MONTHLY UPDATE
AUGUST 2017

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HITS AN AIR POCKETGLOBAL UPDATE|INDIA UPDATE|INDIA INFRASTRUCTURE & REALTY UPDATEMONTHLY UPDATERESEARCH

GLOBALUPDATEGROWTH TO PICK UP IN INDIA IN 2017, 2018:
IMF
In its latest World Economic Outlook, the International
Monetary Fund (IMF) has stated that India will stay ahead ofChina on the growth curve in 2017 and 2018. In its study, theIMF further stated that the growth in India is forecasted topick up further in 2017 and 2018. As regards the growth rate
of China, the IMF further stated that it is expected to remain
at 6.7% in 2017 (the same level as in 2016), and to declinemodestly in 2018 to 6.4%. Global output is projected to growby 3.5% in 2017 and 3.6% in 2018. The growth forecast
for 2018 is 1.9% for advanced economies and 4.8% for

These revisions mirror the macro-economic implications

easier to systematically wind down big US banks by creatingof changes in policy assumptions. According to the IMF,

a safe harbour for financial contracts after the firm defaults.

China’s failure to focus on addressing financial sector risks

The new rule is part of the Federal Reserve’s efforts to ensure

and curb excessive credit growth could result in an abruptthat big institutions do not fail, something which happened

growth slowdown, with adverse spillovers to other countries

during the 2008–09 crisis. The danger with big institutions

through trade, commodity price, and confidence channels.

failing is that they are so large; these companies could throw

On the other hand, a faster-than-expected monetary policy

the entire financial system into a state of bankruptcy. The

normalisation in the United States could tighten global

rule requires global systemically important banks (GSIBs)

financial conditions and trigger reversals in capital flows

to amend the language in common financial contracts soto emerging economies, along with appreciation of the US

that they cannot be immediately cancelled if the firm enters

dollar. The US is projected to grow at a clip of 2.1% in 2017

bankruptcy. Through this new rule, the regulators plan toand 2018.

prevent a reoccurrence of the situation that had occurred in
the case of the Lehman Brothers in 2008. The institutions, onemerging and developing economies. The forecast for China
for 2017 has been revised by 0.1 percentage point. However,the upward revision of 0.2% for 2018 has been done on the
expectation that the authorities will delay fiscal adjustment.

2

NEW RULE TO HELP BIG BANKS UNWIND

which the new rule will apply, are JPMorgan Chase, Goldman
Sachs, and Citigroup.

US ECONOMY RECORDS FASTEST GROWTHIN TWO YEARS
According to estimates released by the US government,
the economy grew by 3% in the second quarter, which isthe strongest performance by the economy since the firstquarter of 2015. The growth recorded by the economy, inthe second quarter, is more than double the pace of the first
three months of 2017 and better than the original estimates
for the second quarter. As per earlier estimates, the economy
was expected to grow at 2.6% in the second quarter. The
strong economic growth was riding on the back of thegovernment initially pegged second-quarter growth at 2.6%
in July. Stronger consumer spending and healthier business
investment drove the economic momentum.

The Federal Reserve finalised a new rule that should make it

3

MONTHLY UPDATERESEARCH

INDIA
UPDATEThe Pradan Mantri Awas Yojana (PMAY) is graduallycautions that anxiety reigns because a series of deflationary

making headway. Until now, over 26 lakh houses have

impulses are weighing on the economy. These include

been sanctioned with an investment of `1.40 lakh crore.

stressed farm revenues, farm-loan waivers and the fiscal

Andhra Pradesh tops the tables with regards the number oftightening that they will entail, and the declining profitability

houses under PMAY. The state accounts for 21% of the total

in the power and telecommunications sectors. As regards

houses sanctioned. The states of Tamil Nadu and Madhya

review of the economic developments in 2016–17, thePradesh are placed second and third, respectively. In thesurvey notes the following:latest sanctions Andhra Pradesh has got 1.21 lakh more
affordable homes followed by Uttar Pradesh (41,173 units),
Assam (16,700 units), Gujarat (15,222 units), Jharkhand(14.017 units) and Maharashtra (9,994 units).

•	Real economy grew by 7.1% in 2016–17 compared with
8% in the previous year•	This growth suggested that the economy was relatively
resilient to the large liquidity shock of demonetisation,
which reduced cash in circulation by 22.6% in the

QUARTERLY GDP PLUMMETS TO A THREEYEAR LOW
As per the latest data released by the Central Statistics
Office (CSO), the gross domestic product (GDP) hit a threeyear low in the first quarter of FY 2018. GDP at constant

the retail portfolio of most banks, who are still trying to pushhome loans among retail customers. The sad part, however,is that there are not too many takers for home loans. As

S.

