SEBI to make it easier for for investors!Just beware to be pushed in the SENSEX trap as a flash 900-point crash in the National Stock Exchange's index Nifty this morning eroded an estimated Rs 10 lakh crore of investor wealth, though for a brief period!LPG price hiked by Rs. 11.42; petrol, diesel rates may go up!
Indian Holocaust My Father`s Life and Time, Chapter:Nine Hundred Twelve
Palash Biswas
Mobile: 919903717833
Skype ID: palash.biswas44
Email: palashbiswaskl@gmail.com
LPG price hiked by Rs. 11.42; petrol, diesel rates may go up!
Just beware to be pushed in the SENSEX trap as a flash 900-point crash in the National Stock Exchange's index Nifty this morning eroded an estimated Rs 10 lakhcrore of investor wealth, though for a brief period!Friday's fall was compared by market watchers to a "flash crash" in US stocks in May 2010 in which the Dow Jones plunged 1,010 points -- about nine percent -- before recovering losses within minutes.India said on Saturday its financial markets were safe from "systemic risk" after a more than 900-point "flash crash" in the National Stock Exchange's Nifty index caused by erroneous trading orders.FM today held a meeting with RBI officials as part of a series of engagements planned for the day with the central bank, market regular Sebi.Get ready for more kicks!In a move that could help the ailing housing sector, the Securities and Exchange Board of India (Sebi) allowed debt funds to invest an additional 10 per cent (after reaching the cap of 30 per cent in financial services) in the housing finance companies.According to Securities and Exchange Board of India (Sebi) figures, foreign institutional investors (FIIs) have bought shares worth Rs 84,000 crore in the Indian markets this year.Cautioning against over-dependence on foreign institutional investors (FIIs), which brings in hot money, chief economic adviser Raghuram Rajan on Monday said the government should focus on foreign direct investment (FDI) and open more sectors to such inflows. "We have to be careful that we are not overtly dependent on external investors that this is an environment when the external investor is quite fickle," Rajan said in his first media interaction.Betting high on the government's reform initiatives, foreign investors have pumped in more than Rs. 9,000 crore (about $1.7 billion) in the equity market this month.The country's top bankers pitched for a cut in the Cash Reserve Ratio (CRR) with the central bank amid concerns on slowdown in credit growth.
Market regulator SEBI today proposed to bring more classes of financial instruments, including insurance policies and fixed deposits, under the ambit of asset categories that can be held in demat or electronic form. It means, the FDI drive would be translated in market equities. SEBI is clearing decks for further market reforms.The proposed move is expected to make it simpler to maintain and safe-keep various kinds of financial instruments, as the risks like loss and theft get minimised in demat form, as compared to the physical paper form. A day after stock market benchmark Nifty witnessed a 900-point flash crash, Finance Minister P Chidambaram today said the matter is being investigated and regulator Sebi would take necessary actions in this regard.In fact,it tuurns out to be that SEBI to make it easier for foreign nvestors! Market regulator Securities Exchange Board of India (Sebi) on Saturday proposed uniform guidelines for all classes of foreign investors, a step aimed at simplifying the investment process for overseas entities and strengthen surveillance over them.After a slew of measures for domestic investors, the market regulator now plans to facilitate overseas investments into equity and debt markets. The Securities & Exchange Board of India is planning to sign bilateral treaties with seven more countries to allow wealthy individuals from these jurisdictions to invest in Indian stocks.At present, all the securities traded in capital markets such as equity shares and mutual funds can be held in demat accounts, maintained by two depositories NSDL and CDSL, which come under Sebi's jurisdiction.
Meanwhile,The Supreme Court on Friday sought a clarification from the government over Reserve Bank of India's clearance on the recent notifications allowing foreign direct investment in multi-brand retail and aviation.A two-judge bench, comprising Justices RM Lodha and Anil R Dave, sought the assistance of the Attorney General or the Solicitor General to clear the air on the claims made in a public interest litigation filed by advocate ML Sharma.The petition claimed that the FDI notifications violated existing laws and rules such as the Foreign Exchange Management Act (Fema) and the Insurance regulatory and Development Authority (IRDA) Act.The petition raised several other objections against the policy, but the Supreme Court bench prima facie rejected most of them.
West Bengal chief minister and Trinamool Congress chief Mamata Banerjee on Saturday expressed her unhappiness over the central government's decision to hike the price of cooking gas by over Rs. 11.
