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Date : May 09, 2017
RBI’s Monthly Bulletin for May 2017

The Reserve Bank of India today released the May 2017 issue of its monthly Bulletin. It includes a Speech by the Top Management, three articles on Finances of Non-Government Non-Financial Public Limited Companies, 2015-16; Performance of Non-Government Non-Banking Financial and Investment Companies, 2015-16 and Union Budget 2017-18: An Assessment and Current Statistics.

1. Finances of Non-Government Non-Financial Public Limited Companies, 2015-16

The article analyses the financial performance of select 19,602 non-government non-financial (NGNF) public limited companies for the financial year 2015-16 on the basis of their audited annual accounts during April 2015 to March 2016 along with comparable data from 2013-14 to 2014-15. These 19,602 companies accounted for 39.9 per cent of the population’s paid-up capital of such companies.


  • At the aggregate level, sales growth moderated, while operating expenses contracted in 2015-16, resulting in improvement in operating profits growth.
  • Mining, textiles, and iron and steel industries recorded contraction in sales.
  • The cost of raw materials as percentage of sales declined substantially in 2015-16 due to fall in international commodity prices.
  • Share of staff cost in total sales of the companies continued to rise.
  • The share of bank borrowings held by the vulnerable companies declined in 2015-16.
  • Recourse to fresh borrowings by the companies was lower in 2015-16 than a year ago.
  • Investment in fixed capital assets showed an upturn.

The aggregate and granular data pertaining to the finances of these companies for 2015-16 are available on the Reserve Bank’s website at!2_44.

2. Performance of Non-Government Non-Banking Financial and Investment Companies, 2015-16

This article presents an analysis of the performance of non-government non-banking financial and investment (NGNBF&I) companies (excluding insurance and banking companies) for the year 2015-16 along with a comparative picture over the three-year period of 2013-14 through 2015-16 based on a common set of companies. The analysis is based on audited annual accounts of 21,186 companies accounting for 74.9 per cent of PUC of all NGNBF&I companies as on March 31, 2016.


  • The overall performance of select NGNBF&I companies improved with gross value added (GVA) recording a higher growth in 2015-16 as compared with the previous year.
  • Financial income and operating profit (EBDT) accelerated during 2015-16 as compared to a year ago.
  • Operating profit margin (measured as a ratio of operating profits to financial income) and return on equity (measured as a ratio of net profit to net worth) improved in 2015-16 from its level in 2014-15.
  • Total borrowings grew at a marginally higher rate in 2015-16 than from a year ago; however, borrowings from banks decelerated significantly.
  • The liquidity position measured by the current ratio (ratio of current assets to current liabilities) and cash ratio (ratio of cash and cash equivalents to current liabilities) deteriorated and the leverage ratio and bad debts to expected receivables ratio wise elevated in 2015-16 relative to a year ago.
  • The share of short-term and long-term borrowings in the total liabilities firmed up during 2015-16 as compared with the previous year.
  • On the assets side, the share of both short-term and long-term loans and advances in the total assets expanded during 2015-16.
  • As regard sources and uses of funds, NGNBF&I companies continued to rely mainly on external sources for funds in their business expansion, predominantly for expanding non-current investments and both short term and long-term loans and advances portfolios.
  • In contrast to the general trend observed at the aggregate level for select NGNBF&I companies, operating profit margin as well as return on equity of chit fund and mutual fund companies declined in 2015-16 from a year ago.

The data pertaining to the finances of these 21,186 NGNBF&I companies for 2015-16 were released earlier in March 2017 on the RBI’s website and is available at

3. Union Budget 2017-18: An Assessment

This article analyses the key features of the Union Budget 2017-18 and presents an assessment of the likely fiscal situation in 2017-18.

Major Highlights:

  • Revised estimates (RE) for 2016-17 indicate that the Central Government achieved the budgetary targets for key deficit indicators through buoyant tax and non-tax revenues even after allowing for higher than budgeted expenditure.

  • The gross fiscal deficit (GFD) and revenue deficit (RD) are budgeted to decline by 0.3 and 0.1 percentage point to 3.2 per cent and 1.9 per cent of GDP, respectively, in 2017-18 reflecting continued commitment to fiscal consolidation. In a deviation from the amended FRBM path, the achievement of the GFD-GDP target of 3.0 per cent, however, has now been deferred to 2018-19 from 2017-18.

  • On the receipts side, the gross tax revenue is estimated to grow by 12.2 per cent driven by buoyant income tax collections while the growth in indirect taxes is expected to moderate. Despite the shortfall in achieving disinvestment targets in 2016-17 (about 20 per cent), aggregate disinvestment receipts are budgeted to grow by 59.3 per cent in 2017-18.

  • As a major reform, the Government removed the classification of Plan and Non-Plan expenditure from 2017-18. While the revenue expenditure is budgeted to decelerate sharply, the capital expenditure is expected to remain buoyant thereby improving the expenditure quality.

  • Overall, the Budget carries a pro-farmer pro-rural focus. Measures, viz., higher infrastructure expenditure; targeted policy for sectors most affected after demonetization; and tax concessions that could stimulate consumption demand may help towards strengthening the pace of recovery in growth.

Ajit Prasad
Assistant Adviser

Press Release : 2016-2017/3028