Current Economic Statistics and Review For the Week 
Ended June 23, 2007 (24^th Weekly Report of 2007)

Theme of the week:

Financial Performance of BSE Companies During 2006-07*

Introduction

The corporate sector has experienced a robust growth in the financial year 2006-07. By and large corporate activity has been vibrant during the year in terms of nominal growth of domestic sales and exports as well. While the first two quarters (April-September 2006) reported excellent results, the third and fourth quarters (October 2006 – March 2007) experienced some set-back in the form of increasing interest burden on companies as a spin-off of the central bank’s inflation fighting measures.

The year has also seen substantial expansion in activity, both domestic and overseas. Indian corporate sector with an urge to increase its global footprint is right now on a merger and acquisition (M&A) spree. The rise in cross-border M&A activity is backed by healthy performance in the domestic market. According to CII, M&A deals have increased from worth $7.5 million in 2004 to $7.5 billion in 2006.

Financial Performance of 79 Companies

This article attempts to review the annual performance of a sample set of private/public limited companies, during 2006-07, based on their unaudited/audited financial results, collected from the website of Bombay Stock Exchange. Since the data are available only on 79 companies, analysis based on these data can be taken as indicative. The sample of 79 companies consists of 63 non-financial public limited companies, 11 scheduled commercial banks and 5 non-banking financial companies. These 79 companies are classified among 9 sectors, namely, capital goods, automobiles, metals, oil and gas, pharmaceuticals, information technology (IT), fast moving consumer goods (FMCG), banks and financial institutions.

During the financial year 2006-07, the selected 63 non-financial public limited companies have performed extremely well as is evident from robust growth in sales and net profit despite mounting pressure from rising interest rates during the second half of the year under review coupled with falling export earnings owing to appreciation of the rupee in the fourth quarter, predominantly impinging on profit margins of the IT, ITeS and export-oriented companies.

As indicated in Table 1, the net sales of 63 companies has grown considerably by 27.3 per cent to Rs 9,54,018 crore during 2006-07 as compared to Rs 7,49,483 crore over the same period a year ago. Concurrently, the net profit has registered a robust growth of 44.1 per cent to Rs 1,00,454 crore in 2006-07 on account of lower debt-equity ratio and inventory to sales ratio, with a significant growth in exports.

On account of considerable rise in expenditure, which includes cost of raw material, power and fuel in case of manufacturing companies whereas in IT and services sector it is due to increased spending on salaries of the employees, the total expenditure incurred by these companies amounting to Rs 8.22 lakh crore has shot up by 25 per cent in 2006-07. However, it is slightly lower than the increase in net sales (27.3 per cent) indicative of some success of companies to control the cost. Accordingly, the total expenditure to sales ratio of the 63 companies has declined marginally to 86.3 per cent from 87.7 per cent in 2005-06. 

The aggregate depreciation provisions of the 63 companies stood at Rs 25,131 crore in 2006-07 as against Rs 21,990 crore in the previous fiscal, registering a rise of 14.3 per cent. The total tax paid by these 63 companies rose by 55.5 per cent amounting to Rs 98,457 crore as against           Rs 69,577 because of sizeable growth profits combined with increase in tax rates.

The rise in other income has improved by 26.3 per cent from Rs 27,093 to Rs 34,218 crore in 2006-07 conceivably attributable to higher returns on investments in the stock market.

A significant highlight of this study is a substantial rise in interest payments of these companies, which has grown sharply by 37.7 per cent to Rs 9,614 crore as against Rs 6,984 crore.  The net profit to sales ratio has stood at 10.5 per cent during 2006-07 as compared to 9.1 per cent in the previous fiscal implying enhanced profitability; gross profit margin (gross profits to sales) on sales was at around 16 per cent as compared to 15 per cent during 2005-06.

Sectoral Performances

Almost all the 8 sectors under review have registered buoyancy in year-on-year (y-o-y) growth in net profits. The telecom sector has witnessed the highest y-o-y growth of around 80.5 per cent followed by pharmaceutical companies of around 77.5 per cent.

Telecom

India 's telecom sector is one of the fastest growing telecom markets in the world, with monthly net additions of around 5 million new connections. Bharti Airtel has reported the highest net profit of around 100 per cent to Rs 4033 crore in 2006-07 compared to Rs 2012 crore in the previous fiscal year.

