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Current Economic Statistics and Review For the
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Age-Sex Structure of Indian Population-2
1. Introduction This second note on age-sex structure tries to analyse the distribution of the population as observed from the data in quinquennial age-group distribution for India. The analysis is supplemented with information on changes in the age structure for the period 1961-2001. An attempt is also made to compare the percentage distribution of population in five-year age-group intervals obtained from population Census 2001 with the UN Projection on India’s population along with corresponding data from other surveys conducted close to the same period.
Statement 1 presents the quinquennial age-wise distribution of population as revealed by Censuses 1961 to 2001. The percentage distribution of population in 5-year age group intervals is depicted in Statement 2. A scrutiny of the statements reveals that the growth of population in various age group is uneven. It can be seen that in the age range for all the 5-year age group intervals, the absolute population in 2001 is more than twice the population in 1961. This is perhaps due to continued high fertility coupled with the effects of population momentum in the early periods.. It can also be seen that, the incremental increase in 0-4 infant age group is much less now as compared to past, due to comparative fertility decline in the recent period. Total fertility rate (TFR) has came down from 5.2 in 1971 to 3.2 in 2001 and at the same time general fertility rate (GFR) has dipped to 99.5 in 2001 from 161.1 in 1971. “In a population that is not greatly affected by huge changes in age-structure, adult migration or child mortality between two points of time, a significant fall in proportion of children is broadly indicative of fall in fertility during the period” ( Census of India 2001, Series-1, Paper 1 of 2001- Provisional Population Totals).The incremental addition in 0-4 age group, which was 18.9 million during 1981-91, dwindled to 8.1 million during 1991-2001 with both sex – male and female – sharing equally for the decline. Another revealing feature of the population characteristic is that there is a steady decline also in the share of child population (0-14 age group). The share of this age-group after increasing by 1 % between 1961 and 1971 may be due to the high fertility of the population subsequently declined steadily consistent with decreasing fertility and reached 35.3% in 2001 from a high of 42% in 1971.Still at this level, the absolute number at 36.4 million in 2001 is more than double to that of 18.0 million in 1961 and about 5 million more than that in 1991. At this level, the sex ratio is 919 in 2001 as compared to 931 in 1991, a 1.3% fall during the decade. This has significant implications for child dependency ratio and burden of child care. An important fact revealed by the Census data is the fact that the population size in the age-group 15-29 is on the rise and it is likely to be so future also. In 2001, the absolute number of population in this age-group is 27.3 million more than double to that of 13.1 million in 1961 and 5 million more than the same cohort population in 1991. This trend has significant implication for planning for higher education as the increasing literacy levels would spur the demand for facilities for higher education in areas where such facilities are low. Again large number of educated would be entering the employment market and this would require a different approach to address the resulting labour problems. The number of females in the reproductive age-group of 15-49 years stands at 251.4 million in 2001, 2.5 times the corresponding number of 100.3 million in 1961. This number has increased by over 26% during the last decade and is likely to increase in absolute terms in the near future also. The impact of fertility decline per woman in the country seen in the last couple of decade is likely to be more than offset by increasing number of females in the reproductive age-group. Thus the number of children born in the country is unlikely to show any sharp decline in the immediate future. Perhaps the most important feature of the population is the steady increase witnessed in the workforce, i.e., in the age-group 15-59. This legion of population in 2001 is 2.5 times to that of in 1961. The population size, which was 23.4 million in 1961 grown by 150% to reach 58.6 million in 2001. The last decade alone witnessed an addition of 12.1 million in this age interval.But, what is more important is that about 35% of this population is illiterate in 2007. Also graduate among this cohort of population is miniscule at 7% in 2007. Hence, it is imperative this people should be given vocational training to make them more efficient. But, the applicability of service tax on private vocational training imposes heavy burden on students. Government vocational training does not attract any service tax and hence it is cheaper, but their availability is miniscule and their performance is pathetic. Hence, accelerating, widening and deepening skill development should be the key objectives for the government by increasing the capacity and quality of vocational training, allowing a level playing field to the private sector vocational and skill development training facilities. Another noticeable feature is the increasing number of people in the older age-group. In 2001 there were 80.4 lakh people above the age of 80; and, 21.3 million above the age of 70. It can also be seen that the share of senior population, i.e., aged 60 and above is also steadily increasing from 5.6% in 1961 to 7.4% in 2001. The above numbers show significant increase over the corresponding numbers from the previous Censuses. Moreover, due to overall increase in the population in younger-age groups in the past decades, these numbers may swell in the coming decades. This phenomenon calls for some new strategies to provide facilities for aged, an area which hardly received any attention till date. There has been significant increase in the number of persons whose age has not been stated in Censuses. From 1.76 lakh in 1961, it has grown to 3.34 lakh in 1981 and then to 47.0 lakh in 1991; thereafter, it dipped to 27.4 lakh in 2001.The last three censuses have used computers extensively in data processing which have had some impact in reducing the subjective decisions of putting individuals whose age appeared inconsistent with other data items. During manual processing in earlier censuses, such inclusions could have been arbitrary. Share of population in younger groups is in general decreasing over a period of time. The fertility decline and its gradual but visible and irreversible spread are the prime reasons for this phenomenon. But, there has been significant gender differential seen in the changes in age structure. Share of females in many age groups is decreasing faster than male population. For example, the percentage of female population in the age 0-4 years, which was 15.5% in 1961 reached its lowest level of 10.7% in 2001 as against this, the share of males came down from 14.7% in 1961 to 10.7% in 2001. However, share of female population at 50.6% in the age-group 15-59 in 2001 is almost same as that of male at 50.7%. But in the elderly population aged 60 plus the share of female population at 7.8% in 2001 was a shade higher than that of 7.1% in case of males and this is true even in 1961
Distribution of population by 5-year age group intervals for rural and urban areas at national level from 1991 and 2001 is presented in Statement 3. It can be seen from Statement 3 that there are significant differences in age distribution between rural and urban areas. Proportion of population in the age-group 0-4 and 5-9 years are less by over 2.5 percentage points in urban areas in comparison to rural areas mainly due to lower fertility level in the urban population. On the other hand, in age-groups 15-19, 20-24 and 25-29 years the proportions in urban areas are significantly higher compared to rural areas. This may be the possible effect of migration from rural to urban areas in search of employment and also for education. The effect of past migration to the urban areas is seen from the fact that higher proportion of population is seen in urban areas in the age range of 30-59 years. However, the aged population is more in rural areas than urban areas by 1.1 percentage points, possible due to reverse migration.
