General Affairs
Steps Taken To Ensure Border Concerns Addressed: Centre
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The government today said steps have been taken to ensure that concerns pertaining to the borders are adequately addressed. The comment by Minister of State for Defence Subhash Bhamre came in the Rajya Sabha at a time when the armies of India and China are in a standoff in Dokalam in the Sikkim sector.
Replying to a question on whether Chinese troops have entered Indian territory several times recently, he said "transgressions" do occur as both sides have differing perception about the Line of Actual Control or LAC.
"Since there is no commonly delineated LAC in the border areas between India and China, there are areas along the LAC where both sides have differing perception of the LAC. Due to both sides undertaking patrolling up to their respective perception of the LAC, transgressions do occur," he said.
The minister said the government had acquired 5,881 acres of land from residents of Arunachal Pradesh post-1962 war with China and paid them a total compensation of Rs.165.95 crore.
On construction of roads by the Border Roads Organisation in border areas, Mr Bhamre said there were delays in execution of 61 India-China Border Roads (ICBR) by the BRO due to a variety of reasons, including delay in land acquisition and limited working seasons.
Mr Bhamre said out of 61 ICBRs of 3,417 kilometres entrusted to the BRO, 27 ICBRs covering 963 km have been completed. The remaining 34 ICBRs will be completed in phases by December 2022.
Asked about steps taken by the government to boost infrastructure in border areas and safeguard people living there, he said the government is fully seized of the security needs of the country.
"Necessary steps as required have been initiated to ensure that the national security concerns pertaining to borders are adequately addressed through capability and infrastructure development," Mr Bhamre said.
To another query, he said required measures including development of infrastructure like rail, road and airfields are taken to safeguard the sovereignty, territorial integrity and security of India.
"Further, military capacity enhancement and modernisation of the armed forces including armament and ammunition is a dynamic and continuous process and is done in consonance with our threat perception," Mr Bhamre said.
On reported incursions by Chinese troops in Ladakh and the Northeast, Mr Bhamre said there have been no such instances.
Referring to steps taken to modernise the armed forces, Mr Bhamre said the government spent Rs. 65,862 crore for capital acquisition for the armed forces in 2014-15, Rs. 62,235 crore in 2015-16 and Rs. 68,252 crore in Rs. 68,252 crore.
To a separate question on induction of the Tejas Light Combat Aircraft or LCA into the Indian Air Force, Mr Bhamre said the final operational clearance is expected to be completed by June next year. He said the LCA MK 2 is in the design and development stage.
"Since there is no commonly delineated LAC in the border areas between India and China, there are areas along the LAC where both sides have differing perception of the LAC. Due to both sides undertaking patrolling up to their respective perception of the LAC, transgressions do occur," he said.
The minister said the government had acquired 5,881 acres of land from residents of Arunachal Pradesh post-1962 war with China and paid them a total compensation of Rs.165.95 crore.
On construction of roads by the Border Roads Organisation in border areas, Mr Bhamre said there were delays in execution of 61 India-China Border Roads (ICBR) by the BRO due to a variety of reasons, including delay in land acquisition and limited working seasons.
Mr Bhamre said out of 61 ICBRs of 3,417 kilometres entrusted to the BRO, 27 ICBRs covering 963 km have been completed. The remaining 34 ICBRs will be completed in phases by December 2022.
Asked about steps taken by the government to boost infrastructure in border areas and safeguard people living there, he said the government is fully seized of the security needs of the country.
To another query, he said required measures including development of infrastructure like rail, road and airfields are taken to safeguard the sovereignty, territorial integrity and security of India.
"Further, military capacity enhancement and modernisation of the armed forces including armament and ammunition is a dynamic and continuous process and is done in consonance with our threat perception," Mr Bhamre said.
On reported incursions by Chinese troops in Ladakh and the Northeast, Mr Bhamre said there have been no such instances.
Referring to steps taken to modernise the armed forces, Mr Bhamre said the government spent Rs. 65,862 crore for capital acquisition for the armed forces in 2014-15, Rs. 62,235 crore in 2015-16 and Rs. 68,252 crore in Rs. 68,252 crore.
To a separate question on induction of the Tejas Light Combat Aircraft or LCA into the Indian Air Force, Mr Bhamre said the final operational clearance is expected to be completed by June next year. He said the LCA MK 2 is in the design and development stage.
Seven Die As Politician's Under-Renovation House Collapses In Mumbai
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Seven people including a baby were killed when a four-storey building in Mumbai's suburb Ghatkopar came crashing down on Tuesday morning. Mumbai Mayor Vishwanath Mahadeshwar ordered an inquiry after local residents linked the collapse to a massive renovation being carried out in the ground floor by a local politician linked to the Shiv Sena.
Shortly after the fire department received the first call at 10.43 am, the chief fire officer Prabhat Rahangdale said many people were believed trapped under the rubble in Ghatkopar's Damodar Park area.
As local residents and Mr Rahangdale's team started the rescue effort, they were able to pull out nearly two dozen people from under the debris over the next few hours. Not everyone made it.
By evening, seven people had died
The police said the building - apart from the nursing home on the ground floor - was also home to 12 families.
Former Congress corporators Pravin Chedda said the nursing home was run by Sunil Shitap and Swati Sunil Shitap, who were linked to the Shiv Sena.
Swati Sunil Shitap had contested the last elections to the Brihanmumbai Municipal Corporation, better known as BMC, earlier this year on a Shiv Sena ticket.
