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Current Economic Statistics and Review For the
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Age-Sex Structure of Indian Population-3
1. Introduction While age-structure is the fundamental characteristic of any population composition and its knowledge is crucial, it is imperative that a deeper knowledge of the magnitudes of different cohorts of population would help us to understand better the changing pattern of wants and needs in the society since they vary for different age-groups. Thus, for example the needs of child population are different from that of the aged population. Similarly the working population has a significant influence on productivity and growth potential of the economy. Old age group decide the resource needs for old age care. This note, third in the series, tries to give a brief insight into the trends in the magnitudes of child population, youth population, female population in the reproductive age-group, adult population, working population and finally the aged population. 2. Child-Population : on the decline Proportion of child population in the age-group of 0-4, 5-9 and overall, i.e., 0-9 for all-India is given in Table 1. The magnitude of child population in respective age group and their proportion state-wise, rural and urban sectors and sex-wise is depicted in Statements 1 to 3. Child-women ratio (CWR) is presented in statement 1 for all-India and State-wise.
It can be seen from Table 1 that the share of child-population is witnessing sharp decline over the years. The proportion of 0-9 age group which was 29.8% in 1961 dipped to 23.2% in 2001, a steep 6.6 percentage point fall during the 50 year period. Contribution to this decline is comparatively sharper in the case of 0-4 age group at 4.4 percentage points than in the 5-9 age group at 2.2 percentage points.
In 2001, 239 million or 23.2% of total population in India is in the age-group 0-9, wherein 110 million persons or 10.7% is in 0-4 age group and 128 million or 12.5% in age-group 5-9. As against this, the corresponding ratios were 25.5%, 12.2% and 13.3% respectively a decade ago. These figures clearly indicate there has been a clear decline in the share of child population to the extent of 2.3 percentage points between 1991 and 2001. This can be attributed to the decline in the overall fertility rate. Table 1 also reveals that the share of male and female child in these age groups at 10.7% in 2001 is same. In the rural area, the share of child population (0-9 years) is 24.8% in 2001, a fall of 1.7 percentage point when compared to 1991. In the urban area, the share has came down from 22.6% to 19.3%, a sharp 3.3 percentage point decline during the period. It can also be seen from Statement 3 that in 2001, the overall sex-ratio, i.e., the number of women per 1000 males is only 928 in the age-group 0-9 years. This state of affairs is more revealing in Haryana (827), Punjab (809), Chandigarh (845) and Gujarat (888). It can be seen from Statement 1 that southern region states as a whole has got the lowest proportion of child population at 18.9% in 2001 as against 23.2% for all-India. Among the southern states, Kerala has the lowest share of child population at 16.7% in 2001 , a fall of 2.4 percentage point from 19.1% in 1991. Incidentally, Kerala has got the lowest share of child population among all states, followed by Tamil Nadu which has got a share of 17.1% of child population. The same trend has been witnessed among rural and urban population (Statement 2), as well as male and female population (Statement 3). On the other hand, Central region as a whole has a higher proportion of child population at 26.6% than any other region with Uttar Pradesh having the highest proportion of 27.4%. Still, it is less than what it was in 1991 (Statement 1), confirming that fertility decline is now spreading to the Central belt also. Except Manipur (20.7%) and Tripura (20.5%) and Nagaland (22.4%) all other north-eastern region states exhibited a proportion of child population which is higher than all-India level. Thus, overall, though in many states child population is higher than 23-25% of total population in 2001, all these states witnessed a decline in the share of child population over that in 1991 exhibiting the same trend in rural and urban areas as well as among male and female population.
