Current Economic Statistics and Review For the
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Theme
of the week: All-India Debt and Investment Surveys – A Factual Review*
Part 11CPurpose-wise Debt “It is a sign of flourishing economic activity in the society if large numbers of households have taken loans and the loan taken is utilised for productive purpose”. AIDIS IntroductionThe
Part II A of the note dealt with an analysis of the magnitude of household
debt in rural and urban areas and the role played by institutional and
non-institutional credit agencies in the credit scene of rural and urban The Part II B of the note brought out albeit briefly the different facets of interest burden or cost of debt such as rate of interest, terms of interest, duration of debt and type of loan and security as well distribution of debt by size of debt. This part of the note (Part II C) reviews briefly the end use of debt incurred along with a brief analysis of current liabilities and kisan credit cards. IDebt According to PurposeThe reasons for which households contract loans is considered as the purposes of loans. Even if a loan mount was utilised for a purpose other than that for which it was borrowed, the original purpose of borrowing was considered. If more than one purpose were involved, the purpose for which the maximum amount of loan was originally intended to be spent was considered by NSSO.
Productive utilisation of debt incurred by households will help augment their economic activities and thereby promote economic welfare. On the other hand, if debt is incurred for purposes, which do not produce any increase in production of goods and services, is known as unproductive purposes. Hence, understanding of the purposes of loan taken becomes crucial. Broadly, purposes of loan taken can be classified as those which taken for productive purposes and those taken or utilised for household expenditure.
Productive PurposesProductive purposes include expenditure incurred in farm business - both capital and current expenditures. Farm business includes household economic activities like cultivation, including cultivation of plantation and orchard crops and processing of produce on the farm, e.g., paddy hulling and gur making if it is carried out in the firm by indigenous method. It also includes ancillary agriculture activities such as livestock raising, poultry, fishing, dairy, bee keeping, etc. Expenditure incurred in farm business on account of purchase, own construction, major repairs, building and other land improvements, etc., are included in capital expenditure. The current expenditure includes expenditure for purchase of seeds, manure, fodder, payment of wages, rent, land revenue, etc., and also expenditure on normal repairs and maintenance of building, machinery and transport equipment, furniture and fixtures and household durables meant for farm business. Non-Farm Business is defined as all other household economic activities, viz., manufacturing, mining and quarrying, trade, hotel and restaurant, transport, construction, repairing and other services. It is treated as capital expenditure, if the households spend the cash dues for own construction, additions, alterations, major repairs and improvement of buildings, etc., and machinery and transport equipment, furniture and fixtures. Current expenditure in non-farm business includes expenditure on account of purchase of raw materials, fuel and lubricants, payment of rent, salary and wages, hire charges of machinery and equipment etc., and normal repairs and maintenance of building, etc. II The
Results Productive
Purposes It can be seen from Table 1, out of 26.5 per cent indebted rural households as on June 30, 2002, 10.2 per cent households spent 41.0 per cent of their cash dues in farm business. About 5.5 percentage points out of 26.5 per cent indebted households have contributed about 27 per cent of total cash dues as capital expenditure in farm business. The incidence and the share of cash dues on farm business in urban areas at 0.9 per cent and 5.2 per cent, as expected, are relatively, very low.
The
incidence of indebtedness for the purpose of non-farm business at 2
percent is roughly the same in both rural and urban areas. The share of
cash dues incurred in rural areas on non-farm business is 12 per cent, of
which 9 per cent is on account of capital expenditure. In urban areas, the
shares are 20 per cent and 17 per cent, respectively. Non-Productive PurposesExpenditure of Households: Expenditure for non-productive purposes or for household expenditure, is defined as purchase of residential plot, construction, addition, alteration, purchase of building for residential purposes, purchase of durable goods and assets, clothes, etc. and expenditure on medical treatment, education, marriages, ceremonies, was the single most important reason for taking loans in both rural and urban areas in 2002. The incidence in the case of household expenditure in rural areas is 13 out of 27 per cent of indebted households and 12 out of 15 in the case of urban areas and they absorbed 35 per cent and 58 per cent of cash dues, respectively, on such household expenditures. Taking other non-business expenses, about 16 per cent of indebted households in rural areas and about 15 per cent of urban households spent 47 per cent and 75 per cent of their cash dues, respectively, for all non-business purposes. Spending Habit by Occupational CategoriesTable 2 portrays the spending habits of rural households by occupational categories, i.e., by cultivator and non-cultivator categories.
