Nifty may try to stabilise around 5240 but the trend is firmly down
The passage of Food Security Bill in the Lok Sabha on Monday night raised concerns about the effect of massive subsidy on the fiscal deficit. As a result, the rupee on Tuesday collapsed to an all-time low and domestic indices fell heavily again. Today’s fall broke the trend of past three consecutive days of gains. The Nifty wiped off all the profits of the past three trading sessions.
On Tuesday, the Indian indices opened in the negative and hit their intra-day highs at the same levels but started falling thereafter. The indices hit a three-day (including today) low and closed almost at the same level. The Sensex opened at 18,461, and touched an intra-day low of 17,922 before closing in the negative at 17,968 (down 590 points or 3.18%). The Nifty opened at 5,427, hit an intra-day low of 5,274 and closed in the negative at 5,287 (down 189 points or 3.45%). The National Stock Exchange (NSE) recorded a volume of 66.04 crore shares which was lower than the average of the last 10 days.
Except for IT (up 0.22%), all other indices closed in the negative. The top five losers were Finance (6.16%); Bank Nifty (5.37%); Infra (4.73%); Realty (4.28%) and PSE (4.18%).
Of the 50 stocks on the Nifty, three ended in the green. Top gainers were Infosys (1.03%); Dr Reddy (0.98%) and HCL Technologies (0.05%). Top losers were IDFC (16.15%); BHEL (10.65%); IndusInd Bank (8.69%); Jaiprakash Associates (8.68%) and HDFC Bank (7.44%).
The rupee fell to a record low of 66.075 against the US dollar. Finance minister P Chidambaram on Tuesday said the currency is undervalued and hoped it will find its appropriate level. Chidambaram further said the fiscal deficit would be contained at 4.8% of the GDP even after considering subsidies for the implementation of the Food Security Bill.
India is considering currency swaps with other countries, TV channels reported on Tuesday, citing senior government officials.
Indian gold futures, which hit a record high on Tuesday, and is set to touch the keenly watched Rs33,000 per 10 grams mark this week with the continuing weakness in the rupee.
Read about the basics of Food Security Bill here
The bill still needs to be passed by the upper house, the Rajya Sabha, to become law. In the remaining days of the monsoon session, the government will try to pass a bill to allow foreign investment in the pension sector during the extended session, a law seen as a first step to building a viable private pension industry in India. Also up for debate is a bill setting rules for compensation for land acquired for infrastructure projects and industry, a move seen as raising costs but potentially reducing protests that have plagued India's industrialization drive.
Based on the current assessment of prevailing and evolving market conditions, the Reserve Bank has decided to conduct Open Market Operations (OMOs) by purchasing the government securities for an aggregate amount of Rs8,000 crore on 30 August 2013 through multi-security auction using the multiple price method.
Meanwhile, India's cabinet has approved infrastructure projects worth Rs1.83 lakh crore, the finance minister said, as part of a government drive to fast-track clearances and win back investor confidence. A cabinet panel cleared 18 power projects at a cost of Rs83,000 crore, he added. The Cabinet Committee on Investment has asked for an immediate resolution of issues hurting the progress of other infrastructure projects within the next two months.
Except for Shanghai Composite, which rose, 0.34%, all the other Asian indices closed in the negative. Jakarta Composite fell the most, 3.71%.
China's industrial-profit growth rebounded in July, adding to signs that the economy is stabilizing after a two-quarter slowdown and an interbank lending squeeze in June. Net income rose 12% from a year earlier after gaining 6.3% in June, the statistics bureau said in Beijing today.
US Secretary of State John Kerry said the US President will hold Syria's government accountable for using chemical weapons against Syrian civilians.
US indices ended in the negative. Among the US economic data, the Commerce Department reported new orders for durable manufactured goods plunged 7.3% in July, much sharper than the 5% drop expected.
European indices and US Futures were trading sharply lower.
The Food Security Bill or FSB requires 62 million tonnes of foodgrains every year and will cost the exchequer Rs1.3 lakh crore per annum
The Lok Sabha on Monday cleared the United Progressive Alliance (UPA) government’s ambitious Food Security Bill (FSB). The bill will now be considered by the Rajya Sabha (upper house). Here is a primer of on the Bill.
Who will be covered?
Up to 75% of the rural population (with at least 46% from priority category) and up to 50% of urban population (with at least 28% from priority category) are to be covered under Targeted Public Distribution System. Meals for special groups such as destitute, homeless persons, emergency/ disaster affected persons and persons on the verge of starvation will also be covered.
Who and how will these people be identified?
Number of persons to be covered to be on the basis of the population estimates as per the Census of India of which the relevant figures have been published. Within the coverage determined for each State, the State Government will have to identify households eligible.
How much of food grains will be given, at what price?