"This hospital has been shut for the past 2 months. He (Sunil Shitap) wants to make a guest house here... He should be arrested," Mr Chedda said.
Mumbai Mayor Mahadeshwar who is also from the Shiv Sena promised the guilty would not be spared. "There will be a full investigation done on this issue and whoever it may be, if he is guilty then there will be a strong action taken against him," he said.
There have been several instances of buildings collapsing during the monsoon. In many instances, the incident was linked to illegal construction or people staying in buildings despite being classified as dilapidated.
In August last year, 8 people were killed after a portion of a two-storey building collapsed in Bhiwandi on the outskirts of Mumbai. In October, 6 children died after a five-storey building had collapsed in Mumbai's Bandra East,
A dilapidated building killed 12 people when it collapsed outside Mumbai in August 2015. Nine people had died the same month when another old three-storeyed building collapsed in monsoon rain in the Mumbai suburb of Thakurli.
Shortly after the fire department received the first call at 10.43 am, the chief fire officer Prabhat Rahangdale said many people were believed trapped under the rubble in Ghatkopar's Damodar Park area.
By evening, seven people had died
The police said the building - apart from the nursing home on the ground floor - was also home to 12 families.
Former Congress corporators Pravin Chedda said the nursing home was run by Sunil Shitap and Swati Sunil Shitap, who were linked to the Shiv Sena.
"This hospital has been shut for the past 2 months. He (Sunil Shitap) wants to make a guest house here... He should be arrested," Mr Chedda said.
Mumbai Mayor Mahadeshwar who is also from the Shiv Sena promised the guilty would not be spared. "There will be a full investigation done on this issue and whoever it may be, if he is guilty then there will be a strong action taken against him," he said.
There have been several instances of buildings collapsing during the monsoon. In many instances, the incident was linked to illegal construction or people staying in buildings despite being classified as dilapidated.
In August last year, 8 people were killed after a portion of a two-storey building collapsed in Bhiwandi on the outskirts of Mumbai. In October, 6 children died after a five-storey building had collapsed in Mumbai's Bandra East,
A dilapidated building killed 12 people when it collapsed outside Mumbai in August 2015. Nine people had died the same month when another old three-storeyed building collapsed in monsoon rain in the Mumbai suburb of Thakurli.
No Proposal To Form Panel To Look Into Gorkhaland Demand, Says Government
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The government on Tuesday said there is no proposal to constitute a committee to look into the merits and demerits of the demand for a separate state for the Gorkhas and others agitating for the same cause in Darjeeling.
Union Minister of State for Home Affairs Hansraj Gangaram Ahir stated this in a written reply to a question in the Lower House of Parliament.
Darjeeling has been witnessing an indefinite strike called by the Gorkha Janmukti Morcha (GJM), demanding a separate state of Gorkhaland, since June 12. Several police stations and government offices have been torched by protestors in the hill station.
"Violence and damage to public property have been reported during the agitations," said Mr Ahir.
He added that according to the Constitution, the states were primarily responsible for the maintenance of law-and order.
The Centre, on a request from a state government, provided assistance by sending Central Armed Police Forces (CAPFs) personnel, said the minister.
Similarly, CAPF battalions were provided to the West Bengal government as well for the maintenance of law-and-order in the Darjeeling hills, he added.
Union Minister of State for Home Affairs Hansraj Gangaram Ahir stated this in a written reply to a question in the Lower House of Parliament.
"Violence and damage to public property have been reported during the agitations," said Mr Ahir.
He added that according to the Constitution, the states were primarily responsible for the maintenance of law-and order.
The Centre, on a request from a state government, provided assistance by sending Central Armed Police Forces (CAPFs) personnel, said the minister.
Similarly, CAPF battalions were provided to the West Bengal government as well for the maintenance of law-and-order in the Darjeeling hills, he added.
China Bound To Be A Future Threat To India: Army Vice Chief
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China is bound to be a threat to India in the years to come, Indian Army's Vice Chief Sarath Chand said on Tuesday as a stand-off between Indian and Chinese troops continues along the border in the Sikkim sector.
Addressing a joint seminar of the Army's Master General Ordnance and Confederation of Indian Industry, Lieutenant General Chand said: "On the North, we have China which has a large landmass, huge resources and a large standing army....despite having the Himalayas between us, China is bound to be a threat for us in the years ahead."
He also said that China was racing with the US in militarisation.
"As the second largest economy in the world, it is racing to catch up with the US," he said.
According to latest figures released by Stockholm International Peace Research Institute (SIPRI), the US remains world's largest spender on defence registering a growth of 1.7 per cent between 2015 and 2016 to $611 billion while China is second on the list spending $215 billion in 2016, an increase of 5.4 percent.
India was fifth largest military spender in the world in 2016 at $55.9 billion, with its military expenditure growing around 8.5 per cent from the previous year.
The Army Vice Chief also noted that a large amount of China's defence spending remains undeclared.
"A large portion of Chinese defence expenditure remains undeclared... On the west, Pakistan smaller economy, smaller army... thus they took route of low intensity conflict, which suits China," he said.
Lieutenant General Chand also stressed that India needs to pay more attention to security.
"We have to pay much more attention to security, that's what we are doing now. India, being at the center of the volatile region is the net security provider," he added.
