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The Reserve Bank of India (RBI), in making its upcoming monetary policy decision, has many variables to juggle. Consumer Price Index (CPI)-based inflation, as shown in Table 1, has been steady at around five per cent, while the Wholesale Price Index (WPI)-based inflation is still in deflationary territory. Food inflation, shown in Table 2, is more volatile, however. Meanwhile the Index of Industrial Production, in Table 3, has decelerated sharply of late. The Purchasing Managers' Indices (PMIs) for the Indian economy, in Table 4, are barely in expansionary (above 50) territory. On the other hand, credit growth seems to have recovered marginally in the past few months, according to Table 5. Interest costs, for the first time in years, have declined as a proportion of revenue for big listed companies; profit margins have increased over last year, according to Table 6.
Yields on long-term government bonds, in Table 7, have decreased - but, although the Centre's borrowing has come under control, as Table 8 shows, combined borrowing still grows thanks to a sharp expansion in state borrowing. The currency has been buoyed by comfortable foreign direct investment numbers though those for foreign investment in the equity markets are less comforting, in Table 9.