Automobile

Automobile industry has been a major player in the growth of the Indian economy. The performance of 8 automobile companies has been presented in Table 3. The net sales of automobiles industry have been increasing for past few years and the trend has continued in 2006-07. During the financial year 2006-07 the sales of four-wheeler witnessed a steady rise throughout the year, however the sales of two-wheeler has declined in the 4^th quarter. An acute rise of 27.2 per cent in total expenditure of these companies has been due to higher input costs mainly aluminium and steel. However, overall auto companies have shown a good performance even though their margins are under pressure due to increase in raw material and component prices. The increase in net sales was around 26 per cent and the net profit of these companies have increased by 18.7 per cent to Rs 7,563 crore in 2006-07 as against Rs 6,379 crore in the previous fiscal 2005-06.

In 2006-07 Tata Motors continued to dominate the market with net sales of Rs 2,75,35 crore as against Rs 2,06,02 crore in 2005-06 followed by Maruti Udyog with Rs 1,46,53 crore and Mahindra & Mahindra with Rs 1,00,50 crore. Tata Motors continued its good performance with the highest net profit of worth Rs 1,913 crore in 2006-07 as against Rs 1528 crore in   2005-06.

Information Technology

The aggregate total income of IT industry increased by 27.6 per cent to Rs 67,187 crore as against Rs 52,653 crore in 2005-06. Infosys Technologies, Tata Consultancy Services, i-flex Solutions, Financial Technologies were the star performers. Infosys reported the highest net profit of Rs 3,783 crore against Rs 2,421 crore in 2005-06. Financial Technologies registered highest net sales of Rs 16,047 crore in 2006-07 followed by Tata Consultancy Services and Wipro which reported sales of Rs 14,939 crore and Rs 13,679 crore respectively.

Oil and Gas

India is one of the largest oil consumers in Asia-Pacific region and it imports around 70 per cent of its total oil requirement. In 2006-07, the total aggregate sales of the 6 oil & gas companies under review registered a rise of 38 per cent in net profit to Rs 22,544 crore in 2006-07 as against Rs 16,330 crore in 2005-06.

Reliance Industries reported highest net profits of Rs 10908 crore in 2006-07 as against Rs 9069 crore in the previous fiscal. 

Metals

Riding high on surging metal prices and burgeoning demand, non-ferrous companies have reported robust growth in sales and profit for the year 2006-07. Net sales of 8 companies increased by 31.5 percent to Rs 89,502 crore as against Rs 68,066 crore in 2005-06.

Performance of Banks and Financial Institutions

In 2006-07, Banking and Financial sector has maintained its growth momentum. Net profit increased by 16.8 per cent due to high interest income, which has increased by 29.2 per cent to Rs 1,44,088 crore as compared to Rs1, 11,562 crore in 2005-06.

Among the 12 banks under review, Bank of India was at the top with 60 per cent rise in its net profit followed by UTI Bank reporting rise of 36 percent. While, Bank of Baroda, ICICI Bank and Kotak Bank registered rise of 24.1, 22.4 and 19.6 per cent rise respectively in net profits.

Issues

In the financial year 2006-07, Indian companies are increasing its export competitiveness in the global market by investing heavily so as to raise the scale of operations to global size capacities. As per their expansion programme, of late, Indian companies are acquiring on a large-scale land to set up special economic zones (SEZs). However, the companies are facing a number of impediments for establishing SEZs, like acquisition of land, rehabilitation of the landowners etc.   

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* - This note is prepared by Bipin K. Deokar and Pallavi N. Phakatkar.

Highlights of  Current Economic Scene

AGRICULTURE  

The central government would import 50 lakh tonnes of wheat in 2007 to strengthen the buffer stock for meeting the requirements under various welfare schemes and any exigencies. However, this issue has become controversial as officials from food ministry feel that a domestic tender may have an inflationary impact, on the other hand a section in the finance ministry favours floating tenders to invite delivery at FCI godowns.