State

No.

per the latest data released by the Reserve Bank of India(RBI), the growth rate of home loans looks to be tapering

Total

Centralshowing a growth rate of 5.7%. Quarterly GVA at a basic

from 6.1% in July 2016 to 1.5% June 2017.

throughout FY 2016 owed to the deceleration in global

in Q1 of 2016–17, showing a growth rate of 5.6% over thecommodities prices, especially crude oil prices.

and communication and services related to broadcasting’,‘public administration, defence and other services’ andof GDP, down from 1.1% of GDP the previous year, led
by the sharp contraction in trade deficit that more thanoutweighed the decline in net invisibles.
•	Export growth turned positive after a gap of two years
and imports contracted marginally, so that India’s trade‘mining and quarrying’, ‘manufacturing’, ‘construction’ anddeficit narrowed to 5.0% of GDP (US$ billion) in FY 2017

housesapproved

approvedfinancial, insurance, real estate and professional services

as compared to 6.2% (US$ 130.1 billion) in the previous

sanctioned(`cr)(` cr)

is estimated to be 2.3%, -0.7%, 1.2%, 2.0% and 6.4%,

year.

541,300

31,056

8,138

2

Tamil Nadu

335,039

11,987

5,090

last year. The fall is more pronounced if compared y-o-y.

3Madhya Pradesh

287,101

19,502

4,415Bank lending to the housing segment grew at 17% by July

4

Karnataka

203,260

9,282

2016 compared to the same period in the previous year.

2017–18 over Q1 of 2016–17 are ‘trade, hotels, transport•	The current account deficit narrowed in 2016–17 to 0.7%

affordable investment assistance

Andhra Pradesh

rate was 0.4% compared to 4.7% during the same period•	The sharp dip in WPI inflation in late FY 2015 andestimated at `29.04 lakh crore, as against `27.51 lakh crore

The growth in the ‘agriculture, forestry and fishing’,

1

off. For the quarter 21 July 2017, the home loan growth

2016–17 compared to 2015–16.

declined to 4.5% in FY 2017. Inflation declined sharply‘electricity, gas, water supply and other utility services’.
No. of

GDP growth accelerated by over 1 percentage point inlakh crore, as against `29.42 lakh crore in Q1 of 2016–17,

activities, which registered growth of over 7% in Q1 of

Housing loans had been one of the major drivers to push

because both nominal Gross Value Added (GVA) and•	Annual inflation averaged 5.9% in 2014–15 and has sincecorresponding quarter of the previous year. The economic

ANDHRA PRADESH SANCTIONS HIGHEST
NUMBER OF HOUSES UNDER PMAY

even more marked in nominal growth magnitudes(2011–12) prices in Q1 of 2017–18 is estimated at `31.10

price at constant (2011–2012) prices for Q1 of 2017–18 is

BANK LENDING GROWTH RATE TO HOUSINGSECTOR HITS A NEW LOW

second half of 2016–17. The apparent resilience wasrespectively, during this period.

WAS DEMONETISATION A SUCCESS?
On the evening of 8 November 2016, when Narendra

3,345

ECONOMIC SURVEY OF INDIA VOL. 2
RELEASED
The second volume of the Economic Survey 2016–17 wasdenomination notes (of `500 and `1,000) ceased to betabled in the Parliament. The survey highlights the rekindledlegal tender, it spread panic among the common man who

optimism with regards structural reforms in the country.

started to find ingenious ways to get rid of the much loved

Modi, the Prime Minister of India declared that high value

5

Gujarat172,816

11,4972,493

6West Bengal

144,904

5,920

2,186

loan growth rate can be attributed to the slowdown in the7Maharashtra

144,165

15,8682,244

The document also adds that macro-economic stability

currency before 9 November brought in a new beginning.

real estate sector, which was largely a result of the lack8

Uttar Pradesh

120,028

4,767

1,959

has become entrenched and is evident because of a series

The panic only intensified when people found it hard to

9

Jharkhand

95,742

3,561

1,474

of government and RBI actions because of the structural

exchange their old notes with the new ones. However,

10

Bihar

88,375

3,915

1,454

changes in the oil market that have reduced the risk ofwith the passage of time re-monetisation happened andsustained price increases. This factor has further added tothings slowly returned to normalcy. The one question,

the growing optimism in the country. The survey, however,

however, remained answered by many was, how much ofThis growth slowed down to 10% by July 2017 comparedto the same period last year. The slowdown in the homeof clarity on policy issues like Real Estate (Regulation andDevelopment) Act, 2016 and GST. The low growth rate alsomeans that there is still time before the real estate sector
will see better days.

4

Source: Ministry of Housing & Urban Affairs
Note: The 10 states mentioned above account for 82% of the total houses sanctioned so
far under PMAY.

5MONTHLY UPDATERESEARCH

the money that was expected to make its way back to theone or more such labs to enable students to experience,

formal banking system did actually move that way? Till very

learn and practise future skills such as design andrecently there was no word from the government on thecomputational thinking.

