The week that was, in charts: Rupee, IPL auctions & WPI inflation
3 min read 17 Jun 2022, 12:22 AM ISTIndia’s wholesale inflation has reached its highest since 1991, leading to worries over its spillover into retail inflation, while the rupee is under extreme pressure
PremiumEvery Friday, Plain Facts publishes a compilation of data-based insights, complete with easy-to-read visual charts, to help you delve deeper into the stories reported by Mint in the week gone by. India’s wholesale inflation has reached its highest since 1991, leading to worries over its spillover into retail inflation, while the rupee is under extreme pressure. Meanwhile, big bets in the media-rights auction at the IPL grabbed eyeballs this week.
Through the Roof
Even as retail inflation eased to 7.04% in May from an eight-year high of 7.79%, wholesale price index (WPI) inflation continued its upward trajectory, rising to its highest since 1991. The further increase in WPI inflation to 15.88% in May from 15.08% was mainly because of soaring prices of food articles, along with existing price pressures from raw materials and crude oil. The worry is that wholesale prices may soon feed into retail inflation, undoing efforts to bring it down.
Raining Money
The Indian Premier League (IPL) has seen a stunning rise in bids from broadcast heavyweights, with the auction value for media-rights nearly rising by 200% from five years ago to ₹48,390 crore. Disney Star won the TV broadcasting rights for ₹23,575 crore, while Viacom18 won two packages for digital rights for ₹23,758 crore. As much as 50% of the total revenue generated from media rights auction will be distributed equally among the 10 IPL franchises.
Eyes on Poll?
1 million: That’s the number of people the government led by Prime Minister Narendra Modi is aiming to recruit over the next 18 months, in what could be seen as a move to address the problem of rising unemployment just ahead of the 2024 general elections. The directions to the central government came from the prime minister the same day the Union cabinet approved the Agnipath scheme, which will offer youngsters a chance to join the armed forces for at least four years.
Looking Overseas
Several Indian companies have spread their presence overseas, but where do they actually invest? Indian entities are looking for country- and industry-specific opportunities, with financial, insurance and business services attracting most attention. The share of outbound foreign direct investment in this sector was 34% in 2021-22. This was followed by the manufacturing sector with 23%. Access to raw materials and a cheap labour pool are major factors behind such investment decisions.
Taking Credit
After two years of struggling through the disruptions caused by the covid-19 pandemic, small enterprises in non-metros are borrowing as before, but those in metropolises continue to struggle. Credit demand was just 81% of pre-pandemic levels in metro cities, with Bengaluru and Chennai being exceptions. The loan demand in the two cities were at 124% and 102% of the pre-covid levels, respectively.
Hitting a Low
78 per dollar: That’s the record low the rupee has hit as global turmoil continues to take a toll on the Indian currency. The rupee surpassed the mark on Monday on skyrocketing US inflation data. The pressure on the rupee is likely to continue as the US Federal Reserve has hiked the interest rate by an aggressive 75 basis points. In the near-term, analysts expect the rupee to test the 78.50-mark, with some risks also anticipated from rising coronavirus cases in some cities of China.
Betting Big
The Buy Now Pay Later (BNPL) industry is growing at a rapid pace, leading to worries over a decline in credit card usage. Experts do not believe BNPL will replace credit cards, but a meteoric rise of the industry is expected. The BNPL industry is estimated to grow by more than 50% over the next few years and reach ₹3.19 trillion by the end of 2025–26, an analysis by PwC showed.
Chart of the Week: Covid Surge
Covid-19 cases have been rising rapidly since last week and new confirmed cases rose to 12,213 on Wednesday. This is the highest daily increase in cases since late February. The positivity rate now is 2.35%.
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