The central government and the Indian sugar industry together are exploring the possibility of setting aside certain quantity for raw sugar production as India is expected to cross 300 lakh tonnes in sugar production next crushing season, which is to begin from October 2007. Of the 300 lakh tonnes, the sugar industry can produce 240 lakh tonnes of white sugar and the balance 60 lakh tonnes of raw sugar in order to ease the industry’s burden and also tap the international raw sugar market. They are also exploring an option of diversion of surplus sugar for the production of ethanol. These options have been considered in addition to the centre's move to increase buffer stock to 5 million tonnes, hike moratorium period up to March 2010 and extend repayment period.

According to the government’s discussion paper, all new Greenfield / Brownfield urea projects in the country would be provided with various incentives in the form of exemption of customs duties on imported items, exemption on excise duty and income tax holiday. The approval of Greenfield / Brownfield urea project under subsidy regime would be given on first-come-first- serve basis depending on the projected demand and production gap for urea in the country. New urea projects meant for urea export would not require any government approval.

The Centre is likely to provide an additional funding of Rs 2,000 crore for the accelerated Irrigation benefit programme (AIPB) during the current fiscal 2007-08. The programme is a part of the government's seven point Bharat Nirman programme. The additional fund for AIPB will be in addition to the budgetary provision of Rs 3,580 crore during 2007-08.

With the acreage under raw jute cultivation declining during kharif season 2007-08, the crop for the ensuing jute year July 2007-June 2008 is expected to be 10 per cent lower than the normal yield of around 100 lakh bales. Despite the lower crop in 2007-08, the mills sector would not face any shortage of raw jute due to the carry forward stock of around 25-26 lakh bales, which has resulted largely on account of the 63-day industry-wide strike that was held earlier in 2007.

Silk production in the country has grown by 8.4 per cent in financial year 2006-07 though it has failed to reach its set target of 21,800 tonnes on account of drought like conditions and farmers hesitating to switchover to new technologies especially in Karnataka. The provisional figures available with the Central Silk Board has revealed that raw silk production has gone up to 18,760 tonnes from 17,305 tonnes. Of the total production, mulberry raw silk has contributed 16,805 tonnes, 8.81 per cent higher from 15,445 tonnes. Vanya silks also have witnessed a 5.11 per cent growth to touch 1,955 tonnes.

Spices exports from the country, during April 2007, have stood at 38,972 tonnes earning foreign exchange worth US $ 78.99 million. This has reported an increase of 44 per cent in quantity from 27,209 tonnes of April 2006 and 72 per cent growth in dollar returns. Chilli contributed the highest in earnings at 38 per cent, followed by spice oils and oleoresins at 36 per cent and pepper at six per cent. Compared to April 2006, export of pepper, cardamom, chilli, coriander, fennel, fenugreek and other seed spices such as aniseed, mustard, nutmeg, mint products, spice oils and oleoresins and other spices such as tamarind, asafoetida were higher in both quantity and value. All other spices have shown a decline in both quantity and value, other than curry powder exports, which have shown an increase in value alone.

Egg exports from the country are likely to increase by 30 per cent following local poultry farms receiving fresh orders from the United Arab Emirates (UAE), which recently (around second week of June 2007) has lifted the ban imposed on imports. Consequently, as per the national egg coordination committee (NECC), egg exports are likely to jump to 260 containers per month from around 190-200 containers of eggs (4.75 lakh eggs per container) All the egg importing countries, except UAE, had lifted ban on Indian eggs after the government declared that the country was free from bird flu in August 2006.

According to data complied by the Solvent Extractors’ Association of India (SEA), total edible oils import (including non-edible oil) has risen by 2.5 per cent to 26.07 lakh tonnes for the first seven months of the current season 2006-07 (November 2006-May 2007) from 25.43 lakh tonnes for corresponding period of the previous year. Total import of edible oils has been 22.01 lakh tonnes, almost same as 22.00 lakh tonnes of the last season due to higher international and domestic prices. Import of non-edible oils has stood at 4.1 lakh tonnes reporting 18 per cent increase from 3.43 lakh tonnes. This is mainly due to. Import of refined edible oils during the review period has touched 52,670 tonnes while total crude oil import has been reported at 21.48 lakh tonnes.

