ECONOMIC REPORT

HIGHLIGHTSThe growth of GDP at factor cost at constant (2004-05) prices (real GDP) for 2013-14 is placed at 4.9 per cent as compared to 4.5 per cent for 2012-13 (Advance Estimates released on 7th February, 2014). The GDP growth rate is placed at 4.4 per cent, 4.8 per cent and 4.7 per cent respectively in the first, second and third quarters of 2013-14.Food grains (rice and wheat) stocks held by FCI and State agencies were 48.39 million tonnes as on March 1, 2014 vis--vis the buffer stock norm of 25 million tonnes as on January 1, 2014.Overall growth in the Index of Industrial Production (IIP) was (-) 1.9 per cent during February 2014 vis--vis 0.6 per cent in February 2013. During April- February 2013-14, IIP growth was (-) 0.1 per cent as compared to 0.9 per cent in April- February 2012-13. Eight core infrastructure industries registered a growth of 4.5 per cent in February2014 as compared to 1.3 per cent in February 2013. During April- February 2013-14, these sectors grew by 2.6 per cent as compared to 6.4 per cent during April- February2012-13.Broad money (M3) for 2013-14 (up to March 21, 2014) increased by 13.5 per cent as compared to 13.8 per cent during the corresponding period of the last year. The year- on-year growth, as on March 21, 2014 was 13.5 per cent as compared to 13.8 per cent in the previous year. Exports and imports declined by 3.2 per cent and 2.1 per cent respectively, in USdollar terms, during March 2014 over March 2013. Foreign Currency Assets stood at US$ 278.4 billion at end-March 2014 as compared toUS$ 260.8 billion at end-March 2013.The Rupee appreciated against the US dollar, Pound sterling, Japanese yen and Euro in the month of March 2014 over February 2014.The WPI inflation for all commodities for the month of March 2014 increased to 5.70 per cent from 4.68 per cent in the previous month. Gross tax revenue for the financial year 2013-14 (April-February) at Rs 892,007 crore,recorded a growth of 9.8 per cent over 2012-13. As a proportion of revised estimate, fiscal deficit and revenue deficit during 2013-14(AprilFebruary) was 114.3 per cent and 117.3 per cent respectively.

1

ECONOMIC GROWTH

As per the Advance Estimates of the Central Statistics Office (CSO), the growth in Gross Domestic Product (GDP) at factor cost at constant (2004-05 prices) is estimated at 4.9 per cent in 2013-14 with agriculture, industry and services registering growth rates of 4.6 per cent, 0.7 per cent and6.9 per cent respectively. The GDP growth rate is placed at 4.4 per cent, 4.8 per cent and 4.7 per cent respectively in the first, second and third quarters of 2013-14.

Table 1: Growth of GDP at factor cost by economic activity (at 2004-05 prices)

SectorGrowthPercentage Share in GDP

2011-122012-13(1R)2013-14(AE)2011-122012-13(1R)2013-14(AE)

1Agriculture, forestry & fishing5.01.44.614.614.413.9

2Industry7.81.00.727.928.227.3

aMining & quarrying0.1-2.2-1.92.22.12.0

bManufacturing7.41.1-0.216.216.315.8

cElectricity, gas & water supply8.42.36.01.91.91.9

dConstruction10.81.11.77.67.97.7

3Services6.67.06.957.557.458.8

aTrade, hotels, transport & Communication4.35.13.527.326.726.9

bFinancing ,insurance, real estate &business services11.310.911.217.318.019.1

cCommunity, social & personal services4.95.37.412.912.712.8

4GDP at factor cost6.74.54.9100100100

1R: 1st Revised Estimates; AE: Advance Estimates. Source: CSO.