The important finding of 2001 Census has been the drastic decline in the child sex-ratio in many parts of the country. An analysis of data on sex ratio would require sex ratio of population at every age group. Statement 4 presents the age-group wise sex ratio for India and States and UTs. Region-wise data has also been calculated by grouping the concerned states falling under a particular region, following Reserve Bank of India’s classification. At the outset, it can be seen that sex-ratio declines by age and reaches a low of 858 females per 1000 males in age-group 15-19 years and thereafter it increases to some extent, but fluctuate over the higher age groups. As far as the sex ratio in the age-group 0-4 is concerned, at one extreme in the northern region states/UTs viz., Punjab, Chandigarh, Haryana, Delhi, Himachal Pradesh, the sex ratio is the lowest than the all-India level of 934, with Punjab being the lowest at 794 among all States. At the other end in all southern region states/UTs, viz., Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Pondicherry and Lakshadweep where the sex ratio is much above the national level. In the central region states, the sex ratio in the age group 0-4 is much below that of the all-India level. Sex ratio among population in this age group of Gujarat is the lowest. In the age group 5-9 years, while all-India sex ratio works out to be 923, in the northern region states as a whole is abysmally low at 879 females per 1000 males; with Punjab and Haryana having the lowest sex-ratio at 821 and 835 respectively, among all states in the country. In this age-group, the southern region states as a whole has the highest ratio at 960 females per 1000 males. Another interesting fact that can be seen from the Statement 3 is that the sex ratio in the older age group is favorable to females in central, western and southern region states. The higher sex ratio favorable to female seen in the age-group 20-24 on wards in Kerala and Tamil Nadu are partly the result of selective male migration from the States to other parts of the country as well as other countries in search of employment opportunities.
For comparison purposes, the data for age distribution based on Census for different years have been taken from the corresponding Census reports given in social and cultural tables. Tables for the United Nations population projection have been taken from world population prospectus: The 2002 Revision Volume 1. Comprehensive Tables (ST/ESA/SER.A/222) NFHS-2, (National Family Health Survey, India) 1998-99 for NFHS data. NSS data on age distribution refers to 1999-2000 and has been taken from employment and unemployment situation in India 1999-2000, Part 1 NSS 55th round. The population projection made by the Office of Registrar General, India has been referred to as ORGIs projection. This is published in ‘Population Projections for India & States, 1996-2016, Office of the Registrar General, India (ORGI). The age distribution used for comparison with Sample Registration System (SRS) is as available from SRS Statistical Report 1999, Registrar General, India. While comparing the data across the Censuses, it may be borne in mind that coverage is not the same in 1961, 1981 and 1991 Censuses as compared to 1971 and 2001 Censuses when the entire country more or less was covered. Areas of North Eastern Frontier Agency, Assam and Jammu and Kashmir were not included in age-distribution data of 1961, 1981 and 1991 Censuses. The NSS and SRS data do not include institutional and houseless population, though they are included in the Census data. The differences in concepts, definitions and reference date should therefore be kept in mind while comparing the data from various sources. A comparison of 5-year interval age group distribution of population in 2001 Census with that of UN projection for India for the year 2000 (Revised 2002) are in Statement 5. While comparing the two data following should be kept in mind: · The UN Projection has been made with a base population different from the Census of India 1991 as they have adjusted the population for undercount in Census as revealed by the post enumeration check 1991. · The population projection figures by age-groups relates to 2000 while Census data relate to 2001. Though the percentage distribution of population by age may not be affected by this variation, the comparison of absolute data would be. The total population of India as projected by UN for the year 2000 for which age distribution is available is 101.7 crore where as Census population is 102.8 crore. There is significant difference in the population in the age group 0-4 and 5-9 years between the two sources. However, these differences are in the inverse direction with the result, that the total population age below 10 years is very close between the two sources with Census reporting 238.8 million and UN projection giving 237.2 million. Age misreporting in Censuses could possibly explain a small part of this difference although assumptions in fertility level and its decline for UN projection could be another reason as well. However, there are significant differences between the two sources for age group intervals 10-14 & 55-59. Though it appears that the UN estimates for higher age-groups are generally lower there is better agreement between the UN projections and Census data with regard to ages 60 and above as a whole. While Census reporting is 76.6 million for 2001, UN projections estimated it at 76.8 million for 2000. However, while Census 2001 reported a sex ratio (number of female per 1000 males) of 1029 for the elderly, UN projections reported a higher sex ratio of 1089. Statement 6 shows distribution of population according to Census 2001 with similar data from NSS, SRS, NFHS and ORGIs projections for 2001 at the national level. It may be noted that data from these sources except ORGI projections do not relate to the same date as that of the Census. However, since only proportionate distributions are compared, conclusions are not expected to be much off the mark. It is seen that the population in age-group 0-9 years, the projection is underestimated. This may be due to a lower proportion in age-group of 5-9 years in the projections. It is pertinent to note here that population in age-group 15-49 years, ORGI estimates 51.7% which is 1% more than that of the Census. In the age group 15-19 the difference is 1.1%. Proportion of elderly (80+) is 