The ERIL Index of Cost of Project Inputs inched up during August, reversing the decline in the previous month that had came after increase in the earlier two months. In a sign of upward movement in cost of project inputs, the final estimates of WPI of project investment-related material inputs have tended to be higher than those provisionally assessed earlier. Nevertheless, the escalation in composite project cost index has remained subdued at 2.2 per cent y-o-y in August and 0.1 per cent in the first five months of the ongoing fiscal, as compared to 3.5 per cent and 3 per cent, respectively in aggregate WPI.

Production of capital goods was up by 8.5 per cent in April-July. Production of cement increased 11 per cent, though alloy and non-alloy steel output stagnated at year-ago level.

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 August
The total wholesale price index for non-metallic mineral products rose 0.8 per cent during the month due to higher price of marbles (3 per cent) and grey cement and railway sleeper (2 per cent each). However, the price of bricks and tiles declined by 1 per cent.

The aggregate WPI for machinery and machine tools rose 0.4 per cent due to higher price of PVC insulated cables (6 per cent), heat exchangers (4 per cent), grinding and wet coffee machinery and loaders (2 per cent each), and conductors, insulators, electric switchgears, pump and pump assembly, electric switches and battery dry cells (1 per cent each). However, the price of washing and laundry machines declined 3 per cent, ball/roller bearings and microwave ovens 2 per cent each, and fibre optic cables, material handling equipment and machine tools 1 per cent each.

The collective WPI for transport, equipment and parts rose nominally due to higher price of bicycles (2 per cent) and buses, mini buses and trucks (1 per cent).

The combined WPI for basic metals, alloys and metal products declined by 0.2 per cent due to lower price of wire rods and pig iron (3 per cent each), melting scrap (2 per cent) and sponge iron, rounds, plates, steel rods, angles, pencil ingots, CRC, gold and gold ornaments, joists and beams, fixtures and ferrochrome (1 per cent each). However, the price of steel castings, ferromanganese, and nuts, bolts, screws and washers increased 2 per cent each, and aluminium, silver and rebars 1 per cent each.

ERIL INDEX OF COST OF PROJECT INPUTS: AUGUST 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 169.5 2.2 0.9 1.2 -0.3
Structural clay products 188.6 8.9 5.3 2.3 3.3
Cement and lime 165.9 -1.4 -2.0 1.1 -2.4
Basic Metals, Alloys & Metal Products 166.4 2.1 -2.2 -0.7 -1.2
Ferrous metals 156.7 2.4 -2.4 -0.7 -1.0
Non-ferrous metals 168.4 2.6 2.2 1.2 1.7
Machinery & Machine tools 134.5 2.7 2.1 1.0 1.2
Industrial machinery 152.4 2.1 2.2 0.5 1.1
Construction machinery 141.4 2.9 1.3 2.8 0.5
Air-conditioner & refrigerators 120.7 5.7 1.2 1.1 0.4
Non-electrical machinery 127.2 2.7 0.7 2.3 1.0
Electrical machinery & batteries 138.4 2.0 1.9 0.0 1.2
Electrical accessories, wires & cables 156.5 4.3 4.5 3.3 7.2
Transport Equipment & Parts 136.0 1.6 3.7 0.1 1.3
Automotives 135.2 1.4 4.0 0.1 1.2
Auto Parts 137.2 2.5 2.8 0.8 1.9
Composite ERIL Index for Project Inputs 150.5 2.2 0.5 0.1 0.3
Overall WPI 185.7 3.7 7.0 3.0 5.2

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