Economy
With 22 out of 30 electricity boards in red, reforms an uphill task, says report
Past restructuring packages for SEBs have failed, the 5% average tariff hike in FY15 is modest at best and low agriculture power supply is putting pressure on residential and industrial customers to pick up the revenue slack. An uphill task for SEB reform says Religare, based on a report by PFC 
 
The aggregate losses of state electricity boards (SEBs) remained high in FY2014, the meagre tariff hike in FY2015 has not helped, and even the restructuring packages have failed to yield results. Reforms remain an uphill task and without further clarity on SEB finances, a sector rerating is most unlikely, says Religare Capital Markets Ltd in a research note.
 
Citing a report by Power Finance Corp (PFC) on SEB performance for FY14, Religare says it (the report from PFC) paints a bleak picture, especially for lossmaking states like Tamil Nadu and Rajasthan. Aggregate SEB losses on subsidy-received basis remain worrying at Rs62,460 crore in FY14, down only marginally from Rs70,570 crore in FY13. FY14 cash losses stood at Rs39,150 crore compared with Rs49,560 crore in FY13. 
 
Religare says, SEB finances have long been a contentious issue for the power sector given the political implications arising out of altering power costs for consumers. Past restructuring packages have failed, the 5% average tariff hike in FY15 is modest at best and low agriculture power supply is putting pressure on residential and industrial customers to pick up the revenue slack.
 
Aggregate losses include marginal profits by state generating and transmission companies and trading utilities to the tune of Rs1,610 crore up from Rs1,140 crore a year ago. Distribution companies (discoms) continue to have a revenue gap of Rs0.73 per unit (Rs0.85 per unit in FY13), leading to EBITDA losses of Rs89,930 crore in FY14 from Rs98,120 crore in FY13, Religare says.

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COMMENTS

Mukund Rajamannar

1 year ago

which ones are actually making profit?

Nestle says Maggi on shelves this month, all tests cleared
Nestle India on Wednesday said Maggi noodles has cleared the tests ordered by the Bombay High Court at three accredited laboratories and that the effort will now be on to re-launch the popular snack within this month.
 
"We have received the results from all the three NABL (National Accreditation Board for Testing Calibration Laboratories) mandated by the Bombay High Court to test newly-manufactured Maggi noodles samples," the company said in a regulatory filing with stock exchanges.
 
"All the samples of the Maggi noodles masala have been cleared with lead much below permissible limits," the statement said, adding this has validated their stand, maintained all along, that the noodles were and continue to be safe.
 
"We will make our best effort to commence the sale of Maggi noodles masala within this month, as well as continue engaging with the states where permissions are needed or specific directions may be necessary."
 
The company said Maggi was currently being manufactured at Nanjangud in Karnataka, Moga in Punjab and Bicholim in Goa, and that it was engaging with the state governments of Himachal Pradesh and the Uttarakhand for commencing production at Tahliwal and Pantnagar, respectively.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

SKRISHNAN

1 year ago

As consumers we have a question to The Food Safety and Standards Authority of India(FSSAI).All of us have read about the raging controversy about Maggi Noodles. How come they are suddenly back on the shelf. Which body in India has cleared it? FSSAI is said to be going in appeal before the S.C.We are not interested in the legal battle. Is Maggi safe or not? -that is the question before the consumer, when it still stands banned in several States.It is high time that FSSAI CAME OUT WITH A CLEAR UNAMBIGUOUS PUBLIC STATEMENT.
SKrishnan, Consumer Online Foundation

Services sector propels India's economic activity
Services sector expansion propelled the overall economic activity in India during October, a key macro data showed on Wednesday.
 
The Nikkei India composite PMI (purchasing managers’ index) which is a key macro data that indicates monthly trends in overall economic activity showed a rise of 52.6 in October from 51.5 in September.
 
An index reading of above 50 indicates an overall increase in the economic activity, below 50 an overall decrease.
 
The composite PMI weighs the average of the manufacturing output index and the services business activity index. It is based on original survey data collected from around 700 companies spread across sectors in India. 
 
According to the composite PMI report published by the leading global diversified provider of financial information services -- "Markit", the October expansion trend was the joint-fastest since March. 
 
The survey said the latest improvement was driven by services, as goods producers saw growth of production wane.
 
"India's economic growth shifted into a higher gear in October, driven by the service sector. Although manufacturing production continued to expand, growth eased and was sluggish by historical standards," said Pollyanna De Lima, economist with Markit.
 
On a standalone basis, the Nikkei India manufacturing PMI recorded a 22-month low in October at 50.7, down from 51.2 in September and from 52.3 in August.
 
The Nikkei services business activity index for India for October stood at 53.2 from September's 51.3. 
 
The services index noted growth in three out of the six surveyed categories, led by post and telecommunication.
 
The survey also revealed a quicker increase in new business inflows since February. 
 
"The upward trend in private sector output reflected stronger inflows of incoming new work, one that was the most marked since March," De Lima said.
 
"Services companies saw a faster rise in new business than their manufacturing counterparts, with data implying that price discounts supported growth of new projects." 
 
The services PMI disclosed that the demand conditions also improved in October. 
 
On the input prices, the survey pointed-out a slight rise in petrol and food costs for the services sector. The purchase prices for manufacturers rose for the first time in three months. 
 
Notwithstanding the rise in input costs, service sector employment levels was remained unchanged with approximately 98 percent of survey members reported no change in payroll numbers since the preceding month. 
 
However, goods producers signalled higher staffing numbers, but the rate of job creation was only marginal. 
 
The report cited that the services companies lowered their selling prices for the second successive month in October to improve competitiveness. 
 
The reduction in selling prices at services firms offset higher charges at goods producers, the study said.
 
"Private sector firms remained wary of costs and left payroll numbers, once again, unchanged. Average input prices rose in both the service and manufacturing sectors, although at rates that were relatively weak," De Lima added.
 
The survey added that the services business sentiment regarding the 12-
month outlook for activity remained positive in October, which was the strongest since July. 
 
The strongest levels of confidence were seen in the 'other services' and 'hotels & restaurants' categories.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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