Child-Women Ratio (CWR) Child-women ratio (CWR) or fertility ratio, is the number of children in the age-group 0-4 and 5-9 years per 1000 women in the age group 15-49 years and 20-54 years respectively. Thus, there are two ratios, one based on child age 0-4 years and women age 15-49 years and the other based on child age 5-9 years and women age 20-54 years. The numerator and denominator for child-women ratio are drawn from the same universe. For example, the number of children in the age-group 0-4 years of age is taken from Census 2001; then the corresponding women in the age group 15-49 years of age are also taken from the Census 2001. Though it is a crude measure, the value of CWR is directly related to the fertility level. CWR is inflated to some extent by coverage errors of net omissions and by age misreporting. It can also be affected by the relative differential in levels of infant and child mortality. CWR for 1991 and 2001 are presented in Statement 1. It can be seen that there are 439 children in the age-group 0-4 years per 1000 women in the age-group 15-49 years , whereas the same ratio is as high as 578 in case of age group 5-9 years per 1000 women in the age-group of 20-54 years. However, these ratios are lower than the corresponding figures of 515 and 632 from the Census 1991. At the state level, Bihar has the highest CWR (0-4) of 602 while Uttar Pradesh has the highest CWR (5-9) of 788 followed by Bihar which has the second highest CWR(5-9) of 786, thereby confirming that these two states have the highest fertility rates in 2001 among all states. Still, the decline in CWR (0-4) in Bihar and Uttar Pradesh - from 612 in 1991 to 602 in 2001 in case of Bihar and from 636 in 1991 to 570 in 2001 in case of Uttar Pradesh – indicates that there is a definite decline in the fertility rate even in these high fertility rate states. On the other hand, southern and western region states have got CWR (0-4) much below that of all-India CWR (0-4). But, here, the drop in CWR (0-4) between 1991 and 2001 had been very steep, indicating a drastic decline in the fertility rate in these states. The prominent states in this category have been Maharashtra, Andhra Pradesh and Karnataka.
3. Youth Population : Future of the Country Generally, the population in the age-group 15-34 years consists of ‘youths’ of the country. This group generally is considered as the future of a country. ‘Youth’ population represent those who are in the ages at which they are expected to be in educational institutions or who are in search of employment, though some of them may be actually working. This group is the most demanding one- whether it is in terms of higher and technical educational requirements, employment related or other services like family welfare, housing, etc. This group is also the most mobile and biologically more active. Hence, the youth population attracts the attention of health authorities to contain all kinds of epidemics associated with migration. Most of the migration whether it is for in search of employment, for education or on account of marriage particularly females, is by people from this highly mobile age group. In urban areas, they are the most targeted consumer group by the consumer item suppliers. India has 34.8 million youths in 2001 forming about one-third of total population of which 17.9 million are male and 16.8 million are female ( Statement 4). In urban areas, this group at 10.7 million, consists of about 31% of total all-India youth population. Youth population in urban area has fewer females with a sex ratio of 897 females per 1000 males. Among the states, southern, north-eastern and western region states have around 35% of their population in this age-group (Statement 5). Bihar and UP have got only about 31% of their population in this age-group. The possible reasons for relatively low proportion in these states may be due to migration of people to other states due to various reasons such as education and employment. The proportion is high at about 35% in almost all UTs; Daman and Diu (48%), Dadra and Nagar Haveli (40.9%) and Chandigarh (40.5%). This may be due to higher incidence of migration to these areas. Kerala has the lowest rural-urban differential of 0.1 percentage point among all major states. Daman and Diu has significantly lower proportion in urban areas (41.9%) as compared to rural area (51.9%) and has the highest rural-urban differential of 10 percentage points. The higher child population in some states suggests that the youth population would continue to grow in these states. This will involve strategies to provide educational facilities especially in rural areas and smaller towns for higher classes and university education so that migration for educational purposes can be checked. Similarly, generation of rural employment that matches the aspirations of the people is another area that needs immediate attention. 4: Adult Population of India: Age 18 years and above Attaining the age of 18 years has some significance in the life of an individual and it has many legal implications. At this age, the person is expected to become responsible for all his action ceasing to be a dependant. This is the age at which a person has the right to self-determine and gets legal recognition in several respects. Legal definition of entering adulthood varies from country to country. For example, in Japan it is 20 years. In India, like many other countries, persons of age 18 years and above are accorded with certain legal rights. One such important right is the minimum age for registration as a voter is 18 years. Minimum legal age for marriage for female is 18 years (for male it is 21 years). In India, 603 million people comprising 309.3 million males and 293.7 million females are adults (Statement 6). About 70.1% of them reside in rural areas. Share of population in this age group at national level is 58.6% and that of males and females are 58.6% and 59.2% respectively (Statement 7). The share of adult population in rural area at 57% is much less than that in urban area (62.9%). A state level analysis reveals that the states which have more child population are generally having low adult population. Thus, the proportion of adult population in Bihar and UP is the lowest among all states perhaps explaining large scale migration of youth from these states. On the other hand, southern and western region states have got more adult population. These states generally witness more female share in this group of population.
