India Economic Survey 2017: Govt pro-poor, 'finclusion' key to poverty reduction: 

President Underlining key policy initiatives taken by the government and their progress, President Pranab Mukherjee said the core of all government policies is the “welfare of needy”. Lauding the country’s citizens for the display of character in the wake of government’s clampdown on black money, President Pranab Mukherjee on Tuesday said the resilience shown by the people is “remarkable”. Mukherjee was addressing both Houses of Parliament on Tuesday, kicking off the Budget Session.

 Underlining key policy initiatives taken by the government and their progress, Mukherjee said the core of all government policies is the “welfare of needy”. Mukherjee toed the government’s line about financial inclusion of the poor. “Financial inclusion is key to poverty alleviation,” he said while spelling out the performance of Jan Dhan Yojana. Listing some of the achievements of the government, he said that one crore bank accounts have been opened for girl children. Also, 50 India International Skill Centres are being set up, in addition to a Rs 6000 crore fund to boost employment and exports in the textiles sector. Minimum wages have been hiked by 42 percent in farm and non-farm sectors

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Trump's new executive order to clamp down on H1B visas 

The executive order drafted by the Trump Administration not only strangulates H-1B and L1 visas, but also increases inspector raj and ends employment authorisation cards to spouses on such work visas, which was recently introduced by the previous Obama Administration.  US President Donald Trump is expected to sign a new executive order aimed at strangulating work-visa programmes, including the H1B and L1 visas used by Indian IT professionals, as part of a larger immigration reform effort, a top White House official has said. The executive order drafted by the Trump Administration not only strangulates H-1B and L1 visas, but also increases inspector raj and ends employment authorisation cards to spouses on such work visas, which was recently introduced by the previous Obama Administration. 

The draft of the order was leaked and published by some news websites yesterday. "I think with respect to H1Bs and other visa is part of a larger immigration reform effort that the President will continue to talk about through executive order and through working with Congress," White House Press Secretary Sean Spicer told reporters at his daily news conference. "You've already seen a lot of action on immigration and I think whether it's that or the spousal visas or other type of visas, I think there's an overall need to look at all of these programmes. You'll see both through executive action and through comprehensive measures a way to address immigration as a whole and the visa programme," Spicer said. As per the leaked draft order, Trump would reverse Obama's extension of the duration of the optional practical training work visas, which allowed foreign students to stay in the US a bit longer after completion of their studies. 

Within 90 days of the signing of the executive order, the Secretary of Homeland Security would have to review all regulations that allow foreign nationals to work in the US and determine which of those regulations violate the immigration laws or are not in the national interest of America. It would also immediately terminate all parole policies. The executive order will also ask the Secretaries of Labour and Homeland Security to restore the integrity of employment-based non-immigrant worker programmes and better protect US and foreign workers affected by these programmes. The draft order seeks the administration to "consider ways to make the process of allocating visas more efficient and ensure that beneficiaries of the programmes are the best and the brightest." It also proposes to establish a commission or advisory committee to analyse the nation's current immigration policies and their impact on the American society, economy, work force, and the foreign policy and national security interest of the United States. The H1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise in specialised fields. The technology companies depend on it to hire tens of thousands of employees each year.

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Notes ban impact: Economy to grow 6.8% in FY17, says 

Survey Significantly, the annual median GDP growth forecast of 6.8 percent is sharply lower than the 7.3 percent projected in the previous round of the survey. |Indian economy will grow 6.8 percent this fiscal due to a slow down in the services and infrastructure sectors post demonetisation, according to a latest round of Ficci's Economic . Significantly, the annual median GDP growth forecast of 6.8 percent is sharply lower than the 7.3 percent projected in the previous round of the survey. The survey was conducted in the months of December 2016/ January 2017 and drew responses from leading economists representing industry, banking and financial services sector. 

Central Statistical Organisation had estimated a GDP growth of 7.1 percent for 2016-17 earlier in January. According to the Ficci survey, the agriculture sector is expected to witness an uptick in 2016-17 on the back of a good monsoon which is expected to support agricultural production. However, both industry and services sectors are anticipated to moderate. Industry and services sector are expected to grow by 5.7 percent and 8.5 percent, respectively in 2016-17. "The decision of the government to demonetise high value currency notes has had an impact on the cash dependent sectors primarily belonging to the informal economy. This is expected to cause some slowdown in industrial and services sector growth," the survey observed in its findings. The economists had a divided view on the time frame by which the economy would return to normalcy. Although some believed that things will start rolling back to the way they were in the pre demonetisation days by the end of the current quarter (March 2017), others felt that it could take at least two more quarters for things to fully settle (June 2017). Economists pointed out that India's economic growth was being propelled by government spending and private consumption and the latter has been hit due to the demonetisation move.

This will affect recovery in investments and overall growth. The participating economists opined that demonetisation exercise would lead to a healthy correction in many sectors of the economy, especially in the real estate segment. A majority of the respondents expect the RBI to maintain status quo with regard to repo rate on account of domestic and global factors in its bi-monthly monetary policy to be announced in the first week of February 2017. However, they anticipate the accommodative stance to continue with a probable rate cut of 25 bps in first half of the financial year 2017-18. The economists felt that the forthcoming Union Budget is likely to be expansionary and some fiscal stimulus is on the way from government's side. The median growth forecast for IIP has been pegged at 1.5 percent for the year 2016-17, with a minimum and maximum range of (-) 2.1 percent and 2.9 percent, respectively. This is marginally lower than the estimate of 1.7 percent put across in the last survey round. The median forecast for Wholesale Price Index based inflation rate for 2016-17 has been put at 3.4 percent, with a minimum and maximum range of 3.1 percent and 3.5 percent respectively. WPI inflation is projected at 3.8 percent for the fourth quarter of 2016-17

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FMCG likely to see all-inclusive, progressive Budget

 Analysts expect tax policy for cigarettes to be benign, with an anticipation of an increase in excise duty on cigarettes by 10 percent across slabs and also the likely introduction of 59-mm segment in the current slab structure.  Even as the fast moving consumer goods (FMCG) sector comes to terms with a steep fall in demand due to demonetisation, major firms are turning to Budget announcements to bring back consumer confidence. Companies such as Marico   , Emami   and Godrej expect a growth-oriented, all-inclusive, and a progressive Budget, according to reports by broking firms. Analysts expect tax policy for cigarettes to be benign, with an anticipation of an increase in excise duty on cigarettes by 10 percent across slabs and also the likely introduction of 59-mm segment in the current slab structure.

