OREANDA-NEWS. March 13, 2012. The Reserve Bank of India released the March 2012 issue of its monthly RBI Bulletin today. The March 2012 issue carries five special articles (i) A Review of the Trends in National Income Aggregates (ii) North-East Monsoon 2011: A Review (iii) International Banking Statistics for September 2011 (iv) Investment Portfolio of Scheduled Commercial Banks: March 2011; and (v) India’s Foreign Trade: 2011-12 (April- December).

Highlights of the special articles are:

1. A Review of the Trends in National Income Aggregates

This article reviews the trends in national income aggregates based on Quick Estimates for 2010-11 and Advance Estimates for 2011-12 that were released by the Central Statistics Office (CSO) on January 30, 2012 and February 7, 2012, respectively.

Main Findings:

After a smart recovery during 2009-10 and 2010-11, real growth slipped sharply to 6.9 per cent during 2011-12, largely on account of the deterioration in the external environment and the slowdown in domestic investment.

The real GDP growth in 2011-12 was below the trend rate.

Seasonally adjusted growth rates also corroborated the loss of momentum in overall activity.

Notwithstanding the recent slowdown, the rate of growth of the Indian economy remained quite impressive in a cross-country context.

The structural changes in the Indian economy over the years point towards a reduction in the share of agriculture, near-stability in the share of industry and increase in the share of services.

Both savings and investment rates dipped during 2010-11 mainly reflecting a decline in the household financial savings rate and the private corporate sector investment rate, respectively.

The public sector’s saving-investment gap has also increased substantially in recent years.

2. North-East Monsoon 2011: A Review

This article reviews deficient North-East monsoon and finds that it is not likely to impact the agricultural prospects during the year.

Main Findings

The North-East monsoon during October-December 2011 was 48 per cent below normal as against 21 per cent above normal in the previous year.

This has been the most acute deficiency in the last one decade. However, reflective of the resilience of Indian agriculture and its reduced dependence on rainfall in recent years, the adverse impact of deficient North-East monsoon during 2011 on overall agricultural production has not been severe.

Production of foodgrains during 2011-12 is estimated to be at a record level. However, production of pulses and oilseeds is estimated to be lower than that of the previous year.

The progress of rabi sowing, so far in the season, has been satisfactory.

Live storage to total storage capacity at 50 per cent as on February 8, 2012 for all the major 81 reservoirs is comfortable and comparable with the previous year. Given this, agriculture and allied sector is expected to grow close to trend level during 2011-12.

This is significant given the high growth of 7 per cent experienced by the sector during the year 2010-11.

3. International Banking Statistics for September 2011

This article presents analysis of international liabilities and assets of banks in India, classified under Locational Banking Statistics (LBS) and consolidated international/ foreign claims under Consolidated Banking Statistics (CBS), collected as per the reporting system of the Bank for International Settlements (BIS), for the quarters ended September 2011.

Main Findings

Locational Banking Statistics - International Liabilities

The international liabilities in ` terms of banks in India, at end-September 2011 grew by 5.3 per cent over the position a year ago and by 1.7 per cent over the previous quarter.

Foreign currency borrowings through Foreign Currency Non Resident (Banks) FCNR(B), Non Resident Ordinary (NRO) and Non Resident External (NRE) deposits contributed to the growth in international liabilities over the previous year.

At end-September 2011, the annual increase in the international liabilities was reflected in the increase in the liabilities towards USA, UK and India.

The share of the international liabilities towards the non-bank sector was lower at 72.1 per cent compared with 75.7 per cent a year ago.

Locational Banking Statistics - International Assets

At end-September 2011, international assets in ` terms of banks in India registered a growth of 9.0 per cent over the position a year ago and an increase of 5.1 per cent over the previous quarter.

Foreign currency loans to residents, loans to non-residents and outstanding export bills contributed to the increase in the international assets over the previous year.

The share of the non-bank sector in the international assets increased to 68.2 per cent as at end-September 2011 from 66.9 per cent a year ago.

As at end-September 2011, as high as 79.9 per cent of the total international assets were denominated in US Dollar, with the next lower share at 8.0 per cent was that of Euro.

Consolidated Banking Statistics

The annual growth in consolidated international claims of banks in ` terms based on country of immediate risk, as at end-September 2011, was 7.2 per cent while the international claims had declined by 5.6 per cent as at end-September 2010 over the previous year.

Major part of consolidated international claims of Indian banks on immediate risk basis, at end-September 2011, continued to be of short-term nature (less than one year) and accounted for 62.0 per cent of total claims as compared with 62.2 per cent a year ago.

4. Investment Portfolio of Scheduled Commercial Banks: March 2011

This article presents the investment portfolio of scheduled commercial banks (excluding Regional Rural Banks) as at end-March 2011, based on annual Basic Statistical Return (BSR)-5.

Main Findings

During 2010-11, the total investments of the scheduled commercial banks (SCBs) increased by 8.9 per cent as compared with 20.2 per cent in 2009-10.

Nationalised banks accounted for the largest share of investments of the SCBs, (47.9 per cent). The share of State Bank group declined from 22.0 per cent to 20.9 per cent.

The maturity profile of the government securities held by the SCBs showed that holdings in medium- term maturity buckets i.e. 'more than 1 year but less than 6 years' and 'more than 6 years but less than 11 years' together contribute to 73.5 per cent of the total. Holdings of government securities with maturity period more than 11 years had a share of 14.3 per cent.

During 2010-11, the share of central government securities with the coupon rate of ‘6 per cent to 10 per cent’ held by the SCBs increased from 82.8 per cent to 83.3 per cent.

Share of the investments of SCBs under ‘held to maturity’ (HTM) as well as ‘held for trading’ (HFT) category increased between March 31,2010 and March 31, 2011, while the share of ‘available for sale’ (AFS) category decline sharply.

5. India’s Foreign Trade: 2011-12 (April- December)

This article reviews India’s merchandise trade performance during 2011-12 (April-December) on the basis of data released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S). It also analyses disaggregated commodity-wise and direction-wise details for the period 2011-12 (April-September).

Main Findings

During 2011-12 (April-December), India’s merchandise exports stood at USD  217.7 billion and recorded a growth of 25.8 per cent as compared with an increase of 36.0 per cent during the corresponding period of the previous year.

During 2011-12 (April-December), India’s merchandise imports at USD  350.9 billion registered a growth of 30.4 per cent as compared with 29.8 per cent in the preceding year. There has been significant rise in import of petroleum, oil and lubricants (POL), gold and silver and machinery.

POL imports at USD  105.6 billion in 2011-12 (April-December) exhibited a higher growth of 40.4 per cent, reflecting increase in international crude oil prices, as compared with 22.0 per cent a year ago.

Non-oil imports during 2011-12 (April- December) at USD  245.3 billion recorded a growth of 26.5 per cent as compared to 33.0 per cent in the corresponding period of the preceding year.

Trade deficit during 2011-12 (April- December) amounted to USD  133.2 billion, as compared with USD  96.2 billion during April- December 2010.

The disaggregated data on commodity-wise merchandise exports indicate that during 2011-12 (April-September), engineering goods, petroleum products, chemicals, textiles, gems and jewellery and agricultural products contributed more than 80 per cent of India’s exports.