Current Economic Statistics and Review For the
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Theme
of the week: Use of Technology Solutions to Banking Operations* Information
Technology (IT) and the Communication Networking Systems (CNS) have
revolutionalised the functioning of the entire Banking, Financial Services
and Insurance (BFSI) industries world over. In response, predominantly,
the commercial banking activity has evolved into a highly competitive and
technologically innovative industry facilitating them to manage
exponentially growing assets with fewer workers. In the wake of adopting
IT and CNS the traditional banking has resulted in a paradigm shift in the
ways of banking in Pre-Nationlisation
Period In
the early sixties introduction of computers in Post-Nationlisation PeriodIn
1968, a major conceptual change took place with the introduction of social
control measures, followed by nationalisation of 14 major commercial banks
in 1969. In the post-nationalisation period RBI issued specific directives
with respect to social and development banking. In the mid-1970s
implementation of the massive programme of extension of branch network to
unbanked centres saw a complete transformation of the banking industry. In
1975, the Government established a new network of rural financial
institutions called the Regional Rural Banks (RRBs). The total number of
bank branches in In such an environment the above developments, emphasized the need for speedy and comprehensive information systems for policy formulation, performance appraisal, and budgetary and control purposes was significant. Automation in banking became a necessity as bankers realized that much of their labour-intensive, information handling processes could be automated on the computer. The James Raj Committee (1977) felt, that, in order to improve efficiency and quality of service, a judicious use of computers for selected services would be advantageous for banks in ensuring better financial management and higher profitability. Towards the end of 1970s a number of banks initiated the process of mechanisation/computerisation in some selected departments. However, employees’ union all along resisted mechanisation/computerisation. In 1983, the Indian Bank’s Association took up the issue with the All India Bank Employees’ Association and reached and agreement, under which electronic ledger posting/accounting machines, microprocessors/minicomputers and mainframe computer systems were allowed to be installed in branches, zonal and head offices of banks. A second revolution occurred in the 1990s with the advent of electronic payments technology. Various
Committees set by RBI The use of IT in the financial sector traces its roots to the report of the Rangarajan Committee on Mechanisation in Banks (1984). Further developments among the public sector banks (PSBs) have been based on the recommendations of the Rangarajan Committee (second - 1989) and the Saraf Committee (1993) and the Vasudevan Committee (1998). The
Committee on Banking Sector Reforms (Narasimham Committee – II) has in
the Report, dealt with, in detail, the issues in technology upgradation
and observed that most of the technologies that could be considered
suitable for In order to examine the various issues pertaining to technology upgradation in the banking sector and to suggest steps that facilitate implementation of the recommendations of the Narasimham Committee–II, in a time-bound manner, the RBI appointed, in September 1998, a 'Committee on Technology Upgradation in the Banking Sector' under the chairmanship of Shri A Vasudevan, having representation from the Government, RBI, banks and academic institutions associated with information technology Post-liberalisation
Period The
financial sector reforms of the nineties and the opening up of the economy
and its integration with global markets have facilitated speedier
computerisation in the banking sector in
Computerisation
during 1995 to 2000 During 1995 to 2000 almost all commercial banks, including PSBs, old private banks, RRBs and co-operative banks initiated efforts to adopt state-of-the art technology services with new business processes and simultaneously implementing an IT platform so as to compete with the new private banks to reduce the overall operating costs and survive the competition. The four main reasons banks initiated investing in technology is as follows: o
Reduction in operating costs o
Streamlining back-office processing o
Banks can offer new products and better
service to customers and also enhance the convenience and value of
existing products and services o
Use of IT technology facilitates
data-warehousing and data-mining applications, in addition data analytics
enables banks to implement sophisticated risk and information-management
systems and techniques. o
IT technology enables sophisticated
product development, better market infrastructure, implementation of
reliable techniques for control of risks and helps the financial
intermediaries to reach geographically distant and diversified markets. Consequently,
almost all banks began investing in technology a substantial amount to
maintain and upgrade their infrastructure, in order to provide new
electronic information-based services and to mange their risk position and
pricing. As well, banks initiated integrating the various services like,
internet banking, on-line banking, smart cards and ATMs with the
mainstream banking technology. In
During
1999-2000, the RBI focussed on two major areas in the field of computers
and IT. One of the issues of concern was related to the Y2K problem &
the second area of focus was on overall technological upgradation in
banking essentially to facilitate smooth and efficient payment and
settlement, improved customer service and the resultant increase in
profitability. With
the growing spread of internet and the forays being made by banks in the
field of internet banking, the RBI constituted a Working Group in 2001 to
examine the different issues relating to internet banking from regulatory
and supervisory perspective and to recommend appropriate standards for
adoption in Progress of Computerisation during 2000 to 2005The entire approach towards technology-based banking has shown significant improvement since the initiation of reforms in the 1990s. In recent years implementation of high tech integrated technology has received greater importance as execution of the IT technology in banking resulted a paradigm shift in the Indian banking industry. With competition as the buzzword among scheduled commercial banks, all categories of banks have been investing on IT technology and use of advances communication networks. The directive by the Central Vigilance Commission (CV) to PSU banks to achieve 100 per cent computerisation has imparted urgency to the process of technological advancement. While the new private sector banks, the foreign banks and a few old private sector banks have been enjoying a head start in adopting ‘Core Banking Solutions’ (CBS), the PSU banks too have fallen in line rather vigorously. The number of PSU banks which has migrated (or are in the process of migration) to CBS, is an indication of the progress in this regard.