5. Female Population in the Age Group 15-49 years The population growth largely depends upon fertility. Thus, if there are large number of women in the reproductive age group 15-49 years, then a large number of births are expected to take place, given the fertility rate. The importance of presenting the number of females in the reproductive age-group lies in the fact that in the Indian context, high absolute numbers of birth continue, even if the fertility rate shows a decline as is the case now. This is attributable to the absolute number of female population in the reproductive age group being 25.1 million in 2001, representing a growth of 26.6% over the level of 19.9 million in 1991(Statement 8). The increasing number of births in the past decades has sustained the demographic momentum in this age-group and in the last decade, the growth rates in some of the states continue to be very high. Northern and north-eastern states and some UTs have got substantially higher growth rates (Statement 8). Thus, this region is going to have a high growth rate of population for a comparatively longer period irrespective of declines in fertility rate that might happen in the coming years. Southern region which overall shows growth rate of 19.4 per cent, is the only region having a growth rate below 20% among all regions, with Kerala (13%) and Tamil Nadu (16%) at the lower rung. Goa (17%) and Chattisgarh (19.4%) are the other two states with growth rates below 20 per cent. 6. Aged Population – Age Group 60+ Conventionally in India, the population in the age-group 60+ years is considered as elderly or aged or constituting senior citizens, given the biological, physical and mental ability related to age in this country. Age-structure composition in India is changing due to fertility decline and improvements in life expectancy. Given the trend of elderly population in India, a National policy for older persons was announced by the Government in January 1999. The size of ageing population has implications for dependency ratio and social and medical care programmes which in turn have financial implications at macro as well as at household level. States with higher proportion of child population like Bihar, Uttar Pradesh, Arunachal Pradesh, Meghalaya, Rajasthan, Jharkhand and Madhya Pradesh which have 38% to 42% of their population in the age group 0-14 years, generally have less than 55% of their population in the working age-group of 15-59 years. On the other hand, Goa, Kerala, Tamil Nadu and Pondicherry which are in the lowest rung of 24-27% of child population, occupy the higher spectrum of working population in the age-group of 15-59. This kind of relationship generally is not found as far as aged population is concerned. This is so, as the onset of fertility decline is more of a recent phenomenon in several states and its impact on the age structure will be after a considerable time lag. It is interesting to note that 77 million people in the country are over 60 years forming about 7.4% of total population. Out of this, as many as 8.0 million persons are above 80 years in 2001. Out of the 77 million aged population, female numbering 38.9 million forms 7.8% of the total population and outstrip males by 1.1 million in 2001. Male population numbering 37.8 million forms about 7.1% of the total population. Southern and western states have the most number of aged population. Kerala having 10.5% of their population in this age group top the list followed by Himachal Pradesh, Punjab, Tamil Nadu, Maharashtra, Goa, Pondicherry and Orissa which have more than about 8% of population in the senior citizens category. Among major states, Nagaland (4.5%), Meghalaya (4.6%) and Mizoram (5.5%) have the lowest share of senior citizens followed by Jharkhand (5.9%). The share of senior citizens in 2001 in all the union territories at about 5% each is also low except in the case of Pondicherry (then a UT) having the highest share at 8.3% (Statement 9). 7. Working Population (Age 15 – 59) Conventionally in India, the population in the age group of 15-59 years is generally considered as economically active or the population of working age. As per the UN definition, the age-group 15-64 years is considered as the working age population. India is continued to have a very favourble position in respect to the size of working population vis-a-vis China and many other countries, thus leading to a high potential of demographic dividend for the next few decades.
