The week in charts: Easing inflation, Gensol fraud, monsoon forecast
Summary
In this weekly Plain Facts compilation, we present to you data-based insights, with easy-to-read charts, to help you delve deeper into the stories reported by Mint in the week gone by.
India's retail inflation reached a multi-year low in March, while rising imports widened the trade deficit in 2024-25. Meanwhile, the government is planning to launch a multi-year incentive for electronics manufacturing in the country and the IMD has predicted above-normal monsoon for the current year.
Inflation retreat
Retail inflation hit a multi-year low of 3.3% in March, marking the second consecutive month below the Reserve Bank of India’s (RBI) medium-term target of 4%. This decline in headline inflation print was primarily driven by year-on-year decline in prices of food items including meat, eggs, and vegetables, while other items reported a modest rise in inflation. Vegetable prices, which tend to influence headline inflation strongly, have retreated significantly in the past few months from the recent peak seen in October.
Dashed hopes
India's merchandise trade deficit widened to $21.5 billion in March, according to latest commerce ministry data. This was up from $15.3 billion in the same month last year and $14.1 billion in the preceding month. This has belied the expectations of front-loading of shipments (thus leading to a lower trade deficit) ahead of reciprocal tariffs by the US.
As such, the full fiscal year trade deficit rose to $282.6 billion— the highest in at least a decade. Amid the uncertainty induced by the US tariffs, India’s trade will need to be closely watched.
Patent push
$4 billion: That is the amount the government is planning to spend on a new design-linked incentive (DLI) scheme to elevate India's electronics industry, Mint reported.
The aim is to foster a tech and design patent ecosystem to provide resilience against import disruptions. The multi-year initiative could support companies across 60 categories in semiconductor and electronic segments. This will be a significant step-up from a previous DLI scheme launched in September 2021 which provided about $12 million in net incentives over five years to five companies.
Monsoon bounty
The India Meteorological Department (IMD) has predicted an above-normal monsoon for the upcoming season—making this the second consecutive year with such a forecast. According to the weather agency, rainfall during the southwest monsoon season (June-September) will likely be 105% of the Long Period Average (LPA).
The LPA currently refers to the average rainfall during 1971-2020. While India is also expected to have an unusually hot summer, the forecast of an above-normal rainfall has brought hopes of relief, particularly for the agricultural sector, which relies heavily on good rainfall.
Also read: IMD predicts above-normal cumulative rainfall during monsoon, rules out El Nino conditions
Startup swindle
Findings from the market regulator, Securities and Exchange Board of India (Sebi), reveal that promoters of EPC firm Gensol Engineering Ltd and EV cab service BluSmart diverted ₹262 crore towards personal use. This included ₹43 crore for an apartment in an ultra-exclusive housing complex in Gurgaon. The Jaggi brothers also transferred several crore rupees to their mother and wives, as well as invested in startups. This could be one of the biggest recorded frauds in India's startup ecosystem.
Also read: Gensol: The Jaggi brothers made smart moves. So, why did they need a ‘piggybank’?
Derivative fallout
₹1,979 crore: That’s the estimated negative impact on IndusInd Bank from its derivative discrepancies as of 30 June 2024, the bank said based on a study by an external agency. This represents a hit of 2.35% as of December 2024 end on a post-tax basis. Last month, the private lender had flagged issues in their derivative transactions during an internal review. The external agency’s estimate is slightly lower than the RBI’s assessment of approximately ₹2,000 crore. The disclosure led to a 4.2% rise in the bank’s share price on Wednesday.
Cover relief?
The Centre intends to mandate health insurers to approve cashless requests within one hour and finalize claim settlements within three hours, Mint reported. Additionally, a professional agency may standardize claim forms that are easy to understand and fill to ensure full and timely settlements. This aims to ease financial distress from medical bills and improve coverage of affordable health insurance by 2047. While India’s insurance regulator issued related guidelines in 2024, insurers have been struggling to adhere to them due to a surge in claims.
Chart of the week: Judicial crunch
The latest edition of India Justice Report has flagged a capacity crisis in the judiciary. India currently has about 16 judges per million people in district and high courts as against the recommended benchmark of 50 per million population. The shortage is more pronounced in several states.
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