0.8% in Census and 0.6% in ORGI projection. In case of population in the age group of 0-4 years, NSS (both rural and urban area), SRS and NFHS have indicated a higher proportion than that of the Census. In case of 5-9 years also, this is true except SRS and ORGI data. The proportion of population in the age-group 0-9 years based on Census data is 23.2%, SRS is 22.8% and NFHS2 is 24.1%. In case of NSS data, that are available only for rural and urban areas, it is seen that the proportions of population in several age-groups are slightly different from Census. A comparison between the Census and SRS data indicates that in the age group 0.4 years the difference is 0.9% with SRS reporting higher than Census. However, in case of age-group of 5-9 the difference is 1.3% with census data showing higher percentage.. Difference of about 0.6% is observed in age-groups 15-19 and 35-39 and in the remaining age groups the variation is between 0.1 to 0.4%. The major difference between the age distributions as shown by Census and NFHS2 are with regard to age-groups 0.4 and 15-19 years and it appears that the higher population returned by NFHS-2 is partly due to age misreporting effects in either or in both the data sets. Overall, the differences between sample surveys and the Census data do not appear to be statistically very significant, reflecting the unbiased nature of sample surveys.
Median age is the age at which there are equal numbers of people above and below that age. Median age which thus divides the population into two equal sizes, one having the population at ages above the median and the other below the median is considered to be appropriate measure of the average age of the population. Depending on the value of median age, a population may be described as young or old. Population with median age below 20 years are usually classified as young and that having median age 30 years or above are classified as old. And those having the median age between 20 and 29 termed as intermediate. Median age of the country as a whole is 22.74 years and it can be seen from Statement 7 that median age of male is less than that of females. Similarly as compared to rural population, the median age of urban population is more. Even here, median age of male is less than that of female. A rough calculation of median age attempted by EPWRF using the quinquinnial age distribution given in statement 2 reveals that the median age which was roughly 18 in 1961 has came down to 17 indicating the population in 1971 became younger. This may be perhaps due to the fact that between 1961 and 1971, the share of child population witnessed an increase. Thereafter, the median age steadily increased from 17 to 18 in 1981, then to 19 in 1991 and to 20 by 2001. While the increase in the median age undoubtedly reveals that the Indian population is getting older, still it is much younger, by classification norms. There is a wide variation in the median age across the country ranging from a low of 18.54 years in Meghalaya to a high of 27.95 years in Kerala. Median age of population in Bihar, Uttar Pradesh, Arunachal Pradesh, Nagaland, Meghalaya are below 20 years. Generally, all the southern region states have median age of above 24 years with population in Kerala and Tamil Nadu having median age above 27. Most of the major states except Assam, Jammu and Kashmir and West Bengal show higher median age of female population compared to males. Similar trends of high median age in case of female population are seen in rural and urban population. Generally, the median age for the urban areas is higher than that of rural areas for both males and females. Thus, by and large, the Indian population in general may fall in Intermediate Category, but the median age makes it closer to the younger. *This note has been prepared by R.Krishnaswamy
Highlights of Curre
Agriculture The central and state government agencies have procured 246 lakh tonnes of wheat so far in the 2009-10 season, surpassing last year’s procurement level of 221.96 on the back of higher minimum support price and lower purchase undertaken by private traders. Experts opine that purchases are likely to cross 250 lakh tonnes by the end of the season. The central government on 19 June has allowed exports of 25,000 tonnes of non-basmati rice to South Africa through PEC. The Directorate General of Foreign Trade (DGFT) issued the notification, that the rice to be exported would have at least 25% broken grains. This shipment is expected to be completed by September 2009. Indian Sugar Mills Association reiterated that sugar production in India declined by 45% in the latest crop year as lower cane output and dry weather harm yields in the main growing areas. Sugar output in the country totalled to 14.22 million metric tonnes (MT) as of June 15, down from 25.65 million tonnes produced a year earlier. Sugar production is likely to reach 14.6 to 14.7 million metric tonnes for the season ending September 2009. Only 13 sugar mills in Tamil Nadu are still crushing cane. It is expected that India may import 3 million tonnes of sugar in the year ending 30 September. The cotton association of India (CAI) has estimated that production of cotton this year would decline to 29 million bales as against 31.5 million bales produced last year. Cotton exports are expected to decline to 3 million bales as compared to 8.5 million bales shipped over the previous year. Before the start of the current cotton year, government hiked MSP of the commodity by over 40% in August last year. The textile industries expressed reservations against MSP hike as it has lost cost competitiveness against its global peers. The central government as on 25 June approved for statutory minimum price (SMP) of Rs 107.76 per quintal for sugarcane at a recovery rate of 9.5%, from Rs 81.18 per quintal approved for sugarcane in 2008-09 (at 9% recovery rate), this ostensibly spells an improvement of 32%. However, this is far lower than the Rs 120-160 per quintal that the sugar industry from many states like Uttar Pradesh, Tamil Nadu and Haryana has been actually paying to sugarcane farmers in 2008-09 on the back of shortfall in cane production. Maharashtra is the only state where the SMP could make a difference, were the mills record a high recovery rates. This decision has been surprise for the sugar industry, especially against projections of low cane output in 2009-10 for the second successive year and the