Table 2: Quarterly Growth Estimate of GDP (Year-on-year in per cent)

Sector2011-122012-132013-14

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3

1Agriculture, forestry & fishing6.54.05.93.41.81.80.81.62.74.63.6

2Industry10.18.26.96.30.3-0.41.72.10.22.3-0.7

aMining & quarrying0.3-4.6-1.95.8-1.1-0.1-2.0-4.8-2.8-0.4-1.6

bManufacturing12.47.85.34.7-1.10.02.53.0-1.21.0-1.9

cElectricity, gas & water supply8.510.39.65.44.21.32.60.93.77.75.0

dConstruction8.911.912.210.22.8-1.91.02.42.84.30.6

3Services6.77.06.56.17.27.66.96.36.76.07.6

aTrade, hotels, transport &communication5.54.74.03.34.05.65.94.83.94.04.3

bFinancing , insurance, real estate& business services11.312.011.111.011.710.610.211.28.910.012.5

cCommunity, social & personal services2.45.45.75.77.67.44.02.89.44.27.0

4GDP at factor cost7.67.06.55.84.54.64.44.44.44.84.7

Source: CSO.

12 Real GDP Growth rate (%) at Factor Cost from Q1 2005-06

10

8

6

4

2

0Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

AGRICULTURE AND FOOD MANAGEMENT

Rainfall: With respect to rainfall situation in India, the year is categorized into four seasons: winter season (January-February); pre monsoon (March-May); south west monsoon (June- September) and post monsoon (October-December). South west monsoon accounts for more than 75 per cent of annual rainfall. The actual rainfall received during the period 01.03.2014 16.04.2014 has been 46.9 mm as against the normal at 49.0 mm. As per the Indian Meteorological Departments stand on El Nino, as of 17.04.2014, there is no immediate acknowledgement of El- Nino phenomenon.

All India production of foodgrains: As per the 2nd advance estimates released by Ministry of Agriculture on 14.02.2014, production of foodgrains during 2013-14 is estimated at 263.20 million tonnes compared to 257.13 million tonnes in 2012-13.

Table 3A: Production of Major Agricultural Crops (in Million Tonnes)

Crop2008-092009-102010-112011-122012-132013-14(2nd advance estimates)

Rice99.1889.0995.98105.30105.24106.19

Wheat80.6880.8086.8794.8893.5195.60

Total Pulses14.5714.6618.2417.0918.3419.77

Total Foodgrains234.47218.11244.49259.29257.13263.20

Total Oilseeds27.7224.8832.4829.7930.9432.98

Sugarcane285.03292.30342.38361.04341.20345.92

Procurement: Procurement of rice as on 17.04.2014 was 26.95 million tonnes during 2013-14 and procurement of wheat as on 17.04.2014 was 3.99 million tonnes during 2014-15.

Table 3B : Procurement in Million Tonnes

2010-112011-122012-132013-142014-15

Rice34.2035.0434.0426.95#

Wheat22.5128.3438.1525.093.99*

Total56.7163.3872.1951.46

# Position as on 17.4.2014* Position as on 17.4.2014.

Off-take: Off-take of rice during the month of March, 2014 was 21.32 lakh tonnes and off-take of wheat was 17.18 lakh tonnes under TPDS (including NFSA).

Stocks: Stocks of food-grains (rice and wheat) held by FCI as on April 1, 2014 were 48.39 million tonnes, which is lower by 18.9 per cent compared to the level of 59.68 million tonnes as on April1, 2013.

Table 4: Off-take and stocks of food grains (Million Tonnes)

Off-takeStocks

2011-122012-132013-14 (Up to Jan 1,2014)Apr 1,2013Apr 1,2014#

Rice32.1232.6424.2135.4720.28

Unmilled Paddy in terms of Rice10.28

Wheat24.2633.2123.7924.2117.83

Total56.3865.8548.0059.6848.39

Note: Buffer Norms for Rice and Wheat are 14.20 Million Tonnes and 7.00 Million Tonnes respectively as on 01.04.2014.# Since September, 2013, FCI gives separate figures for rice and unmilled paddy lying withFCI & state agencies in terms of rice.

