In a communication to ministries and departments on 11th July, the finance ministry had said there would be a ban on holding seminars and conferences in 5-star hotels and that foreign travels would be undertaken only in necessary and unavoidable cases
New Delhi: Faced with rising oil and food subsidy, finance minister Pranab Mukherjee today said the austerity measures, like curbs on foreign travel, will help government save 'wasteful expenditure', reports PTI.
"I am quite confident that some wasteful expenditure will be saved," Mr Mukherjee said adding a similar exercise to check government expenses in the past had paid dividends.
In a communication to ministries and departments on 11th July, the finance ministry had said there would be a ban on holding seminars and conferences in 5-star hotels and that foreign travels would be undertaken only in necessary and unavoidable cases.
Besides, there is a ban on creation of jobs in the government.
The government faces a challenging task to keep fiscal deficit target at 4.6% of the gross domestic product (GDP) in 2011-12.
"...last time when we had the austerity measures a couple of years back, we had good dividends and let us see how does it work (this time)," the finance minister said.
In September 2009, the government had put several restrictions on expenditure. These included instructions to ministers to fly in the economy class, leading to some resentment and the controversial 'cattle class' remark by then minister of state for external affairs Shashi Tharoor.
Due to volatility in global crude prices, the government's subsidy on fuel is likely to increase. It spends about Rs73,637 crore a year on fuel and fertiliser subsidies.
It plans to spend about Rs82,000 crore on food subsidy this fiscal which may go up to Rs95,000 crore once National Food Security Act comes into play.
Besides, the government is expected to lose around Rs36,000 crore during the current fiscal on account of duty cuts on petroleum products.
On the other hand, the government may find it difficult to mop up Rs40,000 crore from sale of equity in the public sector companies during the 2011-12 financial year.
Austerity measures were announced to ensure availability of adequate resources for meeting the development and priority schemes, the finance ministry had said.
The Nifty may rally up to 5,650
The market snapped its three-day losing streak to close higher today, along with its Asian peers and all-round buying support from institutional investors.
The market opened in the positive, tracking its Asian peers which were up. The Nifty opened 16 points higher at 5,542 and the Sensex resumed trade at 18,469, up 57 points from its previous close. The indices touched the day's low in the initial session, with the Nifty dipping marginally to 5,541 and the Sensex a tad lower to 18,465. Subsequently, the market resumed its upmove on good buying in the realty, consumer durables and healthcare sectors.
The market pared a small portion of its gains in mid-morning trade, but continued its northbound journey on support from institutional investors. Despite choppiness in the post-noon session, consumer durables and oil & gas sectors were the top sectoral gainers in post-noon trade. The indices touched their day's high in the closing minutes of trade, with the Nifty scaling 5,596, and the Sensex at 18,626.
All-round buying support ensured that the markets closed near the day's highs. The Nifty closed 59 points up at 5,585 and the Sensex settled at 18,596, up 184 points.
Yesterday, we had mentioned that the Nifty would rise to 5,600. The index was close to this level today. The Nifty may now rally up to 5,665.
The advance-decline ratio on the National Stock Exchange was a splendid 1200:499.
Among the broader indices, the BSE Mid-cap index surged 1.30% and the BSE Small-cap index climbed 0.97%.
All sectoral indices, with the exception of the BSE IT index (down 0.05%), ended in the positive. The top gainers were BSE Consumer Durables (up 1.73%), BSE Oil & Gas (up 1.70%), BSE Realty (up 1.69%), BSE Auto (up 1.58%) and BSE Healthcare (up 1.26%).
The top Sensex gainers were DLF (up 2.95%), Mahindra & Mahindra (up 2.20%), ONGC (up 1.97%), Reliance Industries (up 1.89%) and Tata Motors (up 1.85%). The top laggards were Infosys (down 0.36%), Tata Power (down 0.34%), Hindustan Unilever (down 0.33%) and Wipro (down 0.17%).
