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Current Economic Statistics and Review For the
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Theme
of the week:
Situation Assessment Survey 1.
Introduction Situation
Assessment Survey of Farmers conducted along with AIDIS Survey and Land
Holding Survey by NSSO in their 59th round during January –
December 2003 gave some insight into the use of energy by farmers for
different activities from different sources of energy. The
survey collected data on energy use for different economic activities of
farmer households such as ploughing, irrigation, harvesting, threshing, cane
crushing, transport, cooking, and lighting along with eight different
sources of energy used. The eight sources of energy are electricity,
diesel/petrol/kerosene, solar energy, LPG, gobar gas, dung cake, firewood,
animal power and other sources. However,
it may be noted that for each activity, the ‘percentage of farmer
households using a specific energy source’ refers to the percentage of
such households among households reporting the use of non-human energy for
the activity in question. The
Primary source of energy here refers to the source from which energy is
usually available i.e., most often available during the total time spent on
the activity. This
note, seventh in the series, attempts to give a brief review on the above
subject based on the data published by NSSO in their report no. 496 titled
‘Some Aspects of Farming’. The definitions and concepts of different terms used are given in the Annexure. 2. Use of Different Source of Energy
At
the all-India level, 79.1 million households have reported the using of
energy from different sources during the reference year of the survey, Among
different sources, diesel/petrol/kerosene has been reported to have been
used by maximum number of farmer households numbering 31.0 million farmer
households, or about 39 per cent of the total reported farmer households.
Animal power, next in the rank as a source of energy, was used by 17.4
million farmer households and their share
works out to 22 per cent. Households numbering 13.7 million (17.3 per
cent) reported the use of firewood as a source of energy, followed closely
by 13.3 million farmer households with the use of electricity. Use of other
sources such as LPG, gobar gas, dung cake and solar energy were reported by
about 3.8 million households, which formed a very small share of about 5 per
cent in all reporting farmer households.
3.
Energy used for Different activities
At
all-India level, 83.4 million households
reported energy use for lighting purposes, followed by 81.9 million
households using energy for cooking. Important agricultural activities for
which some form of energy has been used are ploughing (reported by 78.2
million households), harvesting (8.4 million households) and threshing (4.1
million households). About
39.1 million households have reported using energy for irrigation where as
48.3 million households use energy for transport.
4.
Number of Farmer Households Using Energy For Ploughing At
all- The
usage of different sources of energy has also been looked by category of
households classified by size of land possessed at all-
above 10 hectares of land, there was a marked increase in the use of diesel power (Table 3). Seventy per cent of large farmer households reported using diesel tractors for ploughing. Further, 1.5 per cent of farmer household in this class reported the use of electricity for ploughing.
Inter
state variations in the proportion of farmer households reporting the use of
animal power and diesel for ploughing is shown in Table 4. Majority of
states exhibited a remarkable variations in the use of different
source of energy, with not only the economically backward belt consisting of
Orissa, Jharkhand, Chattisgarh and north-eastern states but also by the more
developed states like Karnataka and Maharashtra which depended heavily on
animal power. More than 80 per cent of farmer households in Haryana, 5.
Number of Farmer Households Using Energy For Irrigation At
all- Considering reporting farmers by the size of land possessed by them, small proportion of marginal and small farmer households has been using animal power for irrigation (Table 5). Use of diesel power seems to have increased with the increase in the size of land holding class of farmer households. Incidence of use of electric pumps has also increased steadily with size class of land holding from about 10 per cent in the lowest size class to 73 per cent in the largest size class.
Inter-state
variations in the proportion of households using diesel, electricity, animal
power and other sources for irrigation were shown in Table 6. Use of diesel
pump for irrigation has been reported by more than 80 per cent of the farmer
households in
6.
Number of Farmer Households Using Energy For Harvesting At all-India level, 8.4 million households have reported the usage of energy from different sources for harvesting. Almost
59 per cent of farmer households have reported the use of diesel powered
energy for harvesting crops during the 365 days of the reference year while
another 38 per cent used animal power. However, only 3 per cent of farmer
households reported the use of electricity for harvesting, at all- The
incidence of use of diesel power have increased steadily with increase in
size class of land possessed by farmer household from 47 per cent in the
lowest size class to 80 per cent in the largest class. No such pattern was,
however, seen in the case of usage of electrical energy for harvesting,
where about 3 per cent of households in each of the size classes have
reported to be using
energy for harvesting.