 Furthermore, Morgan Stanley’s Indira Badrinarayan also expects no changes in the cigarette taxes in the Budget as goods and services tax (GST) does not look imminent in the current fiscal. Nillai Shah of Morgan Stanley expects the Budget to provide signposts from the government on measures to curb consumption of smokeless tobacco and bidis. Angel Broking felt that FMCG sector had not seen any significant revenue growth since the last two years due to the slowdown in rural demand. However, better monsoon and increase in consumer spending due to Seventh Pay Commission had boosted its prospects during financial year 2016. However, that was punctured with the government’s demonetisation push as the industry went through a slowdown due to the liquidity crunch. But the brokerage is upbeat on the sector ahead

“Going forward, we believe that the FMCG sector will benefit from the easing liquidity and possible tax benefits,” said Angel Broking. IDFC   expects home improvement products to fall in 28 percent tax category, which could be negative compared to the earlier scenario of a single 18 percent goods and services tax (GST) rate. Additionally, the brokerage report foresees a fat tax on sugary beverages and junk food as well. The sector, this Budget, will closely look at rural development initiatives with an increase in allocation to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Direct Benefit Transfer (DBT) and irrigation schemes. One of the most radical moves by the Modi government was to scrap high-value currency notes of Rs 500 and Rs 1,000.  The rationale behind the government’s move was to crack down on black money and boost digital usage. Demand during the period went down drastically as people were seen holding back to even buy basic necessities. Market researcher Nielsen saw a dip of 16 percent and 18.5 percent in demand, respectively, for soaps and toothpaste in the urban market. Meanwhile, sales of the industry went down by 1-1.5 percent or Rs 3,840 crore in November, the researcher added.

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Wall St weekahead - Investors upbeat on data

Fed; wary of Trump NEW YORK (Reuters) - In an ordinary world, a U.S. Federal Reserve meeting, jobs data and a hefty number of earnings reports next week should provide investors with welcome distraction from speculation about the U.S. President's policy plans. Wall St weekahead - Investors upbeat on data, Fed; wary of TrumpIn an ordinary world, a US Federal Reserve meeting, jobs data and a hefty number of earnings reports next week should provide investors with welcome distraction from speculation about the US President's policy plans. But the current world is less than ordinary and in the second week after his inauguration as US president, the likelihood is that Donald Trump's voice will still ring louder in investors' ears than economic data and the words of Fed chair Janet Yellen.

 Wall Street has already bet on solid economic data, strong earnings and the pace of Fed interest rate hikes, but investors are still uncertain how to bet on the President. "Wall Street's already figured out that the recovery is in place, that the Fed is going to start getting aggressive. What they haven't figured out yet is, exactly who is Donald Trump," said Robert Phipps, a director at Per Stirling Capital Management in Austin. While stocks have risen since the November 8 election on hopes for tax cuts, lighter regulation and fiscal stimulus, investors are still waiting for evidence Trump has the willingness and ability to follow through on his pro-business campaign promises.

 On top of this, add to the uncertainty, fear of his threats to slap massive tariffs on imports and his comments on China's currency policy. Fed fund futures show bets on a 96-percent chance the Fed leaves rates unchanged when it ends its two-day meeting on Wednesday, according to Reuters data. Investors will watch for hints of policymakers' plans for the rest of 2017. If their language indicates faster-than-expected hikes, "the equity rally could pause as investors recalibrate," said Paul Christopher, head global market strategist at Wells Fargo Investment Institute in St. Louis. But investors don't see the Fed rocking the boat next week, at least until it has some clarity on Trump's policies.

 "Like many of us, the Fed is probably waiting to see what is going to come of all the new policies and changes that can be expected out of the new administration," said Tim Dreiling, senior portfolio manager at the Private Client Reserve at US Bank in Kansas City. Strong fourth-quarter earnings reports and forecasts have been part of the driver for the S&P 500's 10-percent increase since Nov. 4 and many big companies are due to report next week. A few weeks into reporting season, analysts now expect quarterly earnings to have risen 6.8 percent, up from an expectation of a 6.1 percent gain on Jan. 1, according to Reuters data. This growth rate would be the fastest in two years

