Budget speech expected to begin at 11 am

Cabinet meeting FM in progress

The much awaited Union budget is expected in a few minutes from now. The Finance Minister is expected to begin his budget speech at around 11 am.

The stock market has opened on an optimistic note with expectations running high ahead of the budget.

FM likely to lay down roadmap for GST roll-out

Report said that the minister will set deadlines for the government of implementation of the GST by April 1, 2016. 

Finance minister Arun Jaitley, in his maiden budget speech , is expected to list out the roadmap for rolling out goods and services tax (GST).

Report said that the minister will set deadlines for the government of implementation of the GST by April 1, 2016. 

This would be the major challenge for the government as it will have to get the Constitution Amendment Bill passed in Lok Sabha 

Sensex, Nifty in green ahead of Union Budget

Auto, consumer Durables, power, banking, capital goods, metal, realty, FMCG, Oil and gas indices are the gainers, while healthcare indices is only the loser.

At 10:25AM, the S&P BSE Sensex is trading at 29,450 up 230 points, while NSE Nifty is trading at 8,908 up 63 points.

The BSE Mid-cap Index and BSE Small-cap Index was trading up at 1%.

Among sectors, the BSE IT index has bucked the trend, and is now down 0.3 per cent at 11,837 dragged by MindTree, HCL Technologies and Tech Mahindra.

The Realty index continues to trade with a gain of over 2 per cent at 1,879. The Capital Goods index has climbed almost 2 per cent at 18,168. The Power, Metal and Bankex indices have also spurted over a per cent each.

On the BSE, the breadth is fairly positive in morning session - out of 2,128 stocks traded 1,344 stocks are advancing, while 692 stocks are declining.

Among Sensex-30 stocks - Tata Steel has soared around 3 per cent to Rs. 360. BHEL, HDFC and ICICI bank have jumped over 2 per cent each at Rs. 277, Rs. 1,376 and Rs. 342, respectively.

Larsen & Toubro, SBI, Gail India, Axis Bank, Tata Power and ONGC are the other significant gainers.

On the losing side, Cipla has declined 0.5 per cent at Rs. 666 and Hero MotoCorp and Infosys are also down 0.3 per cent each at Rs. 2,662 and Rs. 2,260, respectively.

Pidilite Industries appoints Bharat Puri as Managing Director

Pidilite has inducted several senior professionals to strengthen its management structure and reduce operational responsibilities of promoter family members.

Over the last seven years, Pidilite has inducted several senior professionals to strengthen its management structure and reduce operational responsibilities of promoter family members. As a continuation of this process, the Board of Directors of Pidilite Industries Limited, at its Board meeting on 27th February 2015 has approved the appointment of Bharat Puri as Managing Director, effective 10th April 2015.

M B Parekh, Chairman and Managing Director, will step down from position of Managing Director on 10th April 2015 and will become Executive Chairman. N K Parekh, Jt. Managing Director, will step down as Jt. Managing Director on 1st April 2015 and will become Non-Executive Vice Chairman. Ajay Parekh, Executive Director, and Apurva Parekh, Executive Director, will continue to play a significant role in the company and will work with Bharat on key strategic matters and also help oversee & strengthen various business divisions & functions.

Bharat Puri has been closely associated with the Company since his appointment as an Independent Director of the company in 2008. Bharat has had a very successful career with leading Indian and Global companies. In his last assignment, Bharat has been President - Global Chocolate, Gum and Candy Categories at Mondelēz International, based in Zurich and with worldwide responsibilities for these categories.

He started his career with Asian Paints in 1982 and rose to the position of General Manager - Sales & Marketing. He then moved to Cadbury in 1998 as Director of Sales and Marketing for Cadbury India. In 2002 he was appointed as Managing Director South Asia for Cadbury. After a successful stint in this role, Bharat moved to Singapore in 2006 where he was responsible for Strategy, Marketing and Sales for the Asia Pacific region. Since that time he has held senior leadership positions at the country, region and global level. Bharat completed his MBA from the Indian Institute of Management, Ahmedabad.

Commenting on his appointment, Bharat Puri said, “It is indeed an honour to lead Pidilite, an iconic home grown Indian multinational in its next phase of growth. I look forward to working with and learning from the talented and committed team at Pidilite, MB Parekh and the Board.

M B Parekh, Chairman and Managing Director of Pidilite said“I am delighted with appointment of Bharat Puri as Managing Director. There is a strong familiarity between Bharat and the Company as he has been an Independent Director of the Company since 2008. Bharat has outstanding local and global experience and a great track record. His vision and value system closely matches that of the Company. We are confident that Bharat will build on Pidilite’s strong foundations and steer it to its next phase of growth and development ".