Though,
a large number of farmer households in the lowest size classes, i.e.
marginal and small farmers, used animal power for harvesting, it is
interesting to note that almost 18 per cent of farmer households possessing
land holdings of more than 10 hectares, has
used animal power for harvesting (Table 7).
Usage
of energy by farmer households across the states indicate that comparatively
higher proportion of farmer households in Himachal Pradesh ( 63.4 per
cent)and to some extent those in Uttranchal (12.6 per cent), Kerala( 14.9
per cent) and Tamil Nadu ( 8.3 per cent) reported use of electricity for
harvesting. More
than 80 per cent of farmer households from Haryana, More
than 90 per cent of farmer households in 7.
Number of Farmer Households Using Energy for Threshing At all-India level, 40.5 million farmer households has reported using different source of energy for threshing. Among these households, 61.1 per cent have used diesel powered thresher. Animal power and electricity were reportedly used by 27.2 per cent and 11.5 per cent of farmer households for threshing. The incidence of use of electric power rose steadily with increase in size of land possessed from 8 per cent in the lowest size class to 24 per cent in the highest size class. Use of diesel powered threshers has however, ranged between 51 per cent to 67 per cent (Table 9) among all classes of households. However,
the share of animal power decreased from around 41 per cent in the small
size class to 9 per cent in the highest size class.
Inter-state
variations in the relative importance of different sources of energy for
threshing are shown in Table 10. Farmer
households in the northern region states and southern region except
Karnataka, Bihar, Uttranchal, Uttat Pradesh, Gujarat and In
Madhya Pradesh, Most
of the farmer households in north-eastern states , Jharkhand, Orissa,
8.
Number of Farmer Households Using Energy For Cane Crushing Table
11 presents the state-wise proportion of farmer households using energy from
different sources for cane crushing activity.
It
can be seen from the table that 5.6 million farmer households were engaged
in cane crushing activity using different sources of energy at all- While
animal power has been used by majority of households in north-eastern
states, Jhakhand, and Madhya Pradesh, diesel power has been used by farmer
households from northern states, Karnataka and Tamil Nadu. Electricity
power has been used by some farmer households ina few other states like
Chattisgarh, Andhra Pradesh and Uttar Pradesh. 9.
Number of Farmer Households Using Energy For Lighting At
all-India level, 83.4 million households have been reported using different
sources of energy for lighting. Electricity and Kerosene were the main
source of energy for lighting. About 52 per cent of farmer households have
reported using electricity for lighting and another 46.8 per cent of the
farmer households have reported usage of kerosene for lighting, at all- There
is not much difference among state farmer households as far as electricity
usage for lighting except in case of farmer households of Bihar, Jharkhand,
Orissa, Farmer households of Himachal Pradesh and Tripura also reported usage of gobar gas as a source of energy for lighting. In Arunachal Pradesh, about 22 per cent of farmer households have reported use of firewood for lighting. Firewood and animal power have reported as a source of energy by a small proportion of farmer households from Kerala for lighting.
10.
Number of Farmer Households Using Energy For Cooking At
all-India level, out of 81.9 million farmer households have reported using
some kind of energy for cooking. Of which, 77 per cent households have
reported use of
firewood
as their main source of energy for cooking. About 16 per cent farmer
households reported usage of dung cake for cooking and another 5 per cent
used LPG. State-wise
use of energy used for cooking is shown in Table 13. It
can be seen from table, that firewood is the main source of energy for
cooking for majority of farmer households in all states. Dung cake is used
as a source of energy among 20-58 per cent of farmer households of Haryana,
Punjab, 11.
Number of Farmer Households Using Energy For Transport Diesel/petrol powered and Animal powered transport had been the main form of transport among the rural farmer households. Of the 48.3 million households reporting the usage of different sources of energy for transport, about 53 per cent of them uses diesel, petrol etc and another 46 per cent reported the use of animal power. Less than 1 per cent has reported the use of another source of energy like electricity etc, for transport Electricity powered transport is reported by a small 0.4 per cent of farmer households, perhaps due to the fact that the survey is confined mainly to the rural area. Northern
states mainly depend upon diesel and petrol for energizing their transport,
which north-eastern states uses
animal power as well as diesel as a source of energy for transport. In
eastern region, while farmer households from Bihar mainly depend upon diesel
and petrol, the farmer households in Jharkhand and Orissa and to some extent
Even
in rural In Mizoram 7.7 percent of households have reported use of firewood for energizing the transport.
