--ICICI Lombard rolls out weather insurance -
--Increasing tax efficiency
--IIM-A, IIM-C hike fees; others may follow suit -
--Market cheers Economic Survey –
--NIIT Technologies acquires German firm
--Indiabulls Securities may list in March: Official
--Annual inflation seen at 4.79% on February 16
--Govt staff may get a 25% pay hike
--Slowdown in capital flows could affect market in short term: Survey
--Chidambaram confident of 9% growth in 2008-09
Ahmedabad bourse in tie-up talks with Nasdaq
Nasdaq, one of the largest electronic equity exchanges in the US, is in talks with the Ahmedabad Stock Exchange (ASE), India's second-oldest exchange, and a couple of other regional stock exchanges for a possible collaboration.
If the deal is struck, the ASE will become the first regional exchange to have a foreign partner.
"The tie-up with the ASE could either be an equity partnership or a technology tie-up, or both. The regulatory bodies have to clear the proposal and we also need approval from our members first," a top ASE official said on conditions of anonymity.
Sources close to the development said one of the objectives of the collaboration is to create a third parallel platform on the lines of the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), the two largest equities markets in India. (Full story)
ICICI Lombard rolls out weather insurance -
Product aided by satellite to enable accurate yield assessment.
ICICI Lombard General Insurance, in association with Weather Risk Management Services (WRMS), has launched a hybrid weather-cum-satellite imagery-based insurance product in India to cover the risk of farmers growing wheat in the Patiala district of Punjab.
Although weather-based crop insurance covers are available, ICICI Lombard's product is unique as it uses satellite-based imagery to assess crop yields.
The Jharkhand and Tamil Nadu governments have also agreed to introduce the same product in some of their districts.
The product, if successful, is likely to significantly reduce the time required for estimating the yield of an area by carrying out crop-cutting experiments. The procedure can also verify the accuracy of crop-cutting experiments conducted to assess yields.
Increasing tax efficiency
Tax officials across the country will welcome Finance Minister P Chidambaram's statement that, with tax collections growing handsomely, they can expect an incentive bonus. Certainly, there is reason to celebrate when the tax to GDP ratio has climbed quite significantly, and when direct taxes on incomes and profits (which have grown by more than 40 per cent for two years running) overtake indirect taxes on goods and services. Any modern tax system reduces taxes on commodities and focuses more on taxing incomes — that way the system causes fewer distortions and also becomes more egalitarian. But it may be premature to equate rising tax collections with rising tax efficiency; the growth in revenue could simply be a result of the sharp growth in profits, a trend that now seems to be tapering off as the economy slows. The finance minister has already referred to the problem with excise duties, which for many years have been rising at less than half the growth rate for industrial output. The key question is whether compliance has improved, and whether the tax net is catching all those whom it is intended to catch.
On this score, the news is not so good. Analysis of major tax trends and efficiency levels, done by Sanjay Kumar, AL Nagar and Sayan Samanta of the tax department and the National Institute of Public Finance and Policy, show that while there has been improvement in the indices of tax compliance, there are action areas that need urgent attention. Indeed, in an article in this newspaper last week, Mr Kumar argued that compliance rates have not gone up so significantly as to the general demand for lower tax rates.
IIM-A, IIM-C hike fees; others may follow suit -
Studying at the Indian Institutes of Management (IIMs) is going to be costlier with two institutes — IIM-Calcutta (IIM-C) and IIM-Ahmedabad (IIM-A) — hiking fees for the two-year post graduate management programme (PGP) by Rs 1 lakh.
The other IIMs, IIM-Bangalore, IIM-Kozhikode, IIM-Lucknow and IIM-Indore, are also expected to decide on fee hike at their board meetings in early March.
IIM-C announced it would hike its annual fee for the first year to Rs 3 lakh from Rs 2 lakh and for the second year to Rs 4 lakh from Rs 2 lakh.
Last year too, the premier institute had increased its fees from Rs 1.75 lakh to Rs 2 lakh per annum.
This means students at IIM-C will have to shell out Rs 7 lakh for the 2008-10 PGP batch, compared with the current Rs 4 lakh.
However, students seeking admission to the 2009-2011 batch will have to pay Rs 8 lakh.
Commenting on the fee hike, IIM-C Director Shekhar Chaudhuri said, "The decision to raise the fees was taken in view of the rising costs and will be implemented from the coming academic session. (Full Story)
Market cheers Economic Survey –
MUMBAI: Stock rose from the day's lows as investors cheered data from the pre-Budget Economic Survey. The government has sounded a word of caution to investors, asking them to resist the herd mentality, but also stated that the road ahead is optimistic for equity investment. At 12:40 pm, the Sensex was up 4 points at 17,830.24, rising from a low of 17,692.13 in trade so far.
Hindalco Industries (up 3.37%), Cipla (2.31%), Mahindra & Mahindra (1.99%), HDFC Bank (1.05%) and ONGC (0.83%) led the advances. Ambuja Cement (down 2.44%), State Bank of India (1.79%), ACC (1.17%), Reliance Industries (1.14%) and ICICI Bank (1.01%) continued to drag.
