Educational Loan Scheme has outstanding amount of Rs34,000 crore

New Delhi: Total outstanding loans under the government's Educational Loan Scheme were over Rs34,000 crore in 2009-10, reports PTI.

However, no decision has been taken to set up a credit guarantee fund for the scheme, minister of state for finance Namo Narain Meena said in a written reply in the Lok Sabha.

He said total outstanding loans under the scheme were Rs34,192 as on 31st March this year. The amount of outstanding loan under the Educational Loan Scheme during 2007-08 and 2008-09 was Rs19,817 crore and Rs27,646 crore, respectively.

During the previous three fiscals the number of accounts under it also increased from 12.47 lakh in 2007-08 to 18.51 lakh in 2009-10, Mr Meena added.

Replying to a question on plans to set up a credit guarantee fund for the scheme, the minister said: "No such proposal is under consideration. The government has not taken any decision to set up a credit guarantee fund in this regard."

Mr Meena said the ministry of human resources development has circulated an interest subsidy scheme on educational loan for economically weaker sections (EWS) to banks in May this year, which is for students in recognised technical and professional courses.

"In terms of the scheme, full interest subsidy would be provided by government during the period of moratorium/study and would be applicable to students from EWS with a parental upper income limit of Rs4.50 lakh," he added.


DTC may moderate tax rates, hints finance ministry official

New Delhi: Taxpayers may get relief in terms of tax rates in the proposed Direct Taxes Code (DTC), which is likely to replace the 50-year-old Income Tax Act from the next fiscal, reports PTI quoting a key financial ministry official.

"We are in the process of reducing the rate of tax and DTC will be a good example in that direction," Central Board of Direct Taxes (CBDT) chairman S S N Moorthy said at an Associated Chambers of Commerce and Industry (Assocham) tax conference.

He further said India is coming down to a realistic platform where the rates will be almost in line with international standards. "We are in the process whereby we have to be taxpayer friendly, we have to be in tune with international standards."

At the same time, the government would take measures so that the flight of revenue from India can be checked.

The DTC bill is likely to be tabled in this session of Parliament so that it could replace the archaic Income Tax Act from 1 April, 2011.

In the first DTC draft, the government had proposed a substantial widening of the tax base. It had suggested imposing 10% tax on income of Rs1.6 lakh-Rs10 lakh, 20% on income of Rs10 lakh-Rs25 lakh and 30% beyond Rs25 lakh in a year.

The proposed tax slabs were even substantially wider than the increase in the Budget 2010-11. The Budget imposed 10% tax on income of Rs1.6 lakh-Rs5 lakh, 20% on Rs 5 lakh-Rs8 lakh and 30% on over Rs8 lakh in a year.

However, the revised draft on DTC did not talk over tax rates and finance ministry officials said the slabs given in the first draft were just illustrative.

The second draft also said that the rates proposed in the first draft could be calibrated, after it dropped contentious proposal of taxing long-term savings like provident funds at the time of withdrawal. This means that tax rates may not be moderated so sharply, as was given in the first draft, but some rate cuts would be there.

Mr Moorthy further said that direct tax collections of Rs4.3 lakh crore for the current fiscal are on track.

"The target for the current year is about Rs4.30 lakh crore. Fortunately we are on track. We are growing at the rate of 15%," he added.

He further said tax deduction at source (TDS) collection, which constitutes a major chunk of direct tax, is not adequate but it would pick up. "This year we are going at the (TDS) rate of about 37.5% which is not adequate enough but anyways it will pick up."

Last year, TDS collection touched around 38% of the total revenue. It was about Rs1.40 lakh crore.


Cement stocks surge, but the rally may fizzle out

The fundamentals of the industry have not changed; supply will continue to outstrip demand, and prices will be hit further

Cement stocks enjoyed a huge rally across the board yesterday mainly on reports of a 2% hike in western India - CLSA says cement dealers confirmed a 2% hike in Mumbai. Cement stocks went up anywhere between 3%-8%.

Somewhere there was an element of catch-up too - cement stocks have been underperforming the indices. So what does one make of this rally? Well, to be very honest, this looks like a one-off rally - and by the looks of it, it is already fizzling out. Nothing seems to have changed fundamentally.

Most brokerages are advising clients to not read too much into yesterday's rally. Today's CLSA report to its institutional clients states: "Over FY11-12, we expect effective supplies (17% CAGR) to outstrip demand (9% CAGR) which would take down industry utilisation rates to 20-year low of ~80%. Cement prices have already corrected by 10%-35% over the last 3-4 months and we expect pressures to continue over the next few quarters."

The report also says that while dealers have confirmed the ~2% price hike in Mumbai, they are sceptical about the market's ability to absorb it given demand-supply issues.

A channel check update for July by Anand Rathi just three days ago observes that while all-India production declined 0.2%, dispatches rose 2.2% y-o-y - they grew 16% in the west but declined 4% in the centre. The south was still leading in capacity additions. The report said 6 million tonnes have been added in March 2010, but is not yet reported by the Cement Manufacturers Association. All-India utilisation has dropped to 75%, (it was 85% same time last year, and 79% last month) - the south and north recorded lowest utilisation. Volume outperformers were JPA, Orient, Dalmia, UltraTech and India Cements (note that JPA has new capacity) while laggards were ACC and Ambuja. The report states, "prices in August slipped Rs8-12 a bag in the western and central regions; they have been stable in all other regions. In the south, price increases in certain pockets couldn't be sustained. Demand during July-August has eased, chiefly due to shrinking demand from construction at government projects and in real estate. Dealers do not expect any major price cuts in the next two to three months." So, in short, nothing much has changed in the last two months.

Religare has a different standpoint. The brokerage says, in a report dated 4th August, that it sees FY11 as the trough year for cement and expects prices to bottom out in the September quarter. The basis for this assumption is an expectation of an improvement in demand led by higher infrastructure and real estate off-take, rise in capacity utilisation as incremental additions ease off, and a firming up of cement prices. The report also talks of attractive valuations since stocks have corrected 8%-28% over the past four months limiting downside and M&A activity in the sector, fuelling a re-rating. None of these arguments feel right, at least at the moment - so in the short-to-medium term, the flat to negative trend in cement prices could continue.

Q1 earnings of the cement industry were almost universally disappointing. Companies with higher exposure to the south were more hit than others as this region saw both a supply increase and demand contraction. However, sequentially, most companies posted realisation gains of 2%-3% thanks to a price hike in March 2010. However, prices came under pressure once again towards June and right now, realisations are actually 5%-6% lower than they were in Q1. Investors, especially retail ones, will be well advised to stay away and just observe for the moment, at least for a quarter or so.



sushil suryawanshi

7 years ago

Hi sushil

read this cement sector watch....

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