News

         CORE SECTOR GROWS BY 4.5 PC IN FEBRUARY 10

      SIX core infrastructure industries expanded by 4.5per cent in February 2010 against a meagre 2.9 per cent during the corresponding month last year. This was the slowest pace of growth in the last four months. Incidentally, the core sector growth was as high as 9.5 per cent in January 2010. This slowdown is likely to be reflected in the country’s industrial growth rates, which have been showing double digit increases since October 2009.

    The month’s fall was triggered by an unexpected decline in the growth of steel production. This does not gel with the recovery story that is playing out in the country. Steel is a key input in construction and automobile industry, industries that are leading the revival in economic activity The slowdown in the porduction of cement (5.8 per cent against 12.4 per cent in  January 2010 and 6.9 per cent in February 2009), another indicator of the strength of the economic activity, could also be suggestive that the growth story is beginning to lose momentum due to inflation .

    Even if February IIP growth figures fall to single digit levels, the RBI is likely to raise interest rates in the monetary policy review on April 20, 2010. Economists opine that even with a 25-50 basis points hike in the key policy rates in the April review, the economy can clock high growth rate, The strength of recovery is more dependent on the strength of global recovery than cost of funding.

                   FOREX RESERVES FALL BY $ 1,515 MILLION

   Foreign exchange reserves fell by $1,515 million to $2,78,193 million during the week ended March 19,2010 according to data released by the Reserve Bank of India Bulletin weekly Statistical Supplement. The reserves have fallen after having risen for two consecutive weeks ; the rise for the previous week  (ended March 12) being $1,227 million.

   Foreign currency assets fell by $1,476 million to $2,53,845 million during the week under review, as dollar gained against other major currencies. Gold reserves remained unchanged at $17,920 million. SDRs dropped by $ 30 million to $ 5,039 million and reserve position in the IMF tranche was down by $9 million to $1,389 million.

                     RUPEE AT 18 MONTH HIGH AGAINST DOLLAR

    The Indian rupee touched an 18-month high against the dollar, as the US currency came  under selling pressure in both local and international markets. The rupee ended at 45.24, the level last seen in September 2008, on March 26, 2010.

    The dollar’s weakness against other major currencies, selling of greenback by corporates and capital inflows into the country helped the rupee gain, The continued strength of the equity market, the rising interest rate differential and prospects of economic growth are factors for the appreciation of the rupee.

                WORLD TRADE TO GROW BY 9.5 PC IN 2010

      World trade is expected to grow by 9.5 per cent in 2010, after suffering its biggest collapse in 2009 since World war II, according to WTO. The volume of world trade had dropped by 12.2 per cent in 2009 -the biggest contraction in more than 70 years.

    The forecast growth for 2010 comprises 7.5 per cent for developed countries and 11 per cent for developing countries.

                 WORLD URBAN POPULATION BREACH 50 PC MARK

     The world urban population breached the 50 per cent mark for the first time in human histroy. Contrary to the general impression, the bulk of this urban population does not stay in big metropolises. Over 53 per cent of the world’s total urban population of 3.4 billion resides in towns with less than 5 lakh population, Only about 9 per cent of the world’s urban population lives in the 21 such mega cities existing today.

   It is expected that world population will increase to 9.1 billion by 2050, The urban segment will jump by 84 per cent to reach 6.3 billion (3.4 billion now) by that year. In other words, 70 per cent of humanity will be living in urban areas by then. Rural population is projected to start declining by the end of this decade and by 2050. there will be 0.5 billion less rural people than today.

                        BANK CREDIT GROWS BY 16 PC

    Bank credit touched the target of 16 per cent, set by the Reserve Bank of India , according to the fortnightly statement of RBI. The latest data, as on March 12,2010, show bank credit grew by 16 per cent or Rs4,32,091 crore to Rs 31,24,850 crore from Rs 26,92,759 crore a year ago.

   This is the fourth fortnight in a row that bank credit has expanded. In the fortnight ended March 12, bank credit expanded by Rs 35,528 crore. Deposits during the fortnight under review increased by Rs 39,613 crore to Rs 44,02,943 crore, Investment in government securties went up by Rs 7,641 crore to Rs 13,86,937 crore during the year under review.