All rural households operating at least 0.002 hectare of land during the last 365 days preceding the date of survey are cultivator household. On an average, they spend more on productive purposes, i.e., they spend about 62 per cent of cash due in June 2002 as compared 29 per cent by non-cultivator households. Rural households operating no land or holding land land less than 0.002 hectare, are non-cultivator households and they are further sub-divided into agricultural labours and artisans. As referred to above, they spend only about 29 per cent of their cash dues on productive purposes. While cultivators thus spend 38 per cent of cash dues on non-business expenditure, non-cultivator households spend 72 per cent for such non-business purposes. Table 3 explains the spending habits of urban households by occupational categories, i.e., by self-employed and others.
It can be seen therefrom that the self-employed households utilised about 55 per cent of their cash dues for productive purposes and 45 per cent on non-business purposes. Out of which, about 44 per cent is on acquiring capital assets for business purposes, largely in non-farm business. As against this, other households in urban areas, which include all the other households except self-employed households, regular wage/salaries household and casual labour households incur a very meagre 7 per cent of their cash dues for productive expenditure. Their single most purpose is household expenditure at 72 per cent as against 33 per cent in case of the self-employed in 2002. III Deterioration
in Productive Spending Over the Years The reductions in the share of spending for productive purpose in recent decades is an eye opener as brought out in Table 4. The percentage of cash dues spent on productive purposes was at 43 per cent in 1951, which after falling to 38 per cent in 1962, picked up in the next two decades to reach 66 per cent by 1981. However, in the next two decades, there has been a drastic fall 53.0 per cent by 2002 (Data for 1991 in this respect appear an aberration).
Broadly, the converse is true in case of non-productive purposes with corresponding increase or decrease over decrease in their share of expenditure. Overall, a large portion of total rural debt is used for consumption rather than productive purposes. Cultivator
and Non-Cultivator Hosueholds A better insight in to the changing spending habits of rural households, is brought out by an analysis of the differing behaviour of cultivator and non-cultivator households in rural households (Tables 5 and 6).
Cultivator households obviously have a much higher proportion of debt earmarked for productive purposes than non-cultivator households. But, the rising and falling trends shown above are generally valid for both the sets of rural households. However, amongst the cultivator households, it is the receding of the share of farm business expenditure (from 63.8 per cent in 1981 to 52.5 per cent in 2002) and within it, that of capital expenditure (from 45.3 per cent to 34.3 per cent) stands out. The increase in non-farm business expenditure for capital or current expenditures has not compensated for the decline in farm business expenditure. Interestingly, even the non-farm business expenditure of non-cultivator households has fallen from 23.3 per cent in 1981 to 19.0 per cent in 2002. Non-farm households have always borrowed more than 50 per cent for pure household expeditures. A similar analysis of urban households also reveals that the largest share is for household expenditure. Also, amongst the self-employed, what is surprising is that their share in non-farm business expenditure has sharply dwindled from 57 per cent in 1981 to 44 per cent in 2002.
In case of self-employed though there was a fall in 2002 when compared to 1981, however, it was picked from an abysmal 35 per cent in 1991 to 55 per cent in 2002. In the case of household category, ‘others’, the share of non-productive purposes i.e., household expenditure during the last three decades has always been high at about 85 to 95 per cent of the total debt. Poorer
Households Borrow for Unproductive Purposes That poorer households borrow a larger proportion of debt for household expenditure purposes, is evident from data presented in Table 8.