CPI AND WPI INCH UP
INFLATION

matter as well. As per the Reserve Bank of India, 99% ofbanking system. As regards the old `500 notes, a similarcalculation cannot be done because; the old `500 notes
were replaced by new ones of the same denomination.
Then, does it mean that demonetisation was a success?
As regards the total amount of notes that were returned
during demonetisation, there has been no official word.
The returned notes are still being counted by the Reserve
Bank of India. On broader scale however, demonetisation
has provided a web of money trail that could go a longway in fighting corruption. The government has comeup with an official statement with regard the benefits ofdemonetisation. As a result of the demonetisation drive,
there is a substantial increase in the number of Income
Tax Returns (ITRs) filed. The number of Returns filed asof 05.08.2017 registered an increase of 24.7% compared
to a growth rate of 9.9% in the previous year. AdvanceTax collections of Personal Income Tax (i.e. other thanCorporate Tax) as of 05.08.2017 showed a growth of about
41.79% over the corresponding period in FY 2016–2017.
Personal Income Tax under Self-Assessment Tax (SAT)
grew at 34.25% over the corresponding period in FY
2016–2017.

EASE OF DOING BUSINESS REPORTLAUNCHEDNITI Aayog has launched the ease of doing business
report. The government on its part has made it very clearthat the study is a research product and not a view of thegovernment. The findings of the study are however, worth
mentioning. The report is based on a survey of 3,500
manufacturing firms across states and union territories. Thissurvey was conducted along with IDFC Institute to assess
the business regulations and enabling environment acrossIndia from a firm’s perspective. Some of the findings of thisstudy are as follows. As per the survey, the average time
taken to set up a business in India was 118 days with ahuge variation among states. For example, on an average,
it takes 63 days to set up a business in Tamil Nadu and 67
days in Andhra Pradesh. At the other end of the spectrum,in states like Kerala and Assam, it takes 214 and 248 days,
respectively. The average number of days for getting a
construction permit was 112 days. Even in this area there isa huge variation among states. It takes around 41 days to
get a construction permit in Madhya Pradesh and 43 daysin Bihar. On the other hand, in Assam and Kerala it takes
270 days and 117 days, respectively. The average time

“MENTOR INDIA” CAMPAIGN LAUNCHED BYNITI AAYOG

taken for getting all the approvals and NOCs pertaining
to construction was 75 days. There was a huge variation
across states even on this parameter. In Himachal Pradesh,

Atal Tinkering Labs could soon be a nurturing groundit takes eight days for getting the necessary approvals.

for budding entrepreneurs. The National Institution forAmong states in India, it takes the longest time to getTransforming India (NITI) Aayog will soon launch theapprovals in Karnataka (it takes 140 days in Karnataka).

“Mentor India” campaign, which is a strategic nation-

Not far behind are Uttarakhand and Kerala, where it takesbuilding initiative that will engage leaders who will guide and

136 days and 135 days, respectively. Time taken for getting

mentor students at more than 900 Atal Tinkering Labs thatlabour approvals too has a wide range. On an average,

have been established across the country. Atal Tinkering

it takes 74 days for completing all the labour-related

Labs are dedicated works spaces where students fromcompliances. In Himachal Pradesh and Chhattisgarh, itClass 6 to Class 12 learn innovation skills and develop ideas

takes 20 days and 28 days, respectively. For the same work,that will go on to transform India. The labs are powered toit takes on an average 101 days in Assam and Goa. On

acquaint students with state-of-the-art equipment such as

the other hand, the average time taken for renewals is 62

3D printers, robotics and electronics development tools,

days. In Gujarat, however, it took around 28 days to get theInternet, and sensors, etc. The idea behind this campaign

renewals, while it took 60 days to get the same work done

is to engage leaders who will nurture and guide students.

in Uttar Pradesh.

These labs are non-prescriptive by nature, and mentors
are expected to be enablers rather than instructors. For
this programme, NITI Aayog is looking for leaders who canspend anywhere between one to two hours every week in

6

WPI

CPI

May-17

Jun-17

8

Annual Rates (%) based on WPI & CPI

the old `1,000 notes have made its way back into the formal

7
6
5
4
3
2
1
0

Jun-16

Jul-16Aug-16

Sep-16Oct-16

Nov-16

Dec-16

Jan-17

Feb-17Mar-17

Apr-17

Source: Ministry of Commerce & Industry, Ministry of Statistics and Programme Implementation, Government of India

Retail inflation, which hit a new low in June 2017, moved up

trend since February 2017, moved up in July 2017. The WPIslightly in July 2017. The free fall of the CPI, since Octoberin July stood at 1.88% compared to 0.90% in June 2017.

2016, hit a new low in June 2017. In July 2017, the CPI

The index for primary articles group rose by 4.3%. The

inched up slightly. The CPI for July 2017 stood at 2.36%

index for ‘Food Articles’ group rose by 6.2% for the previous

compared to 1.54% in the previous month. The upward

month due to the higher price of fruits and vegetables (29%),

movement in the CPI was largely a result of cyclical factors,

peas/chawali (6%), ragi (4%) and condiments and spices,such as monsoon-related commodities becoming dearerbarley, poultry chicken and paddy (1% each). However, theand the favourable base effect. Inflation in the consumer

price of betel leaves (21%), masur, urad and tea (5% each),price index was -0.29%. Even though the CPI has moved

arhar (4%), moong, bajra, maize and gram (3% each), fish-north in July 2017, the free fall in prices of pulses andinland (2%) and fish-marine and jowar (1% each) went down.

