|
|
Growth rates (%) |
|
2003-04 |
2004-05 |
|
WPI-based inflation |
4.6 |
6 |
|
Index of industrial production |
7 |
8 |
|
Index of infrastructure industries |
6.2 |
4.4 |
|
Exports |
21.3 |
24.4 |
|
Gross domestic product |
8.5 |
6.9* |
|
Fiscal deficit as percentage of GDP |
4.5 |
4.5** |
|
*expected |
** Revised estimates |
|
Sensex |
5,069.87 (on May 14, 2004) |
|
6,451.54 (on May 13, 2005) |
| |
| The index of industrial production, a measure of how the industrial sector has performed, reported a growth of 8 per cent in 2004-05, up from 7 per cent in 2003-04. Manufacturing sector growth was up at 8.8 per cent, compared with 7.4 per cent in 2003-04.
|
| |
| Another good news is that exports, which grew at 21.31 per cent in 2003-04, grew further at 24.41 per cent in 2004-05. As almost 20 per cent of manufacturing are exported, it is a good sign for the industrial sector.
|
| |
| However, with growth in major export markets expected to slow down in 2005-06, the prognosis on that front is not too good either.
|
| |
| On the downside, deficits will increase, but that is in 2005-06. In 2004-05, the UPA managed to maintain fiscal deficit at 4.5 per cent of GDP, the same as in 2003-04.
|
| |
| However, in April-February 2004-05, fiscal deficit was 84 per cent of the Budget estimates compared with 72 per cent in the corresponding period last year. Likewise, revenue deficit was 121.7 per cent of the Budget estimates, compared with 83.1 per cent in the corresponding period in 2003-04.
|
| |
| In 2005-06, however, the government has put a pause on the Fiscal Responsibility and Budget Management targets, citing the recommendations of the Twelfth Finance Commission, which suggests hiking grants to states and stopping the practise of giving central loans. The Budget estimate puts fiscal deficit at Rs 1,51,144 crore, 4.3 per cent of the GDP.
|
| |
| The numbers put out in Budget 2005-06, however, have estimated a lower level of expenditure than the government may actually have to undertake, indicating that fiscal deficit can end up even higher.
|
| |
| Inflation, which is a measure of the general increase in prices, had crossed 8 per cent in August last year mainly on account of the rising international prices of oil and steel. The government took various steps, including duty cuts, to control it and brought it down to below 5 per cent in February 2005.
|
| |
| However, April onwards, the general price level has begun to rise again. Hikes in international oil prices have not been passed on to the domestic consumer and the move is bleeding the oil PSUs.
|
| |
| However, if the government does finally pass it on (it is only likely to do so partially), inflation will remain relatively low (around 6 per cent) on account of the high-base effect.
|
| |
The index of core infrastructure industries, a group of six industries
|