The Nifty was up 8 points at 5276.05, off the low of 5227.55. The market breadth showed 517 advances and 664 declines on NSE. Presenting the Economic Survey, Finance Minister P Chidambaram said investors would do well to resist from commonly observed 'herd mentality' and 'panic' in their buying and selling operations. (Full story)
NIIT Technologies acquires German firm
MUMBAI: NIIT Technologies signed a share purchase agreement for acquisition of 100 per cent of share capital of Softec GmbH, Germany. Softec GmbH focuses on providing IT solutions and services worldwide in the airline revenue accounting and operations space. They have a major market share of about 40 small to medium airlines within Europe, Africa and Asia. At 12pm, the stock was at Rs 133.45, down 1.15 per cent on the BSE.
Indiabulls Securities may list in March: Official
MUMBAI: Brokerage firm Indiabulls Securities Ltd, which was spun-off from flagship Indiabulls Financial Services Ltd last year, is expected to list next month, a senior company official said on Thursday.
"Approvals from the stock exchanges have been received and now we are waiting for Securities and Exchange Board of India (SEBI) clearance," Indiabulls Financial Chief Executive Officer Gagan Banga told reporters.
Shareholders of Indiabulls Financial will get one share of the brokerage for every share held. Indiabulls started operations as a broking firm, but now gets majority of its revenue from financial services business.
Its realty arm, Indiabulls Real Estate, which was also spun off from the main firm in 2007, has now forayed into retail and power generation.
Annual inflation seen at 4.79% on February 16 - Economics Times
MUMBAI: Annual inflation rate is expected to jump to its highest in more than eight months in mid-February, as higher oil and food prices take effect, a poll of 11 analysts showed on Thursday.
The wholesale price index is forecast to have risen 4.79 percent in the 12 months to Feb 16. That is sharply higher than 4.35 per cent a week earlier, and will be the highest reading since June 2, 2007, when it hit 5.09 per cent.
Still, it would be the 37th successive week that inflation has been below 5 percent, the Reserve Bank of India's target for the fiscal year that ends in March.
Govt raised state-set retail prices of petrol and diesel for the first time in 20 months two weeks ago, a move analysts said would increase the inflation rate in coming weeks. In a policy review last month, the central bank kept key rates steady, saying inflation risks persisted, but signalled its readiness to act if turbulence in global markets threatened growth and financial stability.
Govt staff may get a 25% pay hike
NEW DELHI: Less than 48 hours from now, the suspense on salary slips for nearly 40 lakh government employees should come to an end. Budget 2008-09 is expected to provide the first indications of whether the Sixth Pay Commission will turn out to be a bonanza.
And if the provision for railway employees is an indication (Rs 5,000 crore for 14 lakh em-ployees), government employees may be in for a 20%-25% hike. In the current fiscal, the outgo on account of pay and allowances for the government is being estimated at Rs 46,379 crore. However, if one factors in the arrears and pensions with retrospective effect from January 1, 2006, the actual impact could be as high as three times this figure, experts say. (Full story)
Slowdown in capital flows could affect market in short term: Survey
MUMBAI: Finance Minister P Chidambaram tabled the Economic Survey for 2007-08 - a report card on the economy during this fiscal that would show the direction of government policy in the year ahead. The government today said that any slowdown in the excess capital flows from last year's high levels could affect the stock market in short-term, even as it would make the monetary management easier.
"There has been a renewed expansion of liquidity by these countries (US and other developed economies) and this may increase the capital inflows into India and other emerging markets," the pre-Budget Economic Survey said, while outlining its concern over the US sub-prime crisis.
The government said in its Economic Survey 2007-08, tabled in Parliament today by Finance Minister P Chidambaram, that the situation of excess inflows is likely to remain, though the pressure on reserve accumulation and rupee is likely to ease. (Full story)
Chidambaram confident of 9% growth in 2008-09
NEW DELHI: Finance Minister P Chidambaram on Thursday exuded confidence of achieving a nine per cent economic growth and containing inflation in 2008-09 and said this would help ensure overall welfare of common man.
Speaking to reporters after tabling Economic Survey 2007-08 in the Parliament, Chidambaram said that he was confident of achieving 11th Plan target of 9 per cent growth.
With the better targeting of government reserves and increase in quality, we can ensure the overall welfare of the common man in terms of both private consumption and supply of public goods, he said.
"Given the solid foundation of domestic investment and savings, we are confident of meeting the 11th Plan target of nine per cent average growth," the Finance Minister said.
"We will be able to mobilise the resources for meeting the growth target of nine per cent," he added.
Chidambaram said that economy has precisely moved to higher growth trajectory during the five years to 2007-08 in terms of GDP with an average growth rate of 8.7 per cent per annum during these five years.
"This indicates stability and sustainability," he said.
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