urgent need to boost sugarcane support price significantly to correct the prevailing support price imbalance in the crop economy. Agricultural and Processed Food Products Export Development Authority (APEDA) retreated that exports of Groundnut would face a more stringent norms from July as the government would make quality standards mandatory ahead of a visit to some processing units in Gujarat by a European Union (EU) delegation in October. Quality norms for groundnut exports for bird feed and human consumption will be implemented in the country from July. Gujarat Agro Industries Corporation stated that Gujarat, one the major banana growing states, has shipped 1,430 tonnes of the fruit to the Middle East in the first three months of this fiscal, becoming the second state to export banana after Kerala. Till now 143 containers have been exported. Each container has about 10 tonnes of G9 banana variety. Indian cashew exports have shown a decline during the first two months of the current fiscal due to economic recession in major consuming countries. Shipments of cashew in April and May stood at 17,035 tonnes, valued at Rs 456.23 crore, as against 20,008 tonnes, valued at Rs 487.32 crore, in the same period of the previous financial year. However, the unit value realisation was on the higher side because of the weakening of the rupee against the dollar. Unit value this fiscal year was at Rs 267.82 per kg as against Rs 243.56 per kg in April-May 2008. Imports of raw nut continued to show an upward trend due to non-availability of indigenous raw material in sufficient quantity. In April-May this fiscal, 1,32,810 tonnes of raw nuts valued at Rs 493.16 crore was imported at a unit value of Rs 37.13 per kg as against 82,544 tonnes valued at Rs 315.01 crore at unit value of Rs 38.16 per kg during the same period the previous fiscal. Coffee consumption at domestic level grew by 5% in 2008 to 85,800 tonnes, ahead of the global market where the off-take was largely unaffected by the prevailing economic crisis. Latest preliminary estimates by the International Coffee Organisation (ICO) reported that global coffee consumption grew by 1.3% to 128.32 million bags of 60-kg each in 2008, over previous year’s 126.67 million bags. Despite the rising consumption, the domestic industry is still dependent on export market as about 70% of the total produce is exported. The state-run Coffee Board aims to increase the off-take by almost half to around 1.2 lakh tonnes by the end of 2012. IndustryThe Index of Industrial Production (IIP) stands at 297.9, which is 1.4% higher as compared to the level in the month of April 2008. The annual growth of thee Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of April 2009 at3.8%, 0.7% and 7.1% as compared to April 2008. In terms of industries, as many as 11 out of the 17 industry groups (as per 2-digit NIC-1987) have shown positive growth during the month 2009 as compared to the corresponding month of the previous year. The industry group ‘Wool, silk and manmade fibre textiles and non-metallic mineral products registered a double digit growth. On the other hand, the industry group ‘Food Products’ (-34.4%) and leather and leather products (-12.4%) have shown a negative growth. As per Use-based classification, the Sect oral growth rates in April 2009 over 2008 are 4.6% in Basic goods, (-)1.6% in Capital goods and 7.1% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 16.9% and (-) 10.4% respectively, with the overall growth in Consumer goods being negative at 4.7%. InfrastructureThe Index of Six core industries having a combined weight of 26.7 per cent in the Index of Industrial Production (IIP) with base 1993-94 stood at 250.1 (provisional) in May 2009 and registered a growth of 2.8% (provisional) compared to a growth of 3.1% in May 2008. During April-May 2009-10, six core industries registered a growth of 3.9% (provisional) as against 2.7% during the corresponding period of the previous year. Crude Oil production (weight of 4.17% in the IIP) registered a growth of (–)4.3% (provisional) in May 2009 compared to a growth rate of 3.2% in May 2008. The Crude Oil production registered a growth of (-)3.7 (provisional) during April-May 2009-10 compared to 2.1% during the same period of 2008-09. Petroleum refinery production (weight of 2.00% in the IIP) registered a growth of (-)4.3% (provisional) in May 2009 compared to growth of 0.1% in May 2008. The Petroleum refinery production registered a growth of (-)4.4% (provisional) during April-May 2009-10 compared to 2.1% during the same period of 2008-09. Coal production (weight of 3.2% in the IIP) registered a growth of 10.2% (provisional) in May 2009 compared to growth rate of 8.8% in May 2008. Coal production grew by 11.8% (provisional) during April-May 2009-10 compared to an increase of 9.5% during the same period of 2008-09. Electricity generation (weight of 10.17% in the IIP) registered a growth of 3.3% (provisional) in May 2009 compared to a growth rate of 2.0% in May 2008. Electricity generation grew by 5.1% (provisional) during April-May 2009-10 compared to 1.7% during the same period of 2008-09. Cement production (weight of 1.99% in the IIP) registered a growth of 11.6% (provisional) in May 2009 compared to 3.8% in May 2008. Cement Production grew by 11.7% (provisional) during April-May 2009-10 compared to an increase of 5.4% during the same period of 2008-09. Finished (carbon) Steel production (weight of 5.13% in the IIP) registered a growth of 1.4% (provisional) in May 2009 compared to 3.3% (estimated) in May 2008. Finished (carbon) Steel production grew by 2.1% (provisional) during April-May 2009-10 compared to an increase of 1.4% during the same period of 2008-09. InflationThe official Wholesale Price Index for 'All Commodities' (Base: 1993-94 = 100) for the week ended 13 June 2009 rose by 0.6%. The annual rate of inflation, calculated on point to point basis, declined by -1.14% for the week ended 13 June 2009 as compared to a substantial increase of 11.8% during the corresponding week of the previous year. Primary articles witnesses a rise of 0.1 per cent mainly due to higher prices of Jowar,tea and arhar as well as raw jute and rape and mustard seed. The increase in the prices of furnace oil, naphtha, aviation turbine oil, and light diesel oil pushed up the price of the major group fuel, power, light and lubricants by 0.4% during the week. An increase of 1.0% has been witnessed in the