Extension of sops to exporters, infrastructure thrust and a hike in income tax limit are likely to find a mention in the budget
The market is likely to open range-bound ahead of the presentation of the Union Budget, which will be presented at noon today. On the global front, Wall Street closed higher on Friday on assurance by the International Energy Agency that it would step in if crude supplies were disrupted due to the ongoing turmoil in West Asia. Markets in Asia were mostly down in early trade on Monday on concerns that the West Asian crisis will derail economic growth in the region. The SGX Nifty was 4.50 points lower at 5,323.50 compared to its previous close of 5,328 on Friday.
Concerns about the implications of the rise in crude prices for the Indian economy, and interest rates in particular, pulled the market down sharply last week. While the indices ended in the green on the first and the last trading day of the week, they were in the red for three days in between. The market declined 3% for the week ended 25th February with the Sensex and Nifty falling 510.61 points and 155.40 points, respectively.
Although the market ended positive on Friday, the indicators have started finding some direction. The manner in which the market has lost in the past few days shows that the gains are very slow. This means that the bears are still in control of the market.
The market will get a clear direction after the close of trade on Monday, after the Union Budget is to be presented. However, all rallies are likely to be short-lived. With crude prices spiralling to two-year highs, finance minister Pranab Mukherjee will have a difficult balancing act to perform.
The US markets settled in the green on Friday aided by the easing in crude prices after the International Energy Agency asserted that the impact of Libyan crisis was less than estimated and that any shortfall could be easily made up by tapping oil reserves in other countries. However traders were worried that the fighting spread to other countries in the region.
In economy news, the Commerce Department said the economy expanded at an annual rate of 2.8% in the October-December quarter, less than the previous estimate of 3.2%. Consumers spending rose at a rate of 4.1%, less than the initial estimate of 4.4%.
The Dow rose 61.95 points (0.51%) to end at 12,130.45. The S&P 500 Index gained 13.78 points (1.06%) at 1,319.88 and the Nasdaq advanced 43.15 points (1.58%) to settle at 2,781.05.
Markets in Asia were in the red in early trade on Monday on concerns that the ongoing political crisis in West Asia will slow down the economic recovery. Besides, threats by North Korea to attack South Korea and the US as the two allies prepare to conduct military drills, also played on investors’ minds. On the other hand, Japanese factory output rose in January for a third straight month, a sign that the economy is on track for a recovery. However, a rise in commodity costs triggered by unrest in the Middle East clouds the outlook.
The Shanghai Composite fell 0.06%, the Hang Seng declined 0.24%, the KLSE Composite was down 0.29%, the Nikkei 225 fell 0.62%, the Straits Times tanked 0.96% and the Seoul Composite tumbled 1.14%. On the flip side, the Jakarta Composite gained 0.08%. The Taiwanese market is closed for a local holiday.
Back home, finance minister Pranab Mukherjee is likely to extend the concessional credit scheme in his General Budget. In its pre-budget meeting, apex exporters body FIEO has also demanded that the income tax benefit available to export oriented units and software technology park units be extended for another three years.
He is also likely to announce steps to boost the infrastructure sector with a view to sustain over 9% growth in the coming years. The initiatives could include raising the limit for investment in tax saving infrastructure bonds and providing special thrust to plan expenditure for sectors like road, energy, ports, airports etc.
Tax experts are hopeful that the finance minister will increase the income tax exemption limit to Rs2 lakh per annum from Rs1.6 lakh to bring the rates in line with the Direct Taxes Code (DTC).
Company plans to commission first phase of six million tonnes per annum project by March next year; to expand capacity of plant to 20 mtpa in ten years
Bhubaneswar: Optimistic about commissioning the first phase of the proposed six million tonnes per annum steel project in Orissa by March next year, Jindal Steel and Power today said it would expand the capacity of the unit to make it the world’s biggest steel plant within a decade.
“The capacity of the proposed six mtpa steel plant will be expanded to 20 mtpa in the next 10 years. This will be the biggest steel plant in the world,” Naveen Jindal, executive vice-chairman and managing director, JSPL, told reporters after a meeting with Orissa chief minister Naveen Patnaik.
Mr Jindal said the company had already invested Rs10,000 crore and placed orders for another Rs5,000 crore for the Orissa project. The unit would start operation with the commissioning of two mtpa capacity in the first phase, reports PTI.
“We will be able to achieve the capacity of six mtpa steel plant by 2013,” he said, and added that the company was planning a big investment in the state. While JSPL would invest Rs45,000 crore to Rs50,000 crore in the steel sector, it would invest another Rs50,000 crore in the proposed coal-to-liquid (CTL) plant.
"The company is likely to invest Rs1,10,000 crore in the next 10 years,” Mr Jindal said. He also suggested that the environmental clearance for the project was not conditional.
To a question on the rehabilitation of people affected by the project, he said that the company had already demonstrated its intentions by its activities. “Both the chief minister and the company were concerned about the proper rehabilitation of the affected people,” he said.
The Congress member of Parliament also said, “I have never been ignored as an industrialist, even though I am an MP from the opposition party in this state,” he said.
AK Srivastava his wife, middleman Bhushan Lal Bajaj and his spouse arrested; CBI recovers gold and cash allegedly received as gratification from Madhya Pradesh-based Bhatia group of companies
New Delhi: A Delhi court today remanded NALCO chairman and managing director Abhay Kumar Srivastava, his wife and two others, arrested in a bribery case yesterday, in CBI custody till 3rd March.
"The case is required to be thoroughly investigated and for that sustained interrogation of the accused persons is required. Accordingly, I am satisfied that prayer for police custody of accused persons is justified," Special CBI judge OP Saini said.
The CBI arrested Mr Srivastava, his wife Chandani Srivastava, Bhushan Lal Bajaj, described as a middleman, and his spouse Anita Bajaj, and recovered about 10 kg of gold bricks and cash amounting to about Rs30 lakh, reports PTI.
The investigating agency submitted that Mr Bajaj had arranged a deal for bribes between Mr Srivastava and bidders and suppliers of NALCO. The CBI told the court Mr Bajaj was acting as a middleman to obtain favours for the Madhya Pradesh-based Bhatia group of companies and that he had collected huge illegal gratification on behalf of Mr Srivastava from GS Bhatia, the chairman and managing director of Bhatia group.
It also said that Mr Srivastava had instructed Mr Bajaj to convert the gratification from the Bhatia group into gold and to deliver it to him. Ten 24-carat gold bricks, each weighing 1kg, were recovered from a bank locker in the national capital.
The defence counsel opposed the CBI plea for seven days custody saying all searches have already been conducted and recoveries have been made.
Last night, a CBI spokesperson stated that the bank locker, in the name of Anita Bajaj, at the branch of the Bank of Maharashtra, was being operated by Chandani Srivastava. A search of the locker resulted in a further recovery of gold ornaments weighing 188 grammes and currency totalling Rs9.5 lakh.
A search of the wife of the CMD of NALCO also led to the recovery of Rs5 lakh from her handbag and a key of another locker, also in the name of the wife of the middleman. A search of this second locker led to recovery of Rs15 lakh in cash. "The total recovery so far has been 10.18 kg of gold and Rs29.5 lakh in cash, the overall value of which comes to about Rs2.43 crore at current gold prices," the spokesperson said.