The unique feature of the CBS is that the concept of branch-based banking gives way to the bank-based banking treating the constituent as the customer not of a particular branch but of the bank as a whole. Today, 21 public sector banks have embarked on the use of such systems and the number of CBS-enabled branches exceeds 14,000 as against 14 banks with about 5000 CBS-branches a year ago. Besides all PSU banks, except eight, had achieved 100 per cent full/partial computerisation as on March 31, 2005 (Table 1). Of 27 PSU banks, as many as nine (with seven out of eight in the SBI group) had 100 per cent computerisation branches, 19 had more than 50 per cent (Table 2).
Automated
Teller Machines (ATMs) The application of internet communication network has made it possible for banks to aggressively open ATMs as a convenience to their customers as well as to reduce servicing costs. On-site and off-site ATMs together have constituted as much as one-third of branches of all scheduled commercial banks (Table 3). Foreign banks have ATMs more than four times the number of their total branches (441 per cent) followed by new private sector banks (377 per cent). Total number of ATMs managed by PSU banks stands at 9,992 or 21 per cent of their total branches which compares with 4,985 managed by new private banks and 777 managed by foreign banks. Cash withdrawals remain the most widely used ATM transactions; however, many banks are adding a collection of services to help encourage use of ATMs, as ATM transactions cost less than teller transactions. Electronic
Payment The basic objective of deployment of technology in the financial sector should be to progressively move away from paper-based transactions, which include use of currency notes, cheques or challans, and to the extent possible, switch over to electronic means using RTGS or NEFT or any other electronic mode. Although
cash continues to be used heavily in retail transactions in
e-Banking Internet
has significantly influenced delivery channels of the banks. Internet has
emerged as an important medium for delivery of banking products &
services. Detailed guidelines of RBI for Internet Banking has prepared the
necessary ground for growth of Internet Banking in The FutureIndian banking industry, today is in the midst of an IT revolution. A combination of regulatory and competitive reasons have led to increasing importance of total banking automation in the banking Industry. Further, IT and the communication networking systems have a crucial bearing on the efficiency of money, capital and foreign exchange markets. However, armed with a high technology, banking will remain the best business model for managing liquidity and risk. With the use of IT banks are expected to achieve a rise in real output, while providing more services with fewer employees. Areas of concern for the Reserve Bank are regulation of issuance of e-money and the prudential norm to be followed for preserving effectiveness of monetary policy and integrity of the e-money. However, RBI with a view to address the regulatory issues relating to electronic money have constituted several working groups from time to time. So, despite the radical new trends emerging, banks will continue to play their role as trust-enablers in all commercial activities ___________________________________*
This note is prepared by Bipin K Deokar.
ReferencesRBI (2005): Report on Trend and Progress of Banking in India 2004-05, November 24. RBI (2004): Report on Trend and Progress of Banking in India 2004-05, November 29. RBI (2003): Report on Trend and Progress of Banking in India 2004-05, November 17. RBI (2001): Report on Trend and Progress of Banking in India 2004-05, November 15. RBI (1984): Report of the Committee on Mechanisation in Banking Industry. Reddy,
Y V (2006): ‘Use of Technology in the financial sector: Significance of
concerted efforts’, at the Banking Technology Awards Function at the
IDRBT, EPWRF (2006): ‘Increasing Concentration of Banking Operations’, Economic and Political Weekly, March 18-24, Mumbai.
