Major changes in FY 2006-07

  • Normal monsoon is experienced by Rabi season.
  • Whole Price Index (WPI) increased up to 5.43% in the December 16th weekend; in the primary commodities the higher price increase will be same. In the coming weeks higher price remains high because of lower base effect.
  • In FY07 there will be robust economic growth. In the FY07 GDP increased up to 8%; Agriculture services and industry raised up to 1.7%, 10.7% and 10.5% correspondingly
  • Cash Reserve Ratio (CRR) have raise of 50 bps to monitor Rs. 135bn from the system. The Cash Reserve Ratio surprise with the hike rate of 50 bps but RBI’s intention will reflect on the controlling of credit off-take and liquidity management by increasing and reversing repo rate will not obtained the expected and good results because of which RBI utilizes CRR rate hike – a latest instrument for the liquidity control.
  • Index of Industrial Production (IIP) development drops in October 2006. In the manufacturing sector because of the bad performance, which outline of 80% of the Index of Industrial Production index directs to a blip in its vigorous growth trend for the last 9 months. When compared to the last year the mining and electricity grew faster at 4% and 9.7% Vs 0.1% and 7.7% respectively.
  • In YTD basis in the December 2006, rupee has value against dollar and yen but reduces its value continuously when compared to Euro and Pound. Actually from April 2006 to October 2006 the rupee has increased its value up to 1.8%.

In the year November 2006 exports picks up its growth back. As Bop is the base in H1FY06 exports has increased up to 23% and imports at 25.3%. this has been resulted in the trade balance of US$3bn. Growth of net invisibles by 17.6% to US$23.5bn and capital inflows at us$20.3bn (approximately 49%) abalance payment is brought to US$8.6bn (approximately 33%).