The WPI spike:
India's Wholesale Price Index has risen for the second consecutive month in February. Wholesale prices touched a 27-month high to 4.17%, a 100% rise from 2.03% in January.
Manufactured products have seen the biggest inflationary pressure as they rose by 5.81%. The rate of wholesale inflation of fuel and power was at 0.58% as against -4.71% in January. It has also impacted the prices of essentials like vegetables, especially onions with 31.28% inflation. Overall food articles saw 1.36% inflation in February.
The wholesale price index is directly reflecting the volatility in the global commodity prices. This is bound to hit the margins of the companies during the ongoing quarter. And, it is going to be a big factor impacting corporate earnings.
Ultimately, it is the consumers who are going to be impacted the most. Many consumer-facing sectors like FMCGs, consumer durables, and automobiles have taken a price hike since January, passing the burden on end-users.
Road construction into the fast lane:
Highway projects worth Rs 7.89 lakh crore are under construction across the country at this given moment. This work is spread across 2,084 projects and includes the construction of 63,523 km of national highways in the country.
Presenting further details, road transport minister Nitin Gadkari informed Rajya Sabha that his ministry has taken several steps to make up for the work that was stalled due to the Covid-19. And, all these projects are given a period of 2 to 3 years for completion from the date of commencement.
Road construction work has been carried out at an exponential pace since Nitin Gadkari has taken charge of the ministry. The pace of highway construction in the country has touched a record 33 km per day. It is nearly 3x higher than compared to 2014-15 when the average daily construction was 12.08 km/day.
However, it has also put the NHAI under a severe financial burden with debt servicing liability of Rs 97,115 crore.
Rising dependency on MGNREGA:
The day-to-day laborers continue to depend on the government for employment. Latest data from Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) shows that ~38.3 million individuals sought work under the scheme. In comparison, the number was at ~34.2 million in January and 34.8 million in December.
The dependency on MGNREGA had dropped considerably in November to 28.9 million. Post that, it has been rising again.
These numbers largely reflect that the private infrastructure and construction sector has still not been able to recover despite the extensive focus from the government. It also talks about the feeble nature of the economic recovery that is currently underway.