Highlights of Current Economic Scene AGRICULTURE
The central government is likely to announce a minimum support price (MSP) of Rs 750 per 100 kg for wheat for the rabi marketing season 2007-08. Announcement of higher wheat MSP before commencement of sowings has been aimed at encouraging farmers to grow more wheat so that adequate stocks would be ensured. The government might consider a bonus over and above Rs 750 per 100 kg depending on the open market prices during the harvesting season. Excessive rainfall at the end of September 2006 in sugarcane growing districts in Maharashtra have delayed the sugarcane crushing season, which was expected to start on October 01,06 on account of heavy water-logging in the farms, causing difficulties in cutting the wet sugarcane. Hence there is possibility that the crushing season would get extended to April 2007 instead of March 2007. The
government of As per the Rubber Board, natural rubber exports from the country has posted a robust increase of 151 per cent to 46,007 tonnes in April-September 2006 compared with the same period a year ago; on account of higher prices prevailing in global markets mostly during first half of 2006-07. Rubber import, on the other hand, has fallen to 24,910 tonnes in the first half of 2006-07 (April-March) from 36,566 tonnes over the previous year. The
European Union has formulated a plan to tighten controls on import of the According
to the US Department of Agriculture (USDA), cotton output from The fifth and the final report of the National Commission on Farmers (NCF) has suggested the need for a policy approach to deal with the situation, which has led farmers to commit suicides. Major recommendations of the panel are: Conservation of prime farmland and non-diversion of land for non-agricultural purpose. Distribution of land to the landless and revision of the formula for estimating compensation to farmers on acquisition of their land. Formulation of National Food Security and Sovereignty Board. Marketing the crops in the rain-fed areas like millet and pulses. Diversification of activities by farmers into livestock, poultry and fisheries, and also initiatives for non-farm livelihood It suggested policy approaches for tribal farmers, pastorals, plantation labour, island and urban farmers. Undertaking the organic farming, green agriculture, transgenic crops, protected agriculture like greenhouse farming and fertigation and insurance for transgenic crops by seed companies. InfrastructureOverall
The output of six core infrastructure industries has recorded a 5.5 per cent growth in August against 5.8 per cent growth recorded in the corresponding period last year. The drop in growth rate could be attributed to the slower growth in coal and cement output. Cumulatively, the output of the six core infrastructure industries has grown by 6.7 per cent in April-August 2006 against 6.1 per cent in the corresponding period last year. Power The Planning Commission has suggested charging higher electricity tariffs for households in line with the rates being charged for commercial establishments, specifically, "A certain number of units of electricity can be given free to households. Anything beyond that can be charged at par with the commercial establishments". The Commission has insisted that the Power Ministry should evolve ways of rationalising energy-pricing. InflationThe annual point-to-point inflation rate based on wholesale price index (WPI) has gone up to 4.77 per cent for the week ended September 23, 2006 from 4.56 per cent during the previous week. The inflation rate was lower at 4.34 per cent in the corresponding week last year. The WPI in the week under review has gone up marginally by 0.1 per cent to 206.6 from the previous weeks’ level of 206.3 (Base: 1993-94=100). The index of ‘primary articles’ group (weight 22.02 per cent) has risen considerably by 0.6 per cent to 212.3 from its previous week’s level of 211.1, mainly due to an increase in the price index of ‘minerals’, ‘food articles’ and ‘non-food articles’ by 4.7 per cent, 0.4 per cent and 0.4 per cent, respectively. The index of minerals has gone up to 426.2 from 407.1 in the previous week, mainly due to the higher prices of felspar, fire clay and iron ore. The index of ‘food articles’ has gone up to 215.1 from 214.2, mainly due to the higher prices of urad, gram, moong, ragi, masur, wheat, milk and condiments and spices. The index of ‘non-food articles’ has gone up to 188.4 from the previous weeks’ level of 187.7, mainly due to the higher