A stand-off is continuing between Indian and Chinese troops along the border in the Sikkim sector, after China attempted road construction in Bhutan's territory around mid-June.
Both sides have reinforced troops and are maintaining position along the border, with no signs of a withdrawal soon.
Lieutenant General Chand also slammed Pakistan for targeting a school building in cross border firing, adding that India would never do something like that.
"Pakistan shelled schools, it is not something we would do; when we retaliate we assure Pakistani military is targeted. It is unfortunate to see that they've stooped so low and caused casualty to the children," he said.
Addressing a joint seminar of the Army's Master General Ordnance and Confederation of Indian Industry, Lieutenant General Chand said: "On the North, we have China which has a large landmass, huge resources and a large standing army....despite having the Himalayas between us, China is bound to be a threat for us in the years ahead."
"As the second largest economy in the world, it is racing to catch up with the US," he said.
According to latest figures released by Stockholm International Peace Research Institute (SIPRI), the US remains world's largest spender on defence registering a growth of 1.7 per cent between 2015 and 2016 to $611 billion while China is second on the list spending $215 billion in 2016, an increase of 5.4 percent.
India was fifth largest military spender in the world in 2016 at $55.9 billion, with its military expenditure growing around 8.5 per cent from the previous year.
The Army Vice Chief also noted that a large amount of China's defence spending remains undeclared.
"A large portion of Chinese defence expenditure remains undeclared... On the west, Pakistan smaller economy, smaller army... thus they took route of low intensity conflict, which suits China," he said.
Lieutenant General Chand also stressed that India needs to pay more attention to security.
"We have to pay much more attention to security, that's what we are doing now. India, being at the center of the volatile region is the net security provider," he added.
A stand-off is continuing between Indian and Chinese troops along the border in the Sikkim sector, after China attempted road construction in Bhutan's territory around mid-June.
Both sides have reinforced troops and are maintaining position along the border, with no signs of a withdrawal soon.
Lieutenant General Chand also slammed Pakistan for targeting a school building in cross border firing, adding that India would never do something like that.
"Pakistan shelled schools, it is not something we would do; when we retaliate we assure Pakistani military is targeted. It is unfortunate to see that they've stooped so low and caused casualty to the children," he said.
PM Modi Briefed After 357 Bureaucrats, 24 IAS Officers Punished For Poor Performance
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Perform or perish'. This is one of the mantras of good governance being followed by the Modi government to make its workforce accountable, a senior personnel ministry official has said.
The ministry has taken actions like premature retirement and cut in remuneration against 381 civil services officers, including 24 from the Indian Administrative Service (IAS) officers, for being non-performers and allegedly being involved in illegal activities, he said.
It highlighted these measures in a booklet titled '3 years of sustained HR initiatives: Foundation for a new India' and in a presentation made before Prime Minister Narendra Modi recently. "To ensure accountability of bureaucracy, the government has made probity and performance the twin pillars on which good governance rests," the booklet said.
Strict action has also been initiated against officers on foreign postings who were continuing on such assignments beyond their approved tenures, it said. "These strict measures have gone a long way towards inculcating a sense of discipline and accountability in the bureaucracy and have sent a message to employees to either perform or perish, while having a positive impact on the performing workforce," the ministry said.
It said the records of 11,828 Group A officers, including 2,953 all India services like the IAS, the Indian Police Service (IPS) and the Indian Forest Service (IFoS), were reviewed. The service records of 19,714 Group B officers were also reviewed to eliminate the deadwood and the corrupt.
In the presentation before the prime minister, the ministry said action was taken against 381 bureaucrats.
A total of 25 Group A officers, including one IAS and two IPS, and 99 Group B officers were prematurely retired by the government, the ministry said.
As many as 21 civil servants, including ten IAS officers, deemed to have resigned, it said.
The penalties like dismissal, removal or compulsorily retirement and cut in pension was imposed on 37 Group A officers that included five from the IAS. In addition to this, 199 Group A officers, including eight from the IAS, were penalised on remuneration, it said.
The ministry, while highlighting its initiatives, said there was "visible demonstration of the will of the State in punishing wrongdoers".
The ministry has taken actions like premature retirement and cut in remuneration against 381 civil services officers, including 24 from the Indian Administrative Service (IAS) officers, for being non-performers and allegedly being involved in illegal activities, he said.
It highlighted these measures in a booklet titled '3 years of sustained HR initiatives: Foundation for a new India' and in a presentation made before Prime Minister Narendra Modi recently. "To ensure accountability of bureaucracy, the government has made probity and performance the twin pillars on which good governance rests," the booklet said.
It said the records of 11,828 Group A officers, including 2,953 all India services like the IAS, the Indian Police Service (IPS) and the Indian Forest Service (IFoS), were reviewed. The service records of 19,714 Group B officers were also reviewed to eliminate the deadwood and the corrupt.
In the presentation before the prime minister, the ministry said action was taken against 381 bureaucrats.
A total of 25 Group A officers, including one IAS and two IPS, and 99 Group B officers were prematurely retired by the government, the ministry said.
As many as 21 civil servants, including ten IAS officers, deemed to have resigned, it said.
The penalties like dismissal, removal or compulsorily retirement and cut in pension was imposed on 37 Group A officers that included five from the IAS. In addition to this, 199 Group A officers, including eight from the IAS, were penalised on remuneration, it said.
The ministry, while highlighting its initiatives, said there was "visible demonstration of the will of the State in punishing wrongdoers".