The seafood industry has suffered huge losses due to the appreciation of the Indian rupee. Seafood exporters, who have lost Rs 500 crore, are unable to meet the orders and are finding it hard to survive in the global market. The fishing and culture shrimp season has just started but exporters are unable to enter into contracts fearing losses. SEAI has requested the central government to provide immediate assistance to the exporters as the sector supports 50 lakh people. Another industry facing the same problem is the coir industry, which has low unit value realisation and compressed profit margin. The coir exports have slowed down considerably since March 2007. The smaller exporters have been unable to hedge for several contracts signed in February or March and re-negotiate the contracts also seems implausible.

The Genetic Engineering Approval Committee (GEAC), in its 77^th meeting, has approved 39 new Bt cotton hybrids for commercial cultivation in south India and 9 new Bt cotton hybrids for commercial cultivation in central India in the current season. The GEAC in its 76^th meeting had approved 18 Bt cotton hybrids for commercial cultivation in north India and 35 new Bt cotton hybrids for commercial cultivation in central India .

The government of Andhra Pradesh is likely to bring out a `GM Seeds Act' in the short run to control sales, quality and distribution of genetically modified seed. The Bt cotton acreage is expected to cross the 20-lakh-acre mark in 2007-08 as against 16 lakh acres in 2006-07 and 5.5 lakh acres the year before.

The government of Maharashtra has made a budgetary allocation of Rs 240 crore for the fiscal year 2007-08 to subsidise the interest burden on agricultural loans to farmers, and has allocated Rs 50 crore as relief package to farmers whose sugarcane would not be crushed in the current season (October-m September 2006-07). Of the total Rs 240 crore, Rs 130 crore has been allocated as subsidy for loans that will be disbursed at a rate of 6 per cent. The remaining Rs 110 crore has been earmarked for loans of up to Rs 25,000 that will be given at an interest rate of 2 per cent to small farmers who are regular on repayments. A proposal to give equity participation for sugar factories to introduce co-generation would also be suggested for government’s consideration.

Even though state-owned banks have disbursed agriculture loans of over Rs 2 lakh in 2006-07, 73 per cent of the farm households still have no access to formal credit sources. Northeastern states of Meghalaya, Arunachal Pradesh , Assam , Mizoram and Manipur, apart from Jharkhand and Uttaranchal, have achieved a financial inclusion of 25 per cent. The fact that 73 per cent of farmers is still outside the purview of institutional source reflects that larger amount is being disbursed to farmers, who are already in the banking net. This lower coverage can be attributed to tendency of most farmers to prefer to borrow from non-institutional sources and relief packages hardly reaching the needy farmers in absence of proper channels. As a remedial measure, the ministry of finance has asked banks to increase loan accounts and not just loan amounts

INDUSTRY

Buoyed by a robust performance by the manufacturing sector, industrial output has registered a 13.6 per cent year-on-year growth in April this year, compared to the 9.9 per cent rise in the same month last year. However, the pace of growth is lower than the revised 14.5 per cent growth registered by the index of industrial production (IIP) in March 2007. Manufacturing output has risen by 15.1 per cent in April, compared to 11 per cent earlier. Electricity generation in April this year is 8.7 per cent, while mining has risen by only 3.4 per cent, which is same as last year’s. As per use-based classification of the IIP, industry segments such as basic goods and capital goods witnessed deceleration in growth. The growth rate of basic goods has fallen to 8.9 per cent (9.3 per cent), while that of capital goods has fallen to 17.7 per cent (19.6 per cent). Intermediate goods, on the other hand has posted good performance, with growth rate rising to 12.6 per cent (8.5 per cent).

INFRASTRUCTURE

In the infrastructure sector, for April 2007, there has been a slowdown in growth of production of coal, cement and finished steel. But the petroleum and electricity sectors' performance has helped the overall growth of the six infrastructure sectors to be at 7.4 per cent in April 2007 against 7.3 per cent in the same month last year. Coal production has grown by 0.5 per cent against the 3.4 per cent growth registered in April 2006. The growth in cement production has also dipped to 5.1 per cent in April 2007 from 12.2 per cent in the same month last year. Finished steel production has grown by 8.4 per cent in April 2007 against 10.1 per cent. The decline has however been neutralised by the growth registered by sectors such as petroleum refinery and electricity. While petroleum refinery production has grown by 15.1 per cent in April 2007 from 13.1 per cent, electricity generation has registered a growth rate of 8.7 per cent against 5.9 per cent. Crude production has witnessed a 1.4 per cent during the month, recovering from the negative 1.8 per cent growth it registered in April 2006.

