Zoom News : Jun 20, 2022, 08:10 AM
Delhi: Bumper agricultural production from normal monsoon and hike in interest rates by the Reserve Bank of India (RBI) may provide relief on the inflation front. Economists have expressed this opinion. Inflation is at an all-year high as food and fuel have become costlier. Retail inflation rose by 7.04 per cent year-on-year in May as against 7.79 per cent in April. Three-fourth of the price rise is coming from food items and it is expected to be relieved due to normal monsoon.
Major companies have already announced reduction in edible oil prices. S&P Global Ratings Economist Vishruta Rana said global commodity prices are a major driving factor for the rise in inflation and food prices will further depend on the monsoon. A better monsoon will boost agricultural production and keep prices in check. He said that the Reserve Bank has already increased the key policy rate repo by 0.90 percent and it may increase by 0.75 percent in the coming times.Sunil Sinha, chief economist, India Ratings and Research, said being a net importer of goods, India cannot do much on this front. However, import duties may be cut to mitigate the impact. However, it has its limits. EY India chief policy advisor DK Srivastava said fiscal policies can be effective in reducing supply constraints.Employment opportunities will increase in manufacturing sector: FICCIFICCI's latest quarterly survey on the manufacturing sector shows that after witnessing a revival of Indian manufacturing in the first three quarters of 2021-22, the pace of growth has continued in the fourth quarter (January-March 2021-22) as well. At the same time, with the continuation of the momentum in the first quarter of the current financial year, April-June (2022-23), after a long gap, employment opportunities in this sector will increase in the next quarter and new opportunities may increase in many sectors.
job creation improvedAccording to the survey, 53 per cent of the respondents in the first quarter of the current financial year said that they are looking at hiring an additional workforce in the next three months. Whereas in the third quarter of FY 2021-21, only 25 per cent said they were planning additional recruitments. 23% of the respondents said that there is a shortage of skilled workforce in their area. This assessment is also reflected in the order book as 55% of the respondents expect a higher number of orders in the first quarter, the survey said.77% capacity utilization in manufacturingAccording to the survey, the average capacity utilization in the manufacturing sector in the fourth quarter of FY 2021-22 was 77%, which is higher than its previous quarter. This reflects increased economic activity in the region. The future investment outlook has also improved over previous quarters, but cautious optimism remains, as 40% of respondents reported an average of 14% capacity addition plans over the next six months. The survey said that 54.8% of the respondents reported high production levels in the first quarter (April- June 2022-23) of the current financial year, with an average expectation of over 10% growth in production.encouraging signs from 12 sectorsFICCI's latest quarterly survey for the first quarter of the current financial year for twelve key sectors including vehicles, capital goods, cement, chemicals, fertilisers, pharmaceuticals, footwear, machine tools, metal & metal products, paper, textiles, toys, tyres The sentiments of the producers were assessed. Barring a few sectors, almost all sectors are likely to register moderate to strong growth. These sectors have a combined annual turnover of more than three lakh crores. Responses have been received from more than 300 manufacturing units associated with these.Exports expected to accelerateAccording to the survey, the outlook for exports looks positive. 53.4% of the respondents said that exports are expected to grow at an average of 15.2% in the first quarter of the current financial year.interest rate increased costThe average interest rate paid by manufacturers has increased to 9.69% per annum. About 70% of the respondents reported the difficulties of high lending rates. 91% of the respondents said that the cost has increased. Low availability and high raw material prices especially steel, increased transportation, logistics and freight costs, and rising crude oil and fuel prices have been the main contributors to the rising cost of production. Other factors responsible for the increase in production costs include increased labor costs, higher costs of carrying inventory, and foreign exchange rate fluctuations.
Major companies have already announced reduction in edible oil prices. S&P Global Ratings Economist Vishruta Rana said global commodity prices are a major driving factor for the rise in inflation and food prices will further depend on the monsoon. A better monsoon will boost agricultural production and keep prices in check. He said that the Reserve Bank has already increased the key policy rate repo by 0.90 percent and it may increase by 0.75 percent in the coming times.Sunil Sinha, chief economist, India Ratings and Research, said being a net importer of goods, India cannot do much on this front. However, import duties may be cut to mitigate the impact. However, it has its limits. EY India chief policy advisor DK Srivastava said fiscal policies can be effective in reducing supply constraints.Employment opportunities will increase in manufacturing sector: FICCIFICCI's latest quarterly survey on the manufacturing sector shows that after witnessing a revival of Indian manufacturing in the first three quarters of 2021-22, the pace of growth has continued in the fourth quarter (January-March 2021-22) as well. At the same time, with the continuation of the momentum in the first quarter of the current financial year, April-June (2022-23), after a long gap, employment opportunities in this sector will increase in the next quarter and new opportunities may increase in many sectors.
job creation improvedAccording to the survey, 53 per cent of the respondents in the first quarter of the current financial year said that they are looking at hiring an additional workforce in the next three months. Whereas in the third quarter of FY 2021-21, only 25 per cent said they were planning additional recruitments. 23% of the respondents said that there is a shortage of skilled workforce in their area. This assessment is also reflected in the order book as 55% of the respondents expect a higher number of orders in the first quarter, the survey said.77% capacity utilization in manufacturingAccording to the survey, the average capacity utilization in the manufacturing sector in the fourth quarter of FY 2021-22 was 77%, which is higher than its previous quarter. This reflects increased economic activity in the region. The future investment outlook has also improved over previous quarters, but cautious optimism remains, as 40% of respondents reported an average of 14% capacity addition plans over the next six months. The survey said that 54.8% of the respondents reported high production levels in the first quarter (April- June 2022-23) of the current financial year, with an average expectation of over 10% growth in production.encouraging signs from 12 sectorsFICCI's latest quarterly survey for the first quarter of the current financial year for twelve key sectors including vehicles, capital goods, cement, chemicals, fertilisers, pharmaceuticals, footwear, machine tools, metal & metal products, paper, textiles, toys, tyres The sentiments of the producers were assessed. Barring a few sectors, almost all sectors are likely to register moderate to strong growth. These sectors have a combined annual turnover of more than three lakh crores. Responses have been received from more than 300 manufacturing units associated with these.Exports expected to accelerateAccording to the survey, the outlook for exports looks positive. 53.4% of the respondents said that exports are expected to grow at an average of 15.2% in the first quarter of the current financial year.interest rate increased costThe average interest rate paid by manufacturers has increased to 9.69% per annum. About 70% of the respondents reported the difficulties of high lending rates. 91% of the respondents said that the cost has increased. Low availability and high raw material prices especially steel, increased transportation, logistics and freight costs, and rising crude oil and fuel prices have been the main contributors to the rising cost of production. Other factors responsible for the increase in production costs include increased labor costs, higher costs of carrying inventory, and foreign exchange rate fluctuations.