prices of gingelly seed, castor seed, rape and mustard seed. The index of ‘fuel, power, light and lubricants’ group (weight 14.23 per cent) has remained unchanged at it’s previous weeks’ level of 324.9. The index of ‘manufactured products’ group constituting the maximum of 63.7 per cent of total weight, has gone up a tad by 0.1 per cent to 178.3 from it’s previous week’s level of 178.1, mainly due to the higher prices of textiles, chemicals, ‘non-metallic mineral products’ and base metals. The latest final index of WPI for the week ended July 29, 2006 has been revised upwards; as a result both, the absolute index and the implied inflation rate stood at 204.3 and 4.72 per cent as against their provisional levels of 204.1 and 4.61 per cent, respectively. Public
Finance
During April-August 2006, the tax collections of the government through various tax sources have displayed a healthy growth over the corresponding period of the previous year. Corporation tax has continued to show an impressive increase of 71.2 per cent to Rs 22,828 crore. Income tax collections have been buoyant with a rise of 27.3 per cent over the year totalling to Rs 17,662 crore. Custom collection has stood at Rs 33,964 crore with an increase of 33.1 per cent over the year, constituting 44.1 per cent of the budget estimates of 2006-07. The collection form other taxes such as Service Tax, Securities Transaction Tax, Banking Cash Transaction Tax, Fringe Benefit Tax, Wealth Tax, etc. has grown by healthy 66.4 per cent over the corresponding period of the previous year. The revenue collected through excise duties has stood at Rs 33541 crore with a modest rise of 6.9 per cent. The exercise to finalise the revised estimates for 2006-07 and Budget estimates for 2007- 08 has commenced. Financial advisers of all central government departments and ministries have been asked to furnish estimates by November 30 at the latest. The department of economic affairs has also insisted on a realistic assessment of interests due from public sector undertakings and other borrowers in order to ensure that all outstanding dues are cleared in the next two to three years. The estimates of expenditure are to be furnished to the Budget division in stages. The Sixth Pay Commission has been asked to submit its recommendations within 18 months. The terms of reference of the commission include the task of making recommendations, for the first time, for officials and employees of regulatory bodies like the Telecom Regulatory Authority of India, Securities and Exchange Board of India, and Tariff Authority for Major Ports, which have been set up under Acts of Parliament. In addition to central government employees, armed forces, all-India services and union territories, the commission will make recommendations for officials and employees of the Indian audit and accounts department. Further, it will examine the impact on the finances of the states if the recommendations are adopted by them. The terms of reference have emphasised linking the salary structure to efficiency and productivity, while also keeping an eye on fiscal prudence.
BankingTo
offer greater convenience to customers and promote financial inclusion,
the Reserve Bank of India (RBI) has asked all banks to offer passbook
facility to all its savings bank account holders. Explaining the need for
pass-books, RBI said there are a large number of small customers who do
not have access to computers. As such, non-issuance of passbooks to such
small customers would indirectly lead to their financial exclusion. It has
been observed that many banks had unilaterally discontinued issuing
passbooks to savings bank account holders, resulting into great
inconvenience to the account holders. For banks offering statement of
account, they have been asked to issue monthly statement of accounts as
against quarterly statement of accounts issued currently. Banks have been
advised to extend the facility of providing such passbooks or monthly
statements without any additional cost. Highlighting the advantages of a
passbook facility over statement of accounts, RBI said a passbook is a
ready reckoner of transactions and is handy and compact and as such, is
far more convenient to the small customer than a statement of account.
Further, issue of statement of accounts poses a threat of loss of
statements in postal transit. It was also pointed out that ATM slips
during the interregnum between two statements does not provide a
satisfactory solution as full record of transactions is not available.