prices of manufactured products mainly due to high price of rice bran oil, cotton yarn cycle tubes, and motor cycles. Final WPI for the week ended 18 April 2009 was revised upward to 232.6 from 230.2 as a result the corresponding inflation rate stood at 1.62% instead of 0.57%. Financial Market Developments Capital MarketsPrimary Market According to media sources, the Securities and Exchange Board of India (SEBI) is considering a proposal, whereby all qualified institutional buyers (QIBs) will have to pay an upfront margin of 25% while bidding for initial public offerings (IPO), against the existing level of 10%. But it is unlikely to alter the pricing formula for Qualified Institutional Placements (QIPs) in the near future. Recently, merchant bankers had made a presentation to the regulator, requesting that companies be given more flexibility while pricing QIPs. According to data by BSE and NSE, the IPO of Mahindra Holidays and Resorts Ltd attracted bids for 20% of the number of shares offered, on the first day of the issue. Total bids were received for 18.75 lakh shares at the “cut off” price for 65,960 shares on offer for 92.65 lakh shares at a price band of Rs 275 to Rs 325 a share. QIBs, including FIIs and mutual funds, subscribed 32% of the 55.59 lakh shares reserved for them. Secondary Market Subdued global cues and concerns of below-par monsoon were a drag on the broader indices in the initial part of the week. Trading for the week began on a weak note after the World Bank predicted that the global economy will shrink 2.9% this year, a deeper fall than the 1.7% contraction it predicted in March 2009. A strong rally on 26 June 2009 helped the market end the week on an upbeat after sustained selling by foreign funds. However, the introduction of a free-float methodology in Nifty and expiry of derivatives meant volatility through the week. The June 2009 derivatives contracts expired on Thursday, 25 June 2009. The key benchmark indices recovered from the previous week's fall, broadly tracking higher global stocks. The BSE Sensex fell in 3 out of 5 trading sessions during the week. The BSE Sensex rose 242.75 points or 1.67% to 14,764.64 over the week. The NSE Nifty gained 61.90 points or 1.43% to 4,375.50. The BSE Mid-Cap index rose 4.28% to 5,170.90 and the BSE Small-Cap index rose 3.25% to 5,800.75 in the week ended 26 June 2009. Both the indices outperformed the BSE Sensex. During the week, Capital goods index surged 6.9% due to L&T’s increased weightage in the Nifty. Banking and power stocks spurred on the interest generated for the budget expectations. While concerns regarding monsoon led a decline in the auto and metal index. The NSE changes to a free-float market capitalisation methodology for calculating the value of the benchmark indicator. Free float refers to the amount of shares that are available for the investing public and does not include shares held by the promoters. The benchmark Nifty index will be calculated using the new method from 26 June, while the Nifty Junior, the next rung of liquid stocks after Nifty, will begin from 4 May. According to the new methodology, the weight of any scrip on the Nifty will be proportional to only the public shareholding in it, as against the present norm of including public as well as promoter holding. As many as 26 Nifty companies are set to gain significant weight in the NSE index after the NSE switch to a new methodology. Foreign institutional investors (FIIs) have started making a quick buck using the arbitrage opportunities between Indian and international stock markets. American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) of Indian companies are trading at a 2-4% discount to their domestic prices. As a result, FIIs are purchasing ADRs and GDRs abroad, converting them into local shares and selling them at a profit in the Indian market. The Securities and Exchange Board of India (SEBI) will soon be able to attach the properties of fraudsters, file application for winding up of market intermediaries under the Companies Act to recover money that investors have lost and will get powers similar to that of a civil court. With these significant powers, which SEBI's board approved by recommending amendments to the SEBI Act and the Securities and Contract Regulation Act (SCRA), the market regulator will become stronger and more autonomous. There is also talk of doubling the amount of maximum penalty which SEBI can levy on wrong doers from the current Rs 50 crore. The SEBI has come out with a circular to clear the ambiguities surrounding new guidelines for portfolio management services (PMS). According to the circular, “there shall be a clear segregation of each client's fund through proper and clear maintenance of back office records. Portfolio managers shall also maintain an accounting system containing separate client-wise data for their funds and provide statement to clients for such accounts at least on a monthly basis.” It also directed the portfolio managers to transfer funds on a daily basis to each client's bank account. Similarly, SEBI has notified new regulations for delisting of equity shares of listed companies with effect from 10 June 2009. These regulations replace the SEBI (Delisting of Securities) Guidelines, 2003, as far as delisting of equity shares are concerned. Derivatives An extremely volatile June series came to an end on Thursday, 25 June with a 68.75 points correction during the week. The Nifty future managed to end the week on a positive note due to Friday’s strong recovery. The July settlement opened on 25 June with very low carryover and muted sentiment. The Nifty July future closed 4384, a gain of 1.3% over the previous week’s close of 4326. It also ended with a premium of about eight points over Nifty spot, which ended at 4375.5. However, the rollover of Nifty future at 51% was sharply lower when compared with its record in the previous three months. The Nifty July contract added 66.39 lakh shares in Open Interest (OI) on the last day of the June series and the total OI on 25 June stood at 2.12 crore shares indicating a marginal short build-up in the July series. The stock rollover was reasonably better. Throughout the week the Nifty future remained at a premium to the underlying and on 26 June 2009 it closed at a premium of 9 points to the underlying on Friday. Even market-wide rollover was lower at 62-63%, with a good number of counters witnessing short rollovers.