Do you know, how many times prices have been increased, affecting the interest of the common people during UPA-II? Today again, the central government has hiked LPG prices by 11.42 per cylinder. Very bad, very sad," Banerjee posted on Facebook.
Following the central government's decision to raise the commission paid to the dealers, cooking gas (LPG) price was Saturday hiked by Rs. 11.42 per cylinder.
In Kolkata the new price is now at Rs. 412.42 per cylinder.
Since her party's withdrawal of support from the United Progressive Alliance government, Banerjee has never lost any opportunity to criticise the Congress-led UPA and has been vociferous in her attacks against the economic reforms initiated by it.
Meanwhile, the Tamil Nadu Government has expressed its disapproval to the Centre allowing foreign direct investment in insurance and pension funds sectors.Chief Minister J. Jayalalithaa said in a press release: "I strongly oppose these moves as they are detrimental to the future of the common people of this country."
The UPA Government at the Centre is "unfazed by the sufferings of the common people, small traders and small farmers''.
The Cabinet's approval "toting these as big-ticket reforms, which would accelerate unprecedented growth and boost a sagging economy, is premature''.
FDI in insurance, pension funds
Increasing FDI from 26 per cent to 49 per cent in the insurance sector and allowing 26 per cent FDI in pension funds sector will happen only after the Pension Fund Regulatory & Development Authority (PFRDA) Bill, 2011, and Insurance Law (Amendment) Bill, 2008, are passed by both the Houses of Parliament. The UPA faces a "number crunch" in the Houses, she said.
Though 26 per cent FDI was permitted in insurance sector "nothing appreciable" came of it. Hiking this to 49 per cent despite a Parliamentary Committee recommendation against it will prove disastrous.
"As to whether they have the right to jeopardise this crucial sector is a debatable issue," Jayalalithaa said.
Limiting insurance companies' capital requirement to Rs 50 crore will result in the mushrooming of small companies lacking experience and capability and will be fraught with danger. This will unnecessarily expose our public to risk.
Public sector cos to be hit
FDI in insurance sector will see private insurance companies with totally commercial approach dominating. Public sector companies like LIC, which participate in the developmental process, will suffer and "the developmental process of the nation itself will be adversely and severely affected''.
FDI in pension funds and channelling the domestic savings of the elderly into the highly risky and unpredictable capital market will jeopardise the future of senior citizens.
Cooking gas (LPG) price was on Saturday hiked by Rs. 11.42 per cylinder following government decision to raise commission paid to the dealers. Petrol and diesel prices too may go up marginally as the Oil Ministry considers raising dealers commission by at least 23 paisa and 10 paisa a
litre respectively.
The Ministry yesterday issued orders raising commission paid to LPG dealers from Rs. 25.83 per 14.2-kg cylinder to Rs. 37.25, government officials said.
The 44 per cent or Rs. 11.42 per cylinder increase in the commission on the subsidised cooking fuel is being passed on to consumers, they said.
For the consumer, subsidised LPG in Delhi will now cost Rs. 410.42 per cylinder, up from Rs. 399.
The hike comes within weeks of the government deciding to restrict supply of subsidised cooking gas to 6 cylinders of 14.2-kg size per household in a year. The remaining supplies would have to be sourced at market rates.
Officials said the commission paid on market price or non-subsidised LPG too has been raised by Rs. 12.17 to Rs. 38 per cylinder. Accordingly, a non-subsidised LPG cylinder price will go up from Rs. 883.5 to Rs. 921.5.
A similar exercise is on to raise commission paid to petrol pump dealers on sale of petrol and diesel. The Ministry is proposing to raise commission paid on petrol by 23 paisa to 1.72 and that on diesel by 10 paisa to Rs. 1.01 a litre.
The hike being considered for petrol and diesel is less than 67 paisa and 42 paisa respectively being demanded by petrol pump dealers in view of their working capital cost going up substantially due to frequent price changes and sharp rise in overheads like electricity charges.
On the other hand,the BJP, which is yet to commit to a formal position on the insurance and pension reform bills, is caught between two conflicting views - go along with its liberal economic stand, backing reform or stay firmly with the anti-Congress forces to complicate matters for the government.
Doubtful of support from Samajwadi Party and Bahujan Samaj Party on the issue of increasing foreign direct investment (FDI) cap in insurance and pension, the Congress has started working on the Opposition BJP, which supports the decision "in principle."Senior party leaders hinted at certain amendments in both the to suit the demands of BJP. The BJP has been demanding "assured return" to pensioners who are investing in pension funds.