products continue unabated. Prices of pulses and products

The index for ‘Non-Food Articles’ group rose by 0.6% due

went down by 24.75% in July 2017 compared to July 2016.

to the higher price of raw rubber (8%), safflower (kardi seed)This fall in prices was more pronounced in urban areas,(4%), fodder, floriculture and copra (coconut) (3% each)where prices fell by 33.81% compared to a fall of 19.67%

and mesta, rape and mustard seed and castor seed (1%in rural areas. Prices of vegetables too fell by 3.57%. Ineach). However, the price of groundnut seed (4%), raw silk

this category, however, the fall was more pronounced in

and raw jute (3% each), guar seed and sunflower (2% each)rural areas where prices fell by 4.24%, compared to a fall ofand cotton seed and gingelly seed (sesamum) (1% each)

2.45% in urban areas. Prices of eggs too witnessed a fall ofdropped. The index for ‘Minerals’ group rose by 2.8% due to

2.04% and in this case, the fall was largely in urban areas.

higher price of manganese ore (23%), sillimanite and bauxite

The reduction in prices of eggs in urban areas was to the(22% each), chromite (10%) and copper concentrate andtune of 5.27%. The other product category that witnessed

limestone (4% each). However, the price of lead concentrate

a fall in prices was spices. The price of spices declined(20%), zinc concentrate (9%), phosphorite (2%) and iron ore

by 1.67%, where the fall in urban areas was 4.24% and(1%) declined. The index for ‘Crude Petroleum and Natural

0.30% in rural areas. Other product categories witnessed

Gas’ group declined by 7.8% due to the lower price of crude

as increase in prices. The highest price increase was in the

petroleum (11%), while the index for fuel and power declined

pan, tobacco and intoxicants category where prices moved

by 1.4%. The index for ‘Mineral Oils’ group declined by 2.8%

up by 6.39%. Prices in housing went up by 4.98%. In thedue to the lower price of naphtha (7%), ATF (6%), furnacefuel and light category, prices went up by 4.86%.

oil (5%), petrol (4%), bitumen (3%) and LPG and HSD (2%Like the CPI, the wholesale price inflation as measured byeach). However, the price of petroleum coke (3%) moved up.

the wholesale price index (WPI) too had been on a falling

7

MONTHLY UPDATERESEARCH

IIP CONTRACTS FURTHER IN JUNE 2017

products’ and 11.7% in ‘manufacture of furniture’. Some

Some important items showing high positive growth during

important items that have registered high negative growth

the current month over the same period last year include

include ‘water purification apparatus’ -68.4%, ‘shelled‘digestive enzymes and antacids (incl. PPI drugs)’ (67.8%),

cashew kernel, whether or not processed/roasted/salted’‘construction machine/equipment (incl. bull-dozers and8-63.6%, ‘electrical apparatus for switching or protecting

road rollers)’ (36.8%), ‘jewellery of gold (studded with stones

7

electrical circuits (e.g. switchgear, circuit breakers/switches,or not)’ (34.7%), ‘cut and polished diamonds’ (31.1%), ‘axle’6

control/meter panel)’ -48.6%, ‘plastic jars, bottles and(29.5%),’ meters (electric and non-electric)’ (28.9%), ‘pipes,

5

containers’ -48.1%, ‘kerosene’ -39.0%, ‘printing machinery’tubes and casing of steel/iron’ (24.9%) and ‘aluminum-35.6%, ‘toothpaste’ -33.0%, ‘air filters’ -28.9%, ‘vaccine forbillets/ingots’ (22.6%).

YOY Growth Rate (%)

IIP (GENERAL INDEX)

43veterinary medicine’ -28.8% and ‘cement clinkers’ -22.2%.

21

CORE SECTOR GAINS LOST GROUND

0
-1
-2

INDEX OF EIGHT CORE INDUSTRIES-3

Jun-16

Jul-16Aug-16

Sep-16Oct-16

Nov-16

Dec-16

Jan 2017

Feb-17Mar-17

Apr-17May-17

Jun-17

Source: Ministry of Statistics and Programme Implementation, Government of India
10

The Index of Industrial Production, which had contracted in May 2017 compared to April 2017, further went in to the red in
the red in June 2017. During the period April–June 2017, the index grew by 2%. Though the electricity sector remained in thepositive, its growth slowed down and grew by only 2.1% in June 2017 compared to a growth of 8.7% in May 2017.