INFLATION

Annual rate of inflation, based on WPI on point-to-point basis stood at 4.80 per cent for the week ended 2^nd June 2007 as compared to 4.85 per cent last week or 4.88 per cent last year.

Over the week WPI declined by 0.1 per cent to 211.9 from 211.7 for the previous week. Primary articles prices fell marginally to 220.4 from 220.5 due to lower price in moong, bajra, condiments and spices. Marginal fall in the prices of Fuel, Power, Light and Lubricants witnessed during the week due to fall in prices of aviation turbine fuel and furnace oil. Manufactured products rose by 0.2 per cent to 184.4 from 184.1.

WPI index for all commodities were revised upwards for the week ended 07-04-2007 to 211.5 from 210.8. Inflation rate correspondingly changed to 6.44 from 6.09 per cent. 

FINANCIAL MARKETS

Capital Markets

Primary Market

Roman Tarmat Limited has tapped the market between June 12 and 19 by issuing 29 lakhs equity shares in a price band of Rs 150-175.

DLF Ltd. has tapped the market between June 11 and 14 by issuing 1750 lakhs equity shares in a price band of Rs. 500-550.

Vishal Retail Limited has tapped the market between June 11 and 13 by issuing equity shares aggregating Rs. 110 crore in a price band of  Rs. 230-270.

Secondary Market

The market edged higher last week amid volatile trade on alternate bouts of buying and selling. Concerns of rising domestic and global interest rates weighed on the sentiment. Caution was also partly due to large IPO pipeline. While the IPO of reality major DFL was over last week, another large issue which is from ICICI Bank is set to open for subscription early next week.

The 30-share BSE Sensex rose 98.90 points or 0.7% to settle at 14162.71 in the week ended Friday, 15 June 2007 from its close of 14063.81 on 8 June 2007. The S&P CNX Nifty rose 26.45 points or 0.63% to settle at 4171.45 in the week ended 15 June 2007 from its close of 4145 on 8 June 2007.

The BSE Small-Cap index rose 7.66 points or 0.1% to settle at 7350.25 in the week ended 15 June 2007 from its close of 7342.59 on 8 June 2007. BSE Mid-Cap index rose 24.70 points or 0.4% to settle at 6180.92 in the week ended 15 June 2007 from its close of 6156.22 on 8 June 2007.

The barometer index BSE Sensex rose 20 points on Monday, 11 June 2007, snapping four days losing streak. Prior to Monday’s rise, Sensex had plunged 507 points in just four trading sessions, to 14,063.81 on 8 June 2007 from 14,570.75 on 1 June 2007.

The market ended with modest gains on Tuesday, 12 June 2007, amid high degree of volatility. Sensex rose 48 points on the back of gains in oil & gas, metal and cement shares. The barometer index regained 14000 level after it had dipped below the psychologically important level in intra-day trade.

The market edged lower on Wednesday, 13 June 2007, tracking weak global markets as investors grappled with a seemingly relentless rise in US bond yields. The 30-share BSE Sensex lost 128 points at 14,003.03.

Firm global markets aided a rebound on Thursday, 14 June 2007, as Sensex jumped 201 points. Stocks rose across the globe as US bond yields eased and US economic data came in stronger than expected.

Sensex lost 41 points in volatile trade on Friday, 15 June 2007. The fall in domestic bourses was in contrast to the firmness in global equities. The US treasury market continued to show signs of stabilising, helping Asian and European equities extend their gains. Rising US bond yields had weighed on global markets earlier this week.

IT stocks attracted buying at declines on a view that the rally which took the rupee to nine-year high against the dollar in May 2007, has lost momentum. IT stocks had retreated over the past few weeks hit by rupee’s surge. A rise in rupee impacts IT firms as they derive a lion’s share of revenue from exports to US.

The IPO of reality major DFL was subscribed over 3 times, with substantial bidding from foreign institutional investors.

