RBI releases its Monthly Bulletin for October 2014

The Reserve Bank of India today released the Octo­ber 2014 issue of its month­ly Bul­letin. The Bul­letin includes four spe­cial arti­cles: 1. Month­ly Sea­son­al Fac­tors of Select­ed Eco­nom­ic Time Series: 2013–14; 2. Per­for­mance of the Pri­vate Cor­po­rate Busi­ness Sec­tor, 2013–14; 3. Per­for­mance of Finan­cial and Invest­ment Com­pa­nies, 2012–13; and 4. House Price Index: 2010-11 to 2013–14.

  1. Month­ly Sea­son­al Fac­tors of Select­ed Eco­nom­ic Time Series: 2013–14 This arti­cle presents the esti­mat­ed month­ly sea­son­al fac­tors of select­ed 85 major macro­eco­nom­ic series, broad­ly cov­er­ing five major sec­tors, name­ly, Mon­e­tary and Bank­ing Indi­ca­tors (17 series), Prices (WPI/CPI) (29 series), Indus­tri­al Pro­duc­tion (30 series), Exter­nal sec­tor (3 series) and Ser­vices Sec­tor Indi­ca­tors (6series) based on month­ly data for the peri­od 2004-05 to 2013–14. The seasonal

fac­tors have been esti­mat­ed using X‑13ARIMA-SEATS soft­ware pack­age, devel­oped by the US Bureau of Cen­sus, tak­ing care of Diwali as a major fes­ti­val as well as trad­ing day effects.

Main Find­ings:

  • Sea­son­al vari­a­tion in Broad Mon­ey (M3) was observed to be low­er than that for Cur­ren­cy in cir­cu­la­tion, Nar­row Mon­ey (M1) and Reserve Mon­ey (RM) over the years. After show­ing an upward move­ment till 2006-07, the sea­son­al­i­ty of M3 declined grad­u­al­ly. Demand Deposits of SCBs wit­nessed high­er sea­son­al fluc­tu­a­tions than Time Deposits of SCBs, which remained with­in the nar­row band of 1.4 to 2.0. Most of the mon­e­tary and bank­ing aggre­gates wit­nessed their sea­son­al peaks in March/ April.
  • Among the price relat­ed series, range of sea­son­al fac­tors of WPI-All Com­modi­ties increased from 1.4 in 2004-05 to 1.7 in 2007-08, and there­after, revert­ed to 1.1 in 2010-11 before a grad­ual increase to 1.4 in 2013–14. For a major­i­ty of WPI/CPI series, the sea­son­al peaks were dur­ing August-Octo­ber. The range of sea­son­al fac­tors for ‘Pri­ma­ry Arti­cles’ prices was more than three times the sea­son­al­i­ty in the WPI-Man­u­fac­tured Products.
  • In the case of CPI for Agri­cul­tur­al and Rur­al Labour­ers, sim­i­lar move­ment in sea­son­al vari­a­tions was observed with the for­mer hav­ing slight­ly high­er vari­a­tion than the lat­ter. The sea­son­al­i­ty of dif­fer­ent CPI series was con­sis­tent­ly high­er than WPI-All Com­modi­ties. The dif­fer­ence between the sea­son­al vari­a­tions of CPI series and WPI-All Com­modi­ties has how­ev­er, widened after 2008-09.
  • Sea­son­al vari­a­tion of IIP-Gen­er­al increased mar­gin­al­ly over time. Most of the IIP series had their peak sea­son­al­i­ty in March. Among the use-based clas­si­fi­ca­tion of goods, IIP-Con­sumer non-durable goods exhib­it­ed high­est 2 sea­son­al­i­ty, where­as IIP-inter­me­di­ate goods was the only group where sea­son­al­i­ty has reduced over the years.
  • Among India’s mer­chan­dise trade vari­ables, sea­son­al vari­a­tion in export was high­er than import except dur­ing 2006-09 where­as Non-Oil Non-Gold Import and total mer­chan­dise import have shown sim­i­lar seasonality.
  1. Per­for­mance of the Pri­vate Cor­po­rate Busi­ness Sec­tor, 2013–14

This arti­cle analy­ses the per­for­mance of the pri­vate (non-finan­cial) cor­po­rate busi­ness sec­tor dur­ing 2013–14 (April ‑March) based on the earn­ings results of 2,854 com­pa­nies, along with the evolv­ing trend in sales, expen­di­ture and prof­it mar­gins of the cor­po­rate sec­tor over a longer hori­zon. Besides analysing at the aggre­gate lev­el, it analy­ses the cor­po­rate per­for­mance by size and major indus­try groups.