*
R .Krishnaswamy has prepared this note _____________ Annexure Concept
and Definitions Farmer
is person who operated some land and was engaged in agricultural activities
on any part of that land during the 365 days preceding the date of survey. Farmer
households
were defined as one, which had at least one farmer. Agricultural
activities
include cultivation of field and horticultural crops, growing of trees or
plants such as rubber, cashew, coconut, pepper, coffee, tea, etc., animal
husbandry, fishery, bee-keeping, vermiculture, sericulture, etc. Crop
seasons
are generally identified by the months of harvesting of a crop during a
normal year. Kharif season includes both autumn kharif or early kharif and
winter kharif or late kharif. Generally, harvesting months of the early
kharif and the late kharif season extend over August to October and November
to January, respectively. Hence in general, the crops, which are harvested
during August to January, were considered as crops of kharif season.
Similarly, the rabi season includes both rabi and zaid rabi or summer rabi
and the crops are harvested during February –April and May-June,
respectively. Thus, a crop harvested during February to June was treated as
crop of rabi season. However, there are departures from this general rule in
the case of some crops grown in certain region. For example, rice in Tamil
Nadu is harvested thrice and the 3 harvests are termed as autumn, winter and
summer crops. Respective harvesting period of 3 crops is September to
February, January to April and May to June. Hence autumn and winter paddy
were taken as the kharif crop. Similarly, in Karnataka autumn and winter
paddy harvested in September to December and November to March are
considered as kharif crops. Generally,
kharif rice, jowar, bajra,maize,ragi, sugarcane, kharif sesamum, groundnut,
castor seed, cotton seed tobacco and jute are termed as kharif crops and
wheat, rabi jowar, barley, gram, rabi sesamum and linseed are termed as rabi
crops. Since most of the principal crops are grown in only one season, there
is little difficulty in ascertaining the crop season of a particular
agricultural operation. Hence, crop season of such a crop determined on the
basis of its month of harvesting. Owned
Land: A
plot of land is considered to be owned by the household if the right of
permanent heritable possession with or without the right to transfer of
title, is vested in a member or members of the household. Land held in
owner-like possession under long term lease or assignment is also
considered, as land owned. Leased
Land:
Land given to others on rent or free by owner of the land without
surrendering the right of permanent heritable title is defined as land
leased out. All private land encroached upon by household is treated as
leased in land. Otherwise
Here
possession is without the consent of the owner. Orchards:
A
piece of land put to production of horticultural crops is regarded as
orchard; if it is at-least 0.10 hectare or having at least 12 trees planted
on it.
A
plot is considered exclusively for an orchard or plantation, if it is being
operated in both seasons provided some trees/plants remain standing on the
land for the major part of each season, even though the perennial
orchard/plant crop usually harvested in only one season. A
plot engaged in other activities, other than crop production, like
livestock, poultry, pisciculture, etc., is treated as being operated for as
long as it continued to carry out the activity. Hence, a plot used for
livestock is considered as being operated in both seasons provided some
livestock is maintained in the major part of each season.
Highlights of Current Economic Scene AGRICULTURE As
per All India Rice Exporters Association, central government is likely to
increase the minimum export price of non-basmati rice to around US $
600-US $ 650 per tonne from US $ 500 per tonne for discouraging exports
and improving domestic supplies. During the period between April-October
2007-08, The
Ministry of Commerce is likely to expand the definition of basmati rice by
allowing large number of rice varieties to be identified under basmati
brand, which would include varieties such as pusa-1121 and Mangala Rai. STC
has planned to supply 20,000 tonnes of parboiled rice worth Rs 30 crore to
As
per the official from the Pulses Importers Association of India,
production of rabi pulses is likely to fall by 8.8 per cent to 85.7 lakh
tonnes in 2007-08 against 94 lakh tonnes last year, due to deficiency of
rain and cold wave conditions prevailing in the country. It is estimated
that shortfall in the output of winter pulses and rising demand in the
domestic market would force According
to estimates by According
to Solvent Extractor Association of India, vegetable oil imports in India
during the oil-year (October- September) 2007-08 is likely to rise by 7.2
per cent to 5.9 million tonnes as compared with 5.5 million tonnes
registered a year ago, due to lower carry forward stock of oilseed and
rising oil consumption. It is expected that The
Indian Olive Association has urged the central government to abolish
customs duty of 45 per cent and 40 per cent imposed on virgin olive oil,
refined and pomace olive oil, respectively. These rates are very high as
compared with non-olive producing countries like According
to survey conducted by ORGMARG on behalf of Solvent Extractor Association
of India (SEAI), the total area under castor cultivation in Supreme
Court, on February 21, 2008, has asked the government of Uttar Pradesh not
to take coercive action against the private millers with cane arrears for
the 2006-07 season. After the Supreme Court’s order, shares of most of
the sugar firms with mills in the state have raised between 3 and 4.94 per
cent touching intra-day high. Prevalence
of cold climate in most parts of According
to the Spices Board, exports of spices from India is likely to cross the
target of 3.8 lakh tonnes valued at Rs 3,600 crore for the current fiscal.