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Wall St weekahead - Investors upbeat on data, Fed; wary of Trump NEW YORK (Reuters) - In an ordinary world, a U.S. Federal Reserve meeting, jobs data and a hefty number of earnings reports next week should provide investors with welcome distraction from speculation about the U.S. President's policy plans. Wall St weekahead - Investors upbeat on data, Fed; wary of Trump In an ordinary world, a US Federal Reserve meeting, jobs data and a hefty number of earnings reports next week should provide investors with welcome distraction from speculation about the US President's policy plans. But the current world is less than ordinary and in the second week after his inauguration as US president, the likelihood is that Donald Trump's voice will still ring louder in investors' ears than economic data and the words of Fed chair Janet Yellen. Wall Street has already bet on solid economic data, strong earnings and the pace of Fed interest rate hikes, but investors are still uncertain how to bet on the President. "Wall Street's already figured out that the recovery is in place, that the Fed is going to start getting aggressive. What they haven't figured out yet is, exactly who is Donald Trump," said Robert Phipps, a director at Per Stirling Capital Management in Austin. While stocks have risen since the November 8 election on hopes for tax cuts, lighter regulation and fiscal stimulus, investors are still waiting for evidence Trump has the willingness and ability to follow through on his pro-business campaign promises. On top of this, add to the uncertainty, fear of his threats to slap massive tariffs on imports and his comments on China's currency policy. Fed fund futures show bets on a 96-percent chance the Fed leaves rates unchanged when it ends its two-day meeting on Wednesday, according to Reuters data. Investors will watch for hints of policymakers' plans for the rest of 2017. If their language indicates faster-than-expected hikes, "the equity rally could pause as investors recalibrate," said Paul Christopher, head global market strategist at Wells Fargo Investment Institute in St. Louis. But investors don't see the Fed rocking the boat next week, at least until it has some clarity on Trump's policies. "Like many of us, the Fed is probably waiting to see what is going to come of all the new policies and changes that can be expected out of the new administration," said Tim Dreiling, senior portfolio manager at the Private Client Reserve at US Bank in Kansas City. Strong fourth-quarter earnings reports and forecasts have been part of the driver for the S&P 500's 10-percent increase since Nov. 4 and many big companies are due to report next week. A few weeks into reporting season, analysts now expect quarterly earnings to have risen 6.8 percent, up from an expectation of a 6.1 percent gain on Jan. 1, according to Reuters data. This growth rate would be the fastest in two years

You may get another chance to deposit old Rs 500, Rs 1000 notes 

Reserve Bank of India is examining the possibility of opening another window for “genuine people” who were unable to deposit devalued currency notes before the December 30 deadline.  If you still have a few scrapped Rs 500 and Rs 1,000 notes lying at home, the country’s central bank may soon have good news. The Reserve Bank of India is considering giving citizens another chance to deposit a limited sum of devalued notes, Hindustan Times quoted government and banking sector insiders as saying

The report said people who had failed to deposit all their old currency before the December 30 deadline had been pleading with RBI to grant them relief. According to a source quoted in the report, the issue being is looked into and the central bank is examining the possibility of opening another window for these “genuine people”. He added that the deposits, if allowed, would only be for smaller sums and for a limited to to ensure that the window is not misused. In addition, a valid reason would have to be given On November 8, Prime Minister Narendra Modi had announced that 86 percent of the cash in circulation would be junked in a bid to crack down on black money. He had given a December 30 deadline for depositing these devalued bills in banks, and a March 31 deadline for depositing them at RBI offices. However, many citizens who visited RBI offices earlier this month were told that the March 31 deadline was only for NRIs and those who were abroad during the period that demonetisation was announced

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NRIs can exchange old notes till June 30: A step by step guide 

This article explains how an NRI can exchange old currency notes. Adhil Shetty (more) CEO, Bank Bazaar.com | Adhil Shetty Bank Bazaar.com The demonetization announcement on November 8 banning high denomination currency notes brought with it shock and surprise. Panic-stricken people thronged the banks to convert the defunct currency notes with new ones, demonstrating great urgency. Through the course of the 50 days, economics took the backseat while politics hogged the limelight, to the dismay of many. While most Indians would have had the opportunity to exchange old notes through the banks, post offices and the RBI till December 30, it was indeed a good New Year gift for the NRIs as the RBI announced that they can handover the old notes for new ones at the central bank offices any time before June 30, 2017. 

This arrived as a blessing for NRIs who were out of the country during the exchange period from November 9 to December 30. Let us see how the exchange exercise could be carried out by NRIs who still possess the banned currency notes. Where to exchange As per the notification issued by the RBI on December 31, the old currency notes could be deposited at the central bank’s offices at Mumbai, Delhi, Kolkata, Chennai, and Nagpur. The facility will be available on all bank working days. The cap for NRIs will be as prescribed in the Foreign Exchange Management Act regulations, that is, Rs 25,000. Requisite documents needed If you are travelling to India during the period ending June 30, carry the demonetized currency notes with you as there is no other option. You are not allowed to nominate anyone else to carry for you, as third party tender is not allowed. Also, you cannot courier the cash, nor can you send the notes through the money exchange facility or use your bank to transfer money. The most important documentation that you need is the customs declaration form. This document vouches for the Special Bank Notes (SBNs) you possess.

 This is a one-page declaration issued by the customs department at the airport stating the import of SBNs, their value, and count. The form will have the official stamp of the customs department. This declaration of the customs department is mandatory while depositing the notes at the designated offices of the RBI. A false declaration can invite trouble. It can attract a fine of Rs 50,000 or five times the amount imported, whichever is higher. Apart from the customs declaration, NRIs possessing the banned currencies should also submit other documents to deposit the currency notes: • Original passport: The RBI will verify the passport to find out whether the person falls under the definition of NRI. • Immigration stamp in the passport: This is to vouch for the fact that the person concerned was abroad during the period between November 9 and December 30, 2016. • Alternative ID: Apart from the passport, another ID such as Aadhaar or PAN card should be also be produced before the RBI authorities. • Declaration: A declaration should also be submitted that the exchange facility was not availed earlier by the person concerned. • Statement by bank:

 A statement from the banks, wherever the NRI is an account holder, should be given stating that SBNs were not deposited in any of the banks between November 9 and December 30, 2016. The amount permissible will be credited to the KYC compliant bank account of the NRI after due verification of the relevant documents. The RBI decision to extend the exchange period for NRIs till June 30 is good news for those possessing the banned currencies. They should utilize the RBI window and deposit the defunct notes with relevant supporting documents at the earliest. There is nothing to panic about as long as the money being so deposited is clean money and all documentation is in place

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Commodities market await FinMin nod for FII, MF investments