From this table, the following results are discernible. First, the proportion of expenditure spent on farm business increases steadily with the increase in the size of household assets. Second, interestingly, the proportion of expenditure incurred on non-farm business remains generally uniform at around 12 per cent irrespective of the size of household assets. Finally, the proportions spent on household expenditure fall with the increases in household assets, thus showing, as said above, an increase relationship between household expenditure and asset size. The deterioration in spending for the productive purpose is brought out in Table 4. *
This note is prepared by R
Krishnaswamy
Highlights of Current Economic Scene AGRICULTURE
MMTC, the state-run trading firm, will import 1,000 tonnes of tur from Dubai-based Agricommodities at $412 per tonne and 1000 tonnes of moong from its Singapore-based subsidiary MTPL at $630 per tonne. In response to its tender floated in December 2006 to import 5,000 tonnes each of urad, moong and tur for February 2007 delivery, MMTC had received 3 bids and it has decided to buy only 2,000 tonnes of these 15,000 tonnes tender quantity. The
central government has plans to revive 4 of the 8 closed fertilizer units
of Fertilizer Corporation of India (FCI) and Hindustan Fertilizer
Corporation (HFC) with an investment of about Rs 1,000 crore. The efforts
would be made to revive Barauni, The central government has lifted the ban on sugar exports in view of the high domestic production, projected to be about 240 lakh tonnes in the current season. The government had imposed a ban on sugar exports in July 2006 as part of measures to curb rising prices of the commodity. As per the sugar industry experts timing of lifting the ban was wrong since the industry would not benefit from exports, as the international sugar prices are almost the same with that of the domestic market and the country has missed an opportunity to tap the export markets like Bangladesh and Sri Lanka as Brazil and Thailand have exported 6 million tonnes of sugar to these countries. As
per Coir Board, coir exports from the country have posted 10.8 per cent
rise in terms of value and 9.5 per cent increase in terms of quantity
during the April – December 2006. A total 1.97 lakh tonnes of coir and
coir products worth Rs 421.18 crore have been exports during this period
compared to 1.02 tonne worth Rs 380.28 crore a year ago. Value-added
products like coir mats have registered the highest exports with exports
going up to 51,499 tonnes worth Rs 325.83 crore from 48,409 tonnes worth
Rs 295.43 crore. Other products like coir mattings, rubberised coir, Coir
fibre etc, also posted remarkable increase in their exports. However, coir
rugs and carpets have witnessed a drastic fall of 76 per cent (from 1,144
tonnes to 273 tonnes) in quantity to and 71 per cent (from Rs 6.6 crore to
Rs 1.9 crore) in terms of value during the same period. The Seven
state governments have asked for Rs 271.54 crore central assistance for
development of seven agro export zones (AEZs). Union agriculture minister, Mr.Sharad Pawar, has appealed the state governments and the non-resident Indians (NRIs) to invest in farm sector through public-private partnerships in various areas like agriculture marketing, food processing, value addition, water conservation, seeds, e-agriculture and extension, contract farming etc. for achieving 4 per cent growth in the farm sector. The central government has also plans to support ventures for developing infrastructure such as cold storages and terminal markets, by way of equity participation. As
per the Solvent Extractors’ Association of India (SEA), oilmeals exports
have posted a robust increase of 39 per cent to 1,542,550 tonnes during
October-December 2006 as against 32 per cent recorded a year ago at
7,58,275 tonnes on account of surging demand in the overseas markets.