IIP (SECTOR WISE)

9YOY Growth Rate (%)

June 2017, mainly due to decline in the manufacturing and capital goods sectors. The mining sector in particular went into

8
7.1

7
6

5.6

5.3

5

5.2
4.1

4
3

3.1

3.1

3.4

3.2

2.6

2.4

2

ELECTRICITYMINING & QUARRYINGMANUFACTURING

15

0

12

YoY Growth Rate (%)

1
Jul-16Aug-16

Sep-16Oct-16

Nov-16

Dec-16

Jan-17

Feb-17Mar-17

Apr-17May-17

Jun-17

Jul-17

Source: Ministry of Commerce & Industry, Government of India

9

6

3

0

-3

-6
Jun-16

Jul-16Aug-16

Sep-16Oct-16

Nov-16

Dec-16

Jan 2017

Feb-17Mar-17

Apr-17May-17

Jun-17

Source: Ministry of Statistics and Programme Implementation, Government of India

The Core sector growth rate, which had dipped to 0.8% in

2017–18 over the corresponding period last year. Fertilizer

June 2017, gained lost ground in July 2017, when it grew

production declined by 0.3% in July 2017 over July 2016.

by 2.4%. The Eight Core Industries comprise 40.27% of

Its cumulative index declined by 1.5% during April–July

the weight of items included in the IIP. The growth rate

2017–18 compared to the same period last year. Steelof the Core sector, in July 2017, however, is still lower

production increased by 9.2% in July 2017 over July 2016.

compared to the same period last year. The growth

Its cumulative index increased by 6.9% during April–Julyrates of industries that make up the Core sector are as

2017–18 over the corresponding period of the previous year.

follows. Coal production increased by 0.7% in July 2017

Cement production declined by 2.0% in July 2017 over Julycompared to the same period last year. Its cumulative

2016. Its cumulative index declined by 3.5% during April–index, however, declined by 3.3% during April–July

July 2017–18 over the same period last year. Electricity

2017–18 over the corresponding period of the previous

generation increased by 5.4% in July 2017 over July 2016.

year. Crude Oil production decreased by 0.5% in July 2017

Its cumulative index increased by 5.4% during April–Julycompared to July 2016. Its cumulative index increased

2017–18 compared to the same period last year.

by 0.05% during April–July 2017–18 over the same period

As regards industries, 15 out of the 23 industry groupsin ‘manufacture of fabricated metal products (except

last year. Natural Gas production increased by 6.6% inin the manufacturing sector have shown negative growthmachinery and equipment)’ and -10.5% in ‘printing andJuly 2017 over July 2016. Its cumulative index increased

during the month of June 2017, as compared to thereproduction of recorded media’. On the other hand, theby 4.9% during April–July 2017–18 over the same period

corresponding month of the previous year. The industry

industry group ‘other manufacturing’ has shown the highest

last year. Petroleum Refinery production declined by 2.7%

group ‘manufacture of electrical equipment’ has shown

positive growth of 28.1% followed by 19.2% in ‘manufacturein July 2017 compared to the same period last year. Its

the highest negative growth of -20.1% followed by -11.1%

of pharmaceuticals, medicinal chemical and botanicalcumulative index increased by 0.7% during April–July

8

0.8

0.6

OIL IMPORTS CONTINUE TO RISE
With regards merchandise trade (including re-exports),
the positive growth exhibited by exports for the last elevenmonths, exports during July 2017 have shown growth

9

MONTHLY UPDATERESEARCHof 3.94% in dollar terms valued at USD 22.54 billion as

USD 113.99 billion compared to the same period last year.

compared to USD 21.68 billion during the same period last

Major commodity group of imports showing high growthyear. During July 2017, major commodity groups of export

in July 2017 over the same period last year are petroleum,showing positive growth over the corresponding month

crude and products (15.02%), electronic goods (22.5%),of last year are engineering goods (15.16%), petroleum

machinery, electrical and non-electrical (7.34%), pearls,

products (20.27%), organic and inorganic chemicals

precious and semi-precious stones (6.86%) and gold

(20.67%), cotton yarn/fabs/made-ups, handloom products,(95.05%). Oil imports during July 2017 were 15.02% higher

etc. (5.39%) and marine products (30.53%). Cumulative

than the same period last year. Oil imports during April–July,value of exports between April–July 2017–18 was USD

2017–18 was 20.87% higher than the same period last year.

SENSEX
S&P BSE SENSEX

32500
32350
32200
32050
31900

crude prices are more or less stable. These factors arewhich was 15.42% higher in dollar terms compared to thegiving rise to concerns that could impact India’s export

same period last year. Cumulative value of imports for thecompetitiveness.

31-Aug-17

30-Aug-17

29-Aug-17

28-Aug-17

24-Aug-17

23-Aug-17

22-Aug-17

21-Aug-17

18-Aug-17

17-Aug-17

16-Aug-17

5.6% against the dollar this year so far, at a time when

Imports during July 2017 were valued at USD 33.99 billion,

14-Aug-17

record high of USD 395 billion, the rupee has appreciatedan increase of 9.05%.

11-Aug-17

87 billion for the same period last year, thereby, registering

10-Aug-17

for the economy. Further India’s foreign reserves are at a9-Aug-17

18 were valued at USD 94.75 billion, as compared to USD

31150

towards managing inflows which could be non-disruptive
8-Aug-17

and non-gems and jewellery exports during April–July 2017–31300

regulator has advocated for a more calibrated approach
7-Aug-17

million in July 2016, an increase of 6.93%. Non-petroleum

31450

time when economic growth is tapering off. The market

4-Aug-17

valued at US$ 22,543.80 million against US$ 21,689.57

31600

increased inflow of foreign funds into the country at a3-Aug-17

and non-gems and jewellery exports in July 2017 were

31750

Board of India (SEBI) has raised concerns about the

2-Aug-17

a positive growth of 8.91% in dollar terms. Non-petroleum

In a recent move market regulator Securities and Exchange

1-Aug-17

94.75 billion as against USD 87 billion, thereby registering

31000

Source: BSE

The S&P BSE SENSEX lost 3% in August 2017.

