Friday, 26 February 2016

Government budgeted Rs. 73,000 cr on fertilizer subsidies in 2015-16, says Economic Survey

Nearly 70 percent of the amount was allocated to urea, the most commonly used fertilizer, making it the largest subsidy after food.


The Economic Survey 2015-16 presented here today in the Parliament by the Union Finance Minister Shri Arun Jaitley emphasizes that the Government budgeted Rs. 73,000 crore- about 0.5 per cent of GDP- on fertilizer subsidies in 2015-16. Nearly 70 per cent of this amount was allocated to urea, the most commonly used fertilizer, making it the largest subsidy after food.

Distortions in urea are the result of multiple regulations. These distortions feed upon each other, and together create an environment that leads to a series of adverse outcomes.

Firstly, urea is only subsidized for agricultural uses. Subsidies like this violate what we call the One Product- One Price principle. Black market effects are aggravated by further regulation- canalization.

Secondly, the black market hurts small and marginal farmers more than large farmers since a higher percentage of them are forced to buy urea from the black market.

Thirdly, some of the urea subsidy goes to sustaining inefficient domestic production instead of going to the small farmer.

A reform package would address each of the problems identified above- the three leakages and skewed mix of fertilizer use- with the primary aim of benefiting the small farmer.

First, decimalizing urea imports- which would increase the number of importers and allow greater freedom in import decision- would allow fertilizer supply to respond flexibly and quickly to changes in demand. This would be timely as climatic fluctuations are making it much more difficult for governments to forecast agriculture conditions and centrally manage supply.

Second, bringing urea under the Nutrient Based Subsidy program currently in place for DAP (Diammonium Phosphate) and MOP (Muriate of Potash) would allow domestic producers to continue receiving fixed subsidies based on the nutritional content of their fertilizer, while deregulating the market would allow domestic producers to charge market prices. This would encourage fertilizer manufactures to be efficient, as they could then earn greater profits by reducing costs and improving urea quality. And this in turn would benefit farmer.

Economic Survey 2015-16 states that the case for implementing direct transfers in fertilizers is to reduce leakages to the black market. The government’s policy of neem-coating urea is a step in exactly this direction. Neem-coating makes it more difficult for black marketers to divert urea to industrial consumers. Technology could be further used to curtail leakages and improve targeting of fertililzer subsidies. Fertilizer is a good sector to pursue JAM (Jan Dhan, Aadhaar, Mobile) because of a key similarity with the successful LPG experience: the centre controls the fertilizer supply chain.

The relatively low levels of last-mile financial inclusion in much of rural India also suggest that it would be risky to replace subsidized fertilizer with cash, due to beneficiaries’ weak connection to the banking system.

Universal subsidy with cap on number of bags

A preferred option would be to set a cap on the number of subsidized bags each household can purchase and require biometric authentication at the point of sale (POS). Requiring biometric authentication would make it harder to conduct large-scale diversion. Imposing a cap on the total number of subsidized bags each farmer can purchase would improve targeting. Small farmers would still be able to get all their urea at subsidized prices but large farmers may have to pay market prices for some f of the urea the buy.

Economic Survey 2015-16 further states that the Fertilizer subsidies are very costly, accounting for about 0.8 per cent of GDP. They encourage urea overuse, which damages the soil, undermining rural incomes, agricultural productivity, and thereby economic growth. Reform of the fertilizer sector would not only help farmers and improve efficiency in the sector. Decimalizing imports will ensure timely availability of fertilizes, and universal Direct Benefit Transfer (DBT) to farmers based on biometric identification with physical off take can reduce diversion of urea. 

Economy to clock more than 7% growth this fiscal, says Economic Survey

The survey underlines that despite global headwinds and a truant monsoon, India registered 7.2 per cent growth in 2014-15 and 7.6 per cent in 2015-16, thus becoming the fastest growing major economy in the world.


The Economic Survey 2015-16 presented here today in the Parliament by the Union Finance Minister Shri Arun Jaitley emphasizes that Indian economy will continue to grow more than 7 percent for the third year in succession in 2016-17 helped by a normal monsoon, despite global meltdown. The Economic Survey (2015-16) states that due to Government’s commitment to carry the reform process forward, conditions do exist for raising the economy’s growth momentum to 8 percent or more in the next couple of years. The survey underlines that despite global headwinds and a truant monsoon, India registered 7.2 per cent growth in 2014-15 and 7.6 per cent in 2015-16, thus becoming the fastest growing major economy in the world.

