Indian Economy Summary

* Industrial output rose 7.1% in July 2008 from July 2007 and from a rise of 5.4% in June 2008, data released by the Union government on 12 September 2008 showed. This was above market expectation of a 6.5% growth. Manufacturing production was up 7.5% in July 2008 from July 2007.

* The infrastructure sector output grew 4.3% in July 2008 from July 2007. This is above the 3.4% annual growth in June 2008, government data showed on 10 September 2008. The infrastructure sector accounts for 26.7% of industrial output.

* Inflation based on the wholesale price index surged 12.10% in the 12 months to 30 August 2008, below the previous week’s annual rise of 12.34%, data released by the Union government on 11 September 2008 showed. Inflation for the week ended 5 July 2008 was revised up to 12.19% from 11.91%.

* India’s exports grew 31.2% to $16.35 billion in July 2008 from a year earlier but the trade deficit widened to $10.80 billion from June as higher oil imports weighed, data showed on 1 September 2008. Imports were up 48.1% to $27.14 billion in July 2008, while oil imports rose 69.3% to $9.48 billion in the month. Exports were up 24.6% at $59.19 billion in April to July 2008 from a year earlier, while the trade deficit widened to $41.23 billion in the period from $27.35 billion in the same period in the previous year.

* The UPA Government on 1 September 2008 ruled out an immediate reduction in petrol and diesel prices as state-run firms are still running into daily losses of over Rs 400 crore despite softening in international oil prices. The drop in international oil prices has resulted in Indian Oil, Bharat Petroleum and Hindustan Petroleum reporting a revenue loses of Rs 400 crore per day in the fortnight ending September 2008 from Rs 450 crore a fortnight ago.

* The Union government on 1 September 2008 appointed finance secretary Duvvuri Subbarao as the new governor of the Reserve Bank of India (RBI). He succeeded Dr Y V Reddy, whose term ended on 5 September 2008. Subbarao would be appointed for a three-year period. He may, however, be considered for reappointment for another two years, as the RBI Act provides for appointment of a governor for a period of up to five years.

* India has slipped two notches to 122 in a global list that ranks the ease of doing business in 181 economies. The sixth ‘Doing Business Report 2009’, prepared by the International Finance Corporation and the World Bank, places Nepal and Pakistan above India despite these two countries undertaking no major reform in the last year.