RBI releases its Monthly RBI Bulletin for March 2011

Thursday, March 10, 2011

The Reserve Bank of India today released March 2011 issue of its monthly RBI Bulletin (www.rbi.org.in/scripts/BS_ViewBulletin.aspx) . The March issue carries five special articles: (i) North-East Monsoon 2010: An Overview (October 1 to December 31, 2010), (ii) India’s Foreign Trade: 2010-11 (April-December), (iii) Quarterly Industrial Outlook Survey: October-December 2010 (52nd Round), (iv) Finances of Non-Government Non-Financial Large Public Limited Companies: 2009-10 and (v) Finances of Foreign Direct Investment Companies: 2008-09.

Highlights :

North-East Monsoon 2010 : An Overview (October 1 to December 31, 2010)

The article reviews the status of the North-East monsoon against the backdrop of normal South-West monsoon which has immensely improved the prospects of agricultural production during 2010-11.

Main Findings

  • Cumulative rainfall for the country as a whole during October- December 2010 was 21 per cent above long period average (LPA).

  • Area sown under foodgrains, namely, wheat and pulses have surpassed their respective normal areas sown and levels achieved last year.

  • As per the latest available data, rabi sowing of all crops as on February 11, 2011 was 104.9 per cent of normal area sown and 2.4 per cent higher than the level achieved last year.

  • As on February 10, 2011, live storage to total storage capacity at 55 per cent for all the major 81 reservoirs in the country as against 40 per cent last year augurs well for rabi crops.

  • Production of major rabi crops is estimated to register a significant increase.

India’s Foreign Trade: 2010-11 (April-December)

The article reviews the performance of India’s merchandise trade during 2010-11 (April-December) on the basis of data released by Directorate General of Commercial Intelligence and Statistics (DGCI&S). The article also covers disaggregated commodity-wise and direction-wise analysis of India’s trade during the period 2010-11 (April-September).

Main Findings

  • During 2010-11 (April-December), India’s merchandise exports at USD 164.7 billion recorded a growth of 29.5 per cent over the corresponding period of previous year as against a decline of 13.8 per cent during 2009-10 (April-December).

  • Merchandise imports at USD 246.7 billion registered an increase of 19.0 per cent (as against a decline of 18.3 per cent a year ago).

  • On a monthly basis, exports maintained the growth momentum in the recent months while imports experienced deceleration and eventually declined during December 2010, partly on account of base effect.

  • The oil and non-oil imports registered growth rates of 17.7 per cent and 19.6 per cent in 2010-11 (April-December) as against declines of 24.0 per cent and 15.7 per cent, respectively, during the corresponding period of last year.

  • The disaggregated data on commodity-wise merchandise export reveals that during the first half of 2010-11 items such as engineering goods, oil and gems and jewellery contributed the most to the overall growth in exports.

  • Destination-wise, there has been diversification of exports towards developing countries.

Quarterly Industrial Outlook Survey: October-December 2010 (52nd Round)

The article presents the findings of Industrial Outlook Survey conducted for the October-December 2010 quarter, 52nd round in the series. It gives an assessment of the business situation of companies in manufacturing sector, for the quarter October-December 2010, and their expectations for the ensuing quarter January-March 2011.

Main Findings

  • The survey results signal a further improvement of business conditions in the Indian manufacturing sector for assessed quarter (October-December 2010).

  • The Business Expectation Index – a measure that gives a single snapshot of the industrial outlook in each quarter – registered an increase up to 122.8 from 119.0; however, the manufacturers expect growth to moderate in January-March 2011.

  • The expectation index, which is seen to decline marginally from 126.5 to 125.9 for January-March 2011 quarter is still higher than 100 which is the threshold that separates contraction from expansion.

Finances of Non-Government Non-Financial Large Public Limited Companies: 2009-10

The article presents the financial performance of select 1,752 non-government non-financial large (with paid-up capital of `1 crore or more) public limited companies during the financial year 2009-10, based on their audited annual accounts.

Main Findings

  • The aggregate results of the select companies had shown signs of recovery in 2009-10 after the global financial crisis experienced during 2008-09. The growth rates in major parameters such as sales, value of production, manufacturing expenses, net worth, etc. improved in 2009-10.

  • Profitability parameters, viz., gross profits and profits after tax also improved with positive growth in 2009-10 after recording decline in 2008-09.

  • The profitability and profit allocation ratios, e.g., profit margin, return on equity and dividends to net worth were higher due to higher profits in 2009-10 compared to that in 2008-09. However, the pace of expansion of business of the select companies was slower in 2009-10. This led to significant cut-down in the borrowing requirement.

  • For the first time in recent past, stock of capital work-in-progress declined at end 2009-10 as compared with that of the previous year. However, significant increase in acquiring plant and machinery during the year led to the growth in gross fixed assets.

Finances of Foreign Direct Investment Companies: 2008-09

The article assesses the financial performance of select non-government non-financial foreign direct investment (FDI) companies during 2008-09 based on their audited annual accounts. The data are presented at the aggregate level for the select companies and also for select industries and countries of origin.

Main Findings

  • The aggregate results of the select FDI companies in 2008-09 revealed that the global financial crisis during the year had a significant impact on the performance of the non-government, non-financial, FDI companies.

  • While financial performance as indicated by growth rate of sales, value of production and income moderated, gross profit, profit after tax and profit retained declined in 2008-09 when compared to those in 2007-08.

  • However, the FDI companies performed better than non-FDI companies in 2008-09. The FDI companies experienced a higher growth in sales and lower decline in gross profit and profit after tax as compared to those of non-FDI companies. While profit margins of both the groups of companies were at the same level, return on shareholders’ equity of FDI companies was higher as compared with those of non-FDI companies during 2008-09.

  • The FDI companies relied more on borrowings for their financing needs. The share of incremental bank borrowings in total sources of funds increased in 2008-09. ‘Fixed Assets Formation’ and ‘Loans and Advances and Other Debtor Balances’ were the major uses of funds during 2008-09.

J.D. Desai
Assistant Manager

Press Release : 2010-2011/1295

Filed under: Finance

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