CURRENCY

period April–July 2017–18 was USD 146.25 billion as against
CURRENCY

NIFTY

65.20

NIFTY 50

65.02
64.84

10200

64.66

10130

64.48

10060

64.30

9990

64.12

9920

63.94

9850

63.76

31-Aug-17

30-Aug-17

29-Aug-17

28-Aug-17

24-Aug-17

23-Aug-17

22-Aug-17

21-Aug-17

18-Aug-17

17-Aug-17

16-Aug-17

14-Aug-17

11-Aug-17

10-Aug-17

9-Aug-17

8-Aug-17

7-Aug-17

4-Aug-17

3-Aug-17

2-Aug-17

1-Aug-179500

31/08/2017

30/08/2017

29/08/2017

28/08/2017

24/08/2017

23/08/2017

22/08/2017

21/08/2017

18/08/2017

16/08/2017

14/08/2017

11/8/201710/8/2017

9/8/2017

8/8/2017

7/8/2017

9570

4/8/2017

9640

3/8/2017

9710

2/8/2017

63.58
63.40

1/8/2017

9780

Source: Reserve Bank of India

The INR lost 0.08% to the USD in the August 2017.

Source: National Stock Exchange

The Nifty 50, which had breached the 10,000 for the first time, settled to sub-10,000 levels. During the month Nifty 50 lost
2%.

10

11

MONTHLY UPDATERESEARCH

INDIA

INFRASTRUCTURE& REALTY UPDATE

for civil aircraft operations. During 2016–17, passenger

Going forward, Jabalpur will have a new airport terminal.

traffic movement at Jammu Airport reached 1.16 million;

The Airports Authority of India (AAI) has decided tomost importantly the passenger growth rate has touched

construct a new terminal building. The Working Group on

29% in the first quarter of 2017–18. To cope with the

Improvement and Development of Transport Infrastructure

increasing passenger growth and demand, the existingin the North East had submitted its report to Nationalterminal building of Jammu Airport has been expanded

Transport Development Policy Committee (NTDPC) in Juneand upgraded. The area of the terminal building has been

2012. The recommendations of the Committee include,

expanded from 6,700 square metres to 14,500 squareintensifying transport linkage with Myanmar in particular;

metres, with an upgraded peak hour handling capacity

development of hubs and spoke model for improvingof 720 passengers at a time, from the earlier peak of 360

air connectivity; development of skills for construction

passengers per hour. The upgraded passenger terminal

and maintenance; inclusion of provision for periodic

building is equipped with passenger facilities and amenities,

maintenance in road contracts; optimal use of waterways

Common Use Self-Service (CUSS) kiosk for check-and development of multi-model hubs. Under the scheme ofin, central air-conditioning, two arrival conveyer belts,

Non-Lapsable Central Pool of Resources (NLCPR), projects

escalators and glass elevators, Flight Information Display

are taken up on the basis of priority list submitted by the

System, PA system with comfortable seating capacity. The

state government. In Manipur, under sector “Road andterminal building is also equipped with fire-fighting andBridges”, 20 projects with an approved cost of `92.37 crore

fire alarm system, CCTV and baggage scanners. There

have been completed and 6 projects with an approved costof `205.78 crore are in progress.

PUNE TO BE THE FIRST OPERATIONAL‘SMART CITY’One of the more ambitious plans of the incumbent
government has been to develop ‘Smart Cities’. In the firstround, 20 cities were shortlisted to be developed as ‘Smart
Cities’. Pune is expected to be the first ‘Smart City’ to havethe necessary systems and processes in place. Pune hasrolled out six modules for the said project. These modules
deal with areas like traffic management, feedback fromcitizens and emergency alert systems. At the heart of the‘Smart City’ initiative in Pune is a hi-tech command andcontrol centre. Surveillance of the city through CCTV, aerial
surveillance through a drone, birth and death registration,
traffic management, and water and electricity supply canbe managed through the command and control centre.
Apart from Pune, Nagpur too is expected to have a fully
functional command and control centre. Other cities where
the command and control centre is in the advanced stage
include Kakinada, Naya Raipur and Bhopal.

`278 crore, this bridge marks the completion of the east–west corridor. The construction of the bridge was stuck

congestion. The other projects that were inaugurated

BIDDING PROCESS UNDERWAY FOR
THE SECOND ROUND UNDER REGIONALCONNECTIVITY SCHEME

include four-laning of the Gomati Chauraha-Udaipur section

The process for bidding for the second round of theof the NH-8 at a cost of `1,129 crore, four-laning of theRegional Connectivity Scheme (RCS)–UDAN has started.

