The past week saw the release of the all important growth figures for the Indian economy. Measured as the Gross Value Added at basic price, growth inched up to 7.4% on a year on year (yoy) basis in the second quarter (Q2) of 2015-16, from 7.1% growth witnessed during Q1.
However, continued economic weakness was indicated by numbers of core industries, which grew by 3.2% in October 2015, same as that during the previous month.
Further, RBI’s survey on corporate business performance revealed still shrinking sales, though margins are definitely beginning to look up on falling raw material costs. Credit growth too, continues to be weak, with a growth of 8.3% in October.
There are some early reservations regarding the Rabi crop as well, given that area under coverage continues to lag significantly behind that during the last year, particularly for large staple crops like wheat.
On the positive side, the numbers for Foreign Direct Investment (FDI) inflows for the first half of 2015-16 showed robust growth in flows to US$ 24.4bn, which could reach the highest ever by the end of this year going by current trends.
Government finances are also looking better compared to last year, with fiscal deficit as a proportion of budget estimates down to 74% in October compared to 89.6% last year.
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