The Reserve Bank of India today released the November 2015 issue of its monthly Bulletin. The Bulletin includes Speeches by the Top Management and Current Statistics. The issue also includes two articles: (1) Survey of Professional Forecasters: Projections for 2015-16 and 2016-17; and (2) Finances of Non-Government Non-Financial Private Limited Companies, 2013-14.

1. Survey of Professional Forecasters: Projections for 2015-16 and 2016-17

This article presents the forecasts by the respondents for the years 2015-16 and 2016-17 based on the latest round of survey conducted during September 2015 (36th Round). The accuracy of quarterly output growth and inflation forecasts in different horizons has been evaluated. Similarly, the extent of disagreement among forecasters in forecasting output growth and inflation has also been examined.

Major findings:

• Forecasters expect that Indian economy will grow by 7.4 per cent in 2015-16 and 8.0 per cent in 2016-17.

• They expect industry growth to be 6.7 per cent in 2015-16, which is likely to improve to 7.2 per cent in 2016-17. According to the forecasters, services sector is likely to grow by 9.4 per cent in 2015-16 and further by 9.8 per cent in 2016-17.

• The Central Government fiscal deficit is expected at 3.9 per cent of GDP in 2015-16 and is likely to improve to 3.6 per cent of GDP in 2016-17, the forecasters estimated.

• They expected current account deficit to remain below 1.5 per cent of GDP till 2016-17.

• Forecasters’ estimate for CPI headline inflation was to remain below 5.5 per cent till Q2:2016-17.

• The medium and long-term inflation expectations, measured by both wholesale and consumer price index, have moderated in the recent period.

• The disagreement among the forecasters for growth and inflation outlook has declined in the recent period.

The Reserve Bank has been conducting the Survey of Professional Forecasters since September 2007 at quarterly intervals up to March 2014. From 2014-15, the survey has been made bi-monthly in line with the change in monetary policy review cycle. The projections are those of the respondents and are not necessarily shared by the Reserve Bank of India.

2. Finances of Non-Government Non-Financial Private Limited Companies: 2013-14

The article analyses the financial performance of Non-Government Non-Financial (NGNF) Private Limited Companies in 2013-14 based on a sample of 2,55,426 companies’ audited annual accounts. The data utilised to prepare this article is received from Ministry of Corporate Affairs (MCA), which is based on their Extensible Business Reporting Language (XBRL) and Form 23AC/ACA (Non-XBRL) systems.

Major Findings:

• Growth in sales has decelerated to 11.4 per cent in 2013-14 from 13.3 per cent during 2012-13. Operating expenses witnessed a lower growth of 10.7 per cent and growth in earnings before interest, tax, depreciation and amortization (EBITDA) also declined to 15.8 per cent in 2013-14.

• Further a lower growth of 14.0 per cent in profit after tax was observed in 2013-14 (16.0 per cent in 2012-13).

• Growth in sales and EBITDA of Services sector NGNF Private limited companies witnessed a decline in 2013-14. The decline in sales growth of manufacturing sector was mainly contributed by ‘Motor Vehicle and Other Transport Equipments’ and ‘Iron and Steel’ industries.

• Profit margins, as measured by EBITDA to sales, increased both for Manufacturing and Services sector in 2013-14.

• Total net assets of select NGNF private limited companies displayed a lower growth of 10.8 per cent in 2013-14 as against 14.5 per cent in the previous year at aggregate level and contributed by all the sectors.

• There was marginal increase in return on equity in 2013-14 at aggregate level.

• The total borrowings of the select NGNF private limited companies registered a significant lower growth of 13.2 per cent in 2013-14 as compared to 22.7 per cent in 2012-13.The total borrowings to equity ratio, at the aggregate level, witnessed an increasing trend. The rise in leverage was observed in ‘Construction’, ‘Real Estate’ & ‘Electrical Machinery and Apparatus’ industries.

• Debt to equity ratio continued to follow an increasing trend during the study period i.e., 2011-12 to 2013-14.

• On the other hand, share of the external sources of funds declined to 61.5 per cent in 2013-14 from 71.7 per cent in 2012-13. Gross fixed asset formation (tangible assets) declined significantly to 17.6 per cent in 2013-14 as compared with 31.5 per cent in 2012-13.

Alpana Killawala
Principal Chief General Manager

Press Release : 2015-2016/1129