The total shipments during the period between April-January 2007-08 was at
3,49776 tonnes valued at Rs 3,485.48 crore as compared with 292,185 tonnes
valued at Rs 2850.45 crore during the corresponding period of previous
year, showing increase in terms of both volume and value by 20 per cent
and 22 per cent, respectively. During the same period exports of spices
like chilli and mint products have exceeded the targets both in value and
volume terms. Exports of coriander and cumin have exceeded their
respective targets in value terms and that of vanilla in volume terms.
Spices such as pepper, chilli cardamom, coriander, fennel, fenugreek,
vanilla and value added spice products like curry powder, spice oil and
oleoresins have also shown improvement in their export performance
compared to last year. According
to Indian Jute Mills Association (IJMA) the minimum support price of raw
jute (Assam TD5 variety) in the jute year 2008-09 is likely to be raised
to Rs 1,250 per quintal, an increase of Rs 195 over the last year’s
support price of Rs 1,055 per quintal. The
Reserve Bank of India (RBI) as on February 20, 2008 has asked the banks to
reschedule loans given to the poultry units across the countries to
implement relief measures for poultry industry, which is badly hit by the
bird flu. The relief measures would include one-year moratorium on
repayment of outstanding loans, conversion of working capital loans into
term loans and rescheduling of term. The
state government of According
to worldwide data compiled by the International Service for the
Acquisition of Agri-Biotech Applications (ISAAA), the total acreages
planted under all GM crops has accounted to 114.3 million hectares in
2007. Out of this, nearly 57.7 million hectares has been accounted by the According
to the Crop Care Foundation of India, the crop
losses at the production stage due to pests, weeds and diseases in the
country has been Rs 1.48 lakh crore per year. As per the data from
Organisation for Economic and Development (OCED), the per hectare use of
pesticides in India is 0.33 kg as compared with 3 kg in France, 4.17 kg in
Italy and 13.14 kg in Japan. In 2002,
A pick up in the production of all the major group during December pushed up the index of industrial production from 5.1 per cent in November to 7.6 per cent in December 2007. As a result during the fiscal so far registered an increase of 9.0 per cent as against 11.2 per cent last year. Mining sector and electricity sector grew by 3.0 per cent and 3.8 per cent during the month. The growth of manufacturing sector is at 8.4 per cent during December is much below to that of 14.5 per cent recorded last December. Out of the 17 industries, four industries declined and five industries registered double digit growth.. As per use-based classification, the sect oral growth rates in December 2007 over December 2006 are 3.1 per cent in basic goods industries, 16.6 per cent in capital goods and 7.2 per cent in intermediate goods. Consumer goods recorded an increase of 8.7 per cent. Infrastructure The
index of six core infrastructure industries having a combined weight of
26.7 per cent in the index of industrial production registered a slower
growth of 4.0 per cent as compared to 9.0 per cent in December 2007. The
dismal performance of crude petroleum which registered a negative growth
of 1.5 per cent against a growth of 6.0 per cent last year, and
comparatively lower growth performance of refinery products, electricity,
cement, steel all contributed for the lower rate of growth. However, coal
production for the fourth month in succession registered a faster growth
with its production rate registering a growth of 8.4 per cent in December
2007 as against a low growth of 2.9 per cent in November 2006 Inflation The
annual rate of inflation calculated on a point to point basis, rose by
4.35 per cent for the week ended February 09,2008 as compared 4.07 per
cent as on February 10,2007. Index
of Primary Articles group rose by 0.6 per cent to 225.0 from 223.6 for the
previous week. Food articles group rose by 0.8 per cent. Index of non-food
articles rose by 0.3 per cent mainly due to higher prices gingelly and
groundnut seed and cotton seed The
index for the major group Fuel, Power, Light and Lubricants remined
unchanged at 334.0. The
index of manufactured products went up by 0.4
per cent due to higher prices of gingelly oil, oil cakes and bran
all kinds. The
final WPI for all commodities had been revised upward from 216.4 to 215.6
