"India's exports in April jumped nearly three-folds to $30.21 billion from $10.17 billion in the same month last year, according to commerce ministry's preliminary data released on Sunday. Imports too rose to USD 45.45 billion last month as against $17.09 billion in April 2020," Business Insider. Trade deficit was $15.24 billion. The Economic survey 2020-21 predicted a current account surplus of 2% in the last financial year after a gap of 17 years, CNBC TV18. India ran a current account deficit averaging 2.2% of GDP in the last 10 years. Because of robust foreign direct investments (FDI) and foreign portfolio investments (FPI) we were expected to have a balance of payment "(BoP) surplus of over $100 billion in 2020/21 and around $55 billion with downside risks in FY22", Reuters. "Engineering goods exports zoomed 234.63% in April 2021 indicating that recovery in outbound trade is well on track and outlook remains positive," Economic Times (ET). These are in comparison to April last year when world trade was almost in shutdown due to the pandemic. "Manufacturing activity in April improved a tad as new export orders rose at the fastest pace since October, cancelling out the impact of new domestic factory orders and output falling to eight-month lows," Hindustan Times (HT). The IHS Markit Purchasing Managers' Index (PMI) for April "rose to 55.5 after falling to a seven-month low of 55.4 in March". "Retail inflation for the month of April softened to 4.29 percent (from 5.52% in March) while the Index of Industrial Production (IIP) surged to over 22 percent for March mainly on account of low base effect,"ET. However, "Wholesale Price Index (WPI)-based inflation quickened to 10.49% in April from a contraction of 1.7% in the year-ago period. While food inflation accelerated by 4.92%, inflation for fuel and manufacturing items quickened to 20.94% and 9.01%, respectively. Core inflation, excluding food and fuel prices, shot up to a record 8.4% in April," HT. Since the goods and services tax (GST) is calculated as a percentage of the price, GST collection in April rose to a record Rs 1.41384 trillion, All India Radio. "Fuel prices have gone up by more than Rs 20 since May 2020, even though the base cost of petrol and diesel has risen by only Rs 3-4 a litre during this time, as last year's sharp tax hikes harden the pinch of the current oil price rally," Times of India (TOI). India's cost of crude oil has "risen from $31 per barrel in May 2020 to $66 at present". Not just last year, the government of Prime Minister Narendra Modi has been collecting extortionate taxes on fuel ever since coming to power in 2014. Crude oil price was around $100 a barrel in 2014, fell sharply to less than $30 by 2016, and has risen to around $66 today. The government earned Rs 11 trillion in 4.5 years to November 2018 from taxes on fuel, said the Congress. In 2020-21, even as people struggled with a punishing collapse in earnings, the government increased excise duties on fuel and earned Rs 2.95 trillion from April 2020 to January 2021. Price of petrol in the US is around $3 per US gallon, which works out to about Rs 58 per liter. When Modi came to power in 2014, everyone got 6 subsidised cylinders of domestic gas at Rs 414 each and any more than that cost Rs 1,241 per cylinder, India Today. Today, the lowest price of a cylinder of gas is at Rs 819 even for the poorest household in rural areas, ET. "In a country where close to 20% of the population lives below the poverty line and food is a major item of their consumption basket, any rise in inflation, especially food inflation, hurts the poor. Desperately," wrote Mythili Bhusnurmath. "Moreover, globally, commodity prices are already on the rise." "As the US economy recovers, the dollar strengthens and US interest rates rise, the rupee is bound to weaken in response, adding to inflationary pressures here." "While it is true that it will take several more months of data to assess the nature and persistence of higher inflation, there is already sufficient corporate and macroeconomic evidence to question the assertion that rising prices will be 'transitory'." wrote Mohamed El-Erian in the US. Since the next general election is in 2024 Modi is relaxed. The US Federal Reserve is expected to start tightening in 2023, CNBC. Then all hell will break lose.
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