In the domestic futures and options (F&O) market the rollovers for June 2009 series, which expired on 25 June 2009, were lower as compared to previous series. Daily F&O trading volumes have dropped to around Rs 40,000-Rs 50,000 crore and overnight positions have been drastically reduced. As per reports, rollover of Nifty positions from June 2009 series to July 2009 series stood at 55% as compared to 63% in the previous series. Also stock futures rollover slipped to 75% from 77% in the last series. The volume in the F&O segment on Friday was very much lower at Rs 48,071.62 crore. The average volume during the week in the F&O segment was Rs 76,722.81 crore. The average volume for the full series was Rs 72,351.39 crore. The total OI in the Nifty July contract as on 26 June 2009 was 2.17 crore shares thus adding 4.73 lakh shares as compared to the previous trading day. The index put call ratio (PCR) fell to 0.82 on 26 June 2009 as compared to 0.97 during the previous trading session, whereas the stock PCR fell to 0.17 as compared to 0.31 during the previous session. Thus the market wide PCR was 0.77 as compared to 0.94 on 25 June 2009. FII derivative exposures remain steady in absolute terms but these have grown in percentage terms as far as total open interest (OI) is concerned. About 59% of FII outstandings are in index instruments. The cumulative FII positions as percentage of the total gross market position on the derivative segment as on June 25 was 39.81%. They were predominantly net buyers, particularly in index futures. They now hold index futures worth Rs 8,878.73 crore (Rs 14,707.95 crore) and stock futures worth Rs 16,869.59 crore (Rs 21,886.95 crore). On index options, FII holding declined to Rs 15,589.4 crore (Rs 26,556.37 crore). Volatility was high as traders rolled over positions from June 2009 series to July 2009 series in the F&O segment. Volatility index ended the week on a weak note. It dipped to 37.99 against its previous week’s close of 48.95. The fall in volatility index was despite the weakness in Nifty during the early part of the week.
Government Securities Market Primary Market Ten state governments auctioned 10-year State Development Loans maturing in 2019, on 23 June 2009. States those have participated in the auction were Andhra Pradesh, Bihar, Goa, Gujarat, Haryana, Kerala, Meghalaya, Punjab, Rajasthan and Uttar Pradesh. Notified amount lies between 50 crore to 1000 crore and cut of yield was ranged between7.80% to 7.89% being highest for Bihar and lowest for Meghalaya. The RBI auctioned 91-day Treasury Bills (TB) on 24 June 2009, under which 61 bids were received out of 19 bids were accepted. Notified amount for an auction was Rs 5,000 crore with YTM of 3.32%. Similarly on the same day in an auction held for 182 day TB, 36 competitive bids were received out of which 2 bids have accepted. Notified amount of the bid was Rs 500 crore with 3.53% yield to maturity (YTM). Government re-issued securities of 6.07% 2014, 7.94% 2021, 8.24% 2027 and 7.40% 2035 for the notified amount of Rs 6000 crore, Rs 4000 crore, Rs 3000 crore and Rs 2000 crore, respectively on 26 June 2009. The cut-off yield on 5-year maturity, 12-year maturity, 18-year maturity and 26-year maturity was at 6.51%, 7.34%, 7.81% and 7.90%, respectively. Secondary Market Call rates were steady throughout the week as surplus funds in the banking system helped banks to meet their reserve requirements comfortably. Call rates ended the week at 3.25-3.30%, unchanged from the previous week. Bonds remained stable during the week, unaffected by firm global oil prices, as traders waited for the Government’s budgetary proposals for the current year. Stability in government market is due to weak credit off-take from the bank. On the other hand banks have large deposit accumulation comprises significantly from non-resident Indians (NRI). The high liquidity has failed to help the Rs 15,000 crore government borrowing auctions during the week. The long-term securities failed to ignite interest among traders. Low interest among investors was evident form weak ‘bid to cover ratio’. Though government borrowing auctions has failed to attract huge liquidity but for banks have shown interest mainly in shorter and more liquid securities as at the TB auctions have witnessed ‘bid to cover’ ratios close to 4 times. The surplus liquidity in reverse-repo window during the week that banks have parked amounted to Rs 1,22,423 crore. Bond Market During the week under review, 4 FIs/banks, 2 NBFCs and one corporate tapped the bond markes through issuance of bonds to mobilize an amount of Rs 1,500 crore.