The CPI (M) has appealed to all political parties to defeat the Government's decision to raise the cap on foreign direction investment in the insurance and pension sectors when it comes before Parliament.
The BJP's support of the decisions has come as a ray of hope for the Government.
The CPI(M), which has been opposing the opening up of the insurance and pension sectors, said the Cabinet's decisions will make India's finance sector more vulnerable to speculative finance capital.
Further,Government today said it has decided to implement end-to-end computerisation of food supply in cooperation with states as part of efforts to finetune the Public Distribution System in the country.
"To modernise the Public Distribution System, we have decided to have end-to-end modernisation. That is from the godowns of FCI to state ration shops, every movement will be computerised", Minister of State for Consumer Affairs,Food and Public Distribution, K V Thomas told reporters in Chennai.This is a 50:50 Joint Venture with states, with half the cost being given by the Centre and the balance being borne by the state governments, he said.Govt alrady approved the first phase of the end-to-end computerization of Targeted Public Distribution System that will cost the Centre and states about Rs 884 crore.
Congress party president Sonia Gandhi's son-in-law Robert Vadra on Saturday reacted on Facebook against allegation levelled by anti-corruption activist Arvind Kejriwal and said that "he can handle all the negativity".
Activist Arvind Kejriwal today said he was ready to face defamation case if his allegations against Congress president Sonia Gandhi's son-in-law Robert Vadra are proven false."I am ready to face defamation charges if the allegations against Robert Vadra are proven wrong. Why is the Congress silent on the merits of the case?" Kejriwal said.His remarks came a day after he and lawyer Prashant Bhushan alleged that Vadra had bought property worth crores of rupees between 2007 and 2010 with an "unsecured interest free loan" of Rs 65 crore given by DLF.The Congress today dismissed the demand for a probe into the allegations and dubbbed the activists as "B Team of BJP"."An inquiry into what? Is a business transaction between two private entities duly reported to the statutory authorities illegal? Is it a crime?", party spokesman Manish Tewari told reporters here.Asked about Kejriwal daring Vadra to file a defamation case against him, he said "we do not need advice from such a person who is making charges to further his politics".
After its board meeting here, Sebi said "there have been demands for dematerialization of assets/records other than securities, such as, Warehouse receipts, Fixed Deposits with banks and corporates, Insurance Policies, Investment products of Post Office, etc."
To expand the list of asset classes which can be held in demat form, Sebi said, it has decided to initiate steps that would enable an investor to view the details of his holdings and transactions across all asset classes through a single consolidated statement.
"The board approved proposal to amend the Sebi (Depositories & Participants) Regulations to enable depository to share the necessary information/data with its Strategic Business Unit (SBU) with respect to the assets/instruments held by them for the purpose of generation of consolidated statement," Sebi said.
Under Sebi regulations, the depositories are permitted to take up activities assigned by the central government or by a regulator in the financial sector, through the establishment of a Strategic Business Unit (SBU).
In another decision regarding the depositories, Sebi said its board approved a proposal to amend the existing norms to enable the market regulator and the depositories to take action against issuers found non-compliant with regulations related to timely dematerialisation of shares, maintenance of proper records etc.
These regulations also include issuers' agreement with the depositories, carrying out reconciliation of share capital, among others.
Sebi said it has come across instances of non-compliance such as lack of reconciliation of issued or listed capital and actual share capital by the issuer company and its appointed RTA (Registrar and Transfer Agent).
"In order to enable appropriate action by Sebi in such cases (currently possible under the Depositories Act), the board approved proposal to suitably amend the D&P regulations to enable Sebi to take appropriate action against non-compliant issuers or their agents... and to empower depositories to take appropriate action against such issuer or agent as per their bye-laws," the release said.
Addressing the media after meeting Sebi top officials, Finance Minister said that he has been told that there was no systemic risk in the capital market and the stock exchange NSE had come out with a statement explaining the incident. He said the NSE had said it is investigating the matter and market regulator Sebi (Securities and Exchange Board of India) would take necessary actions.While at its board meeting in Mumbai on Saturday, Sebi decided to prepare draft guidelines in this regard with an aim to make uniform rules for different classes of foreign investors such as FIIs, NRIs, foreign venture capital investors (FVCIs) and QFIs (qualified financial investors).
"With a view to rationalise/harmonise different routes for foreign portfolio investments, Sebi will prepare draft guidelines based on the guidance of the Working Group on Foreign Investment in India (WGFII), for consideration of the Government so that uniform guidelines are made for various categories of investors such as FIIs, FVCIs, NRIs, QFIs etc," Sebi said in a statement after the board meeting.