Budget: Govt to raise public health spend to 2.5% of GDP

The health minister said that the draft policy has been circulated among all state governments and central government ministries for their comments and suggestion 

The draft National Health Policy (NHP) proposes to raise public health expenditure to 2.5% of the GDP, Health Minister JP Nadda said.
"The draft NHP proposes raising public health expenditure to 2.5 per cent of the GDP and the major source of financing for the health sector is envisaged to be general taxation," Nadda said in a written reply in Lok Sabha.

"It (NHP) proposes comprehensive primary care as an entitlement and healthcare for every family that links them to a primary care facility to be eligible for this package service," Nadda said.

To ensure the quality of medical education, a common entrance examination has been mooted on the pattern of NEET for entry into UG courses at all-India level institutes, Nadda said.

The minister added that the draft policy has been circulated among all state governments and central government ministries for their comments and suggestion 

Tentative start to Budget day

Prime Minister Narendra Modi-led government’s target of achieving a 4.1% fiscal deficit target is achievable, said Economic Survey for the year 2014-2015. 

There are not many doubts from a long term perspective but many who await a big bang budget like that of 1991 will be left disappointed. The historic mandate to this government not seen in over 30 years, creeping acquisition of power at the state level offer immense hope that unified and rapid action on reforms will take shape. Coupled with building of macro-economic tailwinds, we remain confident that bull market is here to stay.

For the day, the outlook is a positive start. With most global markets shut, the indices have enough reason to decide their own direction. Of course a lot will depend on what the budget has in store and how it is interpreted by the market.  US indices ended lower. US economy grew much slower than expected in the fourth quarter.  The Dow fell 0.45% while the S&P 500 ended flat. Nasdaq shed half a percent.

Prime Minister Narendra Modi-led government’s target of achieving a 4.1% fiscal deficit target is achievable, said Economic Survey for the year 2014-2015.  The Economic Survey 2014-15 presented by the Finance Minister Arun Jaitley to the Parliament indicates that a clear political mandate for reform and a benign external environment now is expected to propel India on to a double digit trajectory.

It states that Indian economy appears to have now gone past the economic slowdown, persistent inflation, elevated fiscal deficit, slackening domestic demand, external account imbalances and oscillating value of the rupee.

According to the Economic Survey 2014-15, the Average Wholesale Price Index (WPI) (base year 2004-05 = 100) inflation declined to 3.4% in 2014-15 (April-December) as compared to an average of 6% during 2013-14. During the first quarter of 2014-15, WPI headline inflation stood at 5.8% as mainly food and fuel prices were high. 

The Economic Survey 2014-15 says the IT and ITeS sector including Business Process Management (BPM), continues to be one of the largest employers in the country, directly employing nearly 35 lakh people. NASSCOM estimates the revenue of the IT-BPM industry at US$119 billion grew by 12 per cent in 2014-15 with export market alone making up almost $100 billion. The year witnessed hyper-growth in the technology start-up and software product landscape, India ranking as the fourth largest start-up hub in the world with over 3,100 start-ups in the country. Software products and services revenues for 2015-16 is projected to grow at 12-14 per cent.

Prime Minister Narendra Modi addressed the Lok Sabha saying we are trying to find out solutions to Problems existing for years. Corruption remains an issue of concern,  he said adding that the issue is about development and not about names of schemes.

The CNX Realty index gained 4.5% at 241.10 on hopes of sops for the housing sector. Shares of Unitech zoomed over 16% at Rs. 21.50, while HDIL soared 6% to Rs. 120, and Indiabulls Real Estate rallied 5.5 % to Rs. 83.

Railway stocks were higher. Titagarh Wagons was locked at the 10% upper circuit at Rs. 640. Texmaco Rail soared 10.5% to Rs. 150. Stone India has gained 3.5% at Rs. 82.50

Economic Survey: Inflation shows a declining trend during the year 2014-15

The decline was caused by lower food and fuel prices. During the first quarter of 2014-15, WPI headline inflation stood at 5.8% as mainly food and fuel prices were high. 

The year 2014-15 (April-December) witnessed a substantial decline in inflation.  According to the Economic Survey 2014-15, the Average Wholesale Price Index (WPI) (base year 2004-05 = 100) inflation declined to 3.4% in 2014-15 (April-December) as compared to an average of 6% during 2013-14.  The WPI inflation even breached the psychological level of 0% in November, 2014 and January, 2015.