While the exports of soybean meal have risen to 2,159,225 tonnes during
April-December 2006 from 1,641,775 tonnes a year earlier, that of rapeseed
meal have jumped to 6,56,825 tonnes from 4,41,500 tonnes owing to
availability of rapeseed during off-season from National Agricultural
Co-operative Marketing Federation of India. On the other hand exports of
castor meal, have declined to 1,37,275 tonnes during the same period from
1,62,450 tonnes a year ago due to reduction in imports by Industry
Overall
Buoyed by strong performance in manufacturing, mining and intermediate goods, the Index for Industrial Production (IIP) has gone up by 14.4 per cent in November 2006 as compared to 6 per cent in November 2005, according to data released by the CSO. The cumulative growth during the April-November 2006 period has been 10.6 per cent as against 8.3 per cent in the corresponding period a year ago. As per user-based classification, the basic goods sector has grown by 11.6 per cent in November 2006, capital goods by 25.3 per cent, intermediate goods sector by 16.7 per cent and consumer goods by 11.9 per cent. In terms of industries, 16 out of the 17 industry groups have shown positive growth during November 2006 compared to the corresponding previous period. The basic metal and alloys industry group has recorded the highest growth of 25.4 per cent, followed by the rubber, plastic, petroleum and coal products group (23.2 per cent) and transport equipment and parts (21.8 per cent). On the other hand, the metal products and parts industry group, except machinery and equipment, has recorded negative growth of 1.5 per cent. Automobiles
The domestic passenger car market has recorded a historic 22.66 per cent growth in April-December 2006, second only to the 28.56 per cent in the fiscal year 2003-04. Analysts believe the industry will close fiscal 2006-07 with around 22-23 per cent growth against just 16 per cent in 2005-06. In the first nine months of 2006-07, the industry has sold 7.65 lakh units against 6.23 lakh in the same period of the last fiscal year. A slew of new launches and attractive discounts by leading carmakers helped the market grow at an explosive rate and is expected to maintain its growth momentum through the remaining three months. The
domestic automobile industry has asked the finance minister to implement a
uniform rate of excise on passenger vehicles at 16 per cent in the
upcoming Budget 2007-08, while asking import duty tariffs on vehicles not
to be brought down below 12.5 per cent. The Paper
The
Indian Paper Manufacturers Association (IPMA) expects the Indian paper
industry to grow to 14 million tonnes in 2015-16 from 7.2 million tonnes
in 2005-06. Along with growth in volumes terms, the industry would also
attract huge investments in the next few years. The IPMA member mills
alone would invest Rs 12,000-15,000 crore over the next ten years. One of
the major constraints the industry faces is inadequate availability of
quality raw material at a competitive cost. Yet, with only 7.2 kgs per
capita consumption compared with 350 kgs in developed countries and 42 kg
in Infrastructure Power
Even
as the total annual plan budgetary support to central power PSUs and
schemes of the power ministry is expected to be slashed by nearly Rs 6,000
crore for 2007-08, the Planning Commission has agreed to extend a Rs 8,000
crore gross budgetary support (GBS) for the implementation of Rajeev
Gandhi Vidyutikaran Yojana (RGVY). There is a sharp reduction in the GBS
to central power PSUs for the fiscal 2007-08 and as against the earlier
GBS of Rs 2,434 crore proposed for central power PSUs, only Rs 706 crore
is expected. The total GBS for the entire power sector, including central
PSUs and schemes like APDRP and RGVY, stands at Rs 9,228.51 crore against
the earlier Rs 15,094.27 crore. Steel
Though the steel companies have been demanding ban on export of iron ores, the chief ministers of the three states — Jharkhand, Orissa and Chhattisgarh — have jointly written to Prime Minister that exports, particularly of lumps, should be frozen at the current levels and a mechanism be worked out to reduce them gradually. The joint memorandum to the PM states that the move will raise the availability of iron ore to the domestic value-adders at economic prices. During 2005-06, the country produced 150 million tones (MT) of iron ore, of which about 90 MT were exported. Out of the 90 MT, 80 per cent exports were of lumps, which are high-grade ores exports canalised through MMTC. The balance 20 per cent is fines. The CMs of three states, where iron ore mines are present and where steel companies are entering into MoUs for setting up new steel projects, have said that it is desirable to impose quantitative restrictions on the export of iron ore, especially on the iron ore of more than 60 per cent Fe content. They have said that eventually export of iron should be banned. The stand-alone mining companies are, however, against any ban of iron ore exports. Cement
