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Crisil pegs fiscal deficit at 5.2% of GDP in FY14
Spectrum auction: DoT-TRAI standoff may play spoilsport
Investors seek clarity on policy formulation: Ficci
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Samsung rolls out Galaxy Grand 2 at Rs 22,990
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Crisil pegs fiscal deficit at 5.2% of GDP in FY14
New Delhi, December 23 By March 31, 2014, the top 20 PSUs, by cash holding, will have an estimated pre-dividend corpus of around Rs 1.60 lakh crore. These include companies like BHEL, BPCL, Coal India, Engineers India, GAIL, MMTC, NHPC, NTPC, ONGC, PowerGrid, SJVN and SAIL, among others. Crisil Research’s analysis shows these companies are comfortably placed to pay special dividends of Rs 27,000 crore over and above their normal dividend payouts, without impacting capex plans. “Apart from the expected shortfall in tax revenue collections, the government may not be able to meet its disinvestment target, which could result in it falling short of the budgeted fiscal deficit. In such a scenario, the cash reserves of PSUs provide an alternative source of income. However, a lot will depend on whether the government is able to convince the companies to part with the surplus cash as a special dividend,” said Mukesh Agarwal, president, Crisil Research. At the end of the last fiscal, the total cash holding with these 20 PSUs was Rs 1.70 lakh crore. The report expects internal accruals and debt inflows (for project financing) to meet most of the capex requirements in 2013-14. By the end of this fiscal, the pre-dividend corpus with these companies is expected to be around Rs 1.60 lakh crore. “We estimate, these companies are well placed to distribute 40% of the corpus (Rs 64,000 crore) as dividend without impacting growth plans”, the report said. That is Rs 27,000 crore more than the Rs 37,000 crore dividend paid by these companies last fiscal. Without incorporating the extra dividends (over and above what was paid last year), Crisil Research expects this year’s fiscal deficit at 5.2% of the gross domestic product (GDP). Sandeep Sabharwal, senior director, Crisil Research, said: “The government will have to cut spending to meet its fiscal deficit goal. But this may not augur well for an economy that has slowed down and fresh spending cuts can also create growth hurdles. Hence, the government could persuade companies with large cash reserves to announce special dividends or a buyback programme”.
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Spectrum auction: DoT-TRAI standoff may play spoilsport
New Delhi, December 23 Already divergent views over the holding of the auction in January have emerged with some of the operators threatening to stay away if the government continued with the present cascading spectrum usage charge (SUC) regime, instead of moving to a flat fee structure. Also, there is a standoff between the DoT and the telecom regulator TRAI over the holding of the CDMA band spectrum with the former pressing for the view from the latter over holding the auction, while the latter evading it on the pretext of knowing whether the Telecom Ministry had put the regulator’s views on the issue in front of the Empowered Group of Ministers (EGoM). Besides, the GSM and the CDMA operators are clashing over the holding of auction with the latter now writing to the DoT to hold auctions in the CDMA band simultaneously with that in the 900 and the 1,800 MHz band. According to two communications sent to DoT last week, the Association of Unified Telecom Service Providers of India (Auspi), the umbrella body of the CDMA mobile operators, has argued that de-linking the 800 MHz band auction from that of the GSM bands is 'discriminatory' and impairs auction participation plans of its members such as Reliance Communications and Tata Teleservices that operate in both GSM and CDMA bands.
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Investors seek clarity on policy formulation: Ficci
Sidharth Birla has taken over as the president of the Federation of Indian Chambers of Commerce & Industry (Ficci) at the conclusion of the chamber's 86th annual general meeting. Birla is chairman of Xpro India Limited — a polymers processing company and Digjam Limited, manufacturer of woollen worsted suiting fabrics. He talks about the mood in the corporate sector before the general elections and how investors are in a wait and watch mode and growth prospects of the economy.
