The ERIL Index of Cost of Project Inputs declined nominally during July, probably reflecting some lull in project investment due to intensification of monsoon. The final estimates of consolidated project outlay indices, made available after two months of provisional estimates, have tended to be higher (relative to provisional numbers). The y-o-y increase in the project cost index worked out to 2.3 per cent in July, against 0.3 per cent over corresponding period a year ago.

Production of capital goods was up by 14 per cent in April-June, against 4 per cent decline in the year-ago period. Production of cement increased 10 per cent during April-June, thrice the measure a year ago. Alloy and non-alloy steel output, however, slowed down to 2 per cent, a seventh of the rate a year ago. The WPI for manufactured products, which conceptually set the stage for project investment, increased annually 3.7 per cent in July, against around 2.8 per cent a year ago.

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

Trends in July
The combined wholesale price index for non-metallic mineral products rose 0.5 per cent during the month due to 2 per cent price rise in bricks and tiles and marbles.

The aggregate WPI for basic metals, alloys and metal products declined by 0.2 per cent due to lower price of ferromanganese (3 per cent) and HRC, gold and gold ornaments, melting scrap, billets, ferrosilicon and plates (1 per cent each). However, the price of steel rods escalated 4 per cent, wire rods 2 per cent and pressure cooker 1 per cent.

The total WPI for machinery and machine tools inched up 0.1 per cent due to 1 per cent price rise in hydraulic equipment, battery dry cells, fans, insulators and magnets. However, the price of fibre optic cable dropped 12 per cent, cranes 2 per cent and rubber machinery one per cent.

ERIL INDEX OF COST OF PROJECT INPUTS: JULY 2014
Wholesale Price Index: 2004-05=100
Index Y-o-Y Increase (%) Increase since March (%)
2014/13 2013/12 2014 2013
Non-metallic Mineral Products 168.1 12.9 2.6 0.4 0.4
Structural clay products 188.6 -5.3 5.5 2.3 2.4
Cement and lime 162.6 -5.2 1.2 -0.9 -0.4
Basic Metals, Alloys & Metal Products 166.8 2.8 2.6 -0.5 -1.6
Ferrous metals 157.3 2.6 -2.7 -0.3 -0.9
Non-ferrous metals 167.1 2.5 1.6 0.4 0.9
Machinery & Machine tools 133.9 2.4 2.0 0.5 1.1
Industrial machinery 152.5 2.1 2.5 0.5 1.2
Construction machinery 141.0 2.9 1.3 2.5 0.2
Air-conditioner and refrigerators 120.3 5.6 1.2 0.8 0.2
Non-electrical machinery 124.8 1.4 0.3 0.3 0.4
Electrical machinery and batteries 138.3 2.0 2.0 -0.1 1.1
Electrical accessories, wires and cables 152.6 1.8 4.2 0.7 7.1
Transport equipment & parts 135.8 2.0 3.4 0.0 0.8
Automotives 134.9 1.7 3.8 -0.1 0.8
Auto parts 137.0 2.6 2.9 0.7 1.7
Composite ERIL Index for project inputs 150.3 2.3 0.3 0.0 -0.2
Overall WPI 184.6 5.2 5.9 2.4 3.2

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