Sebi also relaxed its rules regarding the debt limit allocation mechanism for FIIs (foreign institutional investors), which have emerged as a significant force to the Indian capital market over the years.
The regulator said that "with effect from January 1, 2014, FIIs shall be allowed to re-invest during the calendar year to the extent of 50 percent of their debt holdings at the end of the previous calendar year". "The utilisation period for government and corporate debt limits will be reduced to 30 days and 60 days, respectively," Sebi said.
"Within the FII-debt limit," Sebi said, "the unutilised limit in respect of the corporate debt infra long term bonds category may be availed by the FIIs/sub-accounts without obtaining prior Sebi approval till the overall FII investments reach 90 percent of the limit." Thereafter, the auction mechanism shall be initiated for allocation of remaining limits, it added.
Finance Minister P Chidambaram was replying to queries on fall of about 900 points or close to 16 per cent in Nifty within seconds in a flash crash like situation yesterday morning, which led to a halt in trading at NSE for about 15 minutes.
"I was assured there was no systemic risk," he said.
Asked further about the issue, the minister on a lighter note said he did not understand the technical issues like 'algo trade and non-algo trade' and read out the statement issued by NSE yesterday.
The NSE had said there was no technical glitch in its system and blamed the crash on erroneous orders worth over Rs 650 crore for multiple trades by broker Emkay Global in various stocks at low prices on behalf of an "institutional client".
While NSE said it is investigating into the incident, sources have said market watchdog Sebi had also begun a probe yesterday itself into the 'flash crash'.
Sebi is looking into all aspects of the incident, including the probability of technical problems or any intentional manipulative activities by some vested interests, as per a senior regulatory official.
The incident occurred on a day when expectations were high for an upward rally on bourses, following some big-ticket reform measures approved by the government on Thursday, including on FDI in sectors like insurance and pension.
Sebi is looking into the entire trading pattern of broker concerned Emkay Global, which has been disabled by NSE from trading, as also the trade details of the affected stocks.
Sebi would look into whether adequate safeguard mechanism was in place to avoid a 'flash crash' like situation, as the so-called freak trades were executed in a number of well-known blue chip stocks, including some large banking shares.
While there is no circuit filter in large blue-chip stocks, market systems are supposed to be well-prepared to handle any mischief or large erroneous trades.
The regulator is also concerned that instances of 'freak trades' seem to be on the rise.
NSE has said the abnormal orders were 'non-algo' in nature and were entered for an erroneous quantity which resulted in executing trades at multiple price points across the entire order book. The exchange has also identified these orders to a specific dealer terminal.
Sebi is already looking into issues related to algorithmic trade -- a latest-technology mechanism that allows execution of orders at a very high speed to take benefit of smallest of the change in share price.
This trade mechanism has been criticised in various quarters on apprehensions that it helps market manipulators to take benefit of the high-speed technology.
Sebi has been looking at ways to avoid 'flash crash' like situations in Indian markets for quite some time.
Economic Times reports:
Sebi, in its board meeting in Mumbai on Saturday, will also consider several other measures, such as changing the norms for debt limit for foreign investors, and collapsing various categories of investors such as foreign institutional investors, foreign venture capital investors and non-resident Indians into a single class of investors called qualified financial investors (QFI), said a person familiar with the development.
At present, there are instances of FII funds being allowed from a particular country, but QFIs from the same country not being allowed to invest in the Indian stock markets. By merging these categories, Sebi hopes to do away with ambiguity.
The board is likely to suggest measures to ensure the compliance of minimum public shareholding of 25%. Promoters who own more than 75% will have to reduce holdings by June 2013. The regulator may also indicate penalties or other punitive action in case of non-compliance.
The potential penalties will be discussed at Saturday's meeting. As of June 2012, as many as 216 companies, including 16 public sector undertakings, have less than 25% public shareholding.
Individuals from 45 countries are currently eligible to invest in India under the QFI framework. This list will now be expanded to 52 countries, and residents of seven countries - Argentina, South Korea, Turkey, Kuwait, Qatar, Ireland and Latvia - will be allowed to invest through the QFI route. Sebi will enter into bilateral agreements with the regulators in these countries.
As per existing norms, the category of QFIs includes individuals, groups or associations and residents (not FIIs) of countries that are members of the Financial Action Task Force or signatories to the International Organisation of Securities Commission. QFIs have a separate limit of $1 billion for investment in corporate debt securities and debt schemes of Indian mutual funds. They can also invest up to $3 billion in infrastructure debt, which is part of the overall cap of $45 billion that foreign investors can invest annually in India's debt market.