Q: What is your assessment of the investment slowdown in the economy and what can be done to revive it? A: Slowing economic growth and weak demand have impacted the investment cycle in the country. Investors are still in a ‘wait and watch mood’ as there is a lack of clarity in overall policy framework and decision making, which could continue until the impending general elections. However, there is a need for reviving the investment cycle to put the country back on high growth trajectory. We need to bring back the confidence in the economy. The projects cleared by the CCI should now see ground level implementation. Successive rounds of Ficci Business Confidence Survey have shown that cost of credit remains a major concern. Reduction in lending rates would give a boost to investments. Investors essentially seek clarity in policy formulation and greater certainty in rules and legislations. Procedural reforms have moved at a snail’s pace and this should change. In fact, the process of reforms should continue as this can prop up the investor confidence significantly. Q: Given that the general elections are only a few months away, what is the mood in the corporate sector? A: Whenever we are close to general elections, the corporate sector tends to maintain a cautious approach as the policy machinery also generally slows down. If the wheels of policy actions keep running even during the election cycle, industry can carry out their plans with high confidence. We did see some bold policy moves over the past few months, but some major reform measures like GST have not seen progress. We have been voicing the need for reform momentum to continue and we hope policy matters would see continuous action even till the close of elections. Q: Industry has expressed concern over recent high-profile corporate investigations dampening investor sentiment. What are your views? A: Ficci has maintained that good governance and quality decision making are the key to sustaining economic growth and promoting investments. An investigation under due process of law per se should not dampen investor sentiment. However, it is important that the investigations are tested against rationale. There is a fine line between rationalisation and sensationalisation which should not be breached. In other words, decisions taken in the interest of progress of nation, in a transparent manner are critical for growth but at the same time irrational investigations may lead to reputational risk which can adversely impact the investment environment. Q: What are the growth prospects for the Indian economy? A: The growth numbers below 5% level for the first half of this fiscal have been a matter of concern. Nonetheless, we do expect some recovery in the next two quarters on the back of good performance by the agriculture sector. The kharif season has been good, and the rabi season is expected to see a similar trend. Further, our exports have been doing well this fiscal and we may even exceed the export target of $325 billion for FY14. With clearances of mega projects by the CCI, we do see some improvement in overall investments, especially in the power sector. Ficci estimates the GDP growth at 5% for 2013-14, with growth in agriculture and allied activities at 4%, industry at 2% and services sector at 6.6%. Q: What is your take on the recent investor summit and opportunities in Punjab? A: India is no longer a single investment destination but a collection of many states which are unique from one another, in terms of development, resources and needs. Certain states can and will exploit their strengths, and we expect the success of these to inspire others. Events like Progressive Punjab provide a forum for states to highlight their strengths. The states will also have to improve their business climate to attract investment. |
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Samsung rolls out Galaxy Grand 2 at Rs 22,990
Mumbai, December 23 The dual-SIM smartphone will be available in the market from first week of January next year. "This new Samsung Galaxy Grand 2 delivers an improved HD viewing experience, more powerful multi-tasking features, a premium experience through design and entertainment on the go," Samsung India country head, mobile and IT, Vineet Taneja said. The device runs on Android 4.3 Jelly Bean and is a dual-SIM device with support for GSM+GSM. It also features a 5.25-inch HD TFT display with a resolution of 720x1280 pixels. Samsung has also introduced a single destination - Club Samsung - for its Indian infotainment content, company's director, mobile, Manu Sharma said. "The Club Samsung digital entertainment store features 4 lakh songs, 5,000 movies, 500 gigs and live TV with over 90 channels all optimised for high-quality display on Samsung devices," he said. The device will be available in black, pink and white colour variants in select regions. — PTI
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Sidharth Birla has taken over as the president of the Federation of Indian Chambers of Commerce & Industry (Ficci) at the conclusion of the chamber's 86th annual general meeting. Birla is chairman of Xpro India Limited — a polymers processing company and Digjam Limited, manufacturer of woollen worsted suiting fabrics.