Given the strong demand and limited capacity additions during 2006-07, analysts predict cement prices to further increase by Rs 3-5 per bag in the fourth quarter of the year. Though despatches of the major companies have shown a lacklustre performance in December 2006 with a 3.1 per cent year-on-year rise to 5.8 million tonnes, the outlook on the cement sector remains positive. The reason could be that the transporters strike in November 2005 led to a spill over effect of despatches in December 2005 resulting in subdued year-on-year growth in December 2006 (base effect). The overall demand has grown by 10 per cent during April-November 2006. However, going forward, demand is expected to be buoyant and grow anywhere between 9-9.5 per cent for financial year 2007. Banking The
RBI has simplified the procedures for project and service exports, such as
deployment of temporary cash surpluses and inter-project transfer of
machinery and funds. Under the modified procedures, the RBI has permitted
exporters to deploy their temporary cash surpluses, generated outside
India, in instruments such as deposits with overseas branches or
subsidiaries of a bank in India, a triple ‘A’ rate short term paper
abroad, including treasury bills and other monetary instruments with a
maturity of one year or less. Now, exporters are required to approach the
RBI for overseas deployment of their temporary cash. The central bank has
also permitted exporters to open, maintain and operate one or more foreign
currency account in a currency of their choice with inter-project
transferability of funds in any currency or country. Mahindra
Finance, a leader in four-wheeler and tractor finance for the rural and
semi-urban sectors, has set up a 100 per cent owned subsidiary for rural
housing finance. The new subsidiary is waiting for a licence from the
National Housing Bank to commence operations. Financial
Markets Capital
Markets Primary
Market The
government has decided not to extend budgetary support for 2007-08 to
central power PSUs tapping the primary market with initial public offers.
At present, Navratna PSUs are denied budgetary support. It has also been
decided that equity participation by the government at any stage in
companies going public will be through preferential allotment of shares.
The government may decide to subscribe to this from time to time.
At a meeting held at the Planning Commission on January 5 to
finalise the annual plan for 2007-08 for the power ministry, it was
decided that no gross budgetary support would be provided to PowerGrid,
NHPC and Damodar Valley Corporation (DVC), all of which have IPO plans. Autoline
Industries Limited tapped the market by offering 37.5 lakh shares in the
price band of Rs 200-225 per share between January 8 and 12. Secondary
Market The
stock indices have been volatile during the week under review. The BSE
sensex has fallen from 13652 on January 8 to 13362 on January 10 only to
rise for the next two days of the week to close the index at 14057 points.
Thus, over the week, BSE sensex has gained 196 points and NSE ‘s CNX
Nifty has gained 69 points. The fall in the index in the initial part has
been attributed to a correction in Asian markets, with the appreciation of
the rupee, there were concern about the quarterly performance of the IT
sector. However, following robust growth in IIP index of 14.4 per cent and
Infosys announcing good results, the market sentiment has turned positive.
Cairn
About
48 lakh demat accounts have been frozen by the two depositories, National
Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL),
because investors failed to submit Income Tax Department’s Permanent
Account Numbers. NSDL, in a
press release has said that of its 77 lakh demat accounts, 42 lakh
accounts have been frozen. Of this, 16.6 lakh accounts have share holdings
while 18.6 accounts had nil positions.