Table 2 gives the total population and working population and their share in the total population.The number of working population in 2001 was 586 million and forms about 56.9% of total population. Of which, 407 million or 69.5 % lives in rural area and 178 million or 30.4% reside in urban area. The size of males at 303 million or 51.7% is more than that of female by 21 million in 2001. The magnitude of females in 2001 was 282 million and this number forms about 48.1%. It can be seen from the Table- 2 that the number of working population is on the secular rise from 1951. While the total population has risen from 361 million in 1951 to 1029 million in 2001 at compounded average annual growth rate of 2.1 %, the working population increased from 203 million in 1951 to 586 million in 2001; an addition of 383 million in 50 years and the growth rate is in synchronization with that of total population at 2.1%. And this trend is expected to continue till 2050 but, at a lower growth rate as per UN projection of world population outlook for India. The share of working population in the total population after falling from 56.1 % in 1951 to 52.0 % may be attributable to the baby boom of the 1960s and 1970s. The share started rising steeply from 53.9% in 1981 to 56.9% in 2001. While the decline in the morbidity rate and expectation of life going up with the advent of modern medicine and their comparatively easy availability within India have had its impact in reducing the share of working population its effect to a great extent had been nullified by the demographic backlog of babyboom of the 1960s and 1970s which provided more and more persons in the working population during the subsequent decades. And it will so till 2030 as per UN projection, and then there will be a reversal of trend (See Table 2). The important point to note is that the baby boom of 1960s and 1970s has turned out to be beneficial I n the later decades supplying a large working population. The reaping of demographic dividend of course will depend upon how successful India can translate the potential into reality. It can be seen from statement 10 and statement 11 that in 2001 except Uttar Pradesh and Bihar, the share of working population is about 51 per cent may be partly attributable to large scale migration of youth from these two states to other states in search of job. More than 60 % of the population is in the working age group in all the southern states, Manipur, Gujarat and Goa. In all the UTs also the share of working population is about 60%.
*This note has been prepared by R.Krishnaswamy
Highlights of Curre
Agriculture The Directorate General of Foreign Trade reiterated that three government companies namely, MMTC, PEC and STC have been permitted to export 900,000 million tonnes of wheat and Government won’t be giving any subsidies for the exports of wheat. Delay in rainfall is likely to impact crop size as farmers may shift to short cycle crops like cotton and castor seeds. Sowing of crops like pulses, oilseeds and maize is already late by over 15 days. India's current sugar stock position is enough to take care of the demand for next four months, despite lower production of the sweetener this year. According to industry sources, sugar mills have over 93 lakh tonnes of stocks (including carryover from last year), which is over 66% of the estimated output of 141.62 lakh tonnes till May-end this season. If the quota of about 20 lakh tonnes for June is deducted from the stocks, assuming that the entire quantity was sold in that month, at least 73 lakh tonnes of sugar should be available between July and September as the new season will begin from October. The center has released 16.60 lakh tonnes of sugar, both levy and non-levy, for July. Solvent Extractors' Association of India reported that exports of oilmeal in the month of June have been 1,97,593 tonnes as against 2,95,204 tonnes a year ago, while the exports during the period between April-June were 6,14,528 tonnes, down by 57% over the period of one year. India exported 1,09,923 tonnes of soymeal in June, 58,805 tonnes of rapeseed meal, 12,580 tonnes of ricebran meal and 16,046 tonnes of castormeal. Exports in April-June to Vietnam fell by 51.5% to 2,00,677 tonnes; South Korea dropped by 67.2% to 70,644 tonnes; Japan by 56.1% to 83,436 tonnes; Indonesia fell by 47.9% to 47,821 tonnes and Thailand by 52.5% to 72,118 tonnes. Oilmeal exports to China jumped by 71.4% for the three months to 93,289 tonnes, mainly due to higher shipment of rapeseed meal. As per the reports in Maharashtra upto 29 June, sowings have taken place on a mere 4% of the total kharif area excluding sugarcane. Agriculture output in the corresponding period last year had declined by 30% - 50% due to prolonged dry spells in the monsoon season; sowings had been completed on 10% of the kharif area. Important pulses like tur and moong have been sown only on 1% of their average area while urad has been sown on just 2% area. The area under pulses is expected to rise this year due to better prices offered to pulses. However, the agriculture department has advised farmers not to sow moong and urad after 1 July as the yield of late sown crops reduces substantially. However sowings of soyabean so far has been done only on 4% of the normal area against 29% sowing in the corresponding comparable period of last