1,227.10 1,308.60 54.5 6.6
4. Cashew nuts 313.5 282.9 27.8 -9.8

C Others 18,885.00 21,177.20 41.3 12.1

1. Gold & silver 7,396.20 8,936.20 43.4 20.8
2. Artificial resins, etc 1,374.90 1,522.50 79.2 10.7
3. Professional Instruments,
etc. 1,114.00 1,320.50 43.7 18.5
4. Coal coke and briquettes 2,101.00 2,543.40 30.6 21.1
5. Medicinal & Pharmaceutical
products 564 662.3 48 17.4
6. Chemical materials &
products 635.4 798.9 37.1 25.7
7. Non metallic mineral
manufactures 359.9 444.4 46.6 23.5
Total imports 82,371.20 104,120.20 44.4 26.4
Non oil imports 57,979.00 68,999.40 45.6 19
Non oil imports excluding gold
& silver 50,582.80 60,063.20 46 18.7
Mainly industrial inputs 46,650.20 55,155.30 47.4 18.2

22
Table-8.4: Growth of major export markets

Exports in Exports in Growth in Growth in

April – April – April – April –
December December December December
2005-06 2006-07 2005-06 (%) 2006-07 (%)
($ Million) ($ Million)
OECD countries 25,330.50 29,380.10 32.1 16
EU 12,183.50 14,301.30 37.9 17.4
Belgium 1,610.30 1,886.30 21.2 17.1
France 1,170.50 1,199.70 36.5 2.5
Germany 1,914.30 2,235.60 32 16.8
Italy 1,324.10 1,961.70 21.4 48.2
Netherlands 1,314.50 1,383.70 72 5.3
U.K. 2,816.80 3,167.90 51.1 12.5
North America 10,329.60 11,642.30 26.9 12.7
Canada 571 657.1 24.7 15.1
U.S.A. 9,758.60 10,985.20 27.1 12.6
Asia and Oceania 1,928.80 2,479.10 33.1 28.5
Australia 488 523.1 26.7 7.2
Japan 1,343.40 1,507.10 32.7 12.2
Other OECD countries 888.6 957.4 17.5 7.7
Switzerland 275.9 239 –13.4 –13.4
OPEC 8,024.70 12,025.50 23.5 49.9
Indonesia 733.8 1,013.50 15 38.1
Iran 580.7 977.5 –15.0 68.3
Iraq 53 111.5 –24.6 110.5
Kuwait 294 351.5 30.6 19.5
Saudi Arabia 1,025.10 1,391.40 32.5 35.7
U.A.E. 4,513.00 7,141.90 26.7 58.2
Eastern Europe 1,109.00 1,344.50 17.6 21.2
Romania 46.6 70.5 11.9 51.4
Russia 417.1 488.5 27.5 17.1
Developing countries 22,051.90 28,094.60 43 27.4
Asia 17,221.20 20,742.80 43.1 20.4
SAARC 3,062.90 3,562.00 31 16.3
Bangladesh 901.5 895.9 12.2 –0.6
Bhutan 58.7 27.7 — –52.7
Maldives 41.8 39.4 63.1 –5.6
Nepal 482.7 546.7 8.4 13.3
Pakistan 327 789.1 20.6 141.3
Sri Lanka 1,251.30 1,263.10 69.1 0.9
Other Asian developing
countries 14,158.20 17,180.70 46 21.3
China, People's Republic
of 3,382.30 4,015.40 68.1 18.7
Hong Kong 2,722.60 2,633.40 39.1 –3.3
South Korea 899.8 1,265.40 70.9 40.6
Malaysia 606.7 686.9 –1.3 13.2
Singapore 3,284.20 3,872.70 73.3 17.9
Thailand 584.5 795.1 32 36
Africa 3,048.20 4,973.70 36.6 63.2
Benin 56.3 82.7 131 46.9

23
Egypt, Arab Republic 341.3 379.5 57.1 11.2
Kenya 269.9 876.9 13.5 224.9
South Africa 872.2 1,366.00 51.6 56.6
Sudan 177.4 234.8 33.9 32.4
Tanzania 138 169.3 49.4 22.7
Zambia 38.5 68 71.9 76.7
Latin American countries 1,782.60 2,378.10 54.3 33.4
Others 57.4 61 55.9 6.2
Unspecified 95.6 89.1 –62.4 –6.7
Total 56,669.20 70,994.80 33.9 25.3

Table-8.5: Growth of major imports markets

Imports in Imports in Growth in Growth in

April – April – April – April –
December December December December
2005-06 2006-07 2005-06 (%) 2006-07 (%)
($ Million) ($ Million)
OECD countries 27,569.60 33,616.60 43.3 21.9
EU 12,912.30 14,561.20 41.5 12.8
Belgium 2,976.50 2,285.80 24.7 -23.2
France 886.1 1,198.80 36.0 35.3
Germany 3,286.30 4,151.20 64.8 26.3
Italy 1,020.70 1,460.80 49.9 43.1
Netherlands 620.9 624.5 63.1 0.6
U.K. 2,387.60 2,292.90 40.0 -4.0
North America 5,118.80 6,667.00 39.9 30.2
Canada 559.2 731.9 77.6 30.9
U.S.A. 4,559.60 5,935.20 36.4 30.2
Asia and Oceania 5,007.40 6,792.30 42.6 35.6
Australia 2,891.90 4,099.70 57.1 41.8
Japan 2,016.80 2,534.70 25.8 25.7
Other OECD
countries 4,531.10 5,596.00 53.6 23.5
Switzerland 4,309.50 5,274.20 53.0 22.4
Indonesia 1,733.10 2,092.50 22.1 20.7
Iran 430.9 4,491.60 129.4 942.4
Iraq 1.2 3,517.80 140.0 293050.0
Kuwait 231.2 3,472.00 89.7 1401.7
Saudi Arabia 870.8 8,491.60 32.6 875.1
U.A.E. 2,864.70 4,991.60 46.2 74.2
Eastern Europe 2,341.30 2,406.10 76.5 2.8
Romania 192.6 121.3 94.2 -37.0
Russia 1,260.10 1,059.90 78.8 -15.9
Developing countries 21,225.60 34,189.20 47.3 61.1
Asia 16,963.90 27,143.70 48.4 60.0
SAARC 748.9 856.8 67.2 14.4
Bangladesh 59.3 139.5 148.1 135.2
Bhutan 39.2 67.7 9.5 72.7