Business Affairs
Jio effect: Airtel Q1 net profit tanks 75% to Rs 367 crore
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The country's largest telecom company Bharti Airtel today posted 74.89 per cent plunge in consolidated net profit to Rs 367 crore for the June quarter of the current fiscal, hit hard by the disruptive pricing of newcomer Reliance Jio.
In contrast, its net income was Rs 1,462 crore in the April-June quarter of last fiscal, 2016-17.
Bharti's total revenue fell 14 per cent to Rs 21,958 crore in the first quarter of 2017-18, from Rs 25,546 crore in the year-ago period.
The earnings numbers came in after market hours.
"The pricing disruption in the Indian telecom market caused by the entry of a new operator continued with industry revenues declining over 15 per cent year-on-year, creating further stress on sector profitability, cash flows and leverage," Gopal Vittal, MD and CEO, India & South Asia, Bharti Airtel said in a statement.
The company appears to have controlled the quarter-on- quarter slide it had been experiencing since the entry of Reliance Jio in September 2016.
Bharti Airtel's net profit dipped marginally when compared sequentially to Rs 373.4 crore in the March quarter.
Incidentally, April-June is the first quarter of charged 4G services by the industry newcomer and rival Reliance Jio.
The country's largest telecom company Bharti Airtel today posted 74.89 per cent plunge in consolidated net profit to Rs 367 crore for the June quarter of the current fiscal, hit hard by the disruptive pricing of newcomer Reliance Jio.
In contrast, its net income was Rs 1,462 crore in the April-June quarter of last fiscal, 2016-17.
Bharti's total revenue fell 14 per cent to Rs 21,958 crore in the first quarter of 2017-18, from Rs 25,546 crore in the year-ago period.
The earnings numbers came in after market hours.
"The pricing disruption in the Indian telecom market caused by the entry of a new operator continued with industry revenues declining over 15 per cent year-on-year, creating further stress on sector profitability, cash flows and leverage," Gopal Vittal, MD and CEO, India & South Asia, Bharti Airtel said in a statement.
The company appears to have controlled the quarter-on- quarter slide it had been experiencing since the entry of Reliance Jio in September 2016.
Bharti Airtel's net profit dipped marginally when compared sequentially to Rs 373.4 crore in the March quarter.
Incidentally, April-June is the first quarter of charged 4G services by the industry newcomer and rival Reliance Jio.
'RBI likely to cut rates next week'
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With the Nifty touching 10,000 mark for the first time, Ashish Parthsarthy, Treasurer at HDFC Bank, talks about the concerns that the risks, especially globally, aren't being priced correctly and any unprecedented event may drag down the market across the globe including India. However, he feels that with inflation falling, the Reserve Bank of India (RBI) may cut rates by 25 basis points (bps) when it meets next week on August 2, 2017 which is also evident with the fall in 10-year G-Sec. Meanwhile with strong flows coming into the market he expects the Indian rupee to remain firm and move in a rage of Rs 64 to 65.5 against the dollar.
Edited excerpts of an interview with Mahesh Nayak:
1)With CPI down do you think the RBI will cut interest rates and why?
CPI for June came at 1.54%. Actual CPI inflation has been consistently coming lower than RBI forecasts. Inflation forecasts by many analysts suggest that the actual inflation for the remainder of this financial will be lower than the revised forecast made by the RBI in their last Monetary Policy review. There is an expectation that the CPI inflation for March 2018 will be below 4 per cent and that the average CPI inflation for this fiscal year will be around 3 per cent. Given that and the fact that the output gap is negative, I think that the RBI will reduce the repo rate by 25 bps in the August review and that there is a good chance that this rate could be reduced by another 25 bps in the January-March 2018 quarter.
2)Why is the market lapping the 10 year G-Sec paper when the same maturity G-Sec paper is trading 50 to 60 bps higher than the 10 year G-Sec? Is it an indication that market is expecting a fall in interest rates?
The benchmark paper always trades at yields lower than the other G-Secs. Whenever there is an expectation of a fall in interest rates the fall in the yield of the benchmark G-Sec is quicker. Yield on other G-Secs eventually fall after some time has elapsed.
3)What is your take on the Indian rupee? And Why? Do you see the rupee appreciating from the current levels which can help India Inc as it would change their credit profile and help in bringing down debt?
The view on the rupee is that it will trade in a narrow band. There is appreciation pressure on the currency because of the strong FDI and FPI (especially debt) flows and a contained current account deficit. These conditions are likely to prevail for some more time and hence the rupee is unlikely to depreciate by a large amount. The RBI could absorb the excess supply of the foreign currency inflows over a period of time thus reducing the appreciation pressure on the rupee. Hence the expectation of range bound USD/INR movement. The range bound exchange rate is unlikely to have any major impact on the industry.
4)What are the concerns you see for our market? Basically what can go wrong that can hamper the rally?
It is expected that the Federal Reserve, ECB and BOE will start reducing the QE in their respective economies. The Fed has stated that they would start the process of reducing their balance sheet size and they are already in the process of increasing the policy rate. The above is likely to reduce the amount of portfolio flows into India. However this is unlikely to have any major impact on Indian markets or on the economy. However there is a widely held view that equity markets around the globe, including India, are richly valued; volatility is extremely low; and risks are not being priced correctly. This opens all the markets to a risk from some unanticipated event. If any such thing happens then one will see large correction in all markets.