Foreign Exchange Market The rupee rebounded from an early low of Rs 48.94 per dollar to end the week at Rs 48.10 per dollar, though barely changed from the previous week’s close of 48.08 per dollar. The rupee brushed off the threat from the 49 per dollar mark while the month-end dollar demand amidst higher oil prices exerted pressure on the rupee. With FII flows having turned negative for a string of days, exporters turned reluctant to liquidate dollars, weakening the ground for the rupee. The ability of the rupee to not fall through 49.00 per dollar was the key technical occurrence of the week, important for the immediate term fate of the rupee. Near-term forward contracts were in the receiving mode as banks covered short-term exposures while the lack of interest and bi-directional flows contained medium to longer-dated contracts to a narrow range. Late participation from exporters helped forward premia decline marginally. One, three, six and 12 months premium narrowed to 3.13% (3.43%), 2.94% (3.27%), 2.78% (2.90%) and 2.45% (2.49%). Short forwards, cash to spot however widened to 2.32% from 2.26%, with the wide interest rate differentials between the dollar and the rupee. The non-deliverable forward however was down to Rs 48.54 from the previous week, implying that more depreciation could be under way. Commodities Futures derivatives According to Forward Markets Commission (FMC) chairman, B C Khatua, the value of commodities traded on India’s 22 exchanges in the year to 31 March 2010 may jump from Rs 52.5 lakh crore a year earlier. The Multi Commodity Exchange of India (MCX), the world’s third-biggest bullion bourse, and its domestic rivals may lift the turnover by more than 20% as commodity prices rebound and a new exchange starts next month. National Commodity and Derivatives Exchange (NCDEX) and MCX have imposed a 20% additional special margin on long positions of all running contracts, effective from 27 June. Earlier on 21 April the exchange had imposed a 10% additional margin on sale positions and 15% margin on buy positions including a special and additional margin. World Gold Council welcomes the news that the US Congress has passed the Military Supplemental Bill thereby finalizing the process allowing the IMF to sell 403.3 tonnes of gold in a manner that will have no impact on the smooth running of the international gold market and even there will be no net addition to the overall gold supply. The IMF has stated publicly that its gold sales should be coordinated with current and future Central Bank Gold Agreements (CBGA), whereby signatories have agreed to limit their gold sales to no more than 500 metric tons annually. National Multi-Commodity Exchange of India (NMCE), is in discussion with three private equity (PE) players in the country to raise Rs 50 crore through fresh equity this fiscal to broad-base its operations and fund expansion plans. It has been reported by sources that, NMCE is going to sell a stake to overseas financial and strategic investors. Two major commodity exchanges from the US and one each from the UK and Japan have expressed interest in buying shares of the commodity exchange. Currently, NMCE's main promoters Central Warehousing Corporation (CWC) and the Kailash Gupta-led Neptune Overseas Ltd hold 25.3% and 24.5% stake, respectively, followed by Reliance Money Infrastructure Ltd (10%), Punjab National Bank and NAFED (8.5% each) and Gujarat Agro Industries Corporation (5.6%). NMCE, whose daily trading is worth around Rs 1,400 crore, is also planning to launch logistic parks (repositories) in Gujarat, Madhya Pradesh, Karnataka and Kerala by the end of this year.
Insurance Aegon Religare Life Insurance is likely to infuse Rs 230 crore in the current fiscal year in four tranches. The company’s capital base as of now is Rs 350 crore. The company is planning to hire 10,000 advisors and over 250 frontline sales staff in the current fiscal. Life Insurance Corporation of India (LIC) has hiked its stake to 5.15% in Dena Bank after purchasing fresh shares worth Rs 5.39 crore, through open market transactions. IDBI Fortis Life Insurance company is a joint venture between three leading financial conglomerates – IDBI Bank, Federal Bank and Europe’s premier Bancassurer, Fortis. The private sector insurer is likely to recruit 1,250 employees and increase the number of standalone branches from 33 to 100 mainly in Tier-II cities in the current fiscal year. In 2008-09, LIC has witnessed subdued performance in terms of growth in sale of polices as well as new premium. But the 2009-10 has given positive cues regarding new premium. BankingOriental Bank of Commerce is planning to open 113 branches across Tier-II and Tier-III cities in the current fiscal year and has planned to scale up its total business size to Rs 2,00,000 crore by the end of the fiscal year 2009-10. Bank of India (BOI) is mulling to start mutual fund business again and for that the bank is in search for foreign partner. Bank has not foraying in this business as it had MF arm, which was sold to Taurus Mutual Fund few years ago. BOI has appointed Ernst & Young as consultant to find out a suitable partner of the proposed MF arm. Foreign partner will be either from the three foreign banks based in Spain, the USA and the UK. But the bank will take final decision regarding its foreign partner. Karur Vysya Bank will raise up to Rs 500 crore by issuing equity shares via qualified institutions placement (QIP) route. Oriental Bank of Commerce has declared a dividend of 73% to its shareholders for the fiscal year 2008-09. The total business of bank grew by 25.7% to Rs 1,67,434 crore in 2008-09. Deposits and advances of the bank have increased by 26.4% at Rs 98,369 crore and 24.4% to reach Rs 68,845 crore respectively. Recently, four public sector lenders – State Bank of India (SBI), United Bank of India (UBI), Union Bank of India and IDBI Bank have reduced their lending rates by 25 – 50 basis points (bps).