The government had formed a working group in November 2009 on foreign investments in India to look into various types of foreign fund flows that were taking advantage of arbitrage opportunities across respective standalone regulations. The group has recommended the dissolution of various categories of investors into QFI - a single window for portfolio investment in India that does not distinguish between investors. Based on these suggestions, the regulator is preparing a draft guideline for the government's consideration.
http://economictimes.indiatimes.com/markets/regulation/sebi-may-allow-investors-from-7-more-countries-to-invest-in-indian-equity-and-debt-markets/articleshow/16690972.cms
Promising more reforms, the Finance Minister, P Chidambaram today expressed confidence that the Bills on FDI in insurance and pension will be passed in Parliament for which he will soon open dialogue with the Opposition parties including the BJP.
"There is a difference of opinion (on the issue of 49 per cent FDI in insurance). I intend to meet the leaders of Opposition and convince them. I can convince the opposition parties that this clause (of raising the FDI cap) can be kept," he said on his first visit to the financial capital after taking over as Finance Minister.
The Minister said that he was convinced that the two amendment Bills crucial for the economy Bills will be passed by Parliament and sought media's cooperation in this regard.
Asked by a reporter as to whether there would be more reforms after the second instalment that was announced during the week, he said, "I don't know why you are saying this is second instalment. There will be more. There will be more issues to be addressed. There will be more."
However,the government is set to go slow in bringing reforms in the banking sector including amending the Banking Regulation Act, 1949.
Banking reforms require Parliament nod though last month finance minister P Chidambaram initiated the process of introducing the much awaited bill in the Lok Sabha.
Besides, the government also does not want to antagonise the banking trade unions.
"It would first focus on issues that can be easily implemented and would not require a Parliament route. Reforms in the banking sector needs Parliament approval and it seems unlikely that the government would take it up during the current tenure," said a finance ministry official. http://www.hindustantimes.com/Images/popup/2012/9/26-09-biz4.jpg
Earlier, the Reserve Bank of India said that it would give fresh banking licences to private entities only after the government amended the Banking Regulation Act. However, now the finance ministry is trying to work out a method by which licences can be granted without amending the act.
The bill was aimed at providing more teeth to the central bank. The RBI would be able to supersede the board of directors of a banking company if required and appoint an administrator to manage it for a total period not exceeding 12 months. The bill also proposes to increase voting rights of shareholders. It also proposed raising of voting rights of individual investors to 26% in private sector banks.
"We will strongly protest amendment of the Banking Regulation Act, if the government decides to move with it as it would detrimental to the developmental needs of the Indian economy," said CH Venkatachalam, general secretary, All India Bank Employees Association (AIBEA).
There is a wave of cheer rippling through the stock market as the Sensex flirted with the 19,000 level last week and the Nifty briefly climbing above 5,800. Stock portfolios are sporting a healthier glow and those who had sworn off stock markets have begun wondering if they should dip a toe into it.Business Line reports.
It was a quiet start to the week with the indices etching minor gains in the earlier part. But the Union Cabinet approval of key proposals concerning insurance, pension and commodities market sent stock prices shooting higher on Thursday.
Doubts regarding the passage of the amendments in Parliament coupled with profit booking dragged prices lower on Friday. The flash crash on NSE added to the nervousness in that session.
Global cues were benign. Better than expected US jobs report helped US stock indices close at the highest level since 2007. But doubts about slowing global economy and European debt problems continued to play on the back of investor minds.
NSE derivative volumes were dull in the first half of the week but became robust thereafter. Cash volumes are also at record levels this week. FIIs net purchased stocks through the week, albeit at a slower pace. They have purchased $21 billion in equity and debt through the exchanges so far this year. Derivative open interest at Rs 139,000 crore is not high enough to cause trouble. Put call ratio is also close to 1 implying that many bears have closed their short positions.
Industrial production data to be revealed next week and earnings for the second quarter will preoccupy market participants as they once more take stock of company valuations. Infosys's earnings will be keenly awaited after the stock's debacle on the last occasion it announced its quarterly earnings.
Sensex (18,938.7)
The Sensex hit the intra-week high of 19,137 on Friday before reversing in that session. The negative divergence in the daily chart implies that the index is losing momentum from a short-term time-frame.