24
Maldives 1 1.9 233.3 90.0
Nepal 221.5 162.1 24.9 -26.8
Pakistan 100.6 187.9 87.0 86.8
Sri Lanka 327.3 297.7 108.9 -9.0
Other Asian
developing countries 16,215.00 26,286.90 47.7 62.1
China, People's
Republic of 5,990.30 9,471.60 68.7 58.1
Hong Kong 1,296.20 1,425.90 49.1 10.0
South Korea 2,483.20 2,816.90 45.5 13.4
Malaysia 1,388.80 3,185.40 12.8 129.4
Singapore 1,789.80 3,206.20 32.2 79.1
Thailand 711.3 953.6 64.8 34.1
Africa 2,806.10 4,281.30 44.0 52.6
Benin 65.9 64.5 16.0 -2.1
Egypt, Arab Republic 163.2 1,106.90 76.1 578.2
Kenya 29 33.3 14.2 14.8
South Africa 1,501.50 1,639.80 52.4 9.2
Sudan 19.3 48.9 26.1 153.4
Tanzania 32.4 24.6 -21.4 -24.1
Zambia
21.7 71.4 36.5 229.0
Latin American
countries 1,455.60 2,764.30 40.5 89.9
Others 17.8 35.3 150.7 98.3
Unspecified 24,547.40 270.1 41.6 -98.9
Total 82,371.20 104,120.20 44.4 26.4

Source: Reserve Bank of India

25
9 CAPITAL INFLOWS

Table-9.1: Monthly trends in foreign investments ($ million)

Foreign direct Portfolio Total foreign

investments investments investments
2005-06 2006-07 2005-06 2006-07 2005-06 2006-07
April 268 661 -337 3711 -69 4372
May 654 538 -90 -3334 564 -2796
June 264 523 1291 -903 1555 -380
July 324 1127 1708 -309 2032 818
August 399 619 1224 1212 1623 1831
September 282 916 1310 1238 1592 2154
October 412 1698 88 1755 500 3453
November 746 1151 271 2236 1017 3387
December 342 5130 2389 -429 2731 4701
January 482 1921 1545 1602 2027 3523
February 127 698 1821 2630 1948 3328
March 1240 966 2206
April-Feb 17142 9409 26551
Source: Reserve Bank of India

Table-9.2: Growth on non-resident deposits with commercial banks ($ million)

April-February April-February
2005-06 2006-07
Foreign currency non resident (Banks) 1219 1804
Non resident (external) Rupee account 807 1744
Total 2026 3548
Source: Reserve Bank of India

26
10 FOREIGN EXCHANGE RESERVES

Table-10.1: Monthly trends in foreign exchange reserves ($ billion)

2003- % 2004- % 2005- % 2006- %

04 Change 05 Change 06 Change 07 change
April 78.3 2.2 118.5 5.5 141.8 0.3 160.6 5.9
May 82.3 4.0 119.4 0.9 138.9 -2.9 164.5 2.4
June 83.2 0.6 119.5 0.1 138.4 -0.5 162.9 -0.9
July 85.6 2.3 118.4 -1.1 140.5 2.1 164.0 0.6
August 87.3 1.8 118.2 -0.2 143.8 3.3 166.4 1.4
September 92.3 4.8 119.6 1.4 143.0 -0.6 165.3 -0.6
October 93.8 1.4 121.3 1.7 143.7 0.5 167.1 1.1
November 97.4 3.5 128.2 6.9 142.1 -1.1 175.5 5.0
December 103.2 5.8 131.2 3.0 137.2 -3.4 177.2 1.0
January 106.4 3.2 129.5 -1.8 139.5 1.7 180.0 1.6
February 109.6 3.2 135.9 6.4 143.1 2.5 194.6 8.1
March 113.0 3.4 141.5 5.6 151.6 5.9 199.1 2.3
Source: Reserve Bank of India

27
11 TRENDS IN EXCHANGE RATES

Table-11.1: Exchange rate of Rupee (per unit of other currencies).

US dollar Euro
Exchange rate Change (%) Exchange rate Change (%)
2006- 2007- 2006- 2007- 2006- 2007- 2006- 2007-
07 08 07 08 07 08 07 08
April 44.9 42.2 1.4 -4.0 55.2 57.0 3.4 -2.2
May 45.4 1.1 58.0 4.8
June 46.0 1.3 58.3 0.5
July 46.5 1.0 59.0 1.2
August 46.5 0.1 59.6 1.0
September 46.1 -0.8 58.8 -1.4
October 45.5 -1.3 57.4 -2.4
November 44.9 -1.3 57.8 0.7
December 44.6 -0.7 59.0 2.1
January 44.3 -0.7 57.7 -2.2
February 44.2 -0.2 57.7 0.0
March 44.0 0.4 58.3 0.7
Source: Reserve Bank of India

28