The Signal (weekly highlights)

1. Centre not keen on trimming budgetary capex target for FY23

The central government has no plans to curtail capital expenditure (capex) plans for 2022-23. Various infrastructure
ministries have been directed to ensure that they realize their capex goals and create durable assets during the fiscal. For 2022-23, the government has budgeted a capex of Rs.7.50 trillion.

The Centre’s capex in April 2022 rose by 67.5 per cent as compared to same month a year ago, on the back of robust
spending by the ministries of road transport and railways and the department of defence services.

2. Auto companies report healthy domestic sales in May 2022 as demand remains firm

Major car manufacturers such as Maruti Suzuki, Hyundai and Tata Motors reported robust domestic dispatches in May 2022 on the back of a strong demand for passenger vehicles across regions, in spite of global semiconductor shortage continuing to impact production.

Commercial vehicle sales continued their upward trajectory on the back of a steady demand from the infrastructure and e-commerce segments. The sales numbers in May 2022 are not comparable with that of May 2021 as the second wave of Covid-19 affected dispatches in the domestic market during the month.

3. GDP growth decelerates to 4.1% in Q4 FY22

The year-on-year growth in real gross domestic product (GDP) decelerated to 4.1 per cent in the quarter ended March 2022 from 5.4 per cent in the quarter ended December 2021. The slowdown in growth can be traced back to private final consumption expenditure (PFCE) which grew by 1.8 per cent in the March 2022 quarter, as compared to the 7.4 per cent growth clocked in the December 2021 quarter

The GDP numbers broadly came in line with the market expectations. The outlook remains unclear with fate, especially with escalating crude oil prices. Further, the limited ability for additional fiscal spending, stressed corporate margins due to the rise in input prices, the Russia-Ukraine conflict, and softer global demand would remain a concern.

4. Output of eight core industries rises by 8.4% in April 2022
The index of eight core industries rose by 8.4 per cent on a year-on-year basis in April 2022. The growth was higher than the 4.9 per cent growth registered in the preceding month. Six of the eight core industries reported a rise in production, while two reported a fall.

Electricity generation rose by 10.7 per cent and output of coal, which is a key input for thermal power generation, grew by a robust 28.8 per cent. Among other energy sources, output of crude oil fell by 0.9 per cent, but that of natural gas and refinery products rose by 6.4 per cent and 9.2 per cent, respectively. Steel production contracted by 0.7 per cent, but cement production grew by eight per cent.

5. GST collection for May at 1.4 lakh crore, up by 44% yoy

The revenues for the month of May 2022 are 44% higher than the GST revenues in the same month last year of ₹97,821 crore, however, is down 16% from the previous month.
Total number of e-way bills generated in the month of April 2022 was 7.4 crore, which is 4% lesser than 7.7 crore e-way bills generated in the month of March 2022.