 Sources told that capital and commodities markets regulator SEBI has told the Finance Ministry that it is comfortable with opening up the commodities markets to institutional investors.  Commodities market players are hopeful that Finance Minister Arun Jaitley will announce steps towards permitting investments by foreign institutional investors and mutual funds in commodities. Sources told that capital and commodities markets regulator SEBI has told the Finance Ministry that it is comfortable with opening up the commodities markets to institutional investors

SEBI had proposed that Foreign Portfolio Investor (FPI) categories I and II, and also domestic mutual funds be allowed to invest in commodities. Category-I includes government and government-related investors such as central banks, governmental agencies, sovereign wealth funds and international or multilateral organizations or agencies. Category-II includes regulated funds such as mutual funds, investment trusts and insurance companies. It also includes regulated investors such as banks, asset management companies, investment managers or advisors and portfolio managers. Recently, SEBI wrote to the Reserve Bank of India seeking its views on allowing hedge funds to invest in commodities

Hedge funds fall under category-III of Alternative Invest Funds (AIFs), and are known to take leveraged bets, unlike category I and II FPIs. According to the sources, approval for domestic mutual funds is likely to come ahead of approval for foreign portfolio investors, since SEBI oversees the regulations for mutual funds. Where foreign institutional investors are involved, SEBI has to consult with the RBI and the Finance Ministry as well 

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IT placements in B-schools feel Trump's pinch, down 20-40%

 US President Donald Trump’s protectionist rhetoric, muted growth numbers and rising automation have forced IT companies to cut down on hiring. IT recruitments have fallen by 20-40 percent this season at the country’s management institutions, with students at B-schools in tier-II cities in particular feeling the pinch, according to a report in The Economic Times. The report says new US President Donald Trump’s protectionist rhetoric, muted growth numbers and rising automation have forced IT companies to cut down on hiring. IT firms are typically among the largest recruiters at B-school campuses. While IT hiring dipped by 26% at Management Development Institute in Gurgaon

Great Lakes Institute of Management in Chennai recorded a decline of 30% in placements. At Welingkar Institute of Management Development and Research, the figure was almost 40%. At one business school, Infosys hired just 13 recruits compared to 40 last year. The decline can be seen as a fallout of the new regime in the US, which has promised to restrict immigration and bring jobs back home. 

The Trump administration has also indicated that it would introduce curbs on H1B visas, popular among Indian IT workers. In anticipation of these restrictions, Infosys and Tata Consultancy Services have already indicated that they will hire more engineers from US campuses. Automation also poses a challenge, Vineet Nayyar, Vice-Chairman of Tech Mahindra, had earlier told that with automation and analytics assuming greater importance, there would be lower intensity of manpower.  In addition, most of the IT majors including Wipro, TCS, and Infosys have reported muted numbers this quarter

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IT placements in B-schools feel Trump's pinch, down 20-40%

 US President Donald Trump’s protectionist rhetoric, muted growth numbers and rising automation have forced IT companies to cut down on hiring. IT recruitments have fallen by 20-40 percent this season at the country’s management institutions, with students at B-schools in tier-II cities in particular feeling the pinch, according to a report in The Economic Times. The report says new US President Donald Trump’s protectionist rhetoric, muted growth numbers and rising automation have forced IT companies to cut down on hiring. IT firms are typically among the largest recruiters at B-school campuses. While IT hiring dipped by 26% at Management Development Institute in Gurgaon, 

Great Lakes Institute of Management in Chennai recorded a decline of 30% in placements. At Welingkar Institute of Management Development and Research, the figure was almost 40%. At one business school, Infosys hired just 13 recruits compared to 40 last year. The decline can be seen as a fallout of the new regime in the US, which has promised to restrict immigration and bring jobs back home. The Trump administration has also indicated that it would introduce curbs on H1B visas, popular among Indian IT workers. In anticipation of these restrictions, Infosys and Tata Consultancy Services have already indicated that they will hire more engineers from US campuses. Automation also poses a challenge, Vineet Nayyar, Vice-Chairman of Tech Mahindra, had earlier told  that with automation and analytics assuming greater importance, there would be lower intensity of manpower.  In addition, most of the IT majors including Wipro, TCS, and Infosys have reported muted numbers this quarter

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Takata shares lose nearly half their value in less than a week

 The stock has been hit by a glut of sell orders since the Nikkei business daily said on Thursday that Swedish air bag maker Autoliv Inc and a group led by US auto parts supplier Key Safety Systems, two bidding groups for Takata, would present proposals for a court-led restructuring. A Reuters source later confirmed the plan. Takata Corp's shares have lost nearly half their value in less than a week, hit by a report that bidders are seeking a court-mediated turnaround for the embattled Japanese air bag maker. 

The stock has been hit by a glut of sell orders since the Nikkei business daily said  air bag maker Autoliv Inc and a group led by US auto parts supplier Key Safety Systems, two bidding groups for Takata, would present proposals for a court-led restructuring. A Reuters source later confirmed the plan. The stock lost 5 percent in Tuesday morning trade and is down 48 percent since Wednesday's close. When a stock is untraded due to a glut of orders, it is given a closing price by the Tokyo stock exchange that reflects the balance of buy and sell orders. When the glut is big, it will often be the daily limit allowed for the stock. 

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Asian shares wobble as investors await Fed, dollar dips MSCI's broadest index 

Asia-Pacific shares outside Japan edged up 0.1 percent in early trade, while Japan's Nikkei stock index slid 0.5 percent as the dollar came off highs against the yen. Asian shares were on tenterhooks on Tuesday as investors awaited the Federal Reserve's meeting that begins later in session for clues on the  for US monetary policy, while crude oil prices pulled back after their surge to 18-month highs. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent in early trade, while Japan's Nikkei stock index slid 0.5 percent as the dollar came off highs against the yen. The Fed is widely expected to hike interest rates for the first time in 2016 at a two-day meeting, with markets pricing in a nearly 100 percent chance of a quarter percentage point increase to the Fed's target range of 0.25 to 0.50 percent.