Also, use of statements requires the opening balance to be tallied with
closing balance of last statement. In a notification issued in the
previous month, the apex bank had directed all the banks to ensure that
full address and telephone number of the branch is invariably mentioned in
the pass books or statement of accounts issued to account holders. As
per the RBI’s quarterly statistics on deposits and credit of scheduled
commercial banks for the quarter ended June 2006 the share of nationalised
banks in aggregate deposits accounted for 48.5 per cent and the share of
State Bank of India and its associate banks accounted for contributed 22.9
per cent. The shares of foreign banks, regional rural banks and other
scheduled commercial banks in aggregate deposits were 5.4 per cent, 3.2
per cent and 20 per cent, respectively. On the credit front, nationalised
banks held the share of 47.6 per cent in the total bank credit followed by
State Bank of Financial MarketsCapital
Markets Primary
Market Initial public offers (IPOs) of 29 companies have collectively mopped up Rs 6,726 crore from the primarily market between April-September - highest in last one decade. In the first half of last financial year (2005-06), 25 firms had raised Rs 4,641 crore through IPOs. Comparable number in the first half of 2004-05 was Rs 5,802 crore, mobilised by nine companies. Fortis
Healthcare, the healthcare company owned by the promoter family of Ranbaxy
Laboratories, has decided to raise funds through an initial public offer
(IPO). It would be the second
healthcare company after Apollo Hospitals to go public; Fortis will
offload up to 25 per cent equity through the IPO. The rest will remain
with the promoter family. Secondary Market The
market eased a bit during the week as FIIs and traders resorted to
profit-booking. The BSE Sensex lost 81.42 points and settled on 12,373.
The S&P CNX Nifty fell 18.7 points, to close at 3,569.70. While
consumer durables companies surged because of ht festive season, FMCG
counters have surprisingly underperformed over the last four weeks. Bulk deals and block deals are growing in size on the bourses. Foreign institutional investors (FIIs), broking firms, promoters of companies and mutual funds collectively transacted securities worth Rs 48,535 crore through these windows in the first six months of the current financial year. Comparable figures for the last year are not available. While bulk deals accounted for 77.5 per cent or Rs 37,607 crore, block deals – a window for FIIs and promoters of companies to execute a single transaction for a large number of shares – shared the remaining 22.50 per cent or Rs 10,927 crore. A total of 2,831 million shares was transacted through bulk and block deals. Of the total bulk deals of 2,338 million shares, 1,122 million shares were bought and 1,216 million shares sold. As far as block deals were concerned, 246 million shares were bought and 247 million shares sold. Delivery-based turnover on both the bourses — the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) — moved up at a slower pace of 14.52 per cent in the first half of 2006-07 even as the total turnover on these bourses rose 31.2 per cent. The slowdown in the pace of delivery-based trading is largely on account of a market meltdown in May and June this year when the Sensex registered over 30 per cent erosion. Small-cap, mid-cap and trade-to-trade group stocks registered higher value erosion than large cap stocks. Delivery is mandatory for trade-to-trade stocks. The delivery-based turnover in the first half of 2006-07 aggregated to Rs 3,83,699 crore, accounting for 28.4 per cent of the aggregate turnover of Rs 13,58,917 crore. In the first half of 2005-06, delivery turnover was at Rs 3,35,043 crore, accounting for 32.35 per cent of turnover of Rs 10, 35,762 crore. In other words, there is a sharp drop in the delivery-based turnover. Between the two premier exchanges, the BSE reported 10.43 per decline in delivery volume while the NSE witnessed 34.5 per cent rise. The delivery as a percentage of the turnover declined sharply on the BSE — from 41.52 per cent in the first half of last year to 30.26 per cent in April-September in FY07. Stocks traded on NSE, in contrast, witnessed a marginal increase in delivery as percentage of total turnover — from 27.48 per cent to 27.56 per cent. After the market meltdown in May and June this year, the investors’ preference has shifted to large cap stocks from small cap and mid cap stocks. This is reflected in the rise in the gross deliveries in 30 Sensex stocks. In the last two months, it rose to 44 per cent from 36.36 per cent in May and June. The deliveries in the mid cap stocks declined from 40 per cent during the first quarter of the current fiscal to around 35 per cent in the second quarter while the delivery-based trading in small cap stocks remained virtually unchanged at around 45 per cent. Even the BSE 500 stocks witnessed fall in delivery-based trading — from a peak of 41 per cent in June to around 37 per cent in August and September. Among trading groups, B and S groups attracted delivery of over 55 per cent during the first six months of the current financial year compared to around 39 per cent in A group and 40-44 per cent in B1 group. All frontline large cap stocks are A groups stocks, while S group stocks are those which have a small equity base. September