for the week ended December 15,2007. As a result the rate of inflation
calculated on a point to point basis stood at 3.84 per cent as compared to
3.45 per cent provisional. Banking In
a move to boost credit off-take four-state owned banks has announced a
25-50 basis point cut in their benchmark prime lending rates (PLRs). State
Bank of The
RBI has issued a restricted banking licence to American Express Bank to
conduct credit card and travel related businesses in The
board of directors of HDFC Bank and Centurion Bank of Financial
Market Capital
Markets Primary
Market
Reliance Power Ltd, the company, which raised Rs 11,000 crore in
January which became India's biggest initial public offer (IPO), will
issue bonus shares in a ratio of 3:5 (three shares for every five) held to
compensate investors for the slump in the stock price after listing. The
free shares will not be given to promoters like Chairman Anil Ambani and
the founder group, including Reliance Energy Ltd, holding a combined 90
per cent stake. Reliance
Power, which attracted a record Rs 7,56,000 crore worth of bids, slumped
as much as 21 per cent when it listed on February 11,2008 as a global
sell-off in equities dried up the appetite for new shares.
The
IPO of Rural Electrification Corporation(REC) was subscribed 27.76 times
across the price band. The issue received bids for 433 crore equity shares
against the 15.61 crore equity shares on offer. The price band for the
issue was fixed between Rs 90 and Rs 105. The QIB portion was subscribed
40 times, HNI 23 times and retail 5.69 times as per provisional data
available with merchant banking sources.
Hyderabad-based infrastructure project development company, KNR
Constructions Ltd, made its debut at a premium of 23.5 per cent against
the issue price of Rs 170 on the NSE on Monday, February 18,2008. The
scrip opened at Rs 210, and closed at
Rs 154.90. It made a turnover of Rs 8,807 lakh as per NSE e. On the BSE it
opened at a premium of 5.88 per cent but closed at Rs 154.35.
Kerala based electrical equipment maker V-Guard Industries Ltd was
subscribed a total of 2.7 times across the price band on the last day of
its initial public offering. The price band for the issue was fixed
between Rs 80 and Rs 85. The issue was subscribed a total of 1.74 times by
the Qualified Institutional Investors, 2.92 times by the Non-Institutional
Investors and 4.24 by retail investors.
Technology infrastructure services provider GSS America Infotech is
set to invest Rs 66 crore in the company campus being developed near
Multi Commodities Exchange of India (MCX) has re-filed its draft
red herring prospectus (DRHP) with SEBI to tap the capital market with an
IPO of one-crore shares of Rs 5 each. With an enterprise value of Rs 4,400
crore, analysts expect the issue price to range between Rs 500-600. MCX
plans to raise Rs 500 crore to Rs 600 crore through the IPO.
Future Ventures India Ltd (FVIL), the venture capital arm of
Kishore Biyani’s Future Group, is ready to hit again the market with an
initial public offer of around Rs 3,750 crore. The issue will carry a
small price band to make it affordable to the retail investor. The company
will issue 3,736.15 million shares. Future Ventures has already filed a
draft red herring prospectus with SEBI for the proposed issue.
Secondary
Market
Uncertainty in global markets coupled with rising crude oil prices
was responsible for the weak sentiment in the Indian markets.
During the week under review, BSE Sensex slipped 766.18 points or
4.23 per cent to 17,349.07. However, during the same period there was
value buying in some of the mid-cap counters which assisted the BSE
Mid-Cap Index to close with
marginal gains of 0.03 per cent.
Among the sectoral indices of BSE, Consumer durable index jumped to
3.89 per cent over the week on expectation of sops in the forthcoming
budget. While Reality stands for the major loser with 7.97 per cent
followed by banking scrips to 6.75 per cent due to negative impact of
interest rate cuts.
According to Sanjay Sinha, chief investment officer, SBI Funds
Management Pvt Ltd, expectation of more bad news in the first half of the
year and good news in the latter half as the present volatility of the
market would persist for the time being. Although the recent turmoil in
the market is viewed as a correction by the large fund houses, they are
yet to foresee any good news, at least for the time being.
Sensex has been battered down by 3,165.40 points, or 15.23 per
cent, from 20,783 on January 8, 2008 to 17,349.
