Week in Numbers: Tracking India’s Economic Pulse

India’s retail inflation based on CPI rose to 3.21% in February from 2.74% a month earlier. The increase was led by food, with food inflation rising to 3.47% from 2.13% in January. Within food, inflation was 45.29% for tomatoes and 43.77% for cauliflower.

Among the broad groups, the personal care, social protection, and miscellaneous goods and services category recorded the highest inflation in February at 19.64%, driven by silver jewellery at 160.84% and gold, diamond, and platinum jewellery at 48.16%. The category also recorded the highest sequential price momentum, with the index rising 1.5%, led by a 4.7% increase in silver jewellery and a 4.4% increase in gold, diamond, and platinum jewellery.

Core inflation, excluding food and fuel, remained unchanged at 3.4% in February. Core-core inflation, which also excludes precious metals, was steady at 1.9%.

The sharp rise in crude oil and gas prices following the escalation of the West Asia conflict is likely to push up retail prices in the coming months. The full impact will be visible only if the government allows the state-owned oil marketing companies to raise pump prices. However, the effect is already visible in higher cooking gas and aviation jet fuel prices. The gas shortage has forced the government to cut allocations to several industries, which could also push up prices. A weaker rupee may further add to imported inflation.

Automobile wholesale sales remained strong. Total dispatches by automobile companies rose 29.9% year-on-year to 2.36 million vehicles in February, led by strong growth in two-wheelers. Wholesale sales have remained robust since the government cut GST rates in late September, with total sales growing by 20.9% over the past five months.

 

 

Two-wheeler wholesale sales rose 35.2% to 1.87 million units in February, led by a 42.3% rise in scooters and a 30.8% increase in motorcycle sales. Growth in passenger vehicle sales moderated to 10.6%, with dispatches reaching 417,705 units.

Automobile production increased 22.1% to 2.86 million units, suggesting companies expect sales to remain buoyant in the coming months.

Tractor dispatches also remained strong. Domestic dispatches rose 34.2% year-on-year to 78,901 units in February. The sector has been one of the biggest beneficiaries of the recent GST rate cut, which reduced the tax on tractors with engines of up to 1,800 cc to 5% from 12%. Total tractor sales, including exports, rose 30.7% to 88,545 units in February. Tractor production surged to a record 118,768 units in February, up 80% from a year earlier.

 

Mutual fund inflows to open-ended schemes slowed sharply in February, largely due to weaker debt inflows. Open-ended schemes recorded net inflows of ₹942 billion, down from ₹1.565 trillion in January.

 

Debt-oriented schemes attracted ₹421 billion in inflows, compared with ₹748 billion in the previous month. Equity schemes saw inflows rise to ₹260 billion from ₹240 billion in January. Gold ETFs recorded net inflows of ₹53 billion, nearly a fifth of the ₹240 billion seen in the previous month. Inflows through systematic investment plans remained steady at ₹298 billion.

 

 

E-way bill generation rose 18.8% year-on-year in February to 132.59 million. An e-way bill, a GST document for the transport of goods worth more than ₹50,000, has remained buoyant in the recent past. During April-February, generation rose 20.2% to 1.42 billion.

 

Coal production rose 2.3% year-on-year to 100.51 million tonnes in February. Coal dispatches rose 6.2% to 90.80 million tonnes, reversing five months of year-on-year decline. Demand had been weighed down by softer thermal power generation and higher renewable output. However, dispatches to the power sector rose 4.0% to 71.02 million tonnes in February.

 

Freight traffic at major ports rose 7.7% year-on-year to 830.72 million tonnes during April-February, supported by strong growth in crude oil and petroleum products and container cargo. Crude and petroleum volumes rose 9.4%, while container traffic increased 10.2% in the first 11 months of the year.

New-business premiums of life insurers rose 18.1% year-on-year to ₹354 billion in February, led by Life Insurance Corp of India. The state-owned insurer’s first-year premium income rose 24.2% to ₹193 billion, while premiums of private insurers rose 11.6% to ₹162 billion. During April-February, premiums grew 14.3% to ₹3.838 trillion, with private insurers’ income rising 14.1% and LIC's increasing 14.4%. LIC sold 15.10 million policies in the first 11 months of the year, up 2.9%, compared with 8.56 million policies sold by private insurers, up 7.0%.

 

Gross direct premiums of general insurers, including stand-alone health insurers and specialised insurers, rose 9.7% year-on-year to ₹239 billion in February. For April-February, premiums increased 9.4% to ₹3.072 trillion. The growth rate is not strictly comparable with earlier periods because the Insurance Regulatory and Development Authority of India excluded premiums from long-term general insurance policies from its calculations from October 1, 2024.

 

India’s foreign exchange reserves fell to a six-week low of $716.81 billion as of March 6, after the Reserve Bank of India sold dollars in the foreign exchange market to limit a sharp fall in the rupee amid the war in West Asia. Reserves declined $11.68 billion during the week, the biggest weekly fall since Nov. 15, 2024. Foreign currency assets dropped $9.88 billion to $563.25 billion, while gold reserves fell $1.61 billion to $130.02 billion. In the current financial year, gold reserves have increased by $51.84 billion, even though physical bullion holdings have remained unchanged at 880 tonnes.

 

The government has projected foodgrain production in 2025-26 (July-June), excluding the summer crop, at 348.66 million tonnes, up 3.0% from a year ago. In its second advance estimate, the agriculture ministry projected rice production at 140.65 million tonnes, up 1.3%, and wheat production at 120.21 million tonnes, up 1.9%.

Among pulses, gram output is expected to rise 6.1% to 11.79 million tonnes, while tur production is estimated to fall 4.7% to 3.46 million tonnes. Kharif oilseeds are projected to decline 5.3% to 26.53 million tonnes, while rabi oilseeds are expected to rise 6.0% to 14.47 million tonnes.

Foodgrain stocks with the government remained at record highs as of March 1. Total grain stocks, excluding unmilled paddy, stood at 60.10 million tonnes — the highest level on record for March 1. Rice stocks were at 36.47 million tonnes, slightly lower than a year earlier, while wheat stocks stood at 23.62 million tonnes, the highest March 1 level in five years. The government also held 55.92 million tonnes of unmilled paddy, equivalent to about 37.46 million tonnes of rice. High stocks have prompted the government to allow wheat exports after nearly four years.

The pre-monsoon season has started slowly. Rainfall during March 1-13 was 3.3 mm, 74% below the long-period average of 12.5 mm. Reservoir storage levels continued to decline but remained well above historical norms. As of March 12, water levels in 166 reservoirs stood at 98.91 billion cubic metres, or 54% of their total live capacity — 12% higher than a year earlier and 26% above the 10-year average. Reservoirs are typically replenished during the southwest monsoon.

 

Coming up

•  Mar 16: WPI inflation for February
•  Mar 16: Trade data for February
•  Mar 24: HSBC India Flash PMI for March

Tailpiece
Mutual funds had 94.45 million active systematic investment plan accounts in February. On average, mutual funds receive about ₹290 billion in SIP inflows each month. At the end of February, SIPs accounted for 20.3% of the mutual fund industry’s net assets under management of ₹82.03 trillion.