SBI, the country’s largest commercial bank, has revised the BPLR by 50 basis points to 11.75% from 12.25% effective from June 29 2009. Corporate BHEL has bagged a contract worth Rs 120 crore from Indian Oil Corporation (IOL) for setting up a 20 mw steam turbine generator (STG) set-based captive power plant with a gas/oil fired boiler of 150 tonne per hour capacity at its Barauni Refinery Complex. The project is being set up as an extension of the existing captive power plant to meet the requirement of uninterrupted power supply of the refinery. India’s largest oil producer ONGC has reported a net profit dip of 16% at Rs 2,207 crore for the fourth quarter of 2008-09, against a profit of Rs 2,627 crore in the year-ago period. Sales for the period also plunged by 17% at Rs 13,884 crore as against Rs 16,699 crore. Tata Steel Ltd, the world’s sixth largest steel manufacturer has reported a 61% dip in the consolidated net profit at Rs 4,849 crore for the year ended March 31, 2009 as against Rs 12,349 crore in the previous year. However, on standalone basis (Indian operations) the company reported an 11% growth in net profit at Rs 5,202 crore while its total income was up by 23.5% at Rs 24,315 crore. The company has declared a dividend of 160% at the rate of Rs 16 per equity. FMCG major Dabur India has completed the acquisition of women’s beauty care product manufacturer Fem Care Pharma. Dabur India has earlier acquired 72.15% of Fem for Rs 203 crore in an all-cash deal. After obtaining the regulatory approvals, Dabur acquired an additional stake for Rs 54 crore through an open offer. The country’s second largest real estate developer Unitech Ltd has reported a 28% dip in its net profit at Rs 1,197 crore for the financial year 2008-09. The company’s total income fell by 22.5% at Rs 3,316 crore. Net profit during the previous fiscal stood at Rs 1,662 crore while total income was Rs 4,280 crore. Struck with the liquidity crunch and slip in demand for its high-end and luxury projects, the developer has joined the league of real estate developers embarking upon the low-cost housing projects to generate more cash flows. Tata Motors has reported its first annual loss in seven years, buffeted by a slump in global demand and losses at the Jaguar Land Rover (JLR) unit it acquired in 2008 for $2.3 billion (roughly Rs 12,000 crore). The company has reported a consolidated loss of Rs 2,505 crore for the year ended March 31, 2009, against a standalone profit of Rs 2,167 crore a year ago. But the total income grew by 99% to Rs 70,938 crore compared to Rs 35,660 crore (Tata Motors alone) in the same period last year. This is the first time the company is announcing consolidated results with JLR from low-cost countries and trimming its capital expenditure plans. External SectorExports during May, 2009 were valued at US $ 11010 million (Rs. 53435 crore) which was 29.2 per cent lower in dollar terms (18.4 per cent in Rupee terms) than the level of US$ 15550 million (Rs.65506 crore) during May,2008. Cumulative value of exports for the period April- May, 2009 was US$ 21753 million (Rs. 107214 crore) as against US $ 31626 million (Rs. 129846 crore) registering a negative growth of 31.2 per cent in Dollar terms and 17.4 per cent in Rupee terms over the same period last year. Imports during May, 2009 were valued at US $ 16212 million (Rs.78682 crore) representing a decrease of 39.2 per cent in dollar terms (30.0 per cent in Rupee terms) over the level of imports valued at US $ 26684 million ( Rs. 112405 crore) in May,2008. Cumulative value of imports for the period April- May 2009 was US$ 31959 million (Rs. 157514 crore) as against US$ 51507 million (Rs. 211752 crore) registering a negative growth of 38.0 per cent in Dollar terms and 25.6 per cent in Rupee terms over the same period last year. Oil imports during May, 2009 were valued at US $ 4135 million which was 60.6 per cent lower than oil imports valued at US $ 10495 million in the corresponding period last year. Oil imports during April- May, 2009 were valued at US$ 7768 million which was 59.6 per cent lower than the oil imports of US $ 19244 million in the corresponding period last year. Non-oil imports during May, 2009 were estimated at US $ 12078 million which was 25.4 per cent lower than non-oil imports of US $ 16189 million in May, 2008. Non-oil imports during April- May, 2009 were valued at US$ 24191 million which was 25.0 per cent lower than the level of such imports valued at US$ 32262 million in April- May, 2008. The trade deficit for April- May,2009 was estimated at US $ 10206 million which was lower than the deficit of US $ 19880 million during April-May, 2008. TelecomThe Department of Economic Affairs (DEA) in the Finance Ministry has asked the Department of Telecommunications (DoT) to furnish the broad contours of the proposed Bharti Airtel MTN deal that involves cash and share swap to the tune of $23 billion, to ascertain whether the deal would be in accordance with the FDI norms and the regulations of the telecommunications sector. Information TechnologySapphire Industrial Infrastructure Pvt Ltd (SIIPL), a wholly-owned subsidiary of Moser Baer Clean Energy Ltd had tied up a $4 million (around Rs 20 crore) International Finance Corporation (IFC) credit line for its proposed 5 MW solar photovoltaic (PV) power at Sivaganga, Tamil Nadu. MBCEL, engaged in solar farm development, is in the process of building solar photovoltaic (SPV) installations of 5 MW each across India through SHPL. After its consolidation in terms of infrastructure cost and people cost, fraud-hit Satyam Computers has been renamed as Mahindra Satyam.
*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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