With the Nifty touching 10,000 mark for the first time, Ashish Parthsarthy, Treasurer at HDFC Bank, talks about the concerns that the risks, especially globally, aren't being priced correctly and any unprecedented event may drag down the market across the globe including India. However, he feels that with inflation falling, the Reserve Bank of India (RBI) may cut rates by 25 basis points (bps) when it meets next week on August 2, 2017 which is also evident with the fall in 10-year G-Sec. Meanwhile with strong flows coming into the market he expects the Indian rupee to remain firm and move in a rage of Rs 64 to 65.5 against the dollar.
Edited excerpts of an interview with Mahesh Nayak:
1)With CPI down do you think the RBI will cut interest rates and why?
CPI for June came at 1.54%. Actual CPI inflation has been consistently coming lower than RBI forecasts. Inflation forecasts by many analysts suggest that the actual inflation for the remainder of this financial will be lower than the revised forecast made by the RBI in their last Monetary Policy review. There is an expectation that the CPI inflation for March 2018 will be below 4 per cent and that the average CPI inflation for this fiscal year will be around 3 per cent. Given that and the fact that the output gap is negative, I think that the RBI will reduce the repo rate by 25 bps in the August review and that there is a good chance that this rate could be reduced by another 25 bps in the January-March 2018 quarter.
CPI for June came at 1.54%. Actual CPI inflation has been consistently coming lower than RBI forecasts. Inflation forecasts by many analysts suggest that the actual inflation for the remainder of this financial will be lower than the revised forecast made by the RBI in their last Monetary Policy review. There is an expectation that the CPI inflation for March 2018 will be below 4 per cent and that the average CPI inflation for this fiscal year will be around 3 per cent. Given that and the fact that the output gap is negative, I think that the RBI will reduce the repo rate by 25 bps in the August review and that there is a good chance that this rate could be reduced by another 25 bps in the January-March 2018 quarter.
2)Why is the market lapping the 10 year G-Sec paper when the same maturity G-Sec paper is trading 50 to 60 bps higher than the 10 year G-Sec? Is it an indication that market is expecting a fall in interest rates?
The benchmark paper always trades at yields lower than the other G-Secs. Whenever there is an expectation of a fall in interest rates the fall in the yield of the benchmark G-Sec is quicker. Yield on other G-Secs eventually fall after some time has elapsed.
The benchmark paper always trades at yields lower than the other G-Secs. Whenever there is an expectation of a fall in interest rates the fall in the yield of the benchmark G-Sec is quicker. Yield on other G-Secs eventually fall after some time has elapsed.
3)What is your take on the Indian rupee? And Why? Do you see the rupee appreciating from the current levels which can help India Inc as it would change their credit profile and help in bringing down debt?
The view on the rupee is that it will trade in a narrow band. There is appreciation pressure on the currency because of the strong FDI and FPI (especially debt) flows and a contained current account deficit. These conditions are likely to prevail for some more time and hence the rupee is unlikely to depreciate by a large amount. The RBI could absorb the excess supply of the foreign currency inflows over a period of time thus reducing the appreciation pressure on the rupee. Hence the expectation of range bound USD/INR movement. The range bound exchange rate is unlikely to have any major impact on the industry.
The view on the rupee is that it will trade in a narrow band. There is appreciation pressure on the currency because of the strong FDI and FPI (especially debt) flows and a contained current account deficit. These conditions are likely to prevail for some more time and hence the rupee is unlikely to depreciate by a large amount. The RBI could absorb the excess supply of the foreign currency inflows over a period of time thus reducing the appreciation pressure on the rupee. Hence the expectation of range bound USD/INR movement. The range bound exchange rate is unlikely to have any major impact on the industry.
4)What are the concerns you see for our market? Basically what can go wrong that can hamper the rally?
It is expected that the Federal Reserve, ECB and BOE will start reducing the QE in their respective economies. The Fed has stated that they would start the process of reducing their balance sheet size and they are already in the process of increasing the policy rate. The above is likely to reduce the amount of portfolio flows into India. However this is unlikely to have any major impact on Indian markets or on the economy. However there is a widely held view that equity markets around the globe, including India, are richly valued; volatility is extremely low; and risks are not being priced correctly. This opens all the markets to a risk from some unanticipated event. If any such thing happens then one will see large correction in all markets.
It is expected that the Federal Reserve, ECB and BOE will start reducing the QE in their respective economies. The Fed has stated that they would start the process of reducing their balance sheet size and they are already in the process of increasing the policy rate. The above is likely to reduce the amount of portfolio flows into India. However this is unlikely to have any major impact on Indian markets or on the economy. However there is a widely held view that equity markets around the globe, including India, are richly valued; volatility is extremely low; and risks are not being priced correctly. This opens all the markets to a risk from some unanticipated event. If any such thing happens then one will see large correction in all markets.
I-T dept probing 30,000 cases where ITRs revised after demonetisation: CBDT
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The Income Tax department is probing over 30,000 cases of alleged tax evasion wherein the returns (ITRs) were revised by assessees post demonetisation, CBDT chief Sushil Chandra said today.
The Income Tax returns filed after November 8 last year were scrutinised against their earlier tax compliance following which these cases were detected, he said.
"We are taking action in these instances," Chandra told reporters on the sidelines of an event to mark the 157th Income Tax day here.
