Even as the WPI-based inflation sped to 5.6 per cent in H1, from 4.8 per cent in the corresponding period of fiscal 2013, signifying dull conditions in project implementation, the composite ERIL Index of Cost of Project Inputs stagnated during H1, against 2.4 per cent increase during the same period of the preceding fiscal.

Most of the increase in WPI during H1 was in primary articles whose prices shot up 12.8 per cent with food article prices escalating by an even higher 17.8 per cent. Also, electricity prices increased 13 per cent and petroleum product prices, 8.6 per cent. However, the WPI of manufactured products, which technically sets the pace for project investment and reflects the performance of the real economy, declined from 3.8 per cent to 1.5 per cent between the two halves. By the way, the project cost index which had declined till August progressed into a marginal positive zone because of price hikes in several project materials during September.

The rot in H1 of the ongoing fiscal, relative to H1 a year ago, was across most of the project inputs, with notable exceptions comprising marbles (5.3 per cent increase against 6.9 per cent decline), PVC insulated cables (9.8 per cent increase, against 1.7 per cent), radiators and coolers (11.7 per cent increase against 0.6 per cent), pneumatic tools (7.3 per cent increase against 2.9 per cent), and control equipment (5.4 per cent increase against 2.7 per cent decline).

Computed by Economic Research India Pvt. Ltd, the ERIL Index measures the overall project cost escalation in terms of WPI of material inputs relevant in project construction

ERIL INDEX OF COST OF PROJECT INPUTS: SEPTEMBER 2013
Wholesale Price Index: 2004-05=100
 
Index
Increase (%) During
Increase since March (%)
 
 
2013-12
2012-11
2013
2012
Non-metallic Mineral Products
164.7
5.8
9.3
-1.3
4.0
Structural Clay Products
174.0
0.5
5.7
3.8
2.6
Cement & Lime
165.7
-3.2
12.2
-3.8
4.9
Basic Metals, Alloys & Metal Products
163.1
-2.4
7.4
-1.0
2.3
Ferrous Metals
152.9
-2.4
7.1
-1.2
1.2
Non-Ferrous Metals
164.3
1.8
2.7
1.7
2.0
Machinery & Machine Tools
131.1
2.1
2.6
1.3
1.6
Industrial Machinery
149.2
2.3
2.7
1.1
1.2
Construction Machinery
136.2
0.1
3.2
-0.4
3.1
Air-conditioners & Refrigerators
114.9
1.4
2.8
1.1
2.9
Non-electrical Machinery
123.8
0.7
1.6
0.6
0.2
Electrical Machinery & Batteries
135.8
2.0
1.7
1.3
1.7
Electrical Accessories, Wires & Cables
150.3
4.6
4.7
3.7
2.6
Transport Equipment & Parts
134.1
3.2
4.1
1.4
2.8
Automotives
133.6
3.6
3.9
1.4
2.7
Auto Parts
133.2
2.0
4.4
1.4
2.8
Composite ERIL Index for Project Inputs
147.3
0.1
5.6
0.0
2.4
Overall WPI
179.7
6.5
8.1
5.6
4.8

Trends in September
The total wholesale price index for non-metallic mineral products rose 0.2 per cent during the month due to higher price of marbles (5 per cent). However, the price of white cement declined by 1 per cent.

The combined WPI for basic metals, alloys and metal products rose 0.2 per cent due to higher price of ferrosilicon (4 per cent), silver and metal containers and gold and gold ornaments (3 per cent each), sheets (2 per cent), and steel pipes and tubes, aluminium, and iron and steel wires (1 per cent each). However, the price of ferrochrome declined 2 per cent, and steel rods, rounds, sponge iron and steel castings, 1 per cent each.

The consolidated WPI for machinery and machine tools was up by 0.2 per cent due to higher price of battery dry cells and TV accessories (5 per cent each), lamps, compressors, electronic PCB/micro circuits and fibre optic cables (2 per cent each), and capacitors, batteries, control equipment, computers, machine tools and air-conditioners, and refrigerators (1 per cent each). However, the price of loaders eroded 3 per cent, ball/roller bearings 2 per cent, and plastic machinery, washing and laundry machines, and electric motors, 1 per cent.

The aggregate WPI for transport, equipment and parts increased 0.3 per cent due to 1 per cent price hike in motorcycles, scooters, mopeds and shafts (all kinds).


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