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Prasanta Sahu

Articles By Prasanta Sahu

525 Articles

Disinvestment: Plans afoot to raise Rs 1 lakh crore in FY21

Strategic sales in fuel retailer-refiner BPCL, Container Corporation (ConCor) and IDBI Bank would be completed in the year, an official source said.

While the government hasn’t officially put off the LIC listing, the pace of process clearly indicates the receipts won’t come in early enough to be budgeted for the current year.

CPSEs keep normal capex pace in Covid-19 times, but daunting task ahead

This is a creditable achievement, as it reflects that these companies have managed to hold on to the capex pace shown in recent years in the first half, despite the Covid-19 shock.

Among them, a dozen CPSEs in oil-and-gas sector achieved only 25% of their FY21 capex target in April-August this fiscal, compared with 32% of the respective target in the year-ago period, sources said.

LIC IPO: Mega initial public offering of LIC not likely in current financial year

LIC has a lion’s share in India’s insurance business with close to 70% first-year life insurance premia fetched by it, thanks partly to the comfort of sovereign guarantee.

As far as amending the LIC Act is concerned, a Bill may be tabled in Parliament in December, the earliest such opportunity available as the House is currently adjourned sine die.

Q3 Plans: Centre extends spending curbs on regular budgetary expenditure to make room for stimulus 2.0

“With a view to managing the cash flows, it has been decided to retain and continue with the same expenditure management measures, stipulated for Q1 and Q2, for Q3,” the finance ministry said in an office memorandum to ot

Balancing balance sheet: Cesses, surcharges help window-dress govt accounts

A few other instances that show the rampancy of the practice of short-transfer/mis-appropriation of cess funds.

PACL refund, apply, portal, last date, claim,

Air India sale: Allow bidders to quote own terms, says panel

Under the current plan, the buyer is required to take over the airline’s estimated residual debt of  Rs 23,286 crore.

Also, the adviser sought removal of the Rs 1,000-crore cap on asset sale in the first year post-acquisition of AI by the buyer.

Vicious cycle: CPSEs owe a lot, but deprived of much larger dues

So, if the CPSEs, on their part, have not cleared a large portion of their dues to the industry (public and private), and the outstanding amount touched Rs 60,500 crore at March end, 2020, it is due to this vicious cycle of d

Cost control: Centre asks autonomous bodies to return idle funds parked in their bank accounts

Mindful of its fragile fiscal position, the government of late applied brakes on certain spending. Its expenditure in July grew just 6% on year, compared with 46% growth achieved in June and the budgeted spending growth of 13

To illustrate, an experimental exercise of this sort last year freed up about Rs 5,700 crore out of a total of Rs 6,000 crore parked with autonomous/grantee bodies under the ministry of science and technology.

Analysts ask for clarity at the earliest to calm bond yields

While there is no official word yet, deficit monetisation can potentially be in the range of Rs 4-5 lakh crore.

Capex crawls: Despite lower tax revenue, states give timely leg-up to public spend

Despite tax revenue falling by a fifth, 10 states reviewed by FE reported 7% expenditure growth in Apri-July

In recent years, public capex has been roughly in the 5:5.5:3.5 ratio among the CPSEs, states (budget) and the Centre (budget).

Finmin clarification: ‘We haven’t delayed payments of Rs 7 lakh crore’

As on March 31, 2020, state discoms had owed Rs 91,860 crore to power generating companies; the dues increased to Rs 1.17 lakh crore as on July 31.

The power ministry proactively conceptualised Rs 90,000 cr worth of liquidity infusion scheme to ease the liquidity position of the above -mentioned generators in two equal tranches.

Forget stimulus, clear your dues: Rs 7 lakh crore unpaid dues to industry by central govt depts and PSUs

If the Centre’s dues of Rs 2.5 lakh crore to the Food Corporation of India (FCI) are added, as on March 31, 2020, the unpaid dues by the government to various economic players could climb to around Rs 9.5 lakh crore or 4.2%

Niti Aayog bats for major bank consolidation, recommends selling of Uco, BoM, Punjab and Sind Bank

The government has stated that a maximum of four state-run players will be allowed in each of the ‘strategic sectors’, a list of which will soon be placed before the Cabinet for clearance.

The idea was to create only a few but strong banks to support the rising credit appetite of the economy, help reverse a slide in economic growth and cut costs through greater synergy.

Air India privatisation: At least 6, including Lufthansa and Etihad, in race for Maharaja

While NRIs have been allowed to own 100% in AI, the government has retained a provision that substantial ownership and effective control of the airline must remain with an Indian entity.