Main Find­ings:

  • The aggre­gat­ed sales growth of the pri­vate (non-finan­cial) cor­po­rate busi­ness sec­tor mod­er­at­ed dur­ing 2013–14, for the third con­sec­u­tive year. Although, an upturn had been noticed dur­ing the sec­ond quar­ter of 2013–14, sales growth declined in the third quar­ter and then flat­tened sub­se­quent­ly in the fourth quar­ter. Per­for­mance of small com­pa­nies fur­ther worsened.
  • Mod­er­a­tion in sales growth in the man­u­fac­tur­ing sec­tor con­tin­ued. The ser­vices (oth­er than IT) sec­tor also wit­nessed low­er demand. Earn­ings Before Inter­est Tax Depre­ci­a­tion and Amor­ti­sa­tion (EBITDA) mar­gins declined for the man­u­fac­tur­ing and the non-IT ser­vices sec­tors. IT sec­tor has recov­ered in 2013–14 show­ing high­er growth in sales and net prof­it after some mod­er­a­tion last year. How­ev­er, the recov­ery was not spread across the size groups.
  • The trends in var­i­ous com­po­nents of expen­di­ture as a pro­por­tion to sales revealed that at the aggre­gate lev­el, CRM (cost of raw mate­ri­als) to sales record­ed a steady increase till 2011-12 and then mod­er­at­ed in the recent years. Staff cost to sales ratios have increased in the recent two years. The inter­est to sales ratio increased from 2.3 per cent in 2007-08 and stood at 3.7 per cent in 2013–14, wit­ness­ing fluc­tu­a­tions in between.
  • At the aggre­gate lev­el, EBITDA mar­gin remained steady in 2012–13 and 2013- 14, although sig­nif­i­cant­ly at a low­er lev­el than that in 2007-08. Net prof­it con­tract­ed in 2013–14 for the third con­sec­u­tive year and net prof­it mar­gin declined over the last three years.
  • Quar­ter­ly results of 2,291 com­mon com­pa­nies showed an over­all declin­ing trend in sales growth dur­ing the pre­vi­ous eight quar­ters. How­ev­er, it also showed an increase in net prof­it growth in Q4:2013–14 on a Y‑o-Y basis. Lim­it­ed results for Q1:2014–15 hint­ed at an improve­ment in sales growth and profitability.

The data per­tain­ing to the per­for­mance of the pri­vate (non-finan­cial) cor­po­rate busi­ness sec­tor dur­ing 2013–14 was ear­li­er released on the RBI web­site vide press release No. 450 on Sep­tem­ber 2, 2014


  1. Per­for­mance of Finan­cial and Invest­ment Com­pa­nies, 2012–13

This arti­cle presents the per­for­mance of non-Gov­ern­ment non-bank­ing finan­cial and invest­ment com­pa­nies dur­ing the year 2012–13 based on the audit­ed annu­al accounts of 1,005 com­pa­nies closed dur­ing the peri­od April 2012 to March 2013. The study also presents a com­pa­ra­ble pic­ture over a three year peri­od from 2010-11 to 2012–13 based on the data of these com­mon companies.

Major find­ings:

  • Growth in finan­cial income of the select 1,005 finan­cial and invest­ment com­pa­nies mod­er­at­ed to 23.2 per cent in 2012–13 from 30.4 per cent in 2011- 12 main­ly due to low­er growth in inter­est income.
  • Growth in total income also decel­er­at­ed dur­ing the year 2012–13 (24.7 per cent) vis-à-vis pre­vi­ous year (28.9 per cent)
  • Total expen­di­ture increased by 28.5 per cent in 2012–13 (37.7 per cent in 2011-12) aid­ed by a fall in growth of inter­est expens­es to 37.4 per cent (57.6 per cent in 2011-12).
  • Growth in oper­at­ing prof­its (EBDT) of the select com­pa­nies was low­er dur­ing the year 2012–13 where­as growth in net prof­its of the com­pa­nies’ improved. Oper­at­ing prof­it mar­gin (mea­sured as a ratio of oper­at­ing prof­its to finan­cial income) declined togeth­er with mar­gin­al fall in return on assets (ratio of net prof­its to total net assets) and return on share­hold­ers’ equi­ty (ratio of net prof­its to net worth) in com­par­i­son with the pre­vi­ous year.
  • Even though the growth in bor­row­ings from the bank declined sig­nif­i­cant­ly, the share of bank bor­row­ing to total bor­row­ing increased. The debt to equi­ty ratio also increased in 2012–13 as com­pared to that in 2011-12.
  • With­in lia­bil­i­ties, share of the major com­po­nent , long-term bor­row­ings increased mar­gin­al­ly; on the assets side too, share of loans and advances rose.
  • The finan­cial and invest­ment com­pa­nies con­tin­ued to rely main­ly on exter­nal sources for funds and used it pre­dom­i­nant­ly for expand­ing their long-term loans and invest­ment portfolios.

The data per­tain­ing to the per­for­mance of non-Gov­ern­ment non-bank­ing finan­cial and invest­ment com­pa­nies for 2012–13 was ear­li­er released on the RBI web­site vide press release No. 647 on Sep­tem­ber 26, 2014


  1. House Price Index: 2010-11 to 2013–14

This arti­cle presents the trends in house prices of ten major cites (Mum­bai, Del­hi, Chen­nai, Kolkata, Ben­galu­ru, Luc­know, Ahmed­abad, Jaipur, Kan­pur and Kochi) in India for the peri­od Q1:2010–11 to Q4:2013–14 based on a house price index com­piled by the Reserve Bank. For the first time, an approach for com­pil­ing a size-wise house price index in India is illus­trat­ed in this arti­cle. The data for these indices are based on the offi­cial records of reg­is­tra­tion author­i­ties of var­i­ous state gov­ern­ments. Recent trends in the house price index reveal that increase in the

house price, which was steep in the last few years, has since mod­er­at­ed in 2013–14. In par­tic­u­lar, the house price increase in the small and medi­um size cat­e­go­ry has mod­er­at­ed more sharply as com­pared to the large size category.

Source : www.rbi.org.in 

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