INDUSTRIAL PRODUCTION

Table 5: Percentage Change in Index of Industrial Production

Industry GroupApril- February2012-13April- February2013-14February2013February2014

General index0.9-0.10.6-1.9

Mining-2.3-1.1-7.71.4

Manufacturing1.0-0.72.1-3.7

Electricity4.06.2-3.211.5

Basic goods2.41.7-1.83.9

Capital goods-7.7-2.59.1-17.4

Intermediate goods1.53.2-0.84.2

Consumer goods2.5-2.80.8-4.5

Durables2.7-12.2-2.6-9.3

Non-durables2.34.83.2-1.2

Table 6: Production growth (per cent) in core infrastructure-supportive industries

IndustryApril- February2012-13April-February2013-14February 2013February 2014

Coal5.00.9-6.10.1

Crude oil-0.7-0.1-4.01.9

Natural Gas-14.2-13.3-20.1-4.4

Refinery Products29.41.622.93.2

Fertilizers-4.02.2-4.0-0.7

Steel3.44.24.74.8

Cement7.63.33.12.3

Electricity4.15.7-3.710.4

Overall growth6.42.61.34.5

25.0

Year-on-Year Growth (%) of IIP

20.0

15.0

10.0

5.0

0.0

-5.0

-10.0

MONEY AND BANKING

Broad money (M3) for 2013-14 (up to March 21, 2014) increased by 13.5 per cent as compared to 13.8 per cent during the corresponding period of the previous year. The year-on-yeargrowth, as on March 21, 2014 was 13.5 per cent vis--vis 13.8 per cent in the previous year.

Table 7: Money Stock: Components and Sources

(Rs. Billion)

ItemOutstanding as onVariation over

20132014Financial Year so farYear-on- Year

2012-132013-1420132014

Mar. 31Mar. 21

M383,820.295,130.513.813.513.813.5

1 Components

1.1 Currency with the Public11,447.412,549.011.69.610.89.9

1.2 Demand Deposits with Banks7,469.68,062.85.17.96.07.9

1.3 Time Deposits with Banks64,870.974,501.715.314.815.414.8

1.4 Other Deposits with ReserveBank32.417.046.647.53.512.8

2 Sources (2.1+2.2+2.3+2.4-2.5)

2.1 Net Bank Credit to Government27,072.129,987.014.010.814.910.9

2.1.1 Reserve Bank5,905.86,559.9

2.1.2 Other Banks21,166.323,427.115.410.715.410.6

2.2 Bank Credit to CommercialSector56,646.664,494.014.313.914.213.8

2.2.1 Reserve Bank30.685.4

2.2.2 Other Banks56,616.164,408.614.313.814.313.7

2.3 Net Foreign Exchange Assets ofBanking Sector16,366.618,909.26.215.56.915.3

2.4 Government's CurrencyLiabilities to the Public153.4171.714.111.914.111.9

2.5 Banking Sector's Net Non- Monetary Liabilities16,418.518,431.48.312.39.911.8

2.5.1 Net Non-Monetary Liabilities of RBI6,925.08,716.415.525.917.924.9

Source: RBI

Reserve money (M0) during the financial year 2013-14 (up to March 28, 2014) showed an increase of 12.6 per cent as compared to increase of 9.2 per cent in the corresponding period of the previous year. The year-on-year variation revealed an increase of 9.5 per cent (up to March28, 2014) compared to 8.5 per cent on the corresponding date of the previous year.

An important source of reserve money, namely, net foreign exchange assets (NFA) of the RBI (up to March 28, 2014), showed an increase of 15.7 per cent compared to an increase of 5.9 per cent on the corresponding date of the last year.

Scheduled Commercial Banks (SCBs): business in India

During the financial year 2013-14 (up to March 21, 2014), bank credit registered a growth of14.3 per cent year-on-year, as compared to 14.1 per cent during the corresponding period last year.

Non-food credit during this period increased by 17.8 per cent compared to 8.5 per cent during the corresponding period last year.

The aggregate deposits with Scheduled Commercial Banks (SCBs) increased by 14.6 per cent (up to March 21, 2014), as compared to 14.2 per cent in the previous year.