Though there is no official word yet, estimates suggest that AI is making a daily loss of over Rs 30-35 crore during the pandemic due to virtual grounding of the airline, up from about Rs 20-26 crore in December 2019.

Cash-rich ESIC asked to set up more hospitals, make its facilities available to public

Given ESIC's Rs 80,000-crore reserve funds, it is also being nudged to build more modern hospitals across the country and provide cashless healthcare services to attract people with health insurance coverage.

ESIC is tasked with giving insurance cover and free medical care to those earning monthly wages of up to Rs 21,000.

Sugar-coating: Mills to get higher prices to offset hike in cane rates

While the increase in the minimum sale price at the factory gate is expected to improve mills’ cash flow in a market already awash with supplies, the hike in the cane FRP will raise their costs.

The Centre had, in July last year, refrained from raising the FRP for 2019-20 from Rs 275 per quintal to keep a leash on mills’cane costs.

Stimulus 2.0 expected by September-October: To likely focus on employment guarantee for urban poor

Unlike the rural job guarantee scheme, where most of the budget cost are attributable to wages, material component will be high in the urban scheme as most structures to be created under it will be durable.

PSUs struggle to meet FM Nirmala Sitharaman’s target for capital-spend

This delayed floating of tenders, addressing technical specification issues, transportation of equipment and travel of technical experts.

Sitharaman on July 23 asked select seven CPSEs in aviation, railways and steel to accelerate spending to achieve 50% of their FY21 capex target by the end of September quarter (Q2) to help in the revival of economic activity.

Demand Revival: Niti Aayog may recommend govt to purchase 60,000 buses

In the global financial meltdown year 2008-09 and later in 2014-15, the government had bought/sanctioned purchase of a total of over 22,500 buses under JNNURM (later renamed as AMRUT). The said purchase aided auto majors like

Government working on a plan to revamp India Post; could soon turn into a full fledged bank

Loss-making India Post, having a size and workforce hugely disproportionate to its shrinking role, may reinvent itself by becoming a full-fledged bank.

India Post’s FY20 pay and allowances were estimated to be Rs 17,451 crore or in FY20 or 142% more than revenues of Rs 12,211 crore.

PSUs slam break on expenditure, cut capital spending by half

The CPSEs, under government prodding, have set a target to invest about Rs 4.5 lakh crore from their internal accruals and borrowings in FY21

The Centre is endeavouring to maintain capex pace despite the Covid-19 crisis and intends to achieve the target of Rs 4.12 lakh crore for FY21 compared with Rs 3.37 lakh crore in FY20.

Privatisation policy: Explicit immunity to only handful of PSUs — Check list

Others, including the PSU biggies in the energy, engineering and capital equipment sectors, not to mention those in non-strategic sectors like hotel and tourism and trading, could go under the hammer as and when their turns c

Disinvestment of government stakes in companies have become a major source of non-tax revenue in recent years with mop-ups of Rs 1 lakh crore in FY18, Rs 85,000 crore in FY19 and Rs 50,300 crore in FY20

Air India to send section of employees on leave without pay to stem losses

Air India's salary expenditure is estimated to be about Rs 250 crore/month while the aircraft lease rentals outgo is around Rs 225 crore/month.

“AI needs some kind of non-equity support from the government to stride over the current financial stress,” a senior AI official told FE.

After recovering to half of normal, states’ tax revenue plateaus

The alcohol excise revenue of Uttar Pradesh was about 77% of the budget target in June, up 59% of the target in from May and just 1.2% in April.

However, this has proven to be unsustainable; June tax transfers to states are understood to be 9% less than the monthly transfer of Rs 46,083 crore in the April-May period, at around Rs 42,000 crore.

Govt extends curbs on budgetary expenditure, move to help fund the fiscal stimulus

The departments which will now have to restrict the overall expenditure within 15% of BE Q2FY21 include commerce, industry, telecom, defence (civil), housing & urban affairs, school & higher education, water resources, drinki

Early adjustment: Centre cuts June tax transfers to states by 9%

The customary pattern is the Centre makes adjustments on state tax transfers based on actual receipts only during February-March, the final two months of a financial year.

In FY20, the tax devolution was a little over Rs 1 lakh crore less than in the previous year at Rs 6.5 lakh crore and the amount budgeted for FY21 is Rs 7.84 lakh crore.

Saviours In Action: CPSEs keep capex pace, meet 90% of FY20 target

In FY20, state governments developed cold feet in sustaining the capex tempo, but CPSEs, despite an erosion of their cash surplus and profits in a slowing economy, acquitted themselves.

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