It is difficult to parrot the same view every week. But the index is moving in a sideways range with a slight upward bias over the last three weeks. It reached the critical long-term resistance at 18,800 on September 21 and is tantalisingly hovering in the resistance band between 18,826 and 19,136 that we had indicated. At the risk of sounding boring, we have to repeat that investors need to tread carefully as long as this band is not cleared emphatically.
A confluence of wave targets makes this a formidable resistance. But what if the index powers ahead instead of reversing lower? We will then have to revise our counts from an irregular flat to a triangle from the 21,108 peak that has ended at 16,598. The up-move since then would have to be a fresh leg of the long-term bull-market. We will wait for a break above 19,150 before switching over to the other count. Medium-term trend support continues at 17,700.
The short-term trend is positive since the index is currently in a running correction that denotes bullishness. Short-term targets for the index are 19,280 and 19,611. Target on a strong move above 19,611 is 19,992.
To put it simply, the index could move to 19,600 on a strong move above 19,150. Short-term supports are at 18,418 and 17,982.
Nifty (5,746.9)
The Nifty hit the intra-week peak at 5,815 on Friday before easing up slightly. The movement in the index since September 21 appears to be a corrective wave that is moving in the direction of the prevailing trend instead of against it (running correction).
We retain the medium-term target at 5,870 since 1:1 extrapolation of the move from 4,531 trough gets us there. It is on a strong move above this level that we would have to revise the counts as explained under the discussion on the Sensex.
Short-term targets if the index continues moving higher in the coming sessions are 5,920 and 6,025. Short-term supports will be available at 5,638 and 5,586. Traders can play long as long as the index trades above the first support.
Global cues
Most global indices closed the week in positive territory. CBOE volatility index moved to the lower end of its current range at 13.6 reflecting bullish sentiment among US investors.
The Dow recouped all the losses made in the previous week to close the week with 173 points gain. Short-term supports stay at 13,240 and then 13,000. Close below the first support is required to indicate a reversal in short-term uptrend. If the index manages to hold above this level, it can move higher to 13,784 or 14,043. Close below 13,000 is needed to indicate a reversal in medium-term trend.
Some of the other Asian emerging markets such as Philippines and Thailand are going at full throttle with the benchmarks of these countries hitting new life-time highs last week.
Weekly movement of gold is mimicking the movement in the Sensex. The metal is moving at the critical long-term resistance band over the last three weeks without giving an indication of the direction in which it will break-out.
lokeshwarri.sk@thehindu.co.in
http://www.thehindubusinessline.com/features/investment-world/article3972339.ece?ref=wl_companies
Proposals for investment in the Indian economy witnessed a slowdown during the three months ended September 2012, the sixth consecutive quarter of decline.
A total of 293 new investment proposals worth Rs 57,400 lakh crore were made during the quarter, compared to 735 projects worth Rs 2,37,500 crore in June 2012 quarter and 931 projects worth Rs 2,32,800 crore in quarter ended September 2011.
This was the lowest level of fresh investment commitments since September 2004, according to the Centre for Monitoring Indian Economy (CMIE). But the manufacturing sector saw fresh investment commitments rising by 19 per cent to Rs 27,600 crore vis-à-vis the year ago period, though this was significantly lower than the proposals worth Rs 77,300 crore in March 2012 and Rs 79,900 crore in December 2011.
Sectors like mining and electricity, on the other hand, witnessed a drop in fresh investments during the quarter under review.
As of the September quarter, the total quantum of investment made across 18,348 projects in the country stood at Rs 142 lakh crore, a five per cent increase from Rs 135 lakh crore across 18,870 projects in September 2011.
But in a worrying sign, implementation of 612 projects worth 7.75 lakh crore was stalled during the September 2012 quarter, compared to 474 projects worth Rs 4.74 lakh crore in September 2011.
What is more, commissioning of new projects during the September quarter also witnessed a decline. Projects worth Rs 42,600 crore were commissioned during September 2012, 47 per cent lower than the value of projects commissioned a year ago. This was the poorest achievement with respect to commissioning of projects since the September 2007 quarter.
But the good news is that fewer fresh investment proposals were stalled on the drawing board during the quarter ended September 2012 with respect to year-ago levels.
During the quarter under review, only 104 fresh commitments worth Rs 37,200 crore were held up, compared to 137 projects worth Rs 1.98 lakh crore crore in September 2011.
CMIE noted that the quarterly investment estimates are likely to undergo significant changes over time, as information on projects usually comes out with a lag of several weeks.