Derivatives  

The Nifty June 2007 futures settled at 4,129, a sharp discount of 42.45 points compared to the spot closing of 4,171.45.                                 

Government Securities Market

Primary Market

RBI conducted the sale (re-issue) of "7.49% Government Stock 2017" for Rs.5000 crores and Rs.6000 crores on June 12, 2007 and June 15, 2007 respectively. The cut-off yield was 8.4395 % on June 12, 2007 and 8.3536% on June 15, 2007.

Nine State Governments have announced the auction of 10-year of SDLs for an aggregate amount of Rs.3482.129 crores on June 19, 2007.

RBI conducted additional auctions of 91-day T-Bill and 182-day T-Bill for Rs.3000 crores and Rs. 2000 crores respectively on June 11, 2007. The cut-off yields for the 91-day and 182-day T-Bill were 7.7268% and 7.8136% respectively.

Secondary Market

During the week, the weighted average call rates during the period ranged between 2.79 per cent and 3.23 per cent, while weighted average repo rates ranged between 0.44 per cent and 1.65 per cent and the weighted average CBLO rates ranged between 0.11 per cent and 1.11 per cent. The average volumes of Call, Repo, and CBLO segments were Rs.134,548.8 crores, Rs.139,08.7 crores and Rs.293,231 crores respectively. The daily average outstanding amount in the LAF (reverse repo) operation conducted during the period was Rs. 2998 crores. The 1-10 year YTM spreads decreased by 40 bps to 32 bps.

Bond Market

NABARD has tapped the market to mobilise Rs. 100 crore by issuing bonds and offering 10 per cent for 3 years.

United Bank of India has tapped the market to mobilise Rs. 500 crore by issuing bonds and offering 10.65 per cent for 10 years.

Foreign Exchange Market

The rupee closed at Rs.40.97/USD on June 15, 2007 as compared with Rs. 40.98/USD as on June 08, 2007. The Rupee moved between Rs. 40.73 and Rs.40.97, with a standard deviation of 9 paise during the week. Similarly during the fortnight (June 04, 2007 - June 15, 2007), the Rupee moved between Rs.40.47 and Rs.40.98, with a standard deviation of 19 paise. The Rupee moved between Rs.40.45 and Rs.40.98 during the last 1 month (May 21, 2007 -June 15, 2007), with a standard deviation of 17 paise.

The six-month forward premia closed at 3.14% (annualized) on June 15, 2007 vis-à-vis 2.41% on June 08, 2007.

Commodities Futures derivatives

India 's leading commodity exchange, where gold bullion has always dominated trading, is seeing the spotlight shifting to copper as demand for base metals picks up in the fast-growing economy. The volume of copper being traded has more than doubled to 7,000 to 8,000 tonne a day over the past one year with volatile metal prices prompting more users to hedge, Anjani Sinha, director of Multi Commodity Exchange of India, said. The trading in copper futures is now almost at the same level as gold. World copper prices have more than doubled to about $7,500 per tonne from $3,000 in end-2005. This has lifted copper futures trading on the Indian exchange to about $488-$610 million, just behind gold futures with Rs. 2,500 crore to Rs. 3,000 crore.

Multi Commodity Exchange (MCX) has called for the formation of an independent regulator and the entry of banks, mutual funds, hedge funds and pension funds in the commodity exchanges.

The formation of an independent regulator will expedite the process of decision making, said Arindam Saha, assistant vice president of MCX. Saha felt that allowing the entry of banks, mutual funds and hedge funds into the commodity exchanges will lead to a surge in trading volume in these exchanges. The Sarin committee constituted by the RBI has favoured the entry of banks into the commodity exchanges.

Futures trading in raw jute is expected to gain a momentum, with Multi Commodity Exchange (MCX) deciding to launch the trading in that counter.An MCX official said after receiving request from a section of traders to create opportunity in raw jute futures trading on the MCX platform, the exchange has conducted a study on the physical market of raw jute. The study points out that with an annual production of 80-90 lakh bales of raw jute in the country, there is a good possibility of volume turnover in the futures market, which may hover around Rs. 500 crore in the initial phase of the trading. One bale is equivalent to 180 kg. A final draft containing the details of trading parameters will soon be sent to the Forward Markets Commission (FMC) for its approval. If the FMC clearance comes by July, MCX intends to open raw jute futures contract from August to catch the 2007-08 jute season.