7kg of food grains per person per month to be given to priority category households which include rice, wheat and coarse grains at Rs3, Rs2, and Re1 per kg, respectively
At least 3kg of food grains per person per month to be given to general category households, at prices not exceeding 50% of Minimum Support Price (MSP). After implementation of the proposed Act, about 75 % persons in villages will get wheat at the rate of Rs2 per kg and rice at the rate of Rs3 per kg. However, farmers will get more for their produce i.e. Rs12.85 per kg for wheat and Rs12.50 per kg for paddy as MSP. Food Security Allowance in case of non-supply of food-grains or meals
How much of foodgrain is needed?
FSB would require 62 million tonnes of food grain every year
What would be the cost?
The food subsidy bill would rise to Rs1.3 lakh crore per annum (1.2% of GDP), up from Rs80,000 crore currently (0.8% of GDP), or an additional fiscal burden of 0.3-0.4 percentage points every year.
Who will meet the expenditure?
Central Government will provide assistance to States in meeting the expenditure incurred by them on transportation of food grains within the State, its handling and Fair Price Shops (FPS) dealers margin as per norms to be devised for this purpose.
What are the benefits to women and children?
Women to be made head of the household for the purpose of issue of ration cards. Pregnant women and lactating mothers to be entitled to meals and maternity benefit of not less than Rs6,000. Children in the age group of 6 months to 14 years to be entitled to meals under Intergrated Child Development Services (ICDS) and Mid-Day Meal (MDM) schemes.
Will there be a grievance mechanism?
Yes. It is expected to be a three-tier independent grievance redressal mechanism at District and State levels. However, States will have the flexibility to use the existing machinery or set up separate mechanism.
Who will ensure transparency and accountability?
Social audit will be done by local bodies such as Gram Panchayats, Village Councils, etc.
Other provision for transparency are: Public Distribution System (PDS) related records to be placed in public domain and Vigilance Committees
Despite having wide punitive powers, the provident fund dept claimed helplessness in procuring PF accounts from an organisation. The CIC directed the PIO to obtain the information and provide to the appellant. This is 162nd in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application
The Central Information Commission (CIC), while allowing an appeal, directed the Public Information Officer (CPIO) of Employee's Provident Fund Organisation (EPFO)'s regional officer at Allahabad, to procure information about provident fund (PF) accounts from the employer and provide it to the appellant. The PIO had claimed helplessness in obtaining PF account records from an organization.
While giving this judgement on 17 June 2011, Shailesh Gandhi, the then Central Information Commissioner said, “It is the pathetic state of affairs that the PF department which has been given very wide punitive powers is claiming helplessness for years when an organization does not give its returns. The PF department does not appear to be conscious of the fact that it is responsible for amounts deducted from employees across the country and by such actions it is not discharging its duties towards the employees.”
Akbarpur (Janpad- Ambedkarnagar/ Uttar Pradesh) resident Mohammad Aslam, on 30 November 2010, sought from the PIO information about the status of his provident fund (PF). Here is the information he sought under the RTI Act...
Reasons for not providing the PF Deposit from applicant's Employee's Provident Fund account as requested in application dated 9 November 2010.
The PIO returned the application to Aslam due to certain defects, which should be cured for the release of the applicant's PF deposit.
Citing PIO did not provide any information, the applicant filed his first appeal. However, there was no mention of any order by the First Appellate Authority (FAA).
Aslam, the applicant, then twice sent his appeal to the Office of the Additional Central Provident Fund Commissioner, who forwarded it to the Regional Provident Fund Commissioner (Appellate Authority).
After not receiving any information from the PIO or any reply from the FAA, the applicant approached the CIC with his second appeal.
During the hearing, Mr Gandhi, the then CIC, noted that the appellant was seeking information about the PF status of his account.
The PIO disclosed that it had not been possible (for him) to give the status of the PF accounts since the employers has not filled in the required form and sent it to the Department.
Mr Gandhi said, "It is the pathetic state of affairs that the PF Department, which has been given very wide punitive powers, is claiming helplessness for years when an organization does not give its returns. The PF department does not appear to be conscious of the fact that it is responsible for amounts deducted from employees across the country and by such actions it is not discharging its duties towards the employees."
"In the instant case the employer's representatives are present and they are committed that they would give the returns to the PF Authority before 30 July 2011,' the Bench noted.
While allowing the appeal, the CIC directed the PIO to ensure that the information sought by Aslam is supplied to him before 15 August 2011. "If the returns are not submitted by the employer, the PF Authority should take punitive action for which they have been given powers," the Bench said in its order.
CENTRAL INFORMATION COMMISSION
Decision No. CIC/SG/A/2011/000740/12919
Appeal No. CIC/SG/A/2011/000740
Appellant : Md. Aslam,
Uttar Pradesh- 224122
Respondent : Brijesh Kumar Mishra
PIO & RPFC-II,
Employee's Provident Fund Organisation,
United Tower IInd & IIIrd Floor,
53, Leader Road, Allahabad