year. Data complied by the Textile Commissioners displays that total registrations of raw cotton exports have reached to nearly 32 lakh bales between August 2008 and June 2009, while the actual shipments touched 22.88 lakh bales. Exports of raw cotton have come down from 2.56 lakh bales in May to just 92,070 bales in June. This slowdown is expected to extend mainly on higher domestic cotton prices supported by absence of fresh buying from overseas market. About 4-5 lakh bales of extra long staple cotton in which the country is deficient, while 4-5 lakh bales of medium and long staple are also likely to be imported because of increase in domestic prices. Preliminary reports gathered indicate that sowings of cotton have progress so far; sown area under cotton is reported to be around 18.03-lakh hectare. According to the state-run Spices Board, exports during April - May 2009 declined by 10% in value terms and 23% in volume as compared to the corresponding period of the last fiscal. Exports of cardamom, turmeric, coriander, celery, fennel, nutmeg and other seed spices was higher as compared to the same period last year. However, exports of pepper, chilli, vanilla, mint products and spice oils & oleoresins have shown decline in terms of both volume and value as compared to last year. There is decline of 20-25% in value during the current fiscal due to slowdown in exports and its targets have been brought down. The US continues to be the single largest exporter from India with almost 21% of the market share but it is seen coming down significantly in the current fiscal as buyers opt for smaller inventories. Reports by Coffee Board shows that exports of coffee from the country have dropped by 20% in the first six months of this year due to reduction in global demand. Coffee exports stood at 103,621 tonnes during January-June 2009 as against 130,506 tonnes in the corresponding period of the previous financial year. It is expected that the current coffee year (October 2008 - September 2009) would conclude with exports in the range of 180,000-190,000 tonnes, which would be 14-18% lower as compared with that of previous coffee year. It is estimated by the Coffee Board that by the end of the current coffee year, India’s total coffee output would be 262,300 tonnes, which is 10 % lower than the initial estimates. 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 20 June 2009 rose by 0.2%. The annual rate of inflation, calculated on point to point basis, declined by -1.30% for the week ended 20 June 2009 as compared to a substantial increase of 11.9% during the corresponding week of the previous year. Primary articles witnesses a rise of 0.5 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 naphtha pushed up the price of the major group fuel, power, light and lubricants by 0.1% during the week. An increase of 0.1% has been witnessed in the prices of manufactured products mainly due to high price of sugar and cakes and sweet roles. Final WPI for the week ended 25 April 2009 was revised upward to 233.1 from 230.7 as a result the corresponding inflation rate stood at 1.8% instead of 0.7%. Financial Market Developments Capital MarketsPrimary Market The market for initial public offerings (IPOs) perked up globally in the second quarter of 2009 as new issues by public firms already reached record levels, leading top bankers to forecast a pick-up in IPOs by year-end. Secondary Market Markets were in consolidation mode for most part of the week. Trading for the week began on a positive note as the BSE Sensex inched up 21.10 points or 0.14% on Monday, 29 June 2009. But the market dropped the next day as a rush to raise funds through share sales by corporate India raised concerns that a glut in share sales will suck liquidity from the secondary market. The BSE Sensex lost 291.90 points or 1.97%, on Tuesday, 30 2009. Unemployment levels in the US were inching up to double-digits and were a drag on the global markets on Thursday and Friday. In spite of this news, domestic markets closed in the positive territory on Friday. Experts felt that a growth-oriented Railway Budget with government pledging investment in the railways and unchanged freight and passenger fares was the reason for the rally. Foreign investors who made net positive inflows since mid-March of around $7.5 billion pumped another $250 million in the first four days of the week. BSE Sensex ended flat for the week with gains of a% to close the week at 14,913. The NSE Nifty closed at 4422.75 due to significant short covering in most of the stock futures as well as Nifty. Among the sectoral indices of BSE, PSU scrips recorded 3.84% over the week on expectation that the government may consider divestment. Metal stocks also gained on the back of budget’s likely focus on infrastructure and no change in freight rates. On 30 June2009, the Securities and Exchange Board of India (SEBI) decided to ban entry load for all mutual fund schemes from August 1. As per SEBI circular, the regulator has exempted existing systematic investment plans (SIPs), which means investors in these, will continue to pay 2.25% entry load per month. The application forms for the schemes will now carry a disclosure that the upfront commission to distributors will be paid by the investor directly based on his assessment of various factors, including the service rendered. On exit loads