Rajsamand-Bhilwara section of the NH-758 at a cost of

The thrust in the second round will be on improving`1,360 crore, Nagaur Bypass to Netra village on the NH-65

connectivity to priority areas like the North East, Jammu

at a cost of `301 crore and 48 road safety projects at a

& Kashmir, Uttarakhand, Himachal Pradesh, Andaman &cost of `381 crore. Some of the projects, which the Prime

Nicobar Islands and Lakshadweep by introducing more

Minister conducted the Bhoomi Poojan include the four-

operational flexibility and promoting helicopter operations.

laning of the Bar-Bilara-Jodhpur section of the NH-112

The Regional Connectivity Scheme-Ude Desh Ka Aamat a cost of `1,249 crore, six-laning of the Kishangarh-

Nagrik (UDAN) is a key component of the National Civil

Gulabpura section of the NH-79A and 79 at a cost of `1,184

Aviation Policy (NCAP), which was released by the Ministrycrore, six-laning of the Gulabpura part of the Chittorgarhof Civil Aviation on 15 June 2016. UDAN was launched insince 2006. This bridge will now enable heavy vehicles to
bypass Kota city, thus bringing down pollution and traffic

section of the NH-79 at a cost of `1,378 crore, six-laning of
the Chittorgarh to Udaipur section of the NH-76 at a costof `1,223 crore, six-laning of the new Udaipur Bypass on
the NH-8 at a cost of `726 crore and six-laning from the
Udaipur to Rajasthan/Gujarat border section of the NH-8 at

NATIONAL HIGHWAY PROJECTS WORTH`15,000 CRORE INAUGURATED IN
RAJASTHAN
On his recent visit to Rajasthan, the Prime Minister of India,
Narendra Modi, inaugurated National Highway projects
worth `15,000 crore. One among the major projects thatwas inaugurated is the long pending, six-lane, cable-stayed
bridge across the Chambal River at Kota. Built at a cost of

12

a cost of `1,616 crore.

is a provision for installation of three passenger boarding
bridges with advanced visual docking guidance system(AVDGS) for the terminal, which would increase operational
efficiency besides convenience to passengers. In addition
to the above, the upgraded passenger terminal building
is equipped with ‘Green’ features like double insulated
roofing system, rainwater harvesting, 200 KLD sewage

IMPROVING AIRPORT INFRASTRUCTURE IN
MANIPUR, JAMMU AND JABALPUR

treatment plant (soil-based technology), reuse of treated

Jammu Airport has a new, upgraded passenger terminal.

Compound (VOC) paints, LED lighting, energy efficient

Jammu Airport belongs to the Indian Air Force, and thechillers, and Variable Frequency Drives (VFDs) for highAirports Authority of India (AAI) maintains a Civil Enclave

capacity motors.

water for horticulture and air-conditioning purposes, use of
fly ash bricks, low heat gain glazing, low Volatile Organic

October 2016 with the prime objective to facilitate/stimulate
regional air connectivity by making it affordable for themasses. There are a few changes in the second round.
Among the important changes that are being effected,
in the second round, is that routes with stage length lessthan 150 km will now be permitted for operations as RCS
Routes through fixed wing aircraft. While exclusivity ofoperations will continue to be applicable for a period of
3 years, selected airline operators (SAO) can issue NoObjection Certificate (NOC) to other airline operators willingto operate on the respective RCS Route. To provide more
flexibility to selected airline operators (SAO), the maximum
number of flights with viability gap funding (VGF) has
been increased to 14 for priority areas. Further, the SAOs

13

MONTHLY UPDATERESEARCH

can increase at any time the number of flights on RCS

this regard. This App will convert these RFID tags into ETC

Routes to any number. Also, the minimum performanceTag (FASTag). From 1 October 2017, all lanes of all 371 NHAI

specifications will no longer be applicable on Non-RCS

toll plazas in the country will become FASTag enabled.

Routes. Helicopter operations under the scheme are

One lane in every toll plaza will be a dedicated FASTag lane

limited to priority areas only. To encourage this, the VGF

where no other form of payment will be accepted. The othercaps for helicopters have been increased and 10% of thelanes, though FASTag enabled, can accept other forms

estimated annual inflows in the RCF will be earmarked forof payment too. The dedicated FASTag lanes will become

helicopter operations. Further, all 13 passenger seats for

operational on all 371 NHAI toll plazas from 1 September

helicopters will be considered as RCS seats and VGF will

2017. In addition, the NHAI has also come up with online

be provided accordingly. The methodology for computing

2. IIPINDEX OF INDUSTRIAL PRODUCTION – GROWTH RATE
General Index

Mining & Quarrying

Manufacturing

Electricity

Jun-17

-0.1

0.4

-0.4

2.1

May-17

1.7

-0.9

1.2

8.7

Apr-17

6.5

6.7

5.5

14.4

sale of FASTags and offline sale through Common

Mar-17

2.5

7.9

1.3

5.8

flight duration for helicopters has also been revised based

Services Centre (CSC) near toll plazas. FASTag can now

Feb-17

-1.2

3.3

-2.0

0.3

on the recommendation of the expert committee. Several

be purchased online from Issuer Banks websites/NHAIchanges have been brought in to improve connectivity to

website/IHMCL website and will be delivered by courier at

Jan 2017

2.7

5.3

2.3

3.9

priority areas. Priority RCS route is being defined as an

the door step of the purchaser. More than 6 lakh FASTags

Dec-16

-0.4

5.2

-2.0

6.3

RCS Route in which at least one of the airports’ origin or

have been sold so far. It is expected that these initiatives

Nov-16

5.7

3.9

5.5

8.9

destination is an RCS Airport located in a priority area, andfor improving the availability and access to FASTags willOct-16

-1.9

-1.1

-2.4

1.1

the said RCS Airport satisfies the definition of Underserved

encourage more and more people to buy them.

