Indicating that there is perhaps still no decisive marked upturn in project execution, the ERIL Index of Cost of Project Inputs slipped in September in terms of provisional data, and stagnated during H1. The picture would not change materially even while granting that final estimates of WPI of project investment-related material inputs (available till July) have tended to be higher than those provisionally assessed earlier.

Among the major investment goods, the prices of base metals ruled lower, though those of cement, construction machinery, electrical cables and non-electrical machinery relatively ruled firm during H1.

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

Production of capital goods declined for the second month in August, with the average growth over April-August placed at 4.3 per cent. Production of cement increased at double digits for the third month in August with cumulative growth assessed at 11 per cent, though because of erratic trend, alloy, non-alloy steel output was up 2 per cent cumulatively.

Trends in September
The total WPI for non-metallic mineral products rose by 0.8 per cent during the month due to higher price of asbestos corrugated sheet (4 per cent), white cement (3 per cent), marbles and grey cement (1 per cent). However, the price of slag cement declined by 1 per cent.

The combined WPI for basic metals, alloys and metal products declined by 0.4 per cent due to 2 per cent reduction in price of gold and gold ornaments, zinc, silver and pencil ingots, and 1 per cent each in wire rods, steel rods, billets, CRC, pig iron and steel castings. However, the price of furniture, sponge iron, ferromanganese, melting scrap and pressure cooker moved up 1 per cent each.

The aggregate WPI for machinery and machine tools was up by 0.1 per cent due to higher price of fibre optic cable (3 per cent), ball/roller bearing and electric generators (2 per cent each), and textile machinery, machine tools, electric motors and control equipment (1 per cent each). However, the price of battery dry cells dropped 11 per cent, pump and assembly 3 per cent, and boiler and accessories, communication equipment, insulators and conductors 1 per cent each.

The combined WPI for transport, equipment and parts increased 0.1 per cent due to higher price of gauges (5 per cent), geared motor (2 per cent), and gear boxes and parts and suspension (1 per cent each). However, the price of trolleys/tankers, wheels and parts and wipers, blades, arms etc declined by 1 per cent each.

ERIL INDEX OF COST OF PROJECT INPUTS: SEPTEMBER 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 170.8 3.9 -0.1 2.0 -1.2
Structural clay products 189.1 8.2 6.1 2.5 4.3
Cement & lime 167.7 1.9 -4.2 2.2 -4.5
Basic Metals, Alloys & Metal Products  Ferrous metals 165.8 1.3 -2.0 -1.1 -0.7
156.1 1.7 -2.0 -1.1 -0.8
Non-ferrous metals 168.5 2.1 2.3 1.3 2.2
Machinery & Machine Tools 134.6 2.5 2.3 1.1 1.5
Industrial machinery 152.2 1.8 2.5 0.3 1.3
Construction machinery 141.4 3.7 0.2 2.8 -0.3
Air-conditioners & refrigerators 120.8 4.7 1.9 1.2 1.5
Non-electrical machinery 127.3 2.7 0.8 2.3 1.1
Electrical machinery & batteries 138.4 1.5 2.4 0.0 1.6
Electrical Accessories, wires & cables 156.4 4.3 4.3 3.2 7.1
Transport Equipment & Parts 136.1 0.9 3.8 0.2 2.0
Automotives 135.2 0.4 4.3 0.1 2.2
Auto parts 137.6 3.1 2.1 1.1 1.6
Composite ERIL Index for Project Inputs 150.5 1.8 0.4 0.1 0.7
Overall WPI 185.0 2.4 7.0 2.6 6.2

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