Similarly, BSE mid- and small-caps also declined by 28 and 31 per
cent, respectively. About
10 stocks contributed to the 64 per cent fall in the benchmark BSE Sensex.
Volatility during the period was around 44 per cent in Sensex whereas for
the BSE Mid Cap and BSE Small Cap it was 58 per cent and 50 per cent,
respectively. The
share price of Reliance Power surged 7.66 per cent on BSE following the
company’s Sunday announcement of a bonus issue of shares to non-promoter
shareholders. But investor enthusiasm still couldn’t carry it past the
original issue price. The scrip touched an intra-day high of Rs 429.60 and
a low of Rs 410.10 before closing for the day at Rs 413.95.
Even as the primary market showed signs of revival yesterday, the
secondary market on Wednesday witnessed the highest fall in a week as
investors are yet to recover from the shock of the recent crash and the
impact of rising crude prices, which may trigger further price hike.
Real estate (down 3.59 per cent) and banking (down 3.23 per cent)
led the fall. Public sector State Bank of
The Reserve Bank of India (RBI) has told parliamentarians that it
is concerned over the stock market exposure of various non-banking
financial companies (NBFCs) promoted by leading banks in the country. At a
meeting with the Parliamentary Standing Committee on Finance on February
12, the central bank said some banks were circumventing prudential norms
for capital market exposure through these NBFCs.
On February 12, the Committee had met officials of the Reserve Bank
of
RBI has rejected proposals by four banks Bank of India, IndusIand
Bank, Kotak Mahindra Bank and HDFC Bank to increase their capital market
exposure beyond the regulatory cap of 40 per cent of net worth on grounds
of excessive market volatility. RBI has the discretion to allow higher
capital market exposure to banks with sound internal controls and robust
risk management systems, but the banking regulator decided against
exercising it.
On February 23, 2008 Securities and Exchange Board of India (SEBI),
said foreign institutional investor (FII) or their sub-accounts should
transact in the Indian securities market only by taking and delivering the
securities purchased or sold ahead of the implementation of short selling
in Indian stock markets. This rule, however, will not be applicable to
derivative transactions. Even though current rules make it mandatory for
FIIs and sub-accounts, to take and give delivery of securities purchased
or sold, the new notification will separate the delivery-based trades from
short selling trades. A SEBI notification allowed FIIs and sub-accounts to
lend and borrow securities on the same condition.
BSE is considering a proposal to allow trading in commodity futures
on approximately 15,000 terminals of its members, following its recently
concluded acquisition of 26 per cent in the Ahmedabad-based National Multi
Commodity Exchange (NMCE). The
exchange was upgrading hardware and processing capacities by two or three
times and introducing an integrated platform for equity, futures and
options, commodities and bond trading. The NMCE and the BSE are also
trying to increase the horizon of commodity contracts, which can be traded
on the former exchange’s platform since it currently derives most of its
turnover from plantation commodities.
To make the listing of Real Estate Investment Trusts (REITs) more
attractive in the domestic market, the Securities and Exchange Board of
India is looking at raising the cap on the extent a REIT can invest in a
project. SEBI is also mulling to increase the limit of a single entity’s
investment. SEBI was likely to revise the current draft regulations, which
limit a REIT’s exposure to 15 per cent of a single real estate project
and a single group’s exposure to 25 per cent of a project. These caps
keep developers from owning controlling stakes in projects, which is not
the case in other countries. Once the draft regulations are modified, they
would become much more realtor-friendly and make their listings in Derivatives
Ahead of the expiry of February futures and the Budget that is
expected to be populist, markets will continue to be edgy even as the
build-up of rollover positions is yet again extremely low as in the
previous week. The average daily turnover in the February settlement has
been around Rs 38,000 crore which is way below the calendar 2007 average
of above Rs 57,000 crore. If there is a post-Budget volume explosion, the
market could swing quite violently precisely because it has been so thin
in both cash and F&O through the February settlement. Of the Nifty
futures open interest of Rs 24,215 crore, Rs 5,550 crore has been rolled
over and of the open interest of Rs 35,995 crore in stock futures, Rs
8,069 crore has been rolled over. Rollovers in Nifty futures contracts was
40.95 per cent or Rs 9,748 crore while stock futures witnessed rollovers
worth Rs 22,585 crore or 30.5 per cent. There are few strong supports or
resistances outside the current trading range of Nifty 4,800-5,600.