The major gainers on the Nifty were DLF (up 3.78%), Kotak Bank (up 3.42%), Dr Reddy's (up 3.27%), Reliance Capital (up 3%) and IDFC (up 2.83%). The main losers on the index were Tata Power (down 0.94%), Infosys (down 0.49%), HUL (down 0.35%), BHEL (down 0.27%) and Grasim (down 0.20%).
Markets in Asia settled mostly higher as China's higher gross domestic product (GDP) data for the June quarter eased concerns about a slowdown in growth due to policy-tightening initiatives. China's GDP grew by 9.5% from a year earlier, beating analysts' estimates for a 9.4% rise. Meanwhile, China's industrial output for June rose 15.1%, up from 13.3% in May. Investors remain apprehensive about the developments in Europe.
The Shanghai Composite gained 1.48%, the Hang Seng rose 1.22%, the Jakarta Composite climbed 1.09%, the KLSE Composite added 0.16%, the Nikkei 225 advanced 0.37% and the Seoul Composite gained 0.94%. The Taiwan Weighted shed 0.03%.
Back home, foreign domestic investors were net sellers of stocks worth Rs969.44 crore on Tuesday. On the other hand, domestic institutional investors were net buyers of stocks worth Rs286.77 crore.
Dr Reddy's Laboratories has received final approval from the US Food and Drug Administration (USFDA) to sell Fondaparinux Sodium injection, which is used in the treatment and prevention of deep vein thrombosis (DVT).
The injection is a generic version of GlaxoSmithKline's Arixtra, whose sales grew 16% year-on-year to $340 million for the 12 months ending May 2011, as per IMS sales data. The Dr Reddy's stock settled 3.27% higher at Rs1,593.25 on the NSE.
State-run Power Finance Corporation is planning to disburse Rs35,000 crore worth loans in the current fiscal, according to a media report. The PSU is also in talks to fund two projects of the Nuclear Power Corporation. It will finalise funding terms for nuclear power projects in three months. The PFC stock gained 3.86% to close at Rs195 on the NSE.
The Rs11,500 crore share sale of state-run Oil and Natural Gas Corporation (ONGC) has been deferred again and is unlikely to hit the market before mid-August. The public offer in which the government plans to sell 5% (427.77 million shares) was originally planned for 2010-11, but was deferred to 5th April as the company did not have adequate number of independent directors on its board to meet the market regulator SEBI's listing norms. It was then scheduled for July, but it has again been deferred. ONGC was up 1.90% at Rs287 on the NSE.
Standard Chartered was the banker in the deal in which Maxis bought 74% stake in Aircel. CBI said documents from the bank could provide crucial details about the financial transactions
New Delhi: The Central Bureau of Investigation (CBI) on Wednesday sought clarifications from Standard Chartered Bank officials in connection with its probe into former Aircel chief C Sivasankaran's allegations that the then telecom minister Dayanidhi Maran forced him to sell his company to Malaysia-based Maxis group in 2006, reports PTI.
The agency has registered a preliminary enquiry into sale of telecom spectrum during 2001-07.
Sources in the agency said Standard Chartered was the banker in the deal in which Maxis bought 74% stake in Aircel. They said documents from the bank could provide crucial details about the financial transactions.
They said officials of the bank's corporate wing were quizzed by CBI officials.
Mr Sivasankaran had alleged in a statement before the agency that he was forced to sell his stake in Aircel by Mr Maran and his brother Kalanidhi at a very cheap price to Malaysia-based Maxis, which is considered closed to the Marans.
The allegations have been refuted by Dayanidhi who maintains that he did not play any role in the Aircel-Maxis deal.
Sources said the CBI primarily wants to get details of correspondence of bank with both parties-Sivasankaran and Maxis officials and the manner in which entire deal was done.
CBI, the country's premier investigating agency, in the preliminary enquiry is verifying the allegations levelled by Mr Sivasankaran and seeking documents and other details from Standard Chartered officials are part of that exercise, the sources said.