Economic Survey 2009-2010

http://economictimes.indiatimes.com/economicsurvey.cms

India on track for 7% growth; reforms urged 2 Jul 2009, 1224 hrs IST India's fiscal deficit ballooned to 6.2 percent in 2008-09 as the government unleashed stimulus spending to insulate the economy against the global downturn.

Survey prescribes tax cuts as part of another stimulus 2 Jul 2009, 1241 hrs IST The economic survey suggested tax cuts and increase in govt expenditure as part of another stimulus package to help the economy overcome the global shock.

Phase out cesses; bring new income tax code 2 Jul 2009, 1239 hrs IST The Survey, tabled in Parliament, also called for reviewing commodities transaction tax, which was proposed in the Budget for 2008-09 but not notified.

Govt should raise Rs 25K cr from divestment a year 2 Jul 2009, 1209 hrs IST As regards the loss-making PSUs, the Survey said the government needs to "auction all loss making PSUs that cannot be revived.

Phase out cesses; bring new income tax code

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• Decontrol petrol, diesel prices: Economic Survey
• Six lakh jobs losses in India in four months
• Govt should raise Rs 25,000 cr from disinvestment every year
• Bring all financial mkt regulations under SEBI: Survey

Survey prescribes tax cuts as part of another stimulus

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• Tax system still complex: Economic Survey
• Bring in sweeping tax reforms; eliminate cess, surcharges: ES
• Power cos eye tax sops, pro-investment moves

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Survey calls for more FDI, wants changes in sops, taxes etc

Survey Document

We enlist all the chapters of the economic survey. Simply click and download. Chapter 1: State of the Economy Chapter 2: Challenges, Policy Response and Medium-Term Prospects Chapter 3: Fiscal Developments and Public Finance Chapter 4: Prices and Monetary Management Chapter 5: Financial Intermediation and Markets Chapter 6: External Sector Chapter 7: Agriculture and Food Management Chapter 8: Industry Chapter 9: Energy, Infrastructure and Communications Chapter 10: Human Development, Poverty and Public Programmes Source: Ministry of Finance, Government of India.

