The Reserve Bank of India today released the November 2012 issue of its monthly Bulletin. The Bulletin includes six special articles: (i) Developments in India's Balance of Payments during First Quarter (April-June) of 2012-13, (ii) India’s External Debt: Trends, Policy Measures and Cross-Country Comparison, (iii) Quarterly Industrial Outlook Survey: July-September 2012 (Round 59), (iv) Quarterly Order Books, Inventories and Capacity Utilisation Survey: April-June 2012 (Round 18), (v) Inflation Expectations Survey of Households: September 2012 (Round 29) and (vi) Consumer Confidence Survey: September 2012 (Round 10).

1. Developments in India's Balance of Payments during First Quarter (April-June) of 2012-13

This article provides details on developments in India's balance of payments during April-June (Q1), 2012-13. The disaggregated data on invisibles along with the quarterly data for the corresponding period of the previous year and annual data for 2011-12 have also been published as part of this article.

2. India’s External Debt: Trends, Policy Measures and Cross-Country Comparison

The article reviews India’s external debt position as at end-June 2012 along with cross-country comparison in terms of key indicators with select countries. The policy measures undertaken by the Reserve Bank of India in the backdrop of subdued capital flows for smooth financing of the current account deficit are also presented. The article inter alia provides details about the currency composition, Government and non-Government components, instrument wise classification and maturity profile of the stock of external debt.

Both, developments in India's Balance of Payments during the first quarter (April-June) of 2012-13 as well as India's external debt review were released in public domain on September 28, 2012.

3. Quarterly Industrial Outlook Survey: July-September 2012 (Round 59)

This article presents the findings of Industrial Outlook Survey conducted for the July-September 2012 quarter - 59th round in the series. The survey provides an assessment of business situation of companies in the manufacturing sector for the quarter July-September 2012, and their expectation for the ensuing quarter October-December 2012.

Main Findings

• The demand conditions as reflected in the net response for production, order books, capacity utilisation, imports and exports have further weakened in Q2:2012-13. However, the outlook for Q3: 2012-13 showed a marginal improvement.

• Optimism level for overall financial situation declined further in the assessment quarter. Marginal improvement is expected for the ensuing quarter. Sentiment on availability of finance followed a similar trend. Cost of external finance and cost of raw material were perceived to rise but by a lower percentage of respondents as compared to the previous quarter. The profit margin which had been declining for the last few quarters is expected to remain at the same level in Q3:2012-13.

• The Business Expectation Index, a measure that gives a single snapshot of the industrial outlook, showed moderation for the assessment quarter and reached a level seen at the onset of financial crisis in Q3:2008-09. However the outlook for Q3:2012-13 was marginally better.

4. Quarterly Order Books, Inventories and Capacity Utilisation Survey: April-June 2012 (Round 18)

This article, fifth in the series, presents the findings of the 18th round of the Order Books, Inventories and Capacity Utilisation Survey (OBICUS). The survey was conducted for the April-June 2012 quarter (Q1:2012-13) among a sample of manufacturing companies. It captures the movements in important indicators of economic activity, such as, order books, inventories and capacity utilisation, inflationary pressures and overall business cycle, which are useful for assessing consumption and investment demand outlook.

Main Findings

• Average new orders of respondent companies increased in Q1: 2012-13 over the previous quarter. The higher year-on-year growth was partially caused by the lower base.

• Capacity utilisation level which had increased in Q4: 2011-12 moderated substantially in Q1: 2012-13. The current capacity utilisation level is the lowest in last 13 quarters.

• Both finished goods inventory to sales ratio and raw materials inventory to sales ratio increased in Q1: 2012-13 over the previous quarter.

5. Inflation Expectations Survey of Households: September 2012 (Round 29)

The findings of the 29th round of Inflation Expectations Survey of Households for July-September 2012 quarter, conducted during the first fortnight of September 2012 are presented in the article. The survey captures the inflation expectations of 4,000 urban households across 12 cities for the next three-month period and for the next one-year period. These expectations are based on their individual consumption baskets and hence, should not be considered as predictors of any official measure of inflation. The households’ inflation expectations provide useful directional information on near-term inflationary pressures and also supplement other economic indicators to get a better indication of future inflation. The survey  results are based on replies of the respondents and do not necessarily reflect the perceptions of the Reserve Bank of India.

Main Findings

• The perceived current inflation and three-month ahead inflation expectations based on median as well as mean inflation rate have moved down as compared with the previous round. However, in the case of one-year ahead period, median inflation expectation has moved up while mean inflation expectation has moved down as compared with the previous round.

• The three-month and one-year ahead inflation expectations are higher than the perceived mean current inflation rate (10.6 per cent) by 90 and 210 basis points, respectively.

• The percentage of respondents expecting increase in general prices by ‘more than current rate’ for three-month ahead period has decreased noticeably to 78.9 from 83.6 per cent; in contrast, that for one-year ahead has gone up to 86.8 from 84.4 per cent as compared to the previous round.

6. Consumer Confidence Survey: September 2012 (Round 10)

This article presents the salient findings of the Consumer Confidence Survey conducted in September 2012, the 10th round in the series. The survey covers 5,124 households well spread in six metro cities. Based on perceptions of respondents on general economic and their own financial situation, the survey captures the households’ confidence in the current and expected economic conditions, household circumstances, employment conditions, current and future spending and prices. The survey results are based on replies of the respondents and do not necessarily reflect the perceptions of the Reserve Bank of India.

Main Findings

• While sentiments about current and future economic conditions have been declining over the last four quarters, for the first time in this survey, the net response on perceptions about current economic conditions turned negative.

• There has been a noticeable drop in the positive perceptions on household circumstances, income and price level. However, due to sharp rise in proportion of respondents reporting increase in spending as compared to a year ago, the Current Situation Index in September 2012 remained by and large the same as that of the last quarter. In contrast, there has been a sharp decline in Future Expectations Index due to all constituent factors.

The four surveys were first published as part of Macroeconomic and Monetary Developments: Second Quarter Review 2012-13 on October 29, 2012.

Sangeeta Das
Director

Press Release : 2012-2013/805