The Nifty closed at 5,110 in cash and the February futures was held
at 5,093.6, while March was settled at 5,072.2 and April at 5,047.75.
There is some evidence of carryover because open interest dropped 16 lakhs
in February and increased 32 lakhs in March. The Mini Nifty was settled at
5,096.15 and 5,074.55 in February and March respectively while April was
settled at 5,059.95 with limited open interest available.
The Junior closed at 9,559 in cash and the February futures was
settled 9,490. The BankNifty closed at 8,685 in spot and the February
futures was held at 8,680.2 while March was held at 8,708 with some open
interest. The CNXIT closed at 4,017 in spot and 3,987.3 and 3,986.25 in
February and March contracts respectively. In the options market, the
Nifty Put-Call Ratio (PCR) in terms of open interest had dropped below 0.9
in mid-week. It has recovered slightly, back to 0.91
but that is still bearish in absolute terms. Deconstructing
further, the February PCR is 0.85 while the March-April PCR is 1.74, which
somewhat alters the perspective.
Government
Securities Market Primary
Market
On February 20, 2008, RBI auctioned 91-day and 182-day T-bills for
the notified amounts of Rs.500 crore each. The cut-off yields for 91-day
and 182-day T-bills were 7.39 per cent and 7.53 per cent respectively.
Seven State Governments auctioned 10-year paper maturing in 2018
through an yield based auction using multiple price auction method on
February 22, 2008, at cut-off yields ranging from 8.12-8.48 for an
aggregate amount of Rs. 5,814.175 crore. Secondary
Market
During the week under review, call rates ruled at 6.43-7.76 per
cent. The tightness prompted banks to take recourse to the repurchase
window at the Liquidity Adjustment Facility (LAF) auctions for Rs 17,240
crore towards the week-end. The bonds fell for the second week, the
longest losing streak in almost three months, after inflation jumped to a
six-month high of 4.35 per cent for the week ended February 9,2008. The
yield on benchmark 2017 notes, which moves inversely to price, rose to the
highest in seven weeks. Daily
trade volumes were down to Rs 5,700 crore from last week’s average of Rs
8,100 crore. The Reserve Bank of Bond
Market
During the week under review, Central Bank of
On February 18,2008 RBI stated the issue of 7.95 per cent
Fertilizer Companies Special Bonds maturing in 2026 for the nominal volume
of Rs.3,610 crores. Foreign
Exchange Market
The rupee had its third weekly decline, the longest losing streak
since July 2006, as the currency’s losses may have spurred companies to
boost purchases of dollars needed to pay for imports. The rupee fell this
week past the 40-per-dollar level for the first time since September,
after oil prices climbed to a record, stoking speculation Indian refiners
will buy more dollars to pay for costlier crude imports. It had the
biggest weekly loss in three months; on speculation overseas funds
withdrew part of their investments in local equities. The rupee weakened
0.9 per cent this week to 40.05 per dollar. A strong demand for dollars
from importers and a lack of fresh inflow into the market led the spot
rupee to breach the crucial barrier of 40.00 and close at a seven-month
low of 40.21/22 to a dollar in the middle of the week. Besides the demand
from foreign banks, oil and non-oil importers are rushing to buy dollars
to cover their near-term import payments.
Global oil prices topped $100 a barrel, though they backed off
towards the week-end to settle at $98 a barrel. Public sector refinery
demand, as a result, for foreign exchange pushed up the dollar to about Rs
40.10, though it finally settled at Rs 39.90 towards the week-end. Forward
dollars remained at a discount for up to six months. The discount implied
that forward dollars were cheaper than spot. The rupee closed at Rs.39.98/USD
on February 22, 2008 as compared with Rs.39.66/USD as on February 15,
2008. The Rupee moved between Rs.39.66 and Rs.40.15, with a standard
deviation of 19 paise during the week. Commodities
Futures derivatives
According to media reports and officials in
According to Multi Commodity Exchange’s (MCX) deputy managing
director Joseph Massey, the government must give tax incentives to rural
infrastructure projects in the agriculture sector in order to provide the
sector with a much-needed boost. There are tax incentives for
infrastructure projects; similar incentives should be extended to projects
associated with development of rural agriculture infrastructures such as
warehousing, cold storage and others.
The National Collateral Management Services (NCMSL), a warehousing
and delivery arm of the National Commodity and Derivatives Exchange (NCDEX),
has chalked out a mega expansion plan to upgrade warehousing and
collateral management of agri commodities at an investment of Rs 800 crore.