2006 has been a good month of fund inflows for As per the new settlement cycle for the mutual funds, the payment for redemption of scheme units by an investor will happen only the next day. Liquid schemes of domestic mutual funds have been most reliable investment vehicle for corporates to park surplus funds for the short-term. Earlier, companies could redeem the units on the same day if the application for redemption was placed on the same day before 10 am. Now, companies will have to wait for a day for the payment and delivery to take place. As per this settlement, investors can place application to redeem before 3 pm on a particular day but will receive the payment only the next day. In this case, the closing NAV of the day of the application would be taken into account. If the application of redemption is received after 3 pm, the next day’s closing NAV would be considered. The mutual fund industry saw a 5.08-per cent decline in asset base in September. The industry lost Rs 15,581.76 crore bringing the assets under Management (AUM) to Rs 2,91,199.81 crore. Of the 30 mutual funds, the asset bases of 17 dropped. Mutual Funds are considering new ways to invest in companies and buy shares in bulk at cheaper rates. Though investments in such schemes — Qualified Institutional Placements (QIPs). The scheme allows big funds to pick up a large stake in companies the way large institutional investors do. The Security and Exchange Board of India's guidelines allow mutual funds to buy up to 10 per cent of the stake that companies offer while trying to raise money. A
recent Derivatives
The spot Nifty closed on Friday at 3569.7 points. The October future was held at 3574 while the November Nifty future was settle at 3575 and December Nifty at 3574. Surprisingly, there is already decent liquidity in terms of December OI the Nifty – this is unusual early in a settlement. Usually OI develops in the far-month contract only in the last 5 sessions or so. The other unusual thing is the lack of premium/discounts between the near and mid-month and the spot, the third unusual point is that the near month is at a premium although the spot market is falling. Government
Securities Market Primary
Market Under the weekly T-Bill auction, the RBI mopped up Rs 4100 crore and Rs 1500 crore through 91-days T-Bill. From this, the RBI raised Rs 1500 crore and Rs 1000 crorre under the Market Stabilisation Scheme(MSS) though 91-days T-Bill and 182-days T-bill, respectively. The cut-off yields for the 91-days and 182-days T-Bill were 6.6 per cent and 6.6 per cent, respectively. Secondary MarketIn
his address on ‘Globalisation, Money and finance – Uncertainties and
Dilemmas’ Dr. Y.V Reddy, Governor, RBI gave a broad overview of the
issues associated with globalisation focusing especially on the changing
roles of the central banks and challenges faced by the monetary
authorities. “The
criticality for the policy makers is not only to ensure that there are no
financial sector constraints on the real sector activity but also to
assure that the financial sector reforms have complementarily with the
pace and process of reform in the real sector in India, along with, fiscal
empowerment,” he said. The
Governing Council of the ECB increased the minimum bid rate on the main
refinancing operations interest rate on the marginal lending facility and
interest rate on the deposit facility by 25 basis points each to 3.25 per
cent, 4.25 per cent and 2.25 per cent with effect from October 11, 2006. The weighted average YTM of 7.59 per cent 2016 bond was 7.6 per cent on October 26, 2006 as compared to 7.6 per cent on September 29, 2006. the YTM spreads decreased by 2 bps to 71 bps.
Bonds remained firm through last week propelled by high foreign exchange inflows and cooling international oil prices. But bankers said that what partly contributed to softening of yields was the expectation that Government borrowings would remain low. Government borrowings estimated for the second half of this year was Rs 63,000 crore. But traders said that the borrowings were likely to be much lower in view of tax buoyancy. Advance tax collections till September end were estimated at over Rs 38,000 crore, 30 per cent higher than the corresponding period of the previous year.