Sep-16

0.7

-3.1

0.9

2.4

Underserved Airport for Priority Areas will mean any airport

Aug-16

-0.7

-5.6

-0.3

0.1

that is not an Unserved Airport and there are no more thanJul-16

-2.4

0.8

-3.4

1.6

14 scheduled commercial flight departures per week as

Jun-16

2.1

4.7

0.9

8.3

Airport or Unserved Airport under the Scheme. An

per the latest flight schedule published by the DGCA on its
website. Additional category of aircrafts will be permitted

Source: Ministry of Statistics and Programme Implementation, Government of India

for operations on Priority RCS Routes. Proposals for theseareas will be prioritised.

NHAI LAUNCHES MOBILE APP MYFASTAG
AND FASTAG PARTNER; APPS WILL
FACILITATE THE AVAILABILITY OF FASTAGSFOR ELECTRONIC TOLL COLLECTION

3. CORE SECTOR

APPENDICES

1. INFLATION
WPI

CPI

Jul-17

1.88

2.36

Jun-170.90

1.54

May-172.17

2.18

facilitate the availability of FASTags for Electronic Toll

Apr-17

3.85

2.99

Collection. The purchase and recharge of FASTags has

Mar-17

5.70

3.81

Feb-17

6.55

3.65

FASTags at the click of a mobile button. MyFASTag is a

Jan-17

5.25

3.17

consumer App that can be downloaded from the App

Dec-16

3.39

3.41

Store for both Android and iOS systems. A consumer can

Nov-16

3.15

3.63

Oct-16

3.79

4.20

grievance redressal. FASTag Partner is a merchant App.

Sep-16

3.80

4.39

Agencies like Common Services Centre, banking partners

Aug-16

3.74

5.05

Jul-2016

3.72

6.07

The National Highways Authority of India (NHAI) launched
two mobile Apps – MyFASTag and FASTag Partner, tobeen one of the major challenges. The mobile Apps willease the process, making it possible to buy or rechargepurchase or recharge FASTags on this App. The App also
helps to keep track of transactions and provides for online

and vehicle dealers can sell and enroll FASTag throughthis App. In addition to this, the App can also be used toactivate the RFID tags that come built in with around 74 lakhcars in the country following the 2013 Gazette Notification in

14

WPI Base Year = 2004-05, CPI Base : 2012 = 100

NaturalRefinerygas

products

8.98336.87680.7-0.5

Jun-17-6.7

May-17

SectorCoal

Crude oil

Weight10.3335

Jul-17OverallFertilisers

Steel

CementElectricity

28.0376

2.627617.9166

5.372

19.853

100

6.6

-2.7

-0.3

9.2

-2

5.4

2.4

0.6

6.4

-0.2

-3.6

5.8

-6.3

2.2

0.8

-3.2

0.7

4.5

5.4

-6.5

3.9

-0.4

8.6

4.1

Apr-17

-3.3

-0.6

2.0

0.2

6.2

9.0

-5.2

5.3

2.6

Mar-17

10.6

0.9

9.6

2.0

-3.0

11.0

-6.8

6.2

5.2

Feb-17

6.6

-3.4

-2.1

-2.8

-4.0

8.7

-15.8

1.2

0.6

Jan-17

3.5

1.3

11.6

0.0

-1.2

11.3

-13.3

5.2

3.4

Dec-16

3.6

-0.8

-0.4

5.4

-2.9

15.9

-8.7

6.4

5.6

Nov-16

6.1

-5.4

-2.1

-0.7

4.2

5.4

0.5

9.5

3.2

Oct-16

-1.9

-3.2

-1.5

12.6

0.7

17.4

6.2

3.0

7.1

Sep-16

-6.7

-4.1

-5.9

6.9

0.3

16.1

6.7

5.1

5.3

Aug-16

-9.7

-3.9

-5.9

2.5

2.5

16.7

3.1

2.2

3.1

Jul-16

4.1

-1.8

4.1

8.0

-3.2

0.0

0.7

2.1

3.1

Feb 2016

9.1

-4.6

-15.3

4.8

6.2

-2.8

9

6

9.4

Index

Source: Ministry of Commerce & Industry

15

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For the latest news, views and analysis
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KnightFrankblog.com/global-briefing

RESEARCH
Dr. Samantak Das
Chief Economist &National Director- Researchsamantak.das@in.knightfrank.com
Pankaj Toppo
Vice President - Researchpankaj.toppo@in.knightfrank.com

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