Source: Economic Times, Moneycontrol

Nifty to touch 6000 if it crosses 4650: Rakesh Jhunjhunwala

Nifty to touch 6000 if it crosses 4650: Rakesh Jhunjhunwala

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In a candid interview with CNBC-TV18’s Udayan Mukherjee, Rakesh Jhunjhunwala, one of India’s most respected equity investors, said the Sensex could go up to 20,000 and then slip into a trading range between 15,000 and 16,000. The benchmark index won’t hit 21,000 in a straight run though, the Big Bull said.
“If the Nifty breaks 4650 decisively and holds for a week or so, it could hit 5900-6000,” Jhunjhunwala said. The markets would consolidate between 4,000-5,000 for three-four years, he added.
The correction seen in the latter part of 2008, he said, was a part of a major bull run that continues and which started in September 2001. “The bull market started in September 2001. We had the first leg up to September 2002 after which there was a correction. Then it started from April 2003, that leg lasted till 21,000,” the ace investor said. “That gets corrected back now to 7,500-8,000 and now we have resumed that bull market. So we can go to 20,000 and again come back to 16,000-15,000, make a range and then make a move which goes above 21,000.”
Excerpts from Rakesh Jhunjhunwala’s exclusive interview on CNBC-TV18. Also watch the video.
Q: We spoke on the day after the election results. I do not think even we imagined the market would be here. What is the screen telling you now?
A: The screen is telling me that the bear correction of the larger bull market in India is over. If the markets do not break below 4,000 levels in the next six-nine months — and the screen is telling us they won’t — then surely the fall from 6,000 to 2,500 for the Nifty and from 21,000 to 7,500-8,000 for the index was just a correction in the longer-term bull market in India. Actually, in my opinion, the correction started in September 2001 because the real bottom the market made was post-September 11, 2001 and then the market went up to 3,500 and had a historic correction back from April 2003.
Despite people’s apprehension and doubts about the economic scenario worldwide, it could be that the fall [in 2008] was just a correction. I also feel so because of the way the [subsequent] rise took place with its tremendous breadth, tremendous pace with good volumes — but with a lot of cynicism and lack of participation among the larger people.
Q: You do not agree with the consensus feeling right now that we should be scared by the pace of the rise. That we are now approaching a mini bubble kind of a situation?
A: You first asked what the screen was saying, you never asked me what my opinion was.
Just like others, there is a fair amount of doubt in my mind too. Internationally, things are not clear at all and I do not think that the downturn in the western economies — even if there is some kind of an improvement in the next 12-24 months — has really peaked. So with that knowledge about the world economy, it clouds the judgement of what can happen in India.
However, If you look at the other side of the story, I see no reason why — if Indian software exports grow by 10-15%, commodity prices hold at reasonable levels and we have good government policies — India cannot grow at double digits. We have large internal savings. If we do well, the world capital will be at our doorsteps, there will be no lack of capital if the government is able to facilitate investments. So those are the two sides but I am more tilted towards the second side because in the initial stages, they say, bull markets always go up on a wall of worry and bear markets always go down on a ray of hope.
The fact is that market is just going up in an unexpected pace and everybody is worrying. Surely I am also apprehensive about the valuation and the pace but markets are markets.
Q: When you look at the screen, what worries you? Does it worry you that valuations are far ahead of fundamentals or do you see the kind of participation or mania that you saw in 2007 or that is not visible just yet?
A: Not at all, not even 5%. I don’t go to any cocktail party where stock markets are even talked because everybody is totally left out. And the futures positions are indicative, the number of calls you get, the apprehension that people have in the buy stocks — I don’t know where the buyers are coming from but I don’t think there is even 20% of the participation of that what was in 2007.
Q: Will they all get sucked in you think before this rally tops out, people who have been sitting out?
A: It is very difficult to leave a burning cigarette in a rising market. Everybody will ultimately join. I don’t know how many calls I got when we made a 52-week high. Normally, a lot of channels call me, no channel called me to get an opinion when the market was at a 52-week high. I don’t even know how many people know we were at a 52-week high.
So I think crowd psychology-wise or sentiment-wise, I don’t think at all we are anywhere near any kind of a top.
Q: Are you trading yourself with a bit more caution because you were saying you are also in two minds right now or are you trading the kind of volumes you were trading in the big momentum of 2007?
A: I don’t think I am trading the way II was in 2007. After all, I am a human too and I am also affected by what my thoughts are. However, I am far surer about the [country’s] longer-term growth prospects and the strength than most people.
On next page: Rakesh Jhunjhunwala on market range ahead
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Nifty to touch 6000 if it crosses 4650: Rakesh Jhunjhunwala
Need reforms, FDI in insurance at 49%: Sunil Mittal
See 8% GDP in next 2-3 years: Uday Kotak

Source:Moneycontrol.com

Govt mulls 10% stake sale in BHEL

Govt mulls 10% stake sale in BHEL

NEW DELHI: The government on Friday said it is considering offloading 10 per cent of its equity stake in navratna public sector unit BHEL. "The point of disinvestment (in BHEL) is still under consideration... the government has definitely a positive thinking on that line," Minister of Heavy Industries and Public Enterprises Vilasrao Deshmukh said when asked whether the government is considering divesting 10 per cent in the company. Addressing his first conference after taking charge as the Cabinet Minister, Deshmukh said his department would back the disinvestment policies of the government. BHEL is a power equipment Rs 28,000 crore listed company. Its stock is trading at Rs 2,060.10 on the Bombay Stock Exchange. The government, if it chooses to further disinvest its stake in the company, will have to come with a follow-on public offer. The government at present holds a 67.72 per cent equity stake in power equipment maker BHEL, which would come down to 57.72 per cent if it divests 10 per cent equity. Minister of Heavy Industries and Public Enterprises Vilasrao Deshmukh while announcing the 100-day agenda for its department said that BHEL would enter into an agreement with Indian Railways for supply of stainless steel EMU coaches on a long term basis. BHEL would synchronise eight thermal and hydro sets to generate 1,200 MW capacity in the next 100 days, he said. He said, BHEL would sign an agreement with Madhya Pradesh Power Generation Company for setting up a joint venture to build,own and operate 2x800 MW super critical power plant in Bansagar in the state and also sign a similar agreement with Gujarat State Electricity Generation Co for the setting-up of a 1x800 MW supercritical thermal power plant. The company would synchronise five captive power plants totalling 228 MW of capacity as a part of its 100-day agenda.