Indian Holocaust My Father`s Life and Time, Chapter:Nine Hundred Twelve
Palash Biswas
Mobile: 919903717833
Skype ID: palash.biswas44
Email: palashbiswaskl@gmail.com
LPG price hiked by Rs. 11.42; petrol, diesel rates may go up!
Just beware to be pushed in the SENSEX trap as a flash 900-point crash in the National Stock Exchange's index Nifty this morning eroded an estimated Rs 10 lakhcrore of investor wealth, though for a brief period!Friday's fall was compared by market watchers to a "flash crash" in US stocks in May 2010 in which the Dow Jones plunged 1,010 points -- about nine percent -- before recovering losses within minutes.India said on Saturday its financial markets were safe from "systemic risk" after a more than 900-point "flash crash" in the National Stock Exchange's Nifty index caused by erroneous trading orders.FM today held a meeting with RBI officials as part of a series of engagements planned for the day with the central bank, market regular Sebi.Get ready for more kicks!In a move that could help the ailing housing sector, the Securities and Exchange Board of India (Sebi) allowed debt funds to invest an additional 10 per cent (after reaching the cap of 30 per cent in financial services) in the housing finance companies.According to Securities and Exchange Board of India (Sebi) figures, foreign institutional investors (FIIs) have bought shares worth Rs 84,000 crore in the Indian markets this year.Cautioning against over-dependence on foreign institutional investors (FIIs), which brings in hot money, chief economic adviser Raghuram Rajan on Monday said the government should focus on foreign direct investment (FDI) and open more sectors to such inflows. "We have to be careful that we are not overtly dependent on external investors that this is an environment when the external investor is quite fickle," Rajan said in his first media interaction.Betting high on the government's reform initiatives, foreign investors have pumped in more than Rs. 9,000 crore (about $1.7 billion) in the equity market this month.The country's top bankers pitched for a cut in the Cash Reserve Ratio (CRR) with the central bank amid concerns on slowdown in credit growth.
Market regulator SEBI today proposed to bring more classes of financial instruments, including insurance policies and fixed deposits, under the ambit of asset categories that can be held in demat or electronic form. It means, the FDI drive would be translated in market equities. SEBI is clearing decks for further market reforms.The proposed move is expected to make it simpler to maintain and safe-keep various kinds of financial instruments, as the risks like loss and theft get minimised in demat form, as compared to the physical paper form. A day after stock market benchmark Nifty witnessed a 900-point flash crash, Finance Minister P Chidambaram today said the matter is being investigated and regulator Sebi would take necessary actions in this regard.In fact,it tuurns out to be that SEBI to make it easier for foreign nvestors! Market regulator Securities Exchange Board of India (Sebi) on Saturday proposed uniform guidelines for all classes of foreign investors, a step aimed at simplifying the investment process for overseas entities and strengthen surveillance over them.After a slew of measures for domestic investors, the market regulator now plans to facilitate overseas investments into equity and debt markets. The Securities & Exchange Board of India is planning to sign bilateral treaties with seven more countries to allow wealthy individuals from these jurisdictions to invest in Indian stocks.At present, all the securities traded in capital markets such as equity shares and mutual funds can be held in demat accounts, maintained by two depositories NSDL and CDSL, which come under Sebi's jurisdiction.
Meanwhile,The Supreme Court on Friday sought a clarification from the government over Reserve Bank of India's clearance on the recent notifications allowing foreign direct investment in multi-brand retail and aviation.A two-judge bench, comprising Justices RM Lodha and Anil R Dave, sought the assistance of the Attorney General or the Solicitor General to clear the air on the claims made in a public interest litigation filed by advocate ML Sharma.The petition claimed that the FDI notifications violated existing laws and rules such as the Foreign Exchange Management Act (Fema) and the Insurance regulatory and Development Authority (IRDA) Act.The petition raised several other objections against the policy, but the Supreme Court bench prima facie rejected most of them.
West Bengal chief minister and Trinamool Congress chief Mamata Banerjee on Saturday expressed her unhappiness over the central government's decision to hike the price of cooking gas by over Rs. 11.
Do you know, how many times prices have been increased, affecting the interest of the common people during UPA-II? Today again, the central government has hiked LPG prices by 11.42 per cylinder. Very bad, very sad," Banerjee posted on Facebook.
Following the central government's decision to raise the commission paid to the dealers, cooking gas (LPG) price was Saturday hiked by Rs. 11.42 per cylinder.
In Kolkata the new price is now at Rs. 412.42 per cylinder.
