The market must shed some weight to climb higher
All the Asian indices opened fairly in the positive and also all ended in the green, following a rally in the US markets yesterday. This is on the back of Greece's government edging closer to securing a bailout package. The US also closed in the green yesterday. On the domestic front, the indices opened slightly above yesterday’s close. However, for most of the trading session it managed to keep itself in the green and tried to edge higher after each dip. As we mentioned yesterday that the Nifty should be able to avoid going below the previous day’s low to stop the downward trend. The index made a higher low today at 5,325. From here we may see the Nifty reaching the level of 5,465 if it manages to make a higher low each day. A close below today’s low will see a small dip. The National Stock Exchange saw a volume of 92.93 crore shares
A Greek official said yesterday the government and international creditors were close to a final draft of an agreement on budget and structural measures needed to extend the financial lifeline. Another official said earlier yesterday talks were focused on how to make up for a 550 million-euro shortfall in new austerity measures for this year. At stake is whether Greece wins the bailout, secures a debt write-off with private creditors and remains in the euro region.
The Sensex and the Nifty opened at 17,632 and 5,344 respectively. After the opening of the European market the indices hit their intra-day highs at 17,809 and 5,397, however it was a lower intra day high from yesterday. The indices hit their intra-day low at 17,580 and 5,325. The Sensex closed at 17,707, 85 points up (0.48%) while Nifty closed at 5,368, 33 points up (0.62%). Yesterday’s loss has been completely wiped off in today’s upmove
Also in the positive news was the number of US job openings jumping 8.3% in December, to 3.4 million, the number being just short of September’s reading, which was the highest since August 2008. The European indices were trading in green and so were the US index futures.
“On the one hand, we (advocate) freedom to price gas on an arm’s length basis. But on the other hand we also say that (companies) must allocate gas according to the government’s priorities,” Planning Commission deputy chairman Montek Singh Ahluwalia said
New Delhi: Planning Commission deputy chairman Montek Singh Ahluwalia has criticised the current gas pricing methodology where producers are asked to ‘discover’ market price of the fuel by calling bids from consumers identified by the government, reports PTI.
“We should decide now ab intio what should be the price of natural gas. What should be the principles, which should be applied,” he said at the launch of the book, ‘Natural Gas in India: Liberalisation and Policy,’ written by Anil K Jain, a senior bureaucrat and former joint secretary-exploration in the oil ministry.
“On the one hand, we (advocate) freedom to price gas on an arm’s length basis. But on the other hand we also say that (companies) must allocate gas according to the government’s priorities,” he said citing example of fertilizer sector which can “bid for whatever price” because their input cost is pass through.
Urea-making fertiliser plants have been accorded top priority in allocating domestic natural gas by the government.
The country, he said, “must internalise real cost of energy” while subsidy should be determined separately.
“I am not aware that any of the existing model (for pricing of gas) meet the test of economic rationality,” he said.
Speaking of the formula which formed the basis for fixing the price of $4.2 per million British thermal unit for the gas produced by Reliance Industries (RIL) from KG-D6 block, Mr Ahluwalia said: “Under which circumstances that formula should be determine the price of gas.”
“These are very big decisions and the government has to take informed view on that. It is very easy to say that particular formula does not have much rationality, but then it is quite difficult to propose what the formula should be in future. The whole issue of energy is quite crucial,” he said.
Mr Ahluwalia advocated freeing of natural gas pricing. The Planning Commission has also advocated the market determined energy price in its Integrated Energy Policy which was approved by the Union Cabinet.
Speaking on the occasion, Cairn India CEO Rahul Dhir said taxation system in the country was discriminatory as crude oil producers enjoyed a seven-year holiday from payment of income tax while the same was not available for natural gas producers.
He said energy explorers had no control over what is discovered when a well is drilled and it may turn out that a well may contain both oil and gas and therefore there was an urgent need to end the discrimination between crude oil and gas for tax purposes.
Mr Jain’s book contains comprehensive discussion of the current status of India’s gas sector, including medium to long term outlook for demand and supply.
The net direct tax mop-up during the April-January period rose 9.28% to Rs3.46 lakh crore; however, the government may miss the full year direct tax collection target of Rs5.32 lakh crore which envisaged a growth of 19% over the last year
New Delhi: With the direct tax collection growing at a slower pace of 9% this fiscal so far, the government is likely to miss the revenue mop-up target for the 2011-12, reports PTI.
According to the data released by the finance ministry, the net direct tax mop-up during the April-January period rose 9.28% to Rs3.46 lakh crore mainly on account higher realisation of personal income tax and corporate tax.
The government, however, may miss the full year direct tax collection target of Rs5.32 lakh crore which envisaged a growth of 19% over the last year.
The net direct tax collection was Rs3.17 lakh crore in the 10 month period of the 2010-11 fiscal.
The slow growth in direct tax collection comes on the back of declining gross domestic product (GDP) growth rate which is estimated at 6.9% in 2011-12, down from 8.4% a year ago.
The gross direct tax collection during the April-January period, however, was up by 14.57% at Rs4.25 lakh crore. It was Rs3.71 lakh crore in the corresponding period a year ago.
Amid slowdown in industrial activities due to global factors and high domestic interest rates, revenue collections have come under pressure.
As per the official data, gross corporate tax collection was up 12% at Rs2.85 lakh crore in April-January from Rs2.55 lakh crore in same period in the previous fiscal.
The personal income tax collection in the 10 month period of the current fiscal was up by 20.43% at Rs1.38 lakh crore.
The growth in wealth tax was 45.11% at Rs682 crore against Rs470 crore collected last year.
Amid volatility in the stock market, the securities transaction tax (STT) declined by 27.19% at Rs4,145 crore. The STT mop-up was Rs5,693 crore in the year-ago period.
With only two months of the fiscal remaining, the government will have to add Rs1.86 lakh crore to its tax kitty to meet its budget estimates, which experts say is a tough task.
Even finance minister Pranab Mukherjee had said last week that he is exerting pressure on revenue officials to improve tax realisation to meet the total tax (direct + indirect) collection target of Rs9.32 lakh crore.
“I am putting pressure on my colleagues in the CBEC, CBDT ...and on my behalf secretary (revenue) is continuously breathing (down) their neck to improve revenue because our demand and requirement is much more,” he had said.
The government needs maximum revenue to contain the widening fiscal deficit, which is likely to shoot up due to higher subsidy bill and poor disinvestment receipts. The government had projected the fiscal deficit at 4.6% of the GDP in 2011-12.