The decline was caused by lower food and fuel prices.  During the first quarter of 2014-15, WPI headline inflation stood at 5.8% as mainly food and fuel prices were high.  In the second and third quarters of 2014-15, WPI inflation declined to 3.9% and 0.5% respectively.  WPI food inflation which remained high at 9.4% during 2013-14 moderated to 4.8% during April-December, 2014 following a sharp correction in vegetable prices and moderation in prices of cereals and eggs, meat and fish.
 
The retail inflation as measured by the Consumer Price Index (CPI) (base year 2010= 100) moderated significantly since the second quarter of 2014-15.  It declined to an all time low of 5% in Q3 of 2014-15 after having remained stubbornly sticky at around 9-10% for the last two years.
 
During the third quarter of 2014-15, the CPI food inflation declined considerably due to seasonal softening of food and vegetable prices after the late arrival of monsoon exerted some pressure on vegetable prices during June-August, 2014.  CPI inflation in the fuel and light group registered a consistent decline during 2014-15, touching 3.4% in the third quarter following the sharp decline in International Crude Oil prices.
 
The main factors causing moderation in inflation include both global factors as well as domestic measures.  Global factors, namely persistent decline in crude prices and softness in the global prices of tradables, particularly edible oils and even coal, helped moderate headline inflation.  The tight monitary policy helped contain demand pressures, creating a buffer against any external shock and keeping volatility in the value of the Rupee under check.  During the last one year the Rupee remained relatively stable vis-à-vis the currency of peer emerging countries, which too had a sobering influence on inflation.  Moderation in wage rate growth reduced demand pressures on protein based items.
 
The swift decisive steps taken by the Government also helped control the stubbornly persistent inflation—particularly food inflation.  The decline in inflation is found to be substantial in commodities where the Government had taken effective measures.  The Government took a series of measures to improve availability of food-grains and de-clog the distribution channel.  Some of the major steps taken recently in this regard include:

• Allocation of additional 5 million tonnes of rice to below and above poverty line (BPL and APL) families in the states, pending implementation of the National Food Security Act (NFSA), and allocation of 10 million tonnes of wheat under open market sales for domestic market in 2014-15.
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• Moderation in increases in the MSPs during the last and current season;
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• Advisory to the states to allow free movement of fruits and vegetables by delisting them from the Agricultural Produce Marketing Committee (APMC) Act;
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• Bringing onions and potatoes under the purview of the Essential Commodities Act 1955, thereby allowing state Governments to impose stock limits to deal with cartelization and hoarding, and making  violation of stock limits a non-bailable offence;
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• Imposing a minimum export price (MEP) of US$ 450 per MT for potatoes with effect from 26 June, 2014 and US$ 300 per MT for onions with effect from 21 August, 2014.
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Nifty revisits 8,800 levels

CNX PSU Bank, CNX Realty, CNX Metal and CNX Infra indices are the prominent gainers 



The market is now trading at the highest point of the day on the back of buoyant buying after the Economic Survey said that there is scope for big bang reforms in tomorrow's Union Budget.

At 2:14PM, the S&P BSE Sensex is trading at 29,143 up 396 points, while NSE Nifty is trading at 8,817 up 133 points.

 The broader market is also trading on a firm note. The CNX Smallcap index has advanced 1.8 per cent at 5,675, and the Midcap index has added 1.5 per cent at $ 13,040. 

All sectoral indices, barring the FMCG index, are trading on a positive note. 

The CNX FMCG index has dropped over a per cent as market participants are anticipating hike in excise duty.

 The CNX PSU Bank index has soared nearly 4 per cent. 

The CNX Realty index has jumped 3.2 per cent. The CNX Metal and the CNX Infra indices have surged 2.7 per cent each. In FMCG space, ITC is the top loser - down 2 per cent at Rs. 388. Jubilant 

Foodworks has slipped 1.2 per cent at Rs. 1,662. Dabur India, Emami and Colgate Palmolive are the notable losers.

 On the other hand, Rasoya Proteins has zoomed 12.5 per cent at Rs. 0.45. United Breweries has jumped 3.5 per cent at Rs. 990.  McLeod Russel has added 1.6 per cent at Rs. 232. 

Britannia, Tata Global and Godrej Industries have spurted over a per cent each. 

Eco Survey estimates foodgrains production for 2014-15 at 257.07 million tones

Despite deficiency of 12 % in the monsoon rainfall during the year, the loss in production has been restricted to just around 3 % over the previous year and has exceeded the average production during the last five years by 8.15 million tonnes.

