Evening News 30th Nov

1 . Index of Eight Core Industries (Base: 2011-12=100) October, 2017 

The Eight Core Industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).

The combined Index of Eight Core Industries stands at 128.2 in October, 2017, which was 4.7 per cent higher as compared to the index of October, 2016. Its cumulative growth during April to October, 2017-18 was 3.5 per cent.

Coal

Coal production (weight: 10.33 per cent) increased by 3.9 per cent in October, 2017 over October, 2016. Its cumulative index increased by 1.8 per cent during April to October, 2017-18 over corresponding period of the previous year.

Crude Oil

Crude Oil production (weight: 8.98 per cent) declined by 0.4 per cent in October, 2017 over October, 2016. Its cumulative index declined by 0.2 per cent during April to October, 2017-18 over the corresponding period of previous year.

Natural Gas

The Natural Gas production (weight: 6.88 per cent) increased by 2.8 per cent in October, 2017 over October, 2016. Its cumulative index increased by 4.7 per cent during April to October, 2017-18 over the corresponding period of previous year.

Refinery Products

Petroleum Refinery production (weight: 28.04 per cent) increased by 7.5 per cent in October, 2017 over October, 2016. Its cumulative index increased by 2.9 per cent during April to October, 2017-18 over the corresponding period of previous year.

Fertilizers

Fertilizer production (weight: 2.63 per cent) increased by 3.0 per cent in October, 2017 over October, 2016. Its cumulative index declined by 1.3 per cent during April to October, 2017-18 over the corresponding period of previous year.

Steel

Steel production (weight: 17.92 per cent) increased by 8.4 per cent in October, 2017 over October, 2016. Its cumulative index increased by 6.0 per cent during April to October, 2017-18 over the corresponding period of previous year.

Cement

Cement production (weight: 5.37 per cent) declined by 2.7 per cent in October, 2017 over October, 2016. Its cumulative index declined by 1.6 per cent during April to October, 2017-18 over the corresponding period of previous year.

Electricity

Electricity generation (weight: 19.85 per cent) increased by 2.1 per cent in October, 2017 over October, 2016. Its cumulative index increased by 5.2 per cent during April to October, 2017-18 over the corresponding period of previous year.

 

2 . India’s Q2 2017-18 GDP growth rate at 6.3%

India’s economic growth made an impressive comeback in the second quarter of the fiscal year 2017-2018 at 6.3% after hitting a three-year low of 5.7% in the previous quarter.

The economic activities that registered a growth of over 6% in the Q2 of 2017-18 against the Q2 of 2016-17 are manufacturing, electricity, gas, water supply & other utility services, and trade, hotels, transport & communication and services related to broadcasting.

In the July-September period of the current fiscal, two factors played an important role: The GST and the festive season.

Goods and Services Tax:

The second quarter GDP data recorded the impact of the GST on the economy for the first time since its implementation. In the previous quarter, massive destocking happened, which led the economic growth to a three-year low. But after the implementation of the GST, restocking began to take place, with a positive impact on the GDP.

The Festive Season:

The festive season seems to have cushioned country’s growth against the slowdown. Since mid-year, sales of two-wheel and commercial vehicles, oil consumption, cargo traffic and rail freight have all increased. Sales of cars, refrigerators and televisions also surged more than 15% ahead of Dussehra and Navratri. Auto sales also reported an increase of 10% due to the festive season. The sales also surged ahead of the imposition of additional GST cess on luxury cars.

 

3 . India’s fiscal deficit widens

The Centre’s fiscal deficit during the first seven months (April-October) of the current fiscal was Rs 5.25 lakh crore, or 96.1% of the budgeted target for the current fiscal year that ends in March 2018, higher than Rs 4.99 lakh crore till the previous month.

The country’s fiscal deficit for the April-October period is just a little shy of Rs 5.47 lakh crore that the government has budgeted for the entire year.

The deficit was 79.3% of the full-year target during the same period a year ago.

The net tax receipts in the first seven months the fiscal year were Rs 6.34 lakh crore, government data showed on Thursday. The government aims to restrict the deficit to 3.2% of GDP in the current fiscal as against 3.5% in 2016-17. In absolute terms, 3.2% deficit for the current fiscal works out to nearly Rs 5.47 crore.

What is ‘Fiscal Deficit’?

A fiscal deficit occurs when a government’s total expenditures exceed the revenue that it generates, excluding money from borrowings. Deficit differs from debt, which is an accumulation of yearly deficits.

A fiscal deficit is regarded by some as a positive economic event. For example, economist John Maynard Keynes believed that deficits help countries climb out of economic recession. On the other hand, fiscal conservatives feel that governments should avoid deficits in favor of a balanced budget policy.

 

4 . CPEC in dock after Pakistan, Nepal withdraw from dam projects in China

  • Recently Pakistan and Nepal have withdrawnl from two dam-building deals functional in China, citing measures Beijing might have to adopt in order to ensure equitable terms and distribution of benefits among those that need the investment.
  • The Pakistani withdrawal took on an added significance because it was included in the China-Pakistan Economic Corridor (CPEC).
  • The withdrawals and questioning called into question Beijing’s economics-centred approach to geopolitics based on the long-standing win-win principle of the Chinese policy – the notion that all parties benefit from their investment and largesse – especially in the face of China wanting to secure economic dominance in Eurasia.
  • Pakistan has  said that Chinese conditions for financing the Diamer-Bhasha Dam were not doable and were against their interests. China and Pakistan were also at odds over ownership of the hydropower project on the Indus River.
  • Nepal scrapped a $2.5 billion deal with China’s Gezhouba Group to build a hydroelectric project on the Budhi Gandaki River in the west of the country two days before the Pakistani decision.