International oil prices were under $60 a barrel. This was expected to bring down the weighted average import prices for oil companies to about $55-56 range. The reduction in oil prices has pushed down foreign exchange demand and at the same time relieved liquidity tightness considerably. Bond
Market Crisil
Ltd has assigned AAA/stable rating for the Rs 1,000 crore and Rs 350 crore
Upper Tier II bonds of State Bank of A string of corporate bond issues from banks and public sector undertakings are likely to continue this week as well. Banks — Dena Bank, Vijaya Bank, Punjab National Bank, Bank of Maharashtra, Union Bank and Uco Bank — are in the fray with series of instruments ranging from tier-II vanilla bonds to perpetual tier-I bonds. Primary issues from Power Grid Corporation and Power Finance Corporation are also likely, said a bond dealer. Foreign
Exchange Market The
spot rupee is likely to rule with a bias towards appreciation, given
strong inflows. Globally, no major data is expected this week, besides the
This is because exporters will not like to lose on account of rupee appreciation. The pressure for rupee to move upwards may be seen from the non-deliverable forward markets, where dollar is being sold against rupees. Since the rupee is trading at a premium, there is demand to book rupees in Indian market and sell it in NDF. The forward premia, on the other hand, will continue to rule rangebound. Even as the liquidity situation for rupee has improved with government expenditure, there is a consistent demand from oil and non-oil importers to book dollars so as to take advantage of the appreciating rupee. The
six-month forward premia closed at1.32 per cent (annualized) on October 6,
2006 vis-à-vis 1.29 per cent on September 29, 2006. Commodities
Futures derivatives The
Congress forum on consumer protection, markets and industry has claimed
that the restrictions imposed by the Centre and state governments on
hoarding of wheat are not being applied to imported wheat. In the last
week of August, the Centre issued an order under the Essential Commodities
Act imposing stock limits and movement restrictions on wheat and pulses to
control rising prices of these two commodities during the festive season.
The Centre also empowered the state governments to issue necessary
notifications for the implementation of this order. The Spot prices of chilli are set to hit the Rs 7,000 a quintal mark this week with stocks continuously depleting and new crop expected only in January. Analysts say the existing stocks may not be enough to meet the current trend of rising demand. Desi
urad futures for the near month contract rose a sharp 25 per cent to end
September at Rs 3,409 a quintal level from Rs 2,728 a quintal on September
1. In the spot market,
however, the price of the commodity increased by a lower margin of 12.19
per cent at the end of September from a high of Rs 4,100 achieved early
last week. The current upturn is attributed mainly to the crop loss owing
to floods in major urad producing centres. Lower arrivals in mandis too
played their role in pushing the prices up.
Traders are anticipating about 25 per cent loss in the crop this
year in the leading producing regions, which include Maharashtra,
Karnataka, Andhra Pradesh, Corporate SectorSintex Industries Ltd, a leading player in the plastic and textile segments, on Tuesday announced that its consolidated net sales for the second quarter ended September 30 amounted to Rs 266.7 crore, a 49 per cent increase over the corresponding quarter of the preceding financial year. Net profit after tax increased 93 per cent to Rs 31.5 crore, translating to basic earnings per share for the quarter of Rs 2.92 on an equity capital of Rs 22.26 crore. Announcing
the unaudited financial results, the Sintex Managing Director, Mr Amit
Patel, said strong pre-fabricated and custom moulding demand enabled
healthy revenue growth even as collection and RMG textile sales improved.
Zeppelin Mobile Systems India Ltd (ZMI), the erstwhile subsidiary of
Zeppelin Mobile Systeme GmbH, Sintex is set to expand its manufacturing capacity with a capital outlay of Rs 8 crore. Post-expansion, its capacity will increase from the current 6,000 shelters to 17,000 shelters. Sintex
is also spending Rs 400 crore to expand its textiles and plastics
capacity. This includes investment to the tune of Rs 200 crore to expand
plastic pre-fabricated structures and electrical accessory making units.
After this expansion, the electrical accessory manufacturing units'
capacity will quadruple to 16,000 tonnes per annum by December next year,
at a cost of Rs 70 crore. The company's Export
Sector Exports of fruits, vegetables, meat and fish could soon become easier with commerce ministry proposing a draft legislation on exports of perishable goods. The legislation proposes to set up a single-window clearance mechanism. At present nearly 30 clearances are required to export perishable goods, consuming a lot of time. LabourAccording
to the survey by NSSO titled ‘Employment and Unemployment Situation in
India 2004-05’, 58 per cent of the employable population remained
jobless in 2004-05 with a majority of them concentrated in urban areas.
Interestingly, the unemployment rate among those educated up to the
secondary level or higher was more than that among people whose education
was lower than secondary level.
The employment rate (number of unemployed per 1000 persons in
labour force) was registered as 17 and 45 in the rural and urban areas,
respectively. According to the survey, 44 per cent of people living in
rural areas were employed while urban TelecomThe
Department of Telecom (DoT) has set April 2007 as the deadline for the
implementation of mobile phone number portability. Mobile number
portability has already been implemented in Hong Kong, theUK,
*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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