In a worrying indication, even as the economy and the industry seems to be showing some signs of coming out of the rut, project execution, as reflected in project cost index, appears to be in moribund state. Thus, ERIL Index of Cost of Project Inputs, as measured by the WPI of project implementation-related material inputs, declined 2.2 per cent during the first five months of the ongoing fiscal. What is more worrisome, the decline deepened from 0.9 per cent over Q1 to 1.4 per cent till July and a steeper 2.2 per cent by August. The rot was mainly due to weak basic metal prices: WPI of ferrous metal prices declined by 6.4 per cent during April-August and non-ferrous metal prices by 1.6 per cent. WPI of iron & semis showed 6.7 per cent drop.

Capital goods production increased 4 per cent during April-July. Among the other material inputs in project execution, cement production increased by one per cent and alloy, non-alloy steel production 1.4 per cent during this period. Machinery export declined by one per cent, whereas their import was up by 6.5 per cent during April-July.

Trends during August
The wholesale price index for non-metallic mineral products rose by 0.8 per cent during the month due to higher price of grey cement (2 per cent) and white cement (1 per cent).  However, the price of asbestos corrugated sheet declined 3 per cent, glass bottles & bottleware 2 per cent and marbles and railway sleeper 1 per cent each.
The consolidated WPI for basic metals, alloys & metal products declined by 1.9 per cent due to 6 per cent decline in WPI of melting scrap, 5 per cent each in billets, sheets and wire rods,   4 per cent each in  silver, sponge iron, angles and pencil  ingots, 3 per cent each in rounds, pig iron, HRC and CRC, 2 per cent each in plates, steel rods,     joist & beams, gold & gold ornaments, rebars, GP/GC sheets and iron castings; and one per cent each in steel pipes & tubes, steel castings, metal containers, zinc and aluminium .  However, the price of steel structures escalated 4 per cent and ferro manganese one per cent.
The combined WPI for machinery & machine tool declined by 0.2 per cent due to lower price of fibre optic cable (4 per cent), electric motors (3 per cent), ball/roller bearing (2 per cent); and  electronic PCB/micro circuit, hydraulic equipment, conductor, electrical wires and PVC insulated cable (1 per cent each).  However, the price of battery dry cells increased by 3 per cent, heat exchanger and harvester 2 per cent each and insulators one per cent.
The WPI for transport equipment & parts declined by 0.1 per cent due to lower price of bi-cycles (2 per cent).

ERIL Index of Cost of Project Inputs: August 2015
Wholesale Price Index: 2004-05=100
  Index Y-o-Y Incr. (%) Incr. since Mar (%)
    2015/14 2014/13 2015 2014
Non-metallic mineral products 175.6 2.6 3.3 -1.7 2.2
Structural clay products 197.9 3.6 10.3 0.9 3.6
Cement & Lime 170.5 1.9 -0.5 -4.1 2.0
Basic metals, alloys, metal products 154.1 -7.6 2.3 -4.8 -0.5
Ferrous Metals 141.5 -9.7 2.4 -6.4 -0.7
Non-Ferrous Metals 164.7 -2.6 3.0 -1.6 1.6
Machinery & Machine tools 134.9 0.1 2.8 -0.1 1.1
Industrial Machinery 153.8 0.9 2.1 0.5 0.5
Construction Machinery 141.5 0.1 2.9 0.0 2.8
Air Conditioner & Refrigerators 120.5 -0.2 5.7 -0.1 1.1
Non-electrical Machinery 127.4 0.2 2.7 -0.1 2.2
Electrical Machinery, Batteries 137.9 -0.4 2.0 -0.2 0.0
Electrical Accessories, Wires, Cables. 156.3 -0.1 4.3 -0.5 3.3
Transport equipment & parts 137.7 1.3 1.6 0.3 0.1
Automotives 136.7 1.1 2.8 0.3 0.1
Auto Parts 140.2 2.0 3.1 0.2 1.0
Composite ERIL Index for project inputs 146.7 -2.7 2.4 -2.2 0.3
Overall WPI 176.7 -4.9 3.9 0.3 3.1

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