 What matters most to investors is the Fed's statement and economic projections, which will be examined for any signs of reaction to Donald Trump's surprise victory in the November 8 US presidential election. "The big question is what sort of pace can we expect from the Fed for next year?" said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo. US Treasury yields have recently spiked on expectations that the Trump administration will enact policies to spark growth and inflation. In addition to these expectations, surging crude oil prices have also stoked inflation expectations. On Monday, the yield on benchmark US 10-year notes touched 2.528 percent, its highest since Sept. 29, 2014. It stood at 2.460 percent on Tuesday. Higher yields in turn lifted the dollar, which climbed as high as 116.120 yen on Monday, its highest since early February. But it was last down 0.2 percent at 114.83 yen. "There is some profit-taking, particularly by US hedge funds, ahead of the Fed meeting and the upcoming Christmas holiday,"

 Ogino said. "But many Japanese importers are far behind in dollar-buying, so they would like to buy on dips, and the downside should be limited during Asian trading hours." The euro edged up 0.1 percent to USD 1.0649, while the dollar index, which tracks the greenback against a basket of six rival currencies, was 0.2 percent lower at 100.850 . Crude oil prices came off their highs after surging on Monday to their highest since mid-2015 on the back of a weekend deal by OPEC and non-OPEC producers to curtail output. US crude futures slipped 0.4 percent to USD 52.61 a barrel

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JSW Energy Q3 net down 93% to Rs 21 crore

 It posted a net profit after taxes, minority interest and share of profit of associates of Rs 21.39 crore for the quarter ended December 31, 2016, as against Rs 309.25 crore a year ago, the company said in a BSE filing. | JSW Energy Q3 net down 93% to Rs 21 crore JSW Energy today reported a 93 percent fall in its consolidated net profit at Rs 21.39 crore for the third quarter of this fiscal due to lower power generation. It posted a net profit after taxes, minority interest and share of profit of associates of Rs 21.39 crore for the quarter ended December 31, 2016, as against Rs 309.25 crore a year ago, the company said in a BSE filing. Total income was Rs 1,954.83 crore, down from Rs 2,627.04 crore in the same period a year ago due to the decrease in turnover, primarily on account of lower generation coupled with lower tariff.

 It said during the quarter, net (power) generation was down by 23 per cent compared to the corresponding quarter of the previous year primarily on account of poor power demand across all thermal plants, besides shutdown of one unit of 300 MW at Ratnagiri due to turbine vibrations. Its net power generation was 4,644 million units in the third quarter as against 6,052 million units in same quarter of the previous year. The merchant sales during the quarter were 699 million units (15 per cent of volume), while the sales under long term power purchase agreements were 3,863 million units (85 per cent of volume). Consolidated net worth and consolidated net debt as of December 31, 2016 were Rs 10,205 crore and Rs 14,134 crore respectively, resulting in a net debt to equity ratio of 1.38 times. On the outlook for the industry, the company said that the gauge of industrial activities is appearing to show an uptick, although the consistency of growth is critical in the backdrop of demonetisation and weak PMI. Continued low inflation and softening interest rates are expected to provide necessary impetus to economic activities in the coming quarters.

 Focus on strong public spending on infrastructure and development projects in the forthcoming budget should boost the investment cycle and consequently, the energy demand, it said. In a separate filing, the company told the BSE that its board has decided raise Rs 1,000 crore through issuance of redeemable non-convertible debentures on private placement. The company also said that its Director-Finance and Chief Financial Officer Pramod Menon has put in his papers and will relinquish office on January 31, 2017. It said that the board in its meeting today appointed Jyoti Kumar Aggarwal as Chief Financial Officer from February 1, 2017. The company has also said that Karcham Wangtoo Hydro project of Himachal Baspa Power Company Ltd, a wholly owned subsidiary, has filed petition for determination of final tariff with Central Electricity Regulatory Commission (CERC) and pending the receipt of final tariff order, the revenue from sale of power under long term power purchase agreements are being recognised in terms of expected tariff as per the available guideline in this regard. The hydro projects were acquired during September 2015. Hence, figures for the corresponding nine months ended of the previous year are not comparable, it added.

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Germany to finance strategic infrastructure projects in India 

Germany is ready to support India's growth story and become part of India's DNA in key long term strategic projects for India's growth," Matthias Machnig, State Secretary, Federal Ministry of Economic Affairs and Energy, was quoted as saying by an Indian Embassy statement. |  Germany to finance strategic infrastructure projects in India Germany is set to finance long-term strategic projects in India particularly in the railway, infrastructure and smart cities sectors as part of efforts to support India's "growth story", a top German official has said. "Germany is ready to support India's growth story and become part of India's DNA in key long term strategic projects for India's growth," Matthias Machnig, State Secretary, Federal Ministry of Economic Affairs and Energy, was quoted as saying by an Indian Embassy statement. During a meeting with visiting Indian CEOs delegation led by CII, he also informed about the German Cabinet's decision to finance long-term strategic projects in countries like India particularly in railways, infrastructure and smart cities sectors, the statement said.

 German government has set up a special unit in the Economics Ministry to implement this decision of the German Cabinet, it said. In a meeting with the CII delegation, German Federal Finance Minister Wolfgang Schauble said that Germany is committed to working with India for mutual benefit. The CII delegation was led by Shobana Kameneni, CII President-Designate and Vice Chairperson Apollo Hospitals Ltd. This was the largest CII delegation to visit Germany since India's Participation in the 2015 Hannover Messe where India was a partner country. The 10 members of delegation also included Salil Singhal (PI Industries Ltd), Rajiv Modi (Cadila), Sanjay Kapur (Sona Koyo Steering Systems), Prabhakar Atla (Cyient Ltc), Mohan Murti (Reliance Industries), Mukul Dhyani (Wipro) and Rajesh Menon from CII. They also participated in a roundtable meeting with German CEOs led by Federation of German Industry (BDI) President Dieter Kempf. It was organised by BDI and the Indian Embassy. CII and BDI would be jointly working on a programme, to intensify their engagements in key areas including skill development, the statement said. 