Table 8: Scheduled Commercial Banks - Business in India

Items2013-14Financial year so farYear-on-year

Outstanding as on( Rs. billion)2012-132013-1420132014

March 29,2013March 21,2014

Bank Credit539026013114.114.314.114.3

Non-Food credit52928591468.511.78.517.8

Aggregate deposits675057739414.214.614.214.6

Investments inGovernment and other approved securities200612221715.410.715.410.7

Source: RBI

Table 9 : Policy Rates/Interest Rates(per cent per annum)

Item / Week Ended20132014

March 29March 28

Cash Reserve Ratio (per cent)(1)4.004.00

Bank Rate8.509.00

Repo Rate7.508.00

Reverse Repo Rate6.507.00

Prime Lending Rate(2)9.70 /10.2510.00 /10.25

Deposit Rate(3)7.50 / 9.008.00 / 9.25

Call Money Rate(Weighted Average)(4)8.658.59

(1) Cash Reserve Ratio relates to Scheduled Commercial Banks (excluding Regional Rural Banks). (2) Prime Lending Rate relates to five major Banks. (3) Deposit Rate relates to major Banks for term deposits of more than one year maturity. (4) Data cover 90-95 per cent of total transactions reported by participants.Source: RBI.

As on March 28, 2014, Bank Rate was 9.00 per cent as compared to 8.50 per cent on the corresponding date of last year. As on March 28, 2014, call money rate (weighted average) was8.59 per cent as compared to 8.65 per cent on the corresponding date of last year.

EXTERNAL SECTOR

Foreign trade: Exports and imports declined by 3.2 per cent and 2.1 per cent respectively, in US dollar terms, during March 2014 over March 2013. Oil imports increased by 17.7 per cent and non-oil imports decreased by 11.8 per cent over the same period.

Table 10: Exports and Imports (in US$ million)

Item2010-11 (Apr-Mar)2011-12 (Apr-Mar)2012-13 (Apr-Mar)2013-14 (Apr-Mar)March% Change in March2014

20132014

Exports2511363059643004013123553054129578-3.2

Imports3697694893204907374509494094840086-2.1

Oil105964154968164041167625134081578417.7

Non-Oil2638053343523266962833242754024302-11.8

Trade balance-118633-183356-190336-138594-10406-105071.0

Source: Provisional data as per the Press Note of the Ministry of Commerce and Industry.

Table 11: Foreign Currency Assets

AmountVariation

Rs. CroreUS$ millionRs.US$ million

At the end of (over last year)

March, 20081196023299230359426107306

March, 2009123134024167635317-57554

March, 20101150778254935-8056213259

March, 201112259992745807522119645

March, 20121333954260742107955-13838

March, 201314183392607758438533

2013-14 (over last month)

April 20131433397264372150583597

May 2013146637825955532981-4817

June 2013152476925540758391-4148

July 2013153591025131511141-4092

August 20131653926248433118016-2882

September 20131568148249797-857781364

October 20131564394254746-37544949

November 20131651502264686871089940

December 20131662880268653113783967

January 20141658880265519-4000-3134

February 2014166261126785237312333

March 201416729422783611033110509

Source: RBI.

Exchange rate: The rupee appreciated by 2.0 per cent against US dollar, 1.5 per cent against Pound sterling, 2.3 per cent against Japanese yen and 0.7 per cent against Euro in the month of March 2014 over February 2014.

Table 12 : Rupee per unit of foreign currency*

US dollarPound sterlingJapanese yenEuro

March, 200951.228772.90410.525166.9207

March, 201045.496568.43600.501861.7653

March 201144.968472.70700.549862.9660

March, 201250.321379.65490.610366.4807

March 2013**54.404682.01900.574470.5951

2013-14

April 201354.375783.20050.557170.7652

May 201355.010884.10870.545171.3803

June 201358.397390.47290.599977.0683

July 201359.775490.77570.600078.2026

August 201363.208897.86570.645784.1814

September 201363.7521101.09670.642785.1190

October 201361.615699.20480.630084.1044

November 201362.6330100.87800.626384.5334

December 201361.9101101.39610.598384.8162

January 201462.0731102.26870.596884.5621

February 201462.2540102.97240.610284.9656

March 201461.0140101.40830.596584.3621

* FEDAI Indicative Market Rates (on monthly average basis). ** Data from March, 2013 onwards are based on RBIsreference rate.