According to A Hari Prasad, managing director and CEO, the company was in
the process of setting up warehouses in 60 different locations in 20
states by acquiring land from the government and land owners. At present,
the company does not own any warehouse but deal with clients through 2,000
warehouses on franchise or rental basis.
The poor quality of jeera delivered by the leading agri-commodity
bourse National Commodity and Derivatives Exchange (NCDEX) has
disappointed investors, who had held long positions in the February
contract, who expected uptrend in prices at the end of the February
contract, were disappointed as prices nosedived on reports of poor
quality. Jeera prices of February have fallen by 22 per cent to Rs 8,700 a
quintal since the beginning of the contract. Commodity regulator Forward
Markets Commission (FMC) had recently rejected the samples of jeera
collected from the NCDEX go-down last September, saying that the commodity
failed to meet the quality norms.This affected the futures as well as spot
market. Besides February contract, March delivery of jeera also dipped to
its lowest level at Rs 8,957 a quintal against Rs 12,097 a quintal, which
was highest in January.
Futures trading at the country’s leading commodity exchange MCX
runs the risk of being heavily dependent on 10 players, who account for as
much as 40 per cent or about Rs 10 lakh crore turnover. The share of top
10 members in the turnover increased to 40.20 per cent during the
April-December 2007. The exchange accounts for 75 per cent of the total
commodity futures turnover in the country. In 2006-07, the turnover of the
exchange was around Rs 37 lakh crore. Among the domestic commodity
exchanges, the market share of MCX in futures trade based on value of
contracts was more than 90 per cent in case of important commodities like
gold, silver, crude oil and copper. The other commodities, which are
traded on the MCX include cotton, non-ferrous metals such as zinc and
lead, rubber, cashew, sugar, coffee, chana, masur etc.
MCX also has the largest number of 55 commodities traded on the
exchange in the world followed by 23 commodities at Chicago Board of Trade
and 20 commodities at London Metal Exchange.
Corporate
Sector The
Anil Ambani-controlled Reliance Energy Ltd has outbid Mukesh Ambani run
Reliance Industries Ltd for the Rs 4000 crore Mumbai Trans Harbour Project
(MTHP). The Maharashtra Road Development Corporation (MSRDC) has selected
the REL-Hyundai consortium, which quoted a concession period of 9 years 11
months, over the RIL-promoted SKIL Infrastructure-IL&FS-John Laing
consortium’s 75 years. Wockhardt
has registered a net profit of Rs 386 crore with a growth of 60 per cent
for the year ended December 31, 2007. The sales revenues surged by 53 per
cent to Rs 2,653 crore. Kalyani
Steels, a part of the Rs 8,000 crore Kalyani Group that has diverse
businesses such as engineering steel, forgings and auto components has
signed a memorandum of understanding (MoU) with state industry and
minerals officials for a Rs 6,500 crore integrated steel and power project
in West Bengal. The steel plant will have a capacity of one million tones
and the power plant is planned for 500 MW, along with down stream
operations. L&T
has bagged a multi-million dollar order from Cairn Soon,
paper air-tickers would be history as airlines across the world will move
to 100 per cent e-ticketing from June 1, 2008. The International Air
Transport Association (IATA) claims that penetration of e-tickets is
already 93 per cent. While a paper ticker cost $10 to process, e-ticketing
reduces that cost to $1. The industry will save over $3 billion each year
by offering the passenger a better service. In C
Sivasankaran-promoted Telecom Geodesic
Information Systems (GIS) and Rollout
plans of nine mobile telecom companies that received letters of intent
from the government last month and the launch of 3G wireless services by
others face major problems with spectrum allocation getting delayed from
June to the year-end. The principal delay is because the defense forces,
which are expected to vacate some spectrum for mobile service providers,
are yet to identify locations for some sites for an alternative optic
fiber network that is being developed for them. Of the 162 sites to be
developed for the alternative network, only 50 have been completed. The
DoT had assigned the execution of the network to BSNL in April 2006 and
HCL Info systems is one of the vendors for network equipment. It will
still take another two to three quarters to complete the project. The
defense services are expected to vacate 45 MHz of wireless spectrum (of
which 25 Mhz is for 3G) for mobile services once they shift a part of
their communication needs from a wireless to a wire line network. Meetings
between the ministry of defense and DoT are slated to tackle this issue. Information Technology Faced
with imminent recession in the
*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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