charged to the investor, a maximum of 1% of the redemption proceeds would be maintained in a separate account which could be used by the AMC to pay commissions to the distributor and take care of other marketing and selling expenses, that any balance would be credited to the scheme immediately. Following the move mutual funds will rush to launch offers before the ban comes into force. The ban on entry load is likely to reduce the number of fresh new fund offers (NFOs), which would have otherwise hit the market. It might also prompt fund houses to rush into launching the already-cleared NFOs before the August 1 deadline, when the ban comes into effect. The Economy Survey has recommended a slew of measures for bringing transparency to and deepening the Indian stock markets. For integrated development of financial markets, it said all regulations should be brought under the Securities and Exchange Board of India (SEBI). Derivatives The Nifty July future closed at 4424.65, gaining 0.9% over the previous week’s close of 4384. But the Nifty future ended almost on par with the spot, which ended at 4424.25. Despite firm ending, the Nifty future started shedding open interest (OI), particularly on Thursday and Friday. The rollover to the July series during the previous month was disappointing, as the market seemed to be directionless ahead of the budget. Also during the previous week in the futures & option (F&O) segment huge unwinding of OI was witnessed in many of the stock futures besides Nifty near month contract. The F&O market volume remained insignificant as compared to the previous months. The average volume for the current series for the week was Rs 52,662.92 crore. Most of the front-line future stock saw winding-up of OI on Friday. Nifty July shed 2.59 lakh shares in OI and the total OI of Nifty near month stood at 2.2 crore shares. Also the Nifty future traded at a discount to the underlying throughout the week although it closed at a marginal premium of 1.9 points to the underlying on Friday. The index put call ratio (PCR) increased to 0.88 on 3 July 2009 as compared to 0.76 during the previous trading session, whereas the stock PCR increased to 0.25. Thus the market wide PCR was 0.83 as compared to 0.72 on 2 July 2009. The Index and stock future may have gone without much participation during the week; however the index option market remained extremely active with interesting patterns. Extreme out-of-the-money strike put were aggressively written whereas out-of-the-money calls were aggressively bought thus indicating a strong up-ward bias. The 4600, 4700 and 4,800 witnessed active addition of OI whereas 3,800, 3900, 4000 and 4,100 strike puts also witnessed addition of OI due to aggressive put writing at these levels. OI currently stands at 2.20 crore shares for Nifty July future as against 2.16 crore the previous week. During the week, however, OI position jumped to 2.23 crore shares. Volatility index ended the week on a strong note. It gained steadily to 45.86 against the previous week’s close of 37.99. The cumulative FII positions as a percentage of the total gross market position on the derivative segment as on 2 July was 35.45%. They indulged in alternate bouts of buying and selling. They now hold index futures worth Rs 8,435.74 crore (Rs 8,878.73 crore) and stock futures worth Rs 18,529.59 crore (Rs 16,869.59 crore). On index options, FII holding increased to Rs 20,785.2 crore (Rs 15,589.4 crore). Government Securities Market Primary Market 91-day treasury bills (TBs) were auctioned on 1 July 2009 with notified amount Rs 2000 crore and cut of yield 3.11%. At the time of auctioned 44 bids were received from which only 1 bid was accepted. On 1 July 2009 in an auction of 364-day TBs conducted by RBI for the notified amount of Rs 1,000 crore with the cut of yield at 3.81%. In this auction 8 bids were accepted from 56(received) bids. Secondary Market Call rates moved in the range of 3.20-3.30% during the week with huge liquidity in the banking system enabling traders to meet their needs easily. Prices of bonds have increased and yields softened during the week due to extended purchases by banks and financial institutions ahead of Budget. 10-year yield has also reduced by 19 basis points over previous weekend to 6.79% on a weighted average basis. The spread between the 1-year and 10-year yields were 298 basis points reveals liquidity preference. An absence of government borrowings during the week was one reason behind the part of the high liquidity. Despite advance tax payments and external payment obligations liquidity remained comfortable so at the weekly liquidity adjustment facility auction, through the reverse repurchase window amount of liquidity has started shrinking as the recourse was reduced by 1.09 lakh crore from the previous weeks reduction of recourse was Rs 1.32 lakh crore. The positive sentiment was also reflected in a big increase in daily trade volumes. The average per day trade volume last week jumped Rs 5,500 crore to Rs 18,200 crore. But equity trade volumes continued to contract and trade volumes dropped another Rs 1,300 crore to Rs 17,500 crore over the previous week. Bond Market During the week under review, one bank, three NBFCs, one state undertaking and five corporates tapped the bond market through issuance of bonds to mobilize an amount of Rs 1,875 crore.
