New Delhi, January 15
While the BSE Sensex breached the 20,000-mark after two years on a gush of liquidity from overseas investors, retail investors may not be too thrilled as they have mostly sat out this rally.

The Sensex closed lower at 19,986 points, over 80 points higher, amid strong buying on rate cut hopes, robust liquidity in the global equity markets and the postponement of GAAR have fuelled the markets. This was the first time since Jan 6, 2011 that the index crossed the 20,000-mark.

Retail investors singed by losses over the last couple of years and volatility in the markets have mostly stayed away from the current stock market rally and have in fact been selling their earlier equity positions at higher levels.

Recent reforms initiated by the government have enthused investors. Motilal Oswal Financial Services CMD Motilal Oswal said the market has crossed a big psychological hurdle at 20k after a long time. “I remain optimistic and think the market will touch new high before the budget. Many decisions taken by the government has led to such a confidence. Foreign money is entering in a big way and the GAAR decision has paved the way for big inflows in the near future”, he added.

Buying was seen mainly in blue-chip stocks like ITC, Bharti Airtel, ICICI Bank, Tata Motors and ONGC, that contributed the most to the Sensex rise. However, profit booking in counters like Infosys, CIL, SBI and Sterlite capped gains. Stocks of rate-sensitive banking, realty and auto sectors were in limelight on heightened expectations of a rate cut.

Dipen Shah, head of PCG (private client group) research at Kotak Securities, said it was another strong day for the markets with the BSE Sensex crossing the 20000 mark during the day.

“We believe that strong results from early declarants have buoyed the sentiments of the market. The markets are also expecting interest rates to moderate after the Wholesale Price Index came in at 7.18% for December. Deferral of GAAR to April 2016 also continued to have a positive impact on sentiments”, Shah added. 

New Delhi, January 15
Posting the highest foodgrains production and productivity for the past many years, Punjab is now losing out to states like Madhya Pradesh, Bihar and Chhattisgarh, which have started recording a far more robust growth in agriculture even while neighbouring Haryana is managing to hold on to its lead with competitive figures.

The proof is India’s top awards for foodgrains production — the Krishi Karman Awards —where Punjab has been forced to concede the top spot to Madhya Pradesh in the main category (states with total foodgrains production exceeding 10 million tonnes because of low percentage growth in production as also productivity — a wake-up call perhaps for the state’s farmers as also planners.

Punjab, which along with Uttar Pradesh was adjudged as best performing state in the category, will have to settle with a commendation this year. The message, as reiterated by experts, is clear, Punjab has reached a plateau in production and productivity because of falling soil health and cannot get any better unless drastic steps are taken to disturb the status quo.

Figures say it all. Madhya Pradesh recorded 18.91% rise in output and 9.81% rise in productivity in total food grain while Punjab, as per figures accessed by The Tribune, posted a rise of a mere 1.74% and 1.37%, respectively. In comparison, Haryana, with almost similar soil and water conditions as Punjab, achieved 9.07% growth in production and 8.77% growth in productivity has held on to its position as the best individual performer in wheat. Bihar, the best performer in rice, recorded a whopping 28.81% rise in production and 34.95% in productivity, upping last year’s winner, Chhattisgarh.

While Punjab may contend that it is unfair to compare the country’s top grower with states with far lower base values of production and productivity like MP and Bihar, agriculture ministry officials argue the idea is not to compare in absolute terms but the gains registered by the states on an yearly basis. For example, the maximum weightage (55 points) is given to growth-highest production of the state exceeding previous highest production, while 30 points are given for significant initiatives.

Madhya Pradesh, which posted a percentage growth of 18.91% in overall production and 9.81%, is growing many times faster than Punjab. In comparison, Punjab, which recorded 27.866 million tonnes of foodgrains in 2010-11 and 28.352 million tonnes in 2011-12, posted only 1.74% rise in output. Likewise in productivity, where it recorded 4,280 kilogram per hectare in 2010-11, which rose to 4,339 kg per hectare in 2011-12, an increase of just 1.37% as compared to 9.81% registered by Madhya Pradesh.