 The Indian delegation also interacted with a number of German industry leaders from German Asia-Pacific Business Association. The CII and The Economic Council also signed a memorandum of understanding (MoU) to strengthen economic and trade ties between India and Germany during 'The Germany-India Economic Dialogue' event held at the Indian Embassy here yesterday. The MoU will help in jointly promoting Indo-German business by means of frequent exchange visits for business cooperation, facilitating investment and business development, and jointly organising road shows in both countries for promotion of investment opportunities, the statement said 

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India-EU FTA to benefit apparel sector: Report

 The CII-BCG report also suggested that the state governments should promote infrastructure with plug and play facilities. India-EU FTA to benefit apparel sector: Report A free trade agreement with the European Union (EU) besides rationalisation of taxes and duties would help in promoting the growth of India's apparel sector, says a report. The CII-BCG report also suggested that the state governments should promote infrastructure with plug and play facilities. "Duties and taxes must be rationalised to avoid inefficiencies and high energy and overall costs

. A power subsidy, inclusion of power charges under GST, and similar rates for both cotton and synthetic products are recommended," the report said. It said industry should engage in driving productivity through extensive training and investments in process improvements and automation. The report "strongly calls for a free trade agreement with the EU. An added provision could be to treat the poor states of India on a similar basis as least developed countries," the report added. India and EU are negotiating a free trade pace since June 2007. The talks were stalled on several issues including IPR. It also said that rebranding is essential, accompanied by focused marketing interventions such as global roadshows. Companies should invest in product development and in cutting edge innovations, it said 



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Budget 2017: Tough job for finance minister of meeting too high expectations

 The GDP growth forecasts have been affected by demonetisation, which in turn has led to high expectations of a budget which will cut taxes, incentivize savings, raise more revenue, be anti-inflationary and push growth President- Retail Distribution, Religare Capital | Capital Expertise: Equity - Fundamental Jayant Manglik Religare SecuritiesSomeone famously said that the budget is not just a collection of numbers but an expression of our values and aspirations. The first major sign of change a few years ago was in shifting the time of the budget from evening to morning. It was traditionally read out in the evening so that the British could follow it in London.  now the budget will be presented on 1st February to enable more time to implement the provisions.

 Third, the railway budget will now be a part of the main budget. Since this budget will be launched in the shadow of demonetization, it could be an important inflection point if the government decides to be brave. The GDP growth forecasts have been affected by the move, which in turn has led to high expectations of a budget which will cut taxes, incentivize savings, raise more revenue, be anti-inflationary and push growth, all at the same time. By any yardstick, it is a tough job. But some direction is clear from the previous two budgets. For example the government has already stated that its intention is to double farmers’ income by 2022 and this budget will articulate the next steps aimed at this. Secondly, the MSME segment, which bore the brunt of demonetization because of its dependence on cash transactions, will definitely be favourably addressed in the budget. Also sure is more budget allocation for Make in India, Digital India and Swachh Bharat. All three will be part of the government’s continued focus in future budgets as well.

 Digital India can look forward to additional plans, ideas and allocations because it ties in well with the aim of moving India away from cash. Job creation and revival of the investment cycle, both will receive major attention in the budget. This is important economically, socially as well as politically. On the tax front, there are expectations of moves to neutralize the pain of demonetization by lowering income taxes or increasing tax slabs. However this will have to be done in a revenue-neutral way i.e. to the extent of the new revenue which will come in due to the extended tax net thanks to demonetisation and the data collected by the government. And while corporate taxes may be tinkered with, service tax may be hiked for alignment with the GST rates which is expected to be implemented within six months

Budgets are guidelines but do not stop you from spending more than you should. However that restraint is necessary. So meeting the targeted fiscal deficit of 3% and at the same time pushing growth will need an earnest attempt and extreme discipline on the government’s front. All industry demands are fundamentally focussed towards increased business, whether through lower costs, taxes or higher incentives. The financial services industry too could do with a removal of STT and CTT as it will promote growth. And yes, there is this rumour that long term capital gains benefit will be changed to 3 years, a very bad idea. As they say, if it ain’t broke don’t fix it! Instead the best thing this budget can do is push the equity cult which will fund our growth over the next decade. 

There is a need to attract people to the equity market. It constitutes just 5% of the average Indian family’s financial wealth, compared to more than 40% in the US. To enable mass outreach, entry barriers have to drop or disappear. The success of the Jan Dhan Yojana can be built upon for value addition and wealth creation. Our citizens should have the ability to fund the country’s growth and profit substantially from it. The government is clearly focused towards long-term growth. I expect a budget which lives within its means, accounts for what is truly required and provides support to all sections which need it..... 


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Budget 2017: Jaitley may cut MAT along with lower corporate income tax

The extent of the cut in MAT’s rate will depend on the reduction in headline corporate income tax rate that the finance minister is expected to announce in the budget Gaurav  Finance Minister Arun Jaitley may lower the Minimum Alternate Tax (MAT) from the existing 18.5 percent in Budget 2017 as part of the government’s broad strategy to overhaul India’s corporate income tax structure that is beset with layers of exemptions and incentives. The extent of the cut in MAT’s rate will depend on the reduction in headline corporate income tax rate that Jaitley is expected to announce in the Budget. Corporate income tax rate is expected to be cut by 1.25-1.5 percentage points to 28.75-28.5 percent in the Budget 2017, but will likely remove a plethora of exemptions that allow companies to cut down on their effective tax payouts.