Foreign Exchange Market
The rupee closed at Rs 47.99 per dollar on 3 July 2009 as compared with Rs 48.51 per dollar as on 26 June 2009. The Rupee moved between Rs 47.79 and Rs 48.2, with a standard deviation of 16 paise during the week. Reduction in demand from oil companies has slowed down foreign currency purchases. As a result despite outflow from foreign institutional investors (FIIs) of $193 million during the week, the rupee has vaulted against the dollar. Another reason behind appreciation of rupee against dollar was large current and capital account inflows and low import demand. As per RBIs balance of payment data for the last quarter of the financial year 2008-09, NRI remittances were more than $2 billion, double the amount received same period in the last financial year. Hence in spite of dollar outflows by FIIs, foreign exchange markets remained fluid. Forward premia for one, three, six and 12 months settled the weekend at 2.69% (3.13%), 2.57% (2.94%), 2.43% (2.94%) and 2.27% (2.45%) respectively.
Commodities Futures derivatives Strengthening its presence in the energy sector, Multi Commodity Exchange of India (MCX), launched gasoline monthly contracts on 1 July 2009. The contracts are to be settled every month beginning January 2010 and are designed to be traded in a lot size of 4,200 US gallons while the maximum order size has been fixed at 4,20,000 US gallons. The exchange has fixed a tick size of 5 paise per US gallon. Based on the market sentiments, the daily price limit will be 4% on either side in which the exchange may revise up to 6% without observing a cooling period. On the first day of trading, for July, August and September contracts prices were traded at Rs 93, Rs 92.25 and Rs 88.85 per US gallon (3.78 litre). The Economic Survey has recommended various reforms in the commodity market in its 2008-09 issue. It has favoured regulation of the commodity futures market by the SEBI, lifting of ban on futures trading of rice, tur and urad, extension of spot commodity trading in electronic form to agricultural markets by involving APMCs and complete removal of the commodity transaction tax (CTT). Universal Commodity Exchange (UCX), newly promoted commodity exchange, has approached the Forward Markets Commission (FMC) for setting up a national-level commodity exchange. If the exchange gets formal approval from the regulator, it will become the country’s sixth national commodity exchange. International Multi Commodity Exchange (IMCX), fourth national bourse is expected to come into function by the end of July, while a fifth one, Ahmedabad Commodity Exchange (ACE), will operate as a national bourse in a year. National Multi Commodity Exchange of India (NMCE) is planning to launch seven new future contracts in 2009. The exchange is in the process of starting futures contracts, which include nickel and aluminium in metals segment and silver in bullion category. National Spot Exchange, India’s biggest bourse for trading physical gold, has launched contracts of gold in small denominations in a move to tap household, as they are the world’s largest consumer of the precious metal. The exchange offered contracts in sizes from 8 gm to 1 kg starting on 1 June. Presently, the bourse only trades imported gold bars in sizes of 100 gm and 1 kg. Insurance A joint venture of State Bank of India (SBI) and French firm Cardif SA, SBI Life has emerged as the largest private insurer leaving behind ICICI Prudential. In the first two months of the financial year 2009-10 SBI Life has collected Rs 784 crore as the first year premium as compared to ICICI Prudential’s collection of Rs 484 crore. While the state owned peer of these companies, LIC, has mopped up Rs 5,354 crore as the first year premium, an increase of 28% over the same period last financial year. IRDA has prohibited insurance companies from investing insurance funds in Indian Depository Receipts (IDRs), which gives an opportunity to indirectly invest insurance funds outside the country. Investment in IDRs is violation of section 27 C of insurance act, which bars investment of insurance funds outside the county. BankingSBI has launched two new home plan products – SBI Easy Home Loan and SBI Advantage Home Loan – for buyers in the sub-Rs 30 lakh category, with processing fee for both waived until September 30, 2009, while home mortgage lender LIC Housing Finance has reduced the interest rates for its existing borrowers. Indian arm of the Deutsche Bank has posted a profit after tax of Rs 430 crore in 2008-09 against Rs 386 crore recorded in 2007-08, up by 11%. A survey conducted by the Assocham has realized that banking sector has emerged as biggest job generator in the first quarter of 2009-10, by hiring more than 16,000 