Rupees per US$ (daily)

72

67

62

57

5202-Apr-201317-Apr-201302-May-201317-May-201331-May-201314-Jun-201301-Jul-201316-Jul-201331-Jul-201314-Aug-201330-Aug-201313-Sep-201327-Sep-201314-Oct-201329-Oct-201313-Nov-201328-Nov-201313-Dec-201331-Dec-201315-Jan-201431-Jan-201414-Feb-201428-Feb-201414-Mar-201428-Mar-2014

External assistance and debt service payments: Gross external assistance during 2013-14 (April-March) stands at Rs. 33,659.97 crore as compared to Rs. 27,863.87 crore during the corresponding period of the previous year. Net disbursement stood at Rs. 12,110.79 crore during2013-14 as compared to Rs. 9,236.41 crore during 2012-13 while net transfers were Rs. 7,748.90 crore during 2013-14 as compared to Rs. 4,663.43 crore during 2012-13.

*: Data are provisional.

INFLATION

Wholesale Price Index (WPI 2004-05=100): The headline WPI inflation has increased to 5.70 per cent in March 2014 from 4.68 per cent in the previous month. Inflation for primary food articles for the month of March 2014 has increased to 9.90 per cent from 8.12 per cent in the previous month mainly on account of increase in inflation of moong, urad, vegetables, fruits, milk and fish. Accordingly, food inflation (primary food + manufactured food) increased to 7.09 per cent from 5.60 per cent in previous month. Inflation for fuel & power has increased to 11.22 per cent in March 2014 from 8.75 per cent in the last month. Inflation for manufactured products has increased to 3.23 per cent in March, 2014 from 2.76 per cent in February 2014. Non-food manufactured inflation (core as defined by RBI) has gone up to 3.51 per cent in March 2014 from 3.15 per cent in February 2014. The average WPI inflation rate for the last 12 months (April 2013 to March 2014) was 5.93 per cent as compared to 7.35 per cent during thecorresponding period in 2012-13. WPI inflation rates for major groups are indicated in Table 14.

Table 14: Current Price Situation based on Monthly WPI in March 2014 (Base: 2004-05=100)

Major groupsWeight (%) in WPIInflation (%)Inflation (%) (Average of 12 months)

2013-142012-132013-142012-13

ALL COMMODITIES100.005.705.655.937.35

PRIMARY ARTICLES20.127.667.369.879.81

Food articles14.349.908.6312.809.90

FUEL AND POWER14.9111.227.7610.1110.33

MANUFACTURED PDT.64.973.234.282.905.41

Inflation based on Consumer Price Indices (CPIs): The all India CPI inflation (combined) increased to8.31 per cent in March 2014 from 8.03 per cent in February 2014 mainly on account of vegetables, fruits, pulses, milk, spices, and egg, fish & meat. Inflation based on CPI-IW declined to 6.73 per cent in February2014 from 7.24 per cent in January 2014. Inflation based on CPI-AL & CPI-RL increased to 8.38 per cent and 8.51 per cent respectively in March 2014 from 8.14 per cent and 8.27 per cent respectively in February 2014.

Table 15: Year-on-Year inflation based on WPI and CPI (per cent)

WPICPI-IWCPI-ALCPI-RLCPI(NS)

Base :2004-0520011986-871986-872010

Mar-135.6511.4412.6412.6210.39

Apr-134.7710.2412.3212.159.39

May- 134.5810.6812.7012.509.31

June-135.1611.0612.8512.659.87

July-135.8510.8512.8012.619.64

Aug-136.9910.7513.2112.899.52

Sep-137.0510.7012.7812.449.84

Oct-137.2411.0612.6512.4810.17

Nov-137.5211.4713.4313.2711.16

Dec-136.409.1311.1911.189.87

Jan-145.177.249.089.218.79

Feb-144.686.738.148.278.03

Mar-145.70-8.388.518.31

Note: WPI inflation for Feb & Mar-14 and CPI (New Series) inflation for Mar-14 is provisional.