Multi Commodity Exchange of India (MCX) and Shanghai Futures Exchange (SHFE) of China on Wednesday signed a memorandum of understanding (MoU) to share knowledge and expertise for further development of their exchange ecosystems

Forward Markets Commission (FMC) on Wednesday refused to review the lowering of open position limits in commodities futures saying the move had helped curb needless speculation. FMC chairman BC Khatua told Reuters there was no evidence that producers or exporters were affected by the May 9 decision to lower position limits for jeera and pepper. According Mr. Khatua the steps which are taken has resulted in curbing the unnecessary speculation substantially. The future prices have fallen by a substantial larger volume than the spot prices.

West Bengal government is planning to launch electronic trading of fruits to get good returns for the farmers of the state. It has initiated talks with Safal National Exchange (SNX), a Bangalore-based online spot exchange, for the purpose

PUBLIC FINANCE

The tax revenue of the government has continued to be buoyant even in the fiscal year 2006-07. According to the central board of excise and customs (CBEC), the tax collection during April-May 2007 has risen by 14.3 per cent amounting to Rs. 31,467 crore. Customs duty collection during the first two month of the fiscal year 2007-08 has stood at  Rs. 15,619 crore with an increase of 23.8 per cent over the corresponding period of the previous year. During the month of May 2007 it has stood at Rs. 8,398 crore, an increase of 20.3 per cent over the Rs. 6,951 crore over the year. The excise collection of the government has continued to display a lag albeit witnessing a small increase over the previous year. The collection during April-May 2007 has stood at Rs. 15,848 crore, a rise of 6.3 per cent on year-on-year basis. CBEC has planned a number of proactive measures to address this issue of lower revenue collection through excise duty. It has been planning more audits on traders to check their records of payment of central excise dues. It has also introduced certain measures in December last year, to increase coll.

CORPORATE SECTOR

The JSW Group is diversifying into cement production. The group is setting up a slag-based 4 million tonne clinker facility in Andhra Pradesh (AP) at an estimated cost of Rs. 1,200 – 1,300 crore. The facility will be a split location plant with the clinker plant in AP near the limestone deposits and the grinding units will be spread across two locations, one in Karnataka and the other in AP.

Leading real estate consultancies Jones Lang LaSalle (JLL) and Trammel Crow Meghraj (TCM) has announced their merger to form the largest real estate services firm in the country under the name, Jones Lang LaSalle Meghraj. With TCM being a dominant player in the domestic market and JLL having international expertise, the new merged entity will definitely be a force to reckon with in the real estate sector.

Yash Raj Films has formed an alliance with the Walt Disney Studios to makes series of computer animated feature films for Indian audiences. The Indian animation industry is $40 million and with this tie up, Yash Raj hopes to increase the market three-fold in the next three years.

As many as 23 entities are planning to raise around Rs. 25,000 crore from the domestic market in the remaining past of the financial year 2007-08. This is in addition to the Rs. 9,625 crore DLF mega issue and ICICI Bank’s Rs. 8,700 crore issue. According to SEBI, around 23 entities have filed a draft prospectus with the regulator between April 1 and June 8 for IPOs and rights issues. Among the companies that plan to tap the primary market are several public sector undertakings, including National Hydroelectric Power Corporation, Power Grid Corporation of India and Bharat Earth Movers.

In a major restructuring exercise aimed at sharpening its competitive edge in the face of increasing global competition, engineering and construction major L&T is planning to group all its businesses under 15 verticals compared to the present 5 business divisions.

INSURANCE

The Aditya Birla Group and its life insurance partner, Sun Life Financial Inc, have decided to inject close to Rs. 700 crore into the capital of Birla Sun Life in the current fiscal, thereby doubling the company’s capital base.

The SBI Life Insurance Company has announced a total of 9 per cent bonus. This would consist of simple annual bonus of 5 per cent and guaranteed return of 4 per cent on all its inforce Lifelong Pensions policies for the period 2006-07.

*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.

LIST OF WEEKLY THEMES

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