MAT is currently applied at a rate of 18.5 percent and goes up to 21.34 percent including cesses and surcharges. MAT was introduced in fiscal year 1998 to address inequity in taxation of Indian corporations. Many companies, despite making book profits as per their profit and loss account, were hardly paying any tax because income computed as per provisions of the Income-tax Act, was either nil, or insignificant. The Indian Income Tax Act contains a large number of exemptions from total income. Besides exemptions, there are several deductions permitted from gross total income.

The result of such exemptions, deductions, and other incentives under the Income Tax Act in the form of liberal rates of depreciation is the emergence of “Zero tax companies,” which inspite of having high book profit, are able to reduce their taxable income to nil. The system of MAT was accordingly introduced under which a company is required to pay a minimum tax of 18.5 percent of the book profit in case the tax on the total income computed under the normal provisions of law works out to less than this amount. In November 2015 the government had laid down a comprehensive roadmap for phasing out corporate tax exemptions by 2018 as it looks to reduce the tax rate, simplify the administration and improve India’s competitive edge globally. Tax deductions and exceptions have been prone to misuse and consequential litigation. Currently, there are 32 incentives applicable on corporate profits before calculating tax

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Demonetisation drive to favour big gold jewellery store chains

Somasundaram PR, managing director of the WGC's Indian operations, said on Tuesday Prime Minister Narendra Modi's move to scrap 500 and 1,000 rupee banknotes - a 'demonetisation' crackdown on corruption and tax evasion - will boost larger jewellery retailers' market share from 30 percent in 2015. India's drive to bring transparency to bullion trading, along with the rise of branded gold jewellery, could help major retailers raise their share of the world's second-biggest gold market to 40 percent by 2020, the World Gold Council (WGC) said. Somasundaram PR, managing director of the WGC's Indian operations, said on Tuesday Prime Minister Narendra Modi's move to scrap 500 and 1,000 rupee banknotes - a 'demonetisation' crackdown on corruption and tax evasion - will boost larger jewellery retailers' market share from 30 percent in 2015. "The issue the industry is facing today is lack of transparency," said Somasundaram, speaking in an interview as the WGC published a report on the Indian gold trade. 

"This is addressed by demonetisation...Consumers will be forced to pay by cheque or digital payments for large transactions." Known as 'organised retailers', firms like Titan Co Ltd, P C Jeweller Ltd and Gitanjali Gems Ltd have seen their share of a traditionally fragmented market rocket from just 5 percent in 2000 as young consumers switched to branded jewellery. Many of India's 400,000 jewellers have traditionally sold gold in cash transactions, with small retailers often skipping written documentation in an attempt to avoid paying taxes while people with wealth not recorded in accounting books preferred to buy without invoices or receipts. More than 70 percent of the country's gold sales have been in cash up to now. Those transactions, along with a 10 percent import duty on gold imposed in recent years, have boosted smuggling, Somasundaram said. Prime Minister's Modi's drastic move - withdrawing bills equivalent to 86 percent of the value of cash in circulation - will help curb smuggling, the WGC said in its report. Smugglers offered a discount as high as USD100 an ounce in 2016, disrupting the gold supply business. 

The grey market will disappear due to cashless transactions," Somasundaram said. "It will help both consumers and industry in long run." In its report, the WGC noted that the government's move to charge lower duty on imports of dore - a semi-pure alloy made by miners - than on refined bullion had boosted refining capacity in India to 1,450 tonnes per annum. However, much of that refining capacity remains unutilised due to limits on sourcing dore, the WGC said, pointing to the prospect of deals within the industry

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Tax agri-income to retain demonetisation benefit:

 Govindrajan Subsequent tax laws and monetary policies should supplement the good move (demoentisation), the author of 'The Three-Box Solution: A Strategy for Leading Innovation' said. | Demonetisation is a good step amid implementation challenges but the government needs to plug the holes of farm income and real estate to get long-term benefit out of this major step, a global management strategy and innovation expert said today. 

"Demonetisation is a good idea as it brings transparency and accountability which was missing in the economy for long. But, India needs to follow it up with formulating policies that will prevent accumulation of black money again. Otherwise in the next five years we will get back to the same," Vijay Govindarajan, professor at Dartmouth's Tuck School of Business and world's leading expert on strategy and innovation, told PTI in a brief interview. Subsequent tax laws and monetary policies should supplement the good move (demoentisation), the author of 'The Three-Box Solution:

A Strategy for Leading Innovation' said. He said India should tax agri-income but did not comment on the rate of taxation which would plug the hole of black money getting accumulated again. Currently, income from agriculture is not taxed in the country allowing parking of black money in form of agri income. Introduction of transperency is also needed in real estate, he said. Asked how would he place demonetisation in his three box solution strategy, Govindarajan said, "It is enabler for box ... which is about creating for future." He said a business mind and a social heart is a combination which will define and determine whether and how Indian businesses will fare and thrive, he said at 'Thought Leadership Masterclass' organized by the CII-Suresh Neotia Centre of Excellence for Leadership

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RBI may effect 25 bps rate cut on Feb 8, in April:

BofA-ML According to the global financial services major, further easing is likely as demonetisation is hurting growth while inflationary pressure is benign and the government is expected to target a conservative fiscal deficit of 3.5 percent of GDP. | 1 Comments The Reserve Bank of India is expected to go in for a 25 bps rate cut at its next monetary policy meet on February 8 -- as also in April -- says a Bank of America Merrill Lynch (BofA-ML) report. According to the global financial services major, further easing is likely as demonetisation is hurting growth while inflationary pressure is benign and the government is expected to target a conservative fiscal deficit of 3.5 percent of GDP. "We grow more confident of our call of a 25 bps RBI rate cut on February 8 (and April) after release of latest CPI/WPI/ IIP data," BofA-ML said in a research note. Incoming data show that demonetisation is impeding growth, BofA-ML said, adding that "old series GDP growth is already languishing at 4-4.5 percent".