Pursuant
to the FDI Policy announced by the Government of India in respect of
Foreign Direct Investment in the Indian stock exchanges, five Indian
Institutions: IFCI, IL&FS, ICICI, PNB and GIC have entered into an
agreement with a global stock exchange and three financial institutions to
sell part of their holdings in the National Stock Exchange (NSE). The NYSE
Group, General Atlantic, Goldman Sachs and Softbank Asian Infrastructure
Fund will each acquire 5 per cent stake in the NSE from the above domestic
Institutions. The
Authority on Advance Rulings (AAR) on income tax ruled that the income of
two foreign institutional investors — Fidelity Advisory and Mathew
International — will be taxed as capital gains and not as business
income. The FIIs, which have the option to appeal to the Supreme Court,
had contended that their business income could not be taxed since they did
not have a permanent establishment in India.The AAR’s decision will be
binding irrespective of whether India has a double taxation treaty with an
FII’s country of origin. The FIIs had appealed to the Derivatives
Securities
transaction tax (STT) continues to be a deterrent for options trading
despite the NSE easing brokerage norms. Members said though the exchange
has asked members to charge brokerage on the premium and not on the strike
price from this month, STT continues to be levied on the strike price. As
per a NSE circular, trading members should “charge brokerage for options
contracts on the premium at which the option contract was bought or sold
and not on the strike price. Brokerage on options contracts shall not
exceed 2.5 per cent of the premium amount or Rs 100, whichever is higher.
This would mean that if an option contract for a stock currently traded at
Rs 100 was bought at a premium of Rs 10, earlier the investor was required
to pay brokerage for the strike price of Rs 110. While as per the
rationalised structure, investors are required to pay brokerage only on
the premium of Rs 10, they still need to pay STT for the strike price of
Rs 110. “This is illogical. If the government indeed wants to push the
options segment, the STT should also be on the premium amount,” said a
dealer. STT on the sale side is fixed at 0.017 per cent. In the
derivatives segment, the daily turnover in futures segment is over Rs
25,000 crore, while the turnover in options is about Rs 2,500-2,800 crore.
Vijay Singhania, president of the Association of NSE Members of India,
said the association had requested before the authorities concerned on the
need to bring down STT on par with the rationalised structure. He felt
that the new structure was very complicated and difficult for the members
to execute. “The expenditure in options is similar to stock futures.
When an investor sells options, and if the price goes up, there is no
requirement of mark-to-margin. But if the price comes down, we need to
keep mark-to-margin,” he explained. Kirit Somaiya of the Investor
Grievance Forum, however, was of the view that the derivatives segment
encouraged day traders. He felt that the government should discourage
speculative trading by tightening the rules in F&O segment, so that
small investors stayed away from derivatives.
Government
Securities Market Primary
Market RBI
conducted the sale (re-issue) of 8.33 per cent 2036 for a notified amount
of Rs.4, 000 crore. The cutoff yield of security was 8.2379 per cent
respectively, as against 7.63 per cent set in the previous month. Four
State Governments have announced the sale of 10-year State Development
Loans (SDLs) for an aggregate amount of Rs.1, 214.59 crore through a yield
based auction using multiple price auction method on January 18, 2007. The
cut-off yield in 91-day T-Bill auction remained steady at 7.1443 per cent
as against 7.1443 per cent during the previous week. The cut-off yield in
182-day T-Bill auction moved lower to 7.1447 per cent as against the
previous cut-off yield of 7.2954 per cent. Secondary
Market During
the week, the weighted average call rates during the period ranged between
7.68 per cent and 8.35 per cent, while weighted average repo rates ranged
between 7.25 per cent and 7.58 per cent and the weighted average CBLO
rates ranged between 7.23 per cent and 7.50 per cent. The average volumes
of Call, Repo and CBLO segments were Rs.13375.49 crore, Rs.5976.22 crore
and Rs.16370.93 crore respectively. The daily average outstanding amounts
in the LAF (reverse repo) and LAF (repo) operations conducted during the
period were Rs.278 crore and Rs.18555 crore respectively. The
weighted average YTM of 7.59 per cent 2016 bond was 7.5308 per cent on
January 12, 2007 as compared to 7.5576 per cent on January 05, 2007. The
Union Cabinet approved the promulgation of an Ordinance to amend the
Banking Regulation Act, 1949, which will give the RBI flexibility to set
the statutory liquidity ratio (SLR) for banks. At present, the banks are
required to maintain at least 25 per cent of the deposits under SLR by
investing in government securities. The
Governing Council of the ECB left unchanged minimum bid rate on the main
refinancing operations, the interest rates on the marginal lending
facility and the deposit facility at 3.50 per cent, 4.50 per cent and 2.50
per cent, respectively. The
Monetary Policy Committee of Bank of England increased the official Bank
Rate paid on commercial bank reserves by 25 basis points to 5.25 per cent. Foreign
Exchange Market The
six-month forward premia closed at 3.3 per cent (annualized) on January
12, 2007 vis-à-vis 3.56 per cent on January 05, 2007. Commodities
Futures derivatives RBI
has specified a minimum margin requirement of 50 per cent and minimum cash
margin requirement of 25 per cent (within the margin of 50 per cent) to
the guarantees issued by the commercial banks on behalf of commodity
brokers in favor of national-level commodity exchanges. Yashwant
Bhave, secretary, department of consumer affairs said at
the inauguration of the sixth National Conference on Commodities
Exchanges, that the guidelines for foreign direct investment (FDI) in
commodities exchanges, was under preparation with the department of
consumer affairs, would be announced in near future.