The Economic Survey 2014-15 states that as per the 2nd Advance Estimates, total Foodgrains production in the country is estimated at 257.07 million tonnes during 2014-15.  This is the fourth highest quantity of annual Foodgrains production in the country. Despite deficiency of 12 % in the monsoon rainfall during the year, the loss in production has been restricted to just around 3 % over the previous year and has exceeded the average production during the last five years by 8.15 million tonnes.

As compared to last year’s production of 265.57 million tonnes, current year’s production of Foodgrains is lower by 8.5 million tonnes. This decline has occurred on account of lower production of rice, coarse cereals and pulses due to erratic rainfall conditions during the monsoon season of 2014.
 
According to the new series of national income released by the CSO, at 2011-12 prices, the share of agriculture and allied sectors in total GDP is 18% in 2013-14 which is the same as that of 2012-13 i.e., 18%.   As against a growth target of 4% for agriculture and allied sectors in the Twelfth Plan, the growth registered in the first year in 2012-13 (at 2011-12 prices) was 1.2%, 3.7% in 2013-14 and 1.1% in 2014-15. 
 
As per the fourth Advance Estimates for 2013-14, the production of rice is expected to be 106.5 million tonnes, showing an increase of 1.3% over the previous year.  The Production of wheat is likely to be 95.9 million tonnes with an increase of 2.6% over the previous year.  Similarly, pulses with a production of 19.3 million tonnes show an increase of 5.3%.  The oilseeds production of 32.9 million tonnes shows an increase of 6.4%.  Within oilseeds, the groundnut production of 9.7 million tonnes show a commendable increase of 105.8% over the previous year.
 
As per the fourth Advance Estimates for 2013-14, the overall productivity of Foodgrains has gone down by 1.3% over the previous year.  Rice productivity has shown a decline of 1.5% and wheat of 1.3% in the same year.  The yield of groundnut increased by a remarkable 75.9%, that of Tur increased by 9.2% and cotton by 9.4% in 2013-14 over the previous year.
 
Among the states, for the year 2013-14, Punjab has shown the highest productivity of rice (3952 kg/ha), wheat (5017 kg/ha) and cotton.  Gujarat has shown the maximum productivity of groundnut (2668 kg/ha) and West Bengal of Sugarcane (114273 kg/ha). 
 
The Economic Survey 2014-15 states that to improve resilience of the agricultural sector and bolster food security--including availability and affordable access, the strategy for agriculture has to focus on improving yield and productivity.

Strike a balance between ‘Make in India’ and ‘Skilling India,’ suggests Eco Survey

Economic Survey 2014-15 discusses the “Make in India” the flagship initiative and a key policy objective of the new government.

Economic Survey 2014-15 discusses the “Make in India” the flagship initiative and a key policy objective of the new government. The Survey contemplates “What should India make?Manufacturing or Services? ” As a prelude, the Survey states that, in order to bring about expansion and structural transformation, India should utilize its dominant resource of unskilled labour. 

The survey distinguishes registered manufacturing ( formal sector)from the general manufacturing which covers informal sector as well. The Economic Survey recognizes registered manufacturing as having “the potential for structural transformation.“ Registered manufacturing exhibits high productivity compared to other sectors of the economy. 

However, the Economic Survey observes that manufacturing productivity in India lags behind other nations. The Survey points out that all Indian states exhibit declining share of manufacturing in the State GDP. In addition, the Survey identifies that registered manufacturing couldn’t bridge regional disparities in India. In addition to this, registered manufacturing now in India has been identified as skill intensive which is not in line with the India’s comparative advantage in unskilled labour.

The Economic Survey identifies four factors for non development of manufacturing as an engine of economic growth – 

Distortions in Labour Market

Distortions in Capital Market

Distortions in Land Market

Specialization not in line with India’s comparative advantage in unskilled labour

Certain subsectors of services – financial services and business services, exhibit higher productivity levels than registered manufacturing. However, these sectors being highly skill intensive (excluding construction) are out of line with the skill profile of the Indian labour force. They are unlikely to generate widely shared and inclusive growth. However, the survey observes that the service sector has the potential for domestic growth convergence across regions. 

Hence, the survey redrafts the question of manufacturing versus service. It posits that the real question should be whether we want to concentrate on non-skilled labor intensive sectors or the development of skill intensive sector. The Economic Survey concludes that Indian growth should balance the nation’s comparative advantage in availability of low skilled labour with skill development required by future generations to take advantage of lost opportunities. The registered manufacturing must be expanded to take leverage of India’s abundant unskilled labour. While “Make in India” occupies prominence as an important goal, the future trajectory of Indian Development depends on both “Make in India” and “Skilling India”, the Economic Survey says.