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Mahindra Holidays fixes IPO price band at Rs 275-325/sh

Mahindra Holidays fixes IPO price band at Rs 275-325/sh

Mahindra Holidays and Resorts India (MHRIL), one of the leading leisure hospitality providers in India offering quality family holidays and a part of Mahindra Group, is entering the capital market with an initial public offering of 92,65,275 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process.

The bid/ issue will open on June 23, 2009, and close on June 26, 2009. The IPO price band is fixed at Rs 275-325 per share. The size of the issue will be Rs 301 crore at the upper end of the price band and Rs 255 crore at the lower end of the band. M&M (Mahindra and Mahindra) will raise Rs 90.7-123 crore from the sale of 33 lakh shares and it will hold 83% of the Mahindra Holidays post issue.

The issue has been assigned 4 out of 5 IPO grading by Fitch Ratings India Private Limited reflecting 'above average fundamentals’ of the issue relative to other listed equity securities.

The issue comprises a fresh issue of 58,96,084 equity shares and an offer for sale of 33,69,191 equity shares by Mahindra and Mahindra (the “selling shareholder”). The issue would constitute 11.0% of the fully diluted post-issue paid-up capital of the company.

The proceeds from MHRIL’s proposed issue are expected to be deployed in the setting up of new projects and expansion of some of the existing resorts, to provide a larger range of resorts, and hence a wider choice of holiday destinations to members.

Mr Arun Kumar Nanda, Chairman, MHRIL, said, "It is a proud moment that the Mahindra & Mahindra Group’s leisure hospitality and vacation ownership company with an integrated business model is poised to tap the capital markets. The business of MHRIL has been supported by changing demographics, strong economic growth and increasing disposable incomes in India over the last three years. We believe MHRIL’s brands, inventory, distribution of resorts and its integrated model, combined with the company being an early mover in the industry, will give it significant competitive advantage.”

The global coordinator and book running lead manager (BRLM) is Kotak Mahindra Capital Company Limited. HSBC Securities & Capital Markets (India) Private Limited and SBI Capital Markets are the BRLMs. The equity shares are proposed to be listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited.

MHRIL, one of the leading players in the leisure hospitality industry, offers quality family holidays primarily through vacation ownership memberships. MHRIL’s flagship brand is Club Mahindra Holidays, which has been selected as Superbrand 2009. MHRIL has also introduced new vacation ownership offerings such as Zest and Club Mahindra Fundays, Mahindra Homestays, travel and holiday related services through clubmahindra.travel. The cumulative member base increased to 92,825 in fiscal 2009 from 38,691 in fiscal 2006. As of May 31, 2009, MHRIL has 96,067 members and 27 resorts across India and Thailand. About 35.18% of new member additions in FY09 came from referrals by existing members.

Mahindra Holidays had initially filed offer documents in December 2007 but did not proceed due to unfavourable market conditions. The company refiled its draft offer documents with SEBI on 30 September 2008.

It had sold a 2% stake to SBI and 1% stake to Jacob Ballas as pre-IPO placement at Rs 478/share in January 2008. It raised Rs 120 crore through a 3% sale.

Its reported FY09 sales were at Rs 400 crore and profit was at Rs 80 crore.

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• Sebi scraps entry load for MFs, cuts fees of intermediaries
• Mkts end strong led by capital goods, metals, banks

Source: Moneycontrol.com