Table 16: World Commodity Price Data

Annual averagesMonthly averages

CommodityUnitJan- DecJan- DecJan- MarJanFebMar

201220132014201420142014

Coal, Australia$/mt96.484.677.181.676.373.3

Crude oil, average$/bbl105.0104.1103.7102.1104.8104.0

Natural gas, US$/mmbtu2.83.75.24.26.04.9

Cocoa$/kg2.42.43.02.83.03.0

Coffee, Robusta$/kg2.32.12.11.92.12.3

Tea, auctions avg.$/kg2.92.92.62.92.62.5

Coconut oil$/mt1111941115212701365820

Groundnut oil$/mt243617731546141013031924

Palm oil$/mt999.3856.9875.7865.0908.0854.0

Palm kernel oil$/mt1110897109511601292833

Soybean meal$/mt524.1545.3560.3567.0594.0520.0

Soybean oil$/mt1226105710159439851116

Soybeans$/mt591.4538.4556.0566.0591.0511.0

Maize$/mt298.4259.4209.9198.1209.3222.3

Rice, Thailand, 5%$/mt563.0505.9443.7450.0459.0422.0

Wheat, US, HRW$/mt313.2312.2297.1275.5292.3323.6

Bananas, US$/mt1.00.90.90.91.01.0

Oranges$/mt0.91.00.80.70.80.9

Fishmeal$/mt155817471633153115641803

Meat, chicken$/kg2.12.32.32.32.32.3

Meat, beef$/kg4.14.14.24.14.24.4

Sugar, world$/kg0.50.40.40.30.40.4

Plywood$/sheets610.3560.2531.5525.7535.3533.6

Cotton A Index$/kg2.02.02.12.02.12.1

Rubber, TSR20$/kg3.22.52.02.11.91.9

DAP$/mt539.8444.9476.1438.3490.6499.4

Urea$/mt405.4340.1337.5352.6344.1315.8

Copper$/mt796273327030729171496650

Lead$/mt2064.62139.82101.4214321082053

Tin$/mt211262228322636220642282123024

Nickel$/mt175481503214661141011420415678

Zinc$/mt1950.41910.32026.52036.92034.52007.9

Gold$/toz167014111293124413001336

Silver$/toz312420202121

Iron ore$/dmt128.5135.4120.4128.1121.4111.8

Source: World Bank The Pink Sheet.

PUBLIC FINANCE

As a proportion of revised estimate, fiscal deficit and revenue deficit during 2013-14 (AprilFebruary)was 114.3 per cent and 117.3 per cent respectively.

Table 17: Trends in Central Government Finances: April-February 2014 (Rs. Crore)

RevisedEstimatesApril-FebruaryCol.3 asper cent ofCol.4 asper cent ofPer cent changeover preceding year

2013-142012-132013-142012-13RE2013-14RE2012-132013-14(4/3)

1.Revenue Receipts102925267882878359577.976.114.515.4

Gross tax revenue*115890581261689200778.377.015.59.8

Tax (net to Centre)83602657193262713477.175.015.99.7

Non Tax Revenue19322610689615646182.481.07.646.4

2.Capital Receiptsof which56118254071161616296.7109.85.214.0

Recovery of loans10802105551057675.097.9-40.40.2

Other Receipts2584122797628795.024.3731.1-72.4

Borrowings and otherliabilities52453950735959929997.4114.32.818.1

3.Total Receipts (1+2)15904341219539139975785.288.010.214.8

4.Non-Plan Expenditure(a)+(b)111490386651899082386.588.911.314.3

(a) Revenue Account102768978714989960285.687.512.914.3

of which:

Interest payments38006626385232184483.384.711.822.0

Major Subsidies24545120778121834783.889.064.95.1

Pensions74076593966707293.090.514.612.9

(b) Capital Account87214793699122196.9104.6-2.914.9

5.Plan Expenditure (i)+(ii)47553235302140893482.386.07.515.8

(i) Revenue Account37185128779131837183.885.63.710.6

(ii) Capital Account103681652309056376.087.328.338.8

6.Total Expenditure(4)+(5)=(a)+(b)15904351219539139975785.288.010.214.8

(a)Revenue Expenditure13995401074940121797385.187.010.313.3

(b)Of which Grants forcreation of Capital Assets1212839249811641274.496.0-10.825.9

(c)Capital Expenditure19089514459918178486.295.29.125.7

7.Revenue Deficit370288396112434378101.2117.33.89.7

8.Effective Revenue Deficit(7-6(b))249005303614317966113.7127.79.34.7

9.Fiscal Deficit52454050735959929997.4114.32.818.1

10.Primary Deficit144474243507277455119.2192.0-5.513.9

Source: CGA, *Gross Tax Revenue is prior to devolution to the States.