New Delhi: The industry department today said the Reserve Bank of India’s (RBI) fiscal and monetary policies will not be able to check rising prices, as inflation is being driven by a shortage of agricultural commodities, reports PTI.
“... Inflation is driven by food items and it is something which will not respond to fiscal or monetary policies. So we have to certainly reinvent our agriculture,” Department of Industrial Policy and Promotion (DIPP) secretary RP Singh said at a Nikkei Global Eco-Business Forum here.
He said that to meet the food shortage in the country, there was a need to bridge gaps in the food value chain and set up more food processing units.
Overall inflation stood at 8.58% in October, while food inflation stood at 10.15% for the week ended 13th November.
The RBI has also expressed concern over rising inflation and said the prevailing level is above its comfort zone.
Currently, about 60% of India's population is engaged in agricultural activities, but the sector contributes just 18% to the country's GDP, Mr Singh said, adding that “inclusive growth cannot come unless we reinvent agriculture.”
The Indian economy grew by 8.9% in the second quarter of the current fiscal, up from 8.7% in the corresponding period a year ago.
The government today exuded confidence that the GDP growth rate during the current fiscal would exceed 8.75%.
Finance minister Pranab Mukherjee said, “Amid all the depressing news, there is good news... We may be confident that at the end of this year the GDP growth will not be less than 8.7%-8.75%... It may be more.”
New Delhi: Reliance Industries’ (RIL) prolific D-1 and D-3 gas fields off the east coast have seen a 15% drop in production to about 45-46 million metric standard cubic meters per day (mmscmd) because of reservoir complexities, reports PTI.
The Dhirubhai-1 and 3 fields, known as D1 and D3, in the Krishna Godavari basin have seen output fall from 53-54 mmscmd achieved in mid-2010 to 45-46 mmscmd, sources privy to the development said.
D1 and D3 are the largest among the 20 oil and gas finds that Reliance and its Canadian partner Niko Resources have made in the Krishna Godavari basin KG-DWN-98/3 or KG-D6 block off the Andhra coast.
“The reservoir is a complex reservoir and has not behaved as previously modelled,” a source said.
Besides D1 and D3, D-26 or MA oilfield in the same block, is producing about 8 mmscmd as associated gas. Together, the output from KG-D6 currently stands at around 54 mmscmd.
Reliance has been forced to restrict production from the MA field to less than 20,000 barrels per day due to high water and gas output, sources said, adding the field was yielding more water than oil and even 8 mmscmd of gas in comparison to 20,000 bpd of oil was considered quite high.
A company spokesperson did not immediately revert calls made for comments.
KG-D6 block had earlier this year hit a peak of 60 mmscmd after which the output has fallen, sources said.
Sources said RIL will have to drill more wells to boost output to the approved peak of 80 mmscmd. Currently, 18 wells on D1 and D3 have been completed and hooked to production system but only 17 are producing.
The company is not drilling any production well at the moment as it is concentrating on completing the mandatory appraisal of other discoveries it has made in the block.
In the absence of drilling appraisal wells to delineate the discovery in a prescribed timeframe, Reliance would lose that area of the block.
RIL is yet to complete four out of the total 22 approved wells for phase-1 of D1 and D3 field development plan.
The company is currently selling 14.5 mmscmd of gas produced from KG-D6 to fertilizer plants, 26.5 mmscmd to power plants and remaining 13 mmscmd to other sectors like sponge iron plants, LPG, city gas distribution (CGD), petrochemical plants and refineries.
The petroleum major had previously stated that it is carrying out further optimisation exercises at the MA oilfield in view of increasing water production levels. The field has five oil producing wells and one gas injection-cum-gas producer well.
New Delhi: Cheering up the economy further, the core infrastructure industries grew by 7% in October against 3.9% in the same month last year, helped by robust performance of cement and crude oil sectors, reports PTI.
The October data for six industries-crude oil, petroleum refinery products, coal, electricity, cement and finished steel-reflected a bounce back from September when growth in these sectors had plunged to 2.7% against 4.3% growth in corresponding period in 2009-10.
Core infrastructure industries that have a weight of 26.7% in the Index of Industrial Production (IIP), is expected to show a positive impact on the October IIP, likely to be released next month.
Revival in the core industries comes on top of 8.9% growth in the country's gross domestic product (GDP) for the first half of the current fiscal.
Expansion of the economy, helped by impressive performance by the industries, including the infrastructure sector, is expected to give a boost to investment climate, HSBC Group country head Naina Lal Kidwai said.
"We will see more investments by industry next year because in lots of companies capacity utilisation is 90% plus," she said.
However, amid the overall good performance of core infrastructure activity, coal and petroleum refinery output remained areas of concern. While petroleum refinery products showed a deceleration of 4.8%, coal could barely grow by 0.8% in October.
Cement with 16.8% and crude oil with 13.7% growth emerged as the top infrastructure performers in October.
The April-October cumulative performance remained unchanged at 4.5% from the previous year.
Reacting to the core sector data, principal economist with credit rating agency CRISIL DK Joshi said the slowdown in coal output was a cause of concern as it will have an impact on electricity generation.
He said the six infrastructure sectors are likely to register 6%-7% growth in the coming months.
As per the data released by the industry department, electricity generation increased to 8.4% in October against 4.4% in the comparable month last year. Output of finished steel, too, improved at 6.2% from 2.5% in October 2009.
During April-October period, crude oil sector registered a growth of 10.7% against a contraction of 1.3% in the same period last fiscal.
However, coal output in the first seven months of 2010-11 contracted by 0.1% from a positive growth of 11.4% in April-October 2009-10.
On a cumulative basis, electricity generation and cement also slowed to 4.7% and 6.3%, respectively in April-October from 6.1% and 11.3%, in the same period last year.
The data further said petroleum refinery output in the period expanded by 1.4% and finished steel by 4.2%.