He said that after the first phase of 'Operation Clean Money', it was found that some assessees did not report about all their bank accounts to the taxman.
Under the Operation Clean Money, the I-T department is contacting those whose bank account deposits were seen to be suspicious post the note ban.
"We have found that they (assessees) have got more accounts...they have given less accounts in their replies (to the department). We have now informed them through email and want their response over our website," he said.
The Income Tax boss also said that India has an entry rate tax at 5 per cent of the income which is one of the "lowest" across the globe.
"It is a very reasonable rate of taxation....I do not think we can lower it at present," he said.
Talking about the department's action under the newly enacted Benami Transactions Act, Chandra said the taxman has made attachments worth Rs 840 crore in 233 cases till now.
"We have found that many shell companies are owning such (benami) properties. Action will be taken," he added.
The demonetisation of Rs 1,000 and Rs 500 currency notes was announced by Prime Minister Narendra Modi on November 8 last year.
The Income Tax department is probing over 30,000 cases of alleged tax evasion wherein the returns (ITRs) were revised by assessees post demonetisation, CBDT chief Sushil Chandra said today.
The Income Tax returns filed after November 8 last year were scrutinised against their earlier tax compliance following which these cases were detected, he said.
"We are taking action in these instances," Chandra told reporters on the sidelines of an event to mark the 157th Income Tax day here.
He said that after the first phase of 'Operation Clean Money', it was found that some assessees did not report about all their bank accounts to the taxman.
Under the Operation Clean Money, the I-T department is contacting those whose bank account deposits were seen to be suspicious post the note ban.
"We have found that they (assessees) have got more accounts...they have given less accounts in their replies (to the department). We have now informed them through email and want their response over our website," he said.
The Income Tax boss also said that India has an entry rate tax at 5 per cent of the income which is one of the "lowest" across the globe.
"It is a very reasonable rate of taxation....I do not think we can lower it at present," he said.
Talking about the department's action under the newly enacted Benami Transactions Act, Chandra said the taxman has made attachments worth Rs 840 crore in 233 cases till now.
"We have found that many shell companies are owning such (benami) properties. Action will be taken," he added.
The demonetisation of Rs 1,000 and Rs 500 currency notes was announced by Prime Minister Narendra Modi on November 8 last year.
Nifty scales 10,000 mark, Sensex at all-time high: Five factors that led to the rally
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The Nifty on Wednesday crossed the 10,000 mark for the first time ever in its 21 year history. The Sensex too hit an all-time high of 32,374 in early trade. The Sensex and Nifty surged nearly 21 percent this year and are likely to hit new highs in the near future, say analysts.
We look at factors which led to the Nifty scaling the five-digit mark and Sensex reaching new highs.
Strong quarterly earnings
The first quarter earnings of corporate India have come above street expectations and buoyed market sentiments.
Dalal street behemoth Reliance Industries posted a 8.59 per cent year-on-year (YoY) rise in standalone net profit at Rs 8,196 crore for the quarter ended June 2017 against Rs 7,548 crore reported for the corresponding quarter last year.
IT major Wipro reported a 1.2 per cent rise in its consolidated net profit at Rs 2,076.7 crore for the April-June quarter. The Bengaluru-based firm had registered a net profit of Rs 2,052 crore in the same quarter last year.
Infosys reported a 1.4 percent rise in Q1 net profit on Friday, posting Rs 3,483 crore in net profit compared with Rs 3,436 crore in the corresponding period of last fiscal. Analysts had, on average, estimated a consolidated net profit of Rs 3,439 crore for the quarter ending June, according to Thomson Reuters data.
Private sector lender HDFC Bank reported a 20.22 per cent increase in net profit to Rs 3,893.84 crore for the quarter ended on June 30, 2017, compared to the same period last year. The bank had earned a profit of Rs 3,238.91 crore in the April-June quarter of last fiscal.
Strong investor interest
During the last 10 months till June 2017, domestic institutional and foreign institutional investors have poured in Rs 97,070.13 crore into the Indian market. In July too, investors pumped in Rs 2,786.19 crore.
RIL stock effect
The stock which rose 122 percent or 885 points during the last five years made 57.89 percent or 590 points gain during the last one year.
The stock's meteoric rise in the last 365 days can be attributed to Reliance Jio launching its free services, disrupting the telecom market. Analysts pointed out the large subscriber base Jio registered could translate into paid subscribers after the free offers end. This would inturn lead to huge revenues for the firm.
Last week, the firm announced Jio phone at zero cost (Rs 1500 deposit only for three years) which would disrupt the feature phone market in India. The new offering coupled with Rs 153 per month plan for buyers of this phone would is likely to add to revenue from Jio's paid services and lead to an upside to the stock in the near future. The stock is now trading at a fresh nine-year high on the back of Mukesh Ambani's telecom venture announcements and Reliance Industries bonus issue.
RBI rate cut hopes
The Reserve Bank of India is expected to cut key rates in its August 2 policy meet on the back of June retail inflation falling to a five-year low on drop in food prices.
Retail inflation hit a "historically low" level of 1.54 per cent in June on dip in food items such as vegetables, pulses and milk products.
Wholesale inflation too fell to 0.90 per cent in June -- the lowest in at least eight months -- as prices of food articles, including vegetables, declined. Inflation based on the wholesale price index (WPI) was 2.17 per cent in May 2017 and (-) 0.09 per cent in June 2016.
