The Signal (weekly highlights)

1. Exports rise by 22.4% and imports by 35% in Feb 2022

India’s merchandise exports rose year-on-year by 22.4 per cent to USD 33.8 billion in February 2022, as against a 0.4 per cent fall registered in the year-ago month. POL exports rose by 66.4 per cent to USD 4.1 billion, and non-POL exports rose by 18 per cent to USD 29.7 billion in February 2022.

A sharper rise in imports inflated trade deficit to $21.4 billion in February from a five-month low of $17.4 billion in the previous month. This will further pressure the current account at a time when the global crude oil prices have flared up in the wake of the Russia-Ukraine crisis.

2. Higher than budgeted GDP to pave way for the excise duty cuts on petrol and diesel

Higher than budgeted GDP would enable the government to cut excise duty on petrol and diesel without disturbing the fiscal math in 2022-23, according to a news report in Business Standard. The report quotes ICRA and SBI saying that if the centre reduces excise duty on petrol and diesel to the pre-pandemic level, it will have to bare revenue loss of Rs.920 billion and Rs.1 trillion.

The gross fiscal deficit-to-GDP ratio will remain under check as nominal GDP during 2022-23 would be higher than that estimated by the Union Budget. The budget projects GDP to grow by 11.1 per cent in 2022-23 on the base of Rs.232.2 trillion, the first advance estimates for 2021-22.

3. US will release 30 mn barrels of oil to maintain global oil prices: Joe Biden

United States (US) President Joe Biden has announced that his administration has worked with 30 other countries to release 60 million barrels of oil from reserves across the world to maintain the global oil prices amid the Russian-Ukraine crisis.

US alone will release 30 million barrels from its own strategic reserves. Biden has promised that the US administration will ensure the protection of American businesses and consumers.

4. Centre to provide Rs. 120 bn for additional expenditure in government schemes

The central government is planning to provide Rs.120 billion for additional expenditure on government schemes including the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)

The scheme might require another Rs.80-90 billion over and above the revised estimates (RE) of Rs.980 billion allocated to the scheme in the Union Budget 2022-23. Moreover, an increase is also expected in the outflows towards fertiliser subsidy and by the Department of Food & Public Distribution.

5. PMI rises to 54.9 in Feb 2022

Seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) inched up to 54.9 in February 2022 from 54 in January 2022. This is the eighth consecutive month when the PMI has shown expansion. A PMI reading above 50 denotes expansion and below 50 denotes contraction.

Business sentiment strengthened to its best since last October. Manufacturers continued to witness increase in input cost inflation in February 2022. Selling prices rose too, but modestly.