Since her party's withdrawal of support from the United Progressive Alliance government, Banerjee has never lost any opportunity to criticise the Congress-led UPA and has been vociferous in her attacks against the economic reforms initiated by it.
Meanwhile, the Tamil Nadu Government has expressed its disapproval to the Centre allowing foreign direct investment in insurance and pension funds sectors.Chief Minister J. Jayalalithaa said in a press release: "I strongly oppose these moves as they are detrimental to the future of the common people of this country."
The UPA Government at the Centre is "unfazed by the sufferings of the common people, small traders and small farmers''.
The Cabinet's approval "toting these as big-ticket reforms, which would accelerate unprecedented growth and boost a sagging economy, is premature''.
FDI in insurance, pension funds
Increasing FDI from 26 per cent to 49 per cent in the insurance sector and allowing 26 per cent FDI in pension funds sector will happen only after the Pension Fund Regulatory & Development Authority (PFRDA) Bill, 2011, and Insurance Law (Amendment) Bill, 2008, are passed by both the Houses of Parliament. The UPA faces a "number crunch" in the Houses, she said.
Though 26 per cent FDI was permitted in insurance sector "nothing appreciable" came of it. Hiking this to 49 per cent despite a Parliamentary Committee recommendation against it will prove disastrous.
"As to whether they have the right to jeopardise this crucial sector is a debatable issue," Jayalalithaa said.
Limiting insurance companies' capital requirement to Rs 50 crore will result in the mushrooming of small companies lacking experience and capability and will be fraught with danger. This will unnecessarily expose our public to risk.
Public sector cos to be hit
FDI in insurance sector will see private insurance companies with totally commercial approach dominating. Public sector companies like LIC, which participate in the developmental process, will suffer and "the developmental process of the nation itself will be adversely and severely affected''.
FDI in pension funds and channelling the domestic savings of the elderly into the highly risky and unpredictable capital market will jeopardise the future of senior citizens.
Cooking gas (LPG) price was on Saturday hiked by Rs. 11.42 per cylinder following government decision to raise commission paid to the dealers. Petrol and diesel prices too may go up marginally as the Oil Ministry considers raising dealers commission by at least 23 paisa and 10 paisa a
litre respectively.
The Ministry yesterday issued orders raising commission paid to LPG dealers from Rs. 25.83 per 14.2-kg cylinder to Rs. 37.25, government officials said.
The 44 per cent or Rs. 11.42 per cylinder increase in the commission on the subsidised cooking fuel is being passed on to consumers, they said.
For the consumer, subsidised LPG in Delhi will now cost Rs. 410.42 per cylinder, up from Rs. 399.
The hike comes within weeks of the government deciding to restrict supply of subsidised cooking gas to 6 cylinders of 14.2-kg size per household in a year. The remaining supplies would have to be sourced at market rates.
Officials said the commission paid on market price or non-subsidised LPG too has been raised by Rs. 12.17 to Rs. 38 per cylinder. Accordingly, a non-subsidised LPG cylinder price will go up from Rs. 883.5 to Rs. 921.5.
A similar exercise is on to raise commission paid to petrol pump dealers on sale of petrol and diesel. The Ministry is proposing to raise commission paid on petrol by 23 paisa to 1.72 and that on diesel by 10 paisa to Rs. 1.01 a litre.
The hike being considered for petrol and diesel is less than 67 paisa and 42 paisa respectively being demanded by petrol pump dealers in view of their working capital cost going up substantially due to frequent price changes and sharp rise in overheads like electricity charges.
On the other hand,the BJP, which is yet to commit to a formal position on the insurance and pension reform bills, is caught between two conflicting views - go along with its liberal economic stand, backing reform or stay firmly with the anti-Congress forces to complicate matters for the government.
Doubtful of support from Samajwadi Party and Bahujan Samaj Party on the issue of increasing foreign direct investment (FDI) cap in insurance and pension, the Congress has started working on the Opposition BJP, which supports the decision "in principle."Senior party leaders hinted at certain amendments in both the to suit the demands of BJP. The BJP has been demanding "assured return" to pensioners who are investing in pension funds.
The CPI (M) has appealed to all political parties to defeat the Government's decision to raise the cap on foreign direction investment in the insurance and pension sectors when it comes before Parliament.
The BJP's support of the decisions has come as a ray of hope for the Government.
The CPI(M), which has been opposing the opening up of the insurance and pension sectors, said the Cabinet's decisions will make India's finance sector more vulnerable to speculative finance capital.
Further,