 BofA-ML has slashed its March inflation forecast to 4.6 percent (from 5.1 percent), which is well below RBI's 5 percent target and noted that an RBI rate cut will support the rupee by attracting foreign capital flows. "We continue to expect CPI inflation to meet RBI's 5 percent March 2017 target. In fact, we have cut our March 2017 forecast to 4.6 percent from 5.1 percent," it added. Retail inflation eased further to nearly 3-year low of 3.41 percent in December, reflecting weak demand as consumers grappled with cash crunch following demonetisation. Rising prices of petrol and diesel fuelled WPI inflation to 3.39 percent in December 2016. On December 7, the central bank kept interest rate unchanged despite calls for lowering it and lowered the economic growth projection by half a percentage point to 7.1 percent in the first policy review post demonetisation

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Indiabulls cuts interest rates for existing customers by 15 bps

 "The new rates will vary according to a customer's existing rate and the contract date and will effectively be in the range of 8.90 percent on the lowest side and to 10.50 percent on the higher side. Still most customers will get the benefit from February," Indiabulls Housing Finance executive director Sachin Chaudhary told PTI here. Indiabulls cuts interest rates for existing customers by 15 bps Mortgage player Indiabulls Housing Finance has reduced its interest rates for existing borrowers on floating rates by 15 basis points, matching its offering with with that of the market leader HDFC . "The new rates will vary according to a customer's existing rate and the contract date and will effectively be in the range of 8.90 percent on the lowest side and to 10.50 percent on the higher side.

 Still most customers will get the benefit from February," Indiabulls Housing Finance executive director Sachin Chaudhary told PTI here. The reduction will benefit all its existing home loan customers, including residents and NRIs/PIOs, he said, adding it comes on the heels of it reducing the rates for new women borrowers earlier this month by 45 bps. Indiabulls vice-chairman and managing director Gagan Banga has attributed the reduction to a drop in the cost of funds in recent months "which has given us another opportunity to pass on the benefits to our existing customers." Indiabulls had earlier this month reduced the home loan rates by 45 bps to 8.65 percent for new women borrowers of up to 75 lakh and to 8.70 percent for others following a drop in the marginal cost of funds over the last few months. Chaudhary said the rate cut follows a reduction in the marginal cost of its funds following the noteban which flooded the market with liquidity. 

 "Our average cost of funds has come down to 8-8.10 percent post-noteban," he said. Chaudhary also said their cost to reach out to a customer has also come down following the launch of 'e-home loan' facility six months ago. "The e-Home Loan is an industry-first end-to-end online home loans fulfilment platform which has helped us steadily bring down cost-to-income ratio and source incremental loan business. In Q3, as much as 18 percent of our new customers came in through this platform," he added. When asked about the fund sources for the company he said 40 percent each are bank loans and from markets especially bonds, and the rest come from ECBs or others. On fund raising plans in the current quarter considering a likely spike in advances following interest cuts, he said that will hit the market next month or in March to meet rising credit demand, which in the third quarter rose 30 percent, unimpacted by the note ban and expected to rise further 

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Market to remain range-bound; IT stocks to remain under pressure

 

 IT stocks continue to remains under pressure on back of talks of re-introduction of immigration bill which proposes to increase wages from USD 65,000 to USD 100,000. Dharmesh Kant (more) Head- Retail Research, MOSL | Capital Expertise: Equity - Fundamental Dharmesh Kant Motilal Oswal Securities Ltd Indian equities have moved up by 2.6 percent led by a series of events starting a likely re-introduction of the Immigration Bill, better than expected earnings of IndusInd Bank and housing finance companies, likely cut in steel output by China, mixed earnings by 2 large IT companies and better than expected CPI and IIP numbers. IT stocks continue to remains under pressure on back of talks of re-introduction of Immigration Bill which proposes to increase wages from USD 65,000 to USD 100,000. While management of all top IT companies have ruled out the negative impact due to shortage of skilled workers in the US, we believe stocks are likely to remain under pressure until more clarity emerges

TCS reported strong earnings and business momentum remains intact. However, Infosys delivered weak performance marked by weakness in top accounts which cast a shadow on future performance. Results season started on a positive note with Indusind Bank reporting strong performance with beat on all fronts leaving behind the impact on demonetisation. While the advances growth was strong at 25 percent, core profitability (core operating profit as percent of average assets) remains best in the industry at 3 percent vs 2.5 percent for industry. We continue to remain selective in the space and prefer banks with balanced mix of retail and wholesale financing with relatively stable asset quality. Top picks remain Indusind, Yes Bank and HDFC Bank . RBL and Equitas amongst emerging banks. Housing finance companies also delivered strong earnings with LIC Housing Finance delivering 22 percent NII / 19 percent earnings growth led by 15 percent loan growth and stable Gross NPAs of 0.6 percent. Dewan Housing also delivered stellar 32 percent earnings growth. Further all steel companies have reacted positively on back of cut in output by China which is likely to benefit Indian steel industry to some extent as India is the third largest steel producer.

 Newly elected US President-elect Donald Trump in its first news conference targeted pharmaceutical industry and specified that industry is going to come back to US and need for creating new bidding procedures. We believe pharma stocks are likely to remain under pressure till more clarity emerges on this front. On macro-economic front IIP grew faster than expected while inflation was in line leaving hardly any scope for rate cut in February 2017. Consumer price index (CPI) eased to its 25-month lowest level of 3.4 percent in December 2016, lower than our expectation of 3.6 percent and market consensus of 3.5 percent. Separately, the index of industrial production (IIP) posted 13-month highest growth of 5.7 percent YoY in November 2016, slightly better than our expectation of 4.4 percent YoY and much higher than consensus of ~1 percent. Ensuing fortnight will see meaningful Q3 FY17 earnings which remain the key monitorable and likely impact of demonetisation and management commentary will be key to watch out for. While the individual stock performance is based on Q3 FY17 earnings, we believe overall markets are likely to remain range bound as market will closely watch the Union Budget. 

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