Currently, the repo rate and reverse repo rate stand at 6.25 percent and 6 percent, respectively.
If RBI cuts rates, it will leave more money at the disposal of banks, leading to increased lending to corporates, industries and individuals aiding economic growth.
Robust economic forecasts
The International Monetary Fund (IMF) on Monday predicted India would continue to grow at a faster pace than China's in 2017 as well as 2018. The IMF retained India's GDP forecast at 7.2 cent for the current fiscal and sees it accelerating to 7.7 per cent in 2018-19.
Recently, a Reuters poll of over 35 economists showed India's economy is expected to expand 7.3 percent in the fiscal year ending March 2018, after slowing sharply at the start of 2017 following last year's government move to scrap high-value banknotes. A similar Reuters poll of economists predicted China would grow by 6.6 per cent in calendar year 2017.
The Nifty on Wednesday crossed the 10,000 mark for the first time ever in its 21 year history. The Sensex too hit an all-time high of 32,374 in early trade. The Sensex and Nifty surged nearly 21 percent this year and are likely to hit new highs in the near future, say analysts.
We look at factors which led to the Nifty scaling the five-digit mark and Sensex reaching new highs.
Strong quarterly earnings
The first quarter earnings of corporate India have come above street expectations and buoyed market sentiments.
The first quarter earnings of corporate India have come above street expectations and buoyed market sentiments.
Dalal street behemoth Reliance Industries posted a 8.59 per cent year-on-year (YoY) rise in standalone net profit at Rs 8,196 crore for the quarter ended June 2017 against Rs 7,548 crore reported for the corresponding quarter last year.
IT major Wipro reported a 1.2 per cent rise in its consolidated net profit at Rs 2,076.7 crore for the April-June quarter. The Bengaluru-based firm had registered a net profit of Rs 2,052 crore in the same quarter last year.
Infosys reported a 1.4 percent rise in Q1 net profit on Friday, posting Rs 3,483 crore in net profit compared with Rs 3,436 crore in the corresponding period of last fiscal. Analysts had, on average, estimated a consolidated net profit of Rs 3,439 crore for the quarter ending June, according to Thomson Reuters data.
Private sector lender HDFC Bank reported a 20.22 per cent increase in net profit to Rs 3,893.84 crore for the quarter ended on June 30, 2017, compared to the same period last year. The bank had earned a profit of Rs 3,238.91 crore in the April-June quarter of last fiscal.
Strong investor interest
During the last 10 months till June 2017, domestic institutional and foreign institutional investors have poured in Rs 97,070.13 crore into the Indian market. In July too, investors pumped in Rs 2,786.19 crore.
During the last 10 months till June 2017, domestic institutional and foreign institutional investors have poured in Rs 97,070.13 crore into the Indian market. In July too, investors pumped in Rs 2,786.19 crore.
RIL stock effect
The stock which rose 122 percent or 885 points during the last five years made 57.89 percent or 590 points gain during the last one year.
The stock which rose 122 percent or 885 points during the last five years made 57.89 percent or 590 points gain during the last one year.
The stock's meteoric rise in the last 365 days can be attributed to Reliance Jio launching its free services, disrupting the telecom market. Analysts pointed out the large subscriber base Jio registered could translate into paid subscribers after the free offers end. This would inturn lead to huge revenues for the firm.
Last week, the firm announced Jio phone at zero cost (Rs 1500 deposit only for three years) which would disrupt the feature phone market in India. The new offering coupled with Rs 153 per month plan for buyers of this phone would is likely to add to revenue from Jio's paid services and lead to an upside to the stock in the near future. The stock is now trading at a fresh nine-year high on the back of Mukesh Ambani's telecom venture announcements and Reliance Industries bonus issue.
RBI rate cut hopes
The Reserve Bank of India is expected to cut key rates in its August 2 policy meet on the back of June retail inflation falling to a five-year low on drop in food prices.
The Reserve Bank of India is expected to cut key rates in its August 2 policy meet on the back of June retail inflation falling to a five-year low on drop in food prices.
Retail inflation hit a "historically low" level of 1.54 per cent in June on dip in food items such as vegetables, pulses and milk products.
Wholesale inflation too fell to 0.90 per cent in June -- the lowest in at least eight months -- as prices of food articles, including vegetables, declined. Inflation based on the wholesale price index (WPI) was 2.17 per cent in May 2017 and (-) 0.09 per cent in June 2016.
Currently, the repo rate and reverse repo rate stand at 6.25 percent and 6 percent, respectively.
If RBI cuts rates, it will leave more money at the disposal of banks, leading to increased lending to corporates, industries and individuals aiding economic growth.
Robust economic forecasts
Robust economic forecasts
The International Monetary Fund (IMF) on Monday predicted India would continue to grow at a faster pace than China's in 2017 as well as 2018. The IMF retained India's GDP forecast at 7.2 cent for the current fiscal and sees it accelerating to 7.7 per cent in 2018-19.
Recently, a Reuters poll of over 35 economists showed India's economy is expected to expand 7.3 percent in the fiscal year ending March 2018, after slowing sharply at the start of 2017 following last year's government move to scrap high-value banknotes. A similar Reuters poll of economists predicted China would grow by 6.6 per cent in calendar year 2017.
Air travel to be prime choice for Indians in 3 years, reveals Railway blueprint
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A blueprint prepared by the Railways has revealed that in coming three years, for upper-middle class Indians domestic airlines would be preffered mode of travel for long distance, reported the Indian Express.