New Delhi, January 15
India Inc has told the Prime Minister’s Economic Advisory Council (PMEAC) that imposition of inheritance tax and additional taxes in the FY2014 budget would be highly regressive and hurt business sentiment. Industry bodies CII and FICCI expressed the view this could also lead to a flight of capital in a meeting with PMEAC chairman C. Rangarajan with the budget coming next month.

Underlining the importance of keeping business sentiment positive, CII president Adi Godrej said talk about inheritance tax and other such measures of additional taxation could negatively impact confidence.

FICCI vice president Sidharth Birla pointed out that at this juncture, when there was a need to generate capital resources to invest in developmental needs, any proposal to introduce higher tax rates or inheritance or similar taxes would be highly regressive and ultimately prove counterproductive.

“Such negative policies, particularly when very large untaxed amounts remain visible in the economy, could potentially lead to serious capital flight as well as encourage tax evasion and will serve as a depressant for capital mobilization and hit business confidence adversely”, he added.

Sharing industry’s points of view with Rangarajan, Godrej said all policy actions taken at this time must be aimed at keeping the sentiment positive. He added the conditions prevailing in industry and economy were causing a lot of concern all around. “The November IIP figures is an indication that the talk about an industrial turnaround after the October figures came out is premature”, he said.

Godrej noted the lack of investment demand is perceptible across all sectors. New project announcements are at a low. The need for boosting business confidence of investors can, therefore, hardly be overemphasized, which would be critical for reviving growth momentum of the economy.

In its suggestion to the PMEAC, The CII has said the present excise and service tax rates are maintained. On the same vein, global excess capacity poses a threat in terms of cheap imports, flooding the Indian markets and CII feels the peak customs duty should also be maintained at 10% in the forthcoming budget.

Birla emphasized that industry needs to see timebound implementation of key polices as well as projects. "We also seek measures that enhance protection and consolidation of investible capital and any step that could disturb this scenario could quickly bring to nought the slight improvement that is visible on the horizon," he said. 

Mumbai/London, Jan 15
Yes Bank Ltd is in talks to buy the local retail and commercial operations of Royal Bank of Scotland Group Plc (RBS), a source with direct knowledge of the matter said.

A plan by RBS, majority owned by the UK government, to sell the Indian businesses to HSBC Holdings Plc fell through in November last year, more than two years after the two banks started negotiations.

Yes Bank, India's No. 4 private sector lender with assets of nearly $11 billion, is likely to start due diligence on the RBS unit soon, said the source, declining to be named as he was not authorized to speak to the media.

RBS, which is expected to be fined for its role in a global interest-rate rigging scandal later in January, is selling off unwanted assets to strengthen its capital position. The bank is scaling back its international opeations following a bailout during the 2008 financial crisis which left it 81 percent owned by the government. Britain's Finance Minister George Osborne has ordered it to focus on domestic activities.

The bank has shrunk its balance sheet by 700 billion pounds since its rescue and is continuing to sell off unwanted assets as it looks to meet tougher demands on capital requirements being set by the Bank of England's Financial Policy Committee.

RBS has been shrinking its Indian business since the original deal with HSBC was struck in 2010 and it now has assets of just £190 million. The unit has 31 branches and 400,000 customers.

A Yes Bank spokesman declined to comment. RBS said the bank was reviewing all options for its retail and commercial businesses in India.

According to an earlier media report, Yes Bank and domestic rival IndusInd Bank Ltd, headed by Ramesh Sobti, former India chief of Dutch Bank ABN AMRO, is in talks to buy RBS's India retail assets.

However, IndusInd COO Paul Abraham told Reuters the bank was not pursuing RBS's Indian assets. "No, we aren’t interested," Abraham said, when asked whether the bank was in talks for the RBS assets. — Reuters