employees; this leads to 42% share in total job announcements in the study period followed by IT/ITeS sector by providing 12,200 jobs. Banca Popolare di Vicenza (BPVI), an Italian bank, has signed an agreement with SBI for closer co-operation and growth of bilateral trade. This will help the customers of both banks to explore opportunities in India and Italy as well as European markets. Corporate BHEL has bagged a contract of Rs 170 crore from Chennai Petroleum Corporation for setting up gas turbine based cogeneration power plant at its Manali refinery. A meeting of top officials of Sahara India and Jet Airways to resolve the dispute over the buyout of Sahara Airlines by the latter has not resulted in any settlement. Hindalco Industries Ltd, the flagship of Aditya Birla Group, has reported a fall of 73% in its standalone net profit to Rs 270 crore for the fourth quarter ended March 31, 2009, against Rs 1,000 crore in the corresponding quarter last year. Net sales for the quarter stood at Rs 3,770 crore, down 24.6%, compared to Rs 5,000 crore in Q4:2007-08. For the full year ended March 31, 2009, the consolidated net profit of the company was Rs 485 crore, a drop of 77.8% against Rs 2,193 crore in 2007-08. Net sales during the year, however, grew by 9.4% to Rs 65,625 crore as against Rs 60,013 crore in 2007-08. Libya has become the third African company to ban the import of Indian drugs, after Nigeria and Uganda. Though there is no official confirmation from the Libyan Embassy about the ban, exporters from the country have approached the Pharmaceuticals Export Promotion Council (Pharmexcil) in India as customs officials in Libya have denied them landing permission and some consignments have been seized. Reliance Industries has decided to move the Supreme Court to challenge the High Court Order’s order asking it to supply 28 mmcsmd of K-G D6 gas to Reliance Natural Resources (RNRL) at $2.34 per mmbtu for 17 years. RIL is likely to file its petition on or before July 6, 2009. RNRL had on June 19 had filed a caveat before the apex court to guard against any ex-parte hearing on the matter. Parle Bisleri is planning to set up 25 new bottling plants across the country in the current fiscal year as a part of its growth strategy. Apart from setting up new plants, the company is also expanding the capacity of its existing plants. Power and automation technology group ABB has been awarded a contract worth Rs 165 million from Power Transmission Corporation of Uttarakhand Ltd for three substations in north India. Engineering firm McNally Bharat Engineering has said it has bagged an order worth Rs 81.93 crore from National Thermal Power Corporation (NTPC) for supply and installation related works. Anil-Ambani-led Reliance Infrastructure has bagged IT consultancy contracts from five electricity distribution companies in Karnataka. Gammon Infrastructure Projects in consortium with two other firms, including state-run MMTC, has bagged a Rs 500 crore project from the Paradip Port Trust for the development of deep draught iron ore berth at Paradip. The country’s largest wind turbine manufacturer, Suzlon Energy has reported a 77% decline in net profit at Rs 236 crore in 2008-09 as against Rs 1,030 crore in 2007-08 on the back of currency losses and replacement of defective blades. Revenues took a hit as some clients in the US canceled orders and the company undertook replacement of defective blades. The Bombay High Court has sanctioned the merger of Reliance Industries Ltd (RIL) and Reliance Petroleum (RPL), but stayed its own order to enable those who are against the merger to file an appeal. 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. Information TechnologyA new company, CSC e-governance Services India Ltd will be floated by the government to provide back-end services to the huge network of 1,00,000 common service centres (CSCs) across the country that have sprung up to take Information Technology (IT) to the rural area of the country. The company is a special purpose vehicle (SPV) being set up by the Department of Information Technology. The government is planning to link the CSCs to act as the interface centre for various national level programmes like the National Rural Employment Guarantee Programme and the National Rural Health Mission among others. TelecomVodafone Essar has completed the service expansion into seven new regions across India. Now the services will be available in Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, North East and Orissa. Nokia Siemens Networks (NSN), Vodafone Essar’s infrastructure partner has undertaken the new network roll out in 10 months.
*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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