The projection for 2019-2020 is detailed in a blueprint on the future business scenario prepared by the Railway Ministry also stated that the speed is definately the reason why the air travel might become the number one choice but the reduction in prices in air tickets lately have also raised the interest in air travel.
The blueprint warns that these two factors must be addressed on urgent basis.
25 per cent of domestic air travel happens over inter-city distances within 500 km, this has been a segment where the Railways was always believed to enjoy a monopoly, the report said.
"It is essential that Indian Railways addresses the two key value propositions of airlines passenger business - price and speed - immediately to sustain its core business in the passenger segment in the future", the report quoted the Railway blueprint.
Government policies like UDAAN, which provides for air travel of less than an hour for Rs 2,500 will also help in attractiong travellers to the civil aviation sector, noted the blueprint.
The projection for 2019-2020 is detailed in a blueprint on the future business scenario prepared by the Railway Ministry also stated that the speed is definately the reason why the air travel might become the number one choice but the reduction in prices in air tickets lately have also raised the interest in air travel.
The blueprint warns that these two factors must be addressed on urgent basis.
25 per cent of domestic air travel happens over inter-city distances within 500 km, this has been a segment where the Railways was always believed to enjoy a monopoly, the report said.
"It is essential that Indian Railways addresses the two key value propositions of airlines passenger business - price and speed - immediately to sustain its core business in the passenger segment in the future", the report quoted the Railway blueprint.
Government policies like UDAAN, which provides for air travel of less than an hour for Rs 2,500 will also help in attractiong travellers to the civil aviation sector, noted the blueprint.
General Awareness
Reliance Defence launches first two naval patrol vessels Shachi and Shruti
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On July 25, 2017, Reliance Defence and Engineering Limited (subsidiary of Reliance Infrastructure) announced the launch of its first two Naval Offshore Patrol Vessels (NOPVs) – ‘Shachi’ and ‘Shruti’ – at their shipyard in Pipavav, Gujarat.
First two naval patrol vessels of Reliance Defence:
The two NOPVs — ‘Shachi’ and ‘Shruti’ — are the first warships to be launched by a private sector shipyard in India.
- The five NOPVs are patrol ships armed with a 76 mm Super Rapid Gun Mount (SRGM) system along with two 30 mm AK-630 guns, which provide medium range and short range offensive and defensive capabilities.
- The armament is remotely controlled through an electronic fire control system.
- The vessels are fitted with 20,000 KW diesel engine-driven propulsion systems and can deliver speeds up to 25 knots.
- Vice Admiral Girish Luthra, Flag Officer Commanding – Western Naval Command, mentioned that opening up of warship building to the private sector by the Indian Navy is an opportunity that the private sector must make full use of, and is an enabling factor for increased private sector participation in this key area of national capability.
About Reliance Defence and Engineering Limited (RDEL):
Reliance Defence and Engineering Limited is an Anil Ambani-led shipbuilding and Heavy industry company.Headquarters of RDEL is located in Mumbai
- Reliance Defence and Engineering Limited is the first private shipyard in India to obtain defence production licence and sign a contract for defence ships in 2011.
- The company is also engaged in construction of one training ship and 14 Fast Patrol Vessels (FPVs) for the Indian Coast Guard.
- The RDEL previously has also built ships for varied clients including ice bulk carriers for a Norwegian company, offshore support vessels for ONGC and offshore deck cargo barges for NPCC-UAE.
- The company has also repaired and retrofitted commercial and defence ships as well as mobile oil drilling platforms for international clients
On July 25, 2017, Reliance Defence and Engineering Limited (subsidiary of Reliance Infrastructure) announced the launch of its first two Naval Offshore Patrol Vessels (NOPVs) – ‘Shachi’ and ‘Shruti’ – at their shipyard in Pipavav, Gujarat.
First two naval patrol vessels of Reliance Defence:
The two NOPVs — ‘Shachi’ and ‘Shruti’ — are the first warships to be launched by a private sector shipyard in India.
- The five NOPVs are patrol ships armed with a 76 mm Super Rapid Gun Mount (SRGM) system along with two 30 mm AK-630 guns, which provide medium range and short range offensive and defensive capabilities.
- The armament is remotely controlled through an electronic fire control system.
- The vessels are fitted with 20,000 KW diesel engine-driven propulsion systems and can deliver speeds up to 25 knots.
- Vice Admiral Girish Luthra, Flag Officer Commanding – Western Naval Command, mentioned that opening up of warship building to the private sector by the Indian Navy is an opportunity that the private sector must make full use of, and is an enabling factor for increased private sector participation in this key area of national capability.
About Reliance Defence and Engineering Limited (RDEL):
Reliance Defence and Engineering Limited is an Anil Ambani-led shipbuilding and Heavy industry company.Headquarters of RDEL is located in Mumbai
- Reliance Defence and Engineering Limited is the first private shipyard in India to obtain defence production licence and sign a contract for defence ships in 2011.
- The company is also engaged in construction of one training ship and 14 Fast Patrol Vessels (FPVs) for the Indian Coast Guard.
- The RDEL previously has also built ships for varied clients including ice bulk carriers for a Norwegian company, offshore support vessels for ONGC and offshore deck cargo barges for NPCC-UAE.
- The company has also repaired and retrofitted commercial and defence ships as well as mobile oil drilling platforms for international clients
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