He further said that a record 277 per cent growth in commodities
futures speaks for itself, with no other sector recording such a
spectacular growth in a short span of time. This year, till December,
commodities exchanges have clocked a turnover of Rs 27 lakh crore.
Commodities exchanges are a major component of the regulatory
framework and the onus on enforcing market integrity and transparency,
therefore, rests primarily on the exchanges, which are self-regulatory
organisations (SROs). He asked the regulator and the exchanges to remain
vigilant so that market participants would strictly adhere to the rules
and regulations laid down by the government.
On the Bill amending the Forward Contracts (Regulation) Act, 1952, which was introduced by the Parliament in March 2006 and examined by the Parliamentary Standing Committee, he added that the committee has already submitted its report considering the details on three important issues. The issues include a need for balancing the interest of both the producers and the consumers, a need for market awareness among all stakeholders and quality control and grading of agricultural produce on a priority to align them with commodities futures. The committee has also recommended the need to bring spot and futures commodities markets under a single regulator. National
commodity bourses – the Multi Commodity Exchange (MCX) and the National
Commodity & Derivatives Exchanges (NCDEX) – are planning to launch
commodity-specific electronic spot trading in mandis of different states.
For this, the comexes are awaiting clarifications from the state
governments with regard to amendments in the Agricultural Produce
Marketing Committee (APMC) Act. The purpose of an electronic spot exchange
is to empower farmers with decision-making capabilities by disseminating
the national data electronically at the mandi. In Domestic
wheat prices are expected to remain rangebound despite the 2.2 million
tonne (MT) rise in global output estimates for January on bumper harvest
in Insurance ICICI
Prudential Life Insurance has hiked its capital base by Rs 230 crore to Rs
1815 crore. This is the third equity infusion in the current financial
year and the total increase this year has been Rs 630 crore. The two
partners, ICICI Bank and Prudential Plc, have contributed to the capital
infusion based on their 74:26 per cent equity stake respectively. Bharti
Enterprises and French insurer AXA have signed a memorandum of
understanding to establish a joint venture company in the domestic general
insurance business. Bharti Enterprises will hold a 74 per cent equity
stake while AXA will have the rest of the 26 per cent. The joint venture,
which will be headquarted in Corporate
Sector Infosys Technologies Ltd has posted better than expected third quarter profit growth, though a strong rupee blunted its revenues and operating margins. Infosys reported a 51.5 per cent growth in its net profits at Rs 983 crore for the quarter ended December 31, 2006 over the corresponding quarter last year. HDFC Bank has recoreded 31.74 per cent rise in third quarter net profit to Rs 296 crore for the quarter ended December 31, 2006 against Rs 224 crore for the corresponding quarter of the previous year, on a robust rise in net interest income and an improvement in net interest margin.
*These statistics and the accompanying review are a product arising from the work undertaken under the joint ICICI research centre.org-EPWRF Data Base Project. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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