Updates on Indian Economy

Updates on Indian and Global Economy:

1. India’s eight core industry output has been contracted since March 2020. However, the eight-core industry shrank just (-) 0.8% in September 2020 on a year-on-year basis. The growth rate of Index of Eight Core Industries for June 2020 was (-) 12.4% and August 2020 had recorded a (-) 7.3% dip in the index.

# The Office of the Economic Adviser in the Department for Promotion of Industry and Internal Trade compiles the Index of Eight Core Industries. The eight core industries included are- Coal, Crude oil, Natural Gas, Petroleum refinery products, Fertilizer, Cement, Steel, and Electricity generation. 

2. According to the data released by the World Gold Council, the demand for gold in India declined 30% to 86.6 tonnes in the July-September (3rd) quarter as compared with 123.9 tonnes a year earlier due to COVID-19 disruptions and record-high prices.

3. As per data from the Comptroller General of Accounts, the fiscal deficit continued to rise rapidly in September 2020 to reach ₹9.1 lakh crore, or almost 115% of the budget target of ₹7.96 lakh crore for 2020-21. The revenue deficit hit 125.2% in the first half of the year, with revenue receipts continuing to suffer in view of lower economic activity due to COVID-19. The monthly expenditure trends revealed a discordant sharp contraction in both revenue and capital expenditure in September 2020.

# The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included.

# Revenue deficit arises when the government’s revenue expenditure exceeds the total revenue receipts. Revenue deficit includes those transactions that have a direct impact on a government’s current income and expenditure.

# Revenue Expenditure is that part of government expenditure that does not result in the creation of assets. Payment of salaries, wages, pensions, subsidies and interest fall in this category as revenue expenditure examples. Also, note that revenue expenses are incurred by the government for its operational needs.

# Capital expenditure or capital expense (capex or CAPEX) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset, such as repairing the roof. Capital expenditures contrast with operating expenses (OPEX), which are ongoing expenses that are inherent to the operation of the asset. Opex includes items like electricity or cleaning.