1. GDP growth at 7.3% in 2014-15
India’s economic growth accelerated to 7.5% in the March quarter from a revised 6.6% in the three months ended December. Gross domestic product (GDP) growth for the whole year was reported at 7.3%, as against earlier estimates of 7.4%. The agriculture sector shrunk 1.4% in the March quarter after a 1.1% contraction in the previous three months. Manufacturing growth accelerated to 8.4% compared to 3.6% in the December quarter. This sector has been the main source of controversy in the revised method for calculating India’s economic growth. Surprisingly, despite talk of rural distress and companies complaining about poor urban demand, consumption expenditure grew 7.9% in the three months to March, the fastest in eight quarters.
2. Corporate earnings disappoint
The new economic growth numbers are not matched by corporate earnings. The March quarter net sales of manufacturing firms on the BSE 500 index was largely unchanged from a year ago. Companies seem to have not capitalized on the benefits of a fall in commodity prices and, thus, cheaper input costs. Operating profits fell almost 5%. That also probably indicates a rise in marketing expenses and discounts, which would have eaten into margins. Analysts say this indicates weak pricing power and a lack of demand, a clear contradiction to the sharp consumption growth seen in the GDP numbers.
3. Heatwave kills more than 2,000 across the country
With temperatures soaring in different parts of the country on account of a heatwave, more than 2,000 people have lost their lives, according to the Press Trust of India. Weather forecasters warn that the killer heat will continue. Andhra Pradesh is the worst hit, with close to 1,500 deaths this year, according to PTI. According to data available with the National Crime Records Bureau, the number of deaths every year in the country due to heatwaves has increased by more than 50% between 2003 and 2013.
4. Poor crop forces government to buy more grain
Unseasonal rain and a poor crop have prompted the government to hike its purchase of wheat and paddy from farmers. It seems the government is hoping to ward off criticism that it is anti-poor and anti-farmer. Unseasonal hailstorms had ruined the quality of the winter crop, especially wheat. With no private-sector takers for produce of such low quality, the government has stepped up its purchases to prevent farmers from undertaking distress sales. Wheat and rice procurement are up by 11% and 5%, respectively.
5. Net FDI inflows touch record high in 2014-15
While foreign portfolio investments to India are slowing, net foreign direct investment (FDI) inflows reached a record high of $34.9 billion in 2014-15. There was more inbound FDI due to growing investor confidence in India and lower outbound FDI as global growth remains anaemic. Foreign investment inflows to India are predominantly to infrastructure—mainly the telecom, oil and gas, and mining sectors—as well as to the services sectors. FDI in manufacturing has remained lacklustre, although there were some flows into the auto sector. With the government opening up various sectors such as insurance and defence, these stable flows may continue this year as well.
6. Rate cut chorus gets louder
With inflation well below the declared comfort level of the Reserve Bank of India and the government’s fiscal consolidation on track, chief economic advisor Arvind Subramanian has called for interest rate cuts ahead of the monetary policy review on Tuesday. Minister of state for finance Jayant Sinha, too, said the time is right for the central bank to lower rates. Citing the example of countries such as China that have resorted to aggressive monetary easing to make their currencies weaker, Subramanian said it is time that India allows the rupee to become competitive in order to boost exports.
7. India misses global hunger reduction targets
India has missed the target of halving the proportion of undernourished by 2015 under the United Nations Millennium Development Goals. It has also failed to meet the World Food Summit target of halving the absolute number of the hungry. According to a report jointly published by the Food and Agriculture Organization, the International Fund for Agricultural Development and the World Food Programme, India is home to 194.6 million undernourished people, comprising nearly 25% of the number of undernourished people in the world. A whopping 69% of the undernourished people in South Asia are in India alone. Although the proportion of undernourished people in India has declined, there is still a long way to go.
8. United Spirits faces inquiries by regulators
United Spirits Ltd, now controlled by Diageo, said on Wednesday that it had been served notices by the ministry of corporate affairs and the income-tax department regarding its accounting practices, some of which were again questioned by its independent auditor, BSR and Co. Llp. The maker of McDowell’s No. 1 and Bagpiper whiskies made these disclosures as part of its fourth-quarter earnings report, in which it showed a net loss of Rs1,799.28 crore, partly because it was forced to provide cover for money it is supposed to receive from entities controlled by its embattled chairman, Vijay Mallya.
9. Fifa officials arrested in corruption scandal
The governing body of world football landed itself an indictment, with the US unveiling charges against 14 Fifa (Fédération Internationale de Football Association) officials. After a sweeping three-year investigation, the US presented charges such as money laundering, racketeering, bribery and fraud. Seven Fifa officials were arrested in Zurich last week. According to The Guardian newspaper, the Swiss government has opened separate criminal proceedings in connection with the award of the 2018 World Cup to Russia and the 2022 tournament to Qatar. These decisions were controversial, with claims of bribery and corruption making the rounds since the vote in December 2010. On Friday, embattled Fifa chief Sepp Blatter was re-elected president of the body for a fifth term after the only other candidate conceded defeat after a first round of voting in an election overshadowed by the corruption allegations, reported Reuters.
10. Ireland votes for same-sex marriage
Ireland has become the first country in the world to approve gay marriage by popular vote, in the process becoming the 20th to allow such marriages. In the referendum, 62% were in favour of changing the constitution to allow gay and lesbian couples to marry. However, the Vatican secretary of state said the vote was a “defeat for humanity”. After Ireland, Greenland’s parliament also voted unanimously to allow same-sex unions.