The Survey points out that the growth in agriculture sector in 2015-16 has continued to be lower than the average of last decade, mainly on account of it being the second successive year of lower-than-normal monsoon rains. As per the information of the Department of Agriculture, Cooperation and Farmers Welfare for 2015-16, the production of foodgrains and oil-seeds is estimated to decline by 0.5 per cent and 4.1 per cent respectively, while the production of fruits and vegetables is likely to increase marginally. A brighter picture is expected to emerge from the allied sectors consisting of livestock products, forestry and fisheries with a growth exceeding 5 per cent in 2015-16, which will provide some impetus to rural incomes.

Growth in industry is estimated to have accelerated during the current year on the strength of improving manufacturing activity. The private corporate sector, with an around 69 per cent share of the manufacturing sector, is estimated to grow by 9.9 per cent at current prices in April-December 2015-16. The Index of Industrial Production (IIP) showed that manufacturing production grew by 3.1 per cent during April-December 2015-16, vis-à-vis a growth of 1.8 per cent in the corresponding period of the previous year. The ongoing manufacturing recovery is is aided by robust growth in petroleum refining, automobiles, wearing apparels, chemicals, electrical machinery and wood products including furniture. Apart from manufacturing, the other three segments of the industry sector- electricity, gas, water supply and related utilities, mining and quarrying and construction activities are witnessing a deceleration in growth.

The Survey underlines that the growth in the services sector moderated slightly, but still remains robust. Being the main driver of the economy, the sector contributed about 69 per cent of the total growth during 2011-12 to 2015-16 and in the process expanding its share in the economy by 4 percentage points from 49 to 53 per cent.

The Survey in its outlook clearly points out that though the emerging market economies have clearly slowed down, the Indian economy stands out as a haven of macroeconomic stability, resilience and optimism and can be expected to register GDP growth that could be in the range of 7.0 per cent to 7.75 per cent in the coming year.

Live: Highlights of Economic Survey 2015-16

Ahead of the Union Budget on Monday, the Economic Survey, a flagship annual document of the Ministry of Finance was tabled by Union Finance Minister Arun Jaitley and presented by chief economic advisor Arvind Subramanian. The Economic Survey, which reviews the developments in the economy over the past 12 months is an indicator of government's finances detailing the prospects of the economy in the short term.


Ahead of the Union Budget on Monday, the Economic Survey, a flagship annual document of the Ministry of Finance was tabled by Union Finance Minister Arun Jaitley and presented by chief economic advisor Arvind Subramanian. The Economic Survey, which reviews the developments in the economy over the past 12 months is an indicator of government's finances detailing the prospects of the economy in the short term.

Current RBI policy rates seems ‘Neutral’

Corporate, Bank balance-sheet remain stressed

Industry growth estimated to have accelerated in FY16
 
FY17 CAD seen at 1-1.5% of GDP

FY17 expected to be challenging from fiscal front
 
Over 8% growth in next couple of years

India Farm growth seen lower for second year
 
FY17 expected to be challenging from fiscal front

Medium term growth trajectory at 7-7.5% with downside risks
 
FY16 GDP growth seen at 7-7.5%
 
FY16 fiscal deficit of 3.9% seems achievable
 
Downside risks to medium growth due to global economic conditions

Economic Survey: India's 2016/17 economic growth seen between 7.0 to 7.75 percent

Eco Survey 2016-17: FY17 GDP Growth Seen At 7-7.5%

Eco Survey 2016-17: FY17 Expected To Be Challenging From Fiscal Point Of View

MoS FINANCE: Have Bought Lot Of Changes For Sectors Under Stress
 
MoS FINANCE: Have Bought Systemic Reforms Via Indra Dhanush  
 
MoS Finance Jayant Sinha: Stressed assets increased with economic downturn. Need to address stress in industry & economy.

Govt committed to fiscal consolidation.

7th pay comm recos complicates FY17 fiscal task.

Global uncertainties to impact Rupee to be less than other EM economies.

FY17 CPI inflation seen at 4.5-5%.

Credibility argues for adhering 3.5% of fiscal aim for FY17.

Plan to infuse to Rs 70.000 crore in PSU bank in a few years.

Recommended not increasing income tax exemption threshold.

Prospects of aggressive fed rate hike receding.

Suzlon wins order for 71.40 Mw from Gujarat Industries Power Company

Suzlon will install 29 units of S97-120m Wind Turbine Generators (WTGs) with all steel hybrid tower and 5 units of S97-90m WTGs with tubular tower having a rated capacity of 2.1MW each.


The Suzlon Group, one of the leading global renewable energy solutions providers in the world, today announced its maiden order win for 71.40MW wind power project from Gujarat Industries Power Company Ltd (GIPL), a leading Gujarat based public sector undertaking engaged in the business of  electrical power generation. Suzlon will install 29 units of S97-120m Wind Turbine Generators (WTGs) with all steel hybrid tower and 5 units of S97-90m WTGs with tubular tower having rated capacity of 2.1MW each.

Located in Kutch district, Gujarat, the project will be completed in three phases with execution culminating by April 2017. Suzlon will execute the entire project on a turnkey basis and will also provide operation and maintenance services for a period of 20 years through an integrated service package.

Suzlon has the more than two decades of experience in wind  ector and maintains and services more than 9 GW across India, accounting for nearly 37% of the country’s total installations. As of March 2015, Gujarat’s total wind installations stand at 3,645MW, out of which 1,742MW has been contributed by Suzlon. Suzlon’s wind energy installations in Gujarat offset approximately 3.5 million tonnes of CO2 emissions, thereby supporting the transition of the state to a sustainable energy mix.

The S97 series of 2.1MW WTG feature the time tested Doubly Fed Induction Generator (DFIG) technology which is designed to maximise generation at lower wind sites. It not only delivers higher energy output, but also offers higher return on investment for our customers.

At a height of 120 meters the S97-120m is the Worlds’ tallest All-Steel Hybrid tower which combines both lattice and tubular structures, designed indigenously to harness the enhanced availability of windresources at higher altitudes making low wind sites viable. The combination of lattice and tubular gives enhanced tower strength at lower cost. The three-dimensional lattice structure can support heavier weights due to the broad base and reduces the steel requirement apart from being logistic friendly. Theprototype, set up in November 2014, at Kutch, Gujarat, achieved a PLF of 35%. It has successfully generated 6.42 million kWh over the first 12 months of operation. The evolutionary product has received an encouraging response from customers acrosssegments and reflects in the ~600MW orders received till date.

Mr. Ishwar Mangal, Chief Sales Officer, Suzlon Energy, says, “Gujarat has been at the forefront of has played a pivotal role in contributing to its renewable energy portfolio. We have developed one of Asia’s largest wind parks at Kutch (Gujarat) with current capacity of over 1 GW as at 31st March and ongoing further installations.

We are pleased to partner with Gujarat Industries Power Company Ltd. (GIPL) for driving their commitment towards sustainable and affordable energy. We are thankful to GIPL for the confidence reposed in Suzlon and its technology. With our comprehensive product portfolio, robust in-house R&D and more than 2 decades of experience in providing end-to-end solutions to customers alongwith integrated maintenance and services, we are best equipped to pursue our focus on bringing down the cost of energy”

Bharti Airtel down 1%; joins hands with SoftBank

Bharti Airtel and SoftBank have joined hands to launch a five-year programme GTI 2.0, which aims to advance the existing 4G technology and enable industrialization of the 5G technology.


Bharti Airtel Ltd is currently trading at Rs. 319.3, down by Rs. 3.95 or 1.22% from its previous closing of Rs. 323.25 on the BSE.

Bharti Airtel and SoftBank have joined hands to launch a five-year programme GTI 2.0, which aims to advance the existing 4G technology and enable industrialization of the 5G technology.

The scrip opened at Rs. 329.2 and has touched a high and low of Rs. 329.2 and Rs. 318.85 respectively. So far 1526404(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 129215.96 crore.

The BSE group 'A' stock of face value Rs. 5 has touched a 52 week high of Rs. 452.45 on 21-Jul-2015 and a 52 week low of Rs. 282.3 on 29-Jan-2016. Last one week high and low of the scrip stood at Rs. 334.8 and Rs. 316.7 respectively.

The promoters holding in the company stood at 65.62 % while Institutions and Non-Institutions held 25.4 % and 8.93 % respectively.

The stock is currently trading below its 200 DMA.

Tata Steel down 1%; company loses iron ore mine allotment

The company has lost iron ore mine allotment from the Chhattisgarh government in Dantewada district for not completing the prospecting work within the stipulated period, reports a business daily.


Tata Steel is currently trading at Rs. 245.5, down by Rs. 2.55 or 1.03% from its previous closing of Rs. 248.05 on the BSE. The company has lost iron ore mine allotment by the Chhattisgarh government in Dantewada district for not completing the prospecting work within the stipulated period, reports a business daily.

The scrip opened at Rs. 250.1 and has touched a high and low of Rs. 252 and Rs. 244.45 respectively. So far 1850168(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 24091 crore.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 384.2 on 06-May-2015 and a 52 week low of Rs. 200 on 29-Sep-2015. Last one week high and low of the scrip stood at Rs. 261.25 and Rs. 244.6 respectively.

The promoters holding in the company stood at 31.35 % while Institutions and Non-Institutions held 38.79 % and 29.86 % respectively.

The stock is currently trading above its 200 DMA. 

United Spirits zooms 3.2%

Vijay Mallya has resigned from the post of chairman of United Spirits and will be the "Founder Emeritus" of the company.


United Spirits zoomed 3.2% to Rs.2749.20 on BSE.  Vijay Mallya has resigned from the post of chairman of United Spirits and will be the "Founder Emeritus" of the company.

The scrip opened at Rs. 2800 and has touched a high and low of Rs. 2835.3 and Rs. 2716 respectively. So far 678268(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 38725.36 crore.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 4080 on 05-Mar-2015 and a 52 week low of Rs. 2232 on 18-Feb-2016. Last one week high and low of the scrip stood at Rs. 2686.05 and Rs. 2271 respectively.

The promoters holding in the company stood at 58.77 % while Institutions and Non-Institutions held 28.25 % and 12.47 % respectively.

The stock is currently trading below its 200 DMA.

Coal India rises 2%; to increase production to 1,000 mt

The company is planning to increase its coal production to 1,000 million tonne (mt) in the next four years through the use of latest environment-friendly technologies.


Coal India
Coal India clocked 2.2% and is trading at Rs.306 on BSE.  Coal India is planning to increase its coal production to 1,000 million tonne (mt) in the next four years through the use of latest environment-friendly technologies. The estimated production planned by CIL during 2019-20 is 908.10 mt.

The scrip opened at Rs. 302.25 and has touched a high and low of Rs. 306.4 and Rs. 301.6 respectively. So far 2344617(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 189174.98 crore.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 447.25 on 05-Aug-2015 and a 52 week low of Rs. 286.9 on 21-Jan-2016. Last one week high and low of the scrip stood at Rs. 317.55 and Rs. 293 respectively.

The promoters holding in the company stood at 79.65 % while Institutions and Non-Institutions held 17.44 % and 2.91 % respectively.

The stock is currently trading above its 200 DMA.

MindTree completes deal with Magnet 360

Mindtree Ltd is currently trading at Rs. 1433.4, down by Rs. 3.8 or 0.26% from its previous closing of Rs. 1437.2 on the BSE.


With reference to the earlier letter dated January 18, 2016, MindTree Ltd has announced the Company has completed the necessary closing conditions with respect to the acquisition of entire membership interest in Magnet 360 LLC, USA.

Mindtree Ltd is currently trading at Rs. 1433.4, down by Rs. 3.8 or 0.26% from its previous closing of Rs. 1437.2 on the BSE.

The scrip opened at Rs. 1446 and has touched a high and low of Rs. 1462.9 and Rs. 1427.25 respectively. So far 21399(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 12057.11 crore.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 1605 on 24-Sep-2015 and a 52 week low of Rs. 1154.4 on 27-Apr-2015. Last one week high and low of the scrip stood at Rs. 1484 and Rs. 1401.5 respectively.

The promoters holding in the company stood at 13.75 % while Institutions and Non-Institutions held 51.15 % and 35.09 % respectively.

The stock is currently trading above its 100 DMA.

Top 12 stocks in focus today: Central Bank of India, Tata Steel, United Spirits

Check out the companies which will be in focus during trade today based on recent and latest news developments.


Stock Market
Central Bank of India: The bank has declared the directors of real estate developer Unitech as defaulters for not making a payment of Rs. 38 crore.

United Spirits: Vijay Mallya has resigned from the post of chairman of United Spirits and will be the "Founder Emeritus" of the company.

Tata Steel: Tata Steel has lost iron ore mine allotment by the Chhattisgarh government in Dantewada district for not completing the prospecting work within the stipulated period, reports a business daily.

NCC: NCC is at an advance stage of divesting its stake in the 1,320 MW power project coming up at Nellore in Andhra Pradesh to Sembcorp Industries of Singapore, reports a business daily.

Adani group: Adani group has moved closer to obtaining mining lease for its US$6.5 billion coal mine project in Australia's Queensland state after it struck a mining compensation deal with a local government body, reports a business daily.

Zee Entertainment: Zee Entertainment Enterprises Ltd. is planning to launch an on-demand video platform called OZEE where viewers will be able to watch videos in different languages, reports a business daily.

IDBI Bank: The bank reportedly said that it is planning to offer about 28 crore shares at Rs 53.44 apiece to LIC on preferential basis to raise Rs 1,500 crore.

Lupin: The pharma company is setting up a new plant in Japan and it also investing Rs.1 billion in a manufacturing facility in India which will cater to the Japanese market.

L&T: Larsen & Toubro announced that L&T Hydrocarbon Engineering, a fully owned subsidiary of the Company, has signed a long-term agreement with McDermott International focused on subsea projects in deepwater segment emerging on the east coast of India.

Bharti Airtel: Bharti Airtel and SoftBank have joined hands to launch five-year programme GTI 2.0, which aims to advance existing 4G technology and industrialization of 5G technology.

Coal India: By utilizing latest environment-friendly technology, government is working to increase coal production by Coal India Ltd (CIL) to 1,000 million tonne in the next four years, Coal Minister Piyush Goyal informed the Lok Sabha.

Jet Airways: The aviation company said it has inked a codeshare pact and loyalty exchange programme with the Korean Air which will allow passengers of the two airlines seamless travel between India and South Korea.

Reliance Capital: Reliance Capital said that the transfer proposal of Reliance Commercial Finance (RCF), approved by the board, aligns with the existing corporate structure of Reliance Capital wherein all operating business are held as wholly or majority owned subsidiaries. 

Sensex, Nifty to open on a positive note

Global cues are helping the cause as the market moves into the March series. Nifty ended down 6% for February series (eoe) basis after the fall of 6.5% in January expiry.


The Railway Budget is out of the way after Suresh Prabhu announced some innovative steps to get the largest employer on track. All eyes are now on the Economic Survey, which will be presented in Parliament today. The Union Budget to be presented on Monday will hold the key. It is widely speculated that the government may not stick to the fiscal deficit target of 3.5% of GDP for FY17.

The outlook is a positive start. Global cues are helping the cause as the market moves into the March series. Nifty ended down 6% for February series (eoe) basis after the fall of 6.5% in January expiry. BankNifty was the biggest dragger, with huge quantum of short rollovers positions carried forward for March series in banking stocks. Rollovers for Nifty stood at 68/71% (1.93cr vs 1.97cr previous expiry).  VIX index was up ~28% on (eoe) basis. Ahead of budget, build up on options was seen with 7000 puts and 7500 calls holding maximum open interest.  The release of Jan eight infrastructure industrial data is also eyed. Rupee could turn weak. The fall could be limited due to interventions which may come in close to the 69 per dollar mark.

For the Nifty, it is a classic case of earlier support acting as resistance. Inability of index to sustain above the previous support of 7241 brought it lower on Thursday and in the process the benchmark retraced below 61.8% the recent recovery.

The Economic Survey for 2015-16 (Apr-Mar) will be tabled in Parliament at 11 am. Around 3 pm, Chief Economic Adviser Arvind Subramanian will address the media.

Sunil Kumar Devakonda has purchased total 36,117 shares of Alfatran at a price of Rs. 20.15 from Promila Shroff a bulk deal valued at Rs. 7.27 lakh.

India Opportunities Growth Fund - Pinewood Strategy has purchased total 19,800 shares of Borosil at a price of Rs. 2,545 from Prakash Pranlal Doshi in a block deal valued at Rs. 5.03 crore

The Bombay High Court will hear a public interest litigation seeking application of odd-even rule for vehicles plying in Mumbai.

US stock indices advanced on Thursday, spurred by higher oil prices.   The Dow Jones Industrial Average climbed 212 points, or 1.3%, to end at 16,697, with all 30 of its components in positive territory. The S&P 500 index gained 22 points, or 1.1%, to close at 1,951, led by financials and technologies, up 1.4% and 1.3% respectively. The Nasdaq Composite index rose by 40 points, or 0.9%, to settle at 4,582.

Nymex crude oil futures erased steep losses to end sharply higher after reports quoted Venezuela’s oil minister as saying that his country would meet with fellow oil producers next month in an effort to stabilize prices.

On the US economic front, a report showed that January US orders for durable goods posted their biggest gain in 10 months.

Shipments of non-defense capital goods (ex-aircraft) were negative, in line with economists’ expectations.

Railway Minister Suresh Prabhu has given a no-tariff hike budget without compromising on the capital expenditure for increasing carrying capacity, both passengers and freight even in a challenging economic environment marked by a severe slowdown in the commodity sectors, which are lifeline of the Railways’ earnings, ASSOCHAM President Sunil Kanoria said.

Presenting the Railway Budget 2016-17  in the Parliament, Railway Minister  Suresh Prabhakar Prabhu said  the budget seeks to fulfill the  long-felt desires of the common man such as  reserved accommodation on trains available on demand, time tabled freight trains, high end technology to improve safety record, elimination of all unmanned level crossings, improved punctuality, higher average speed of freight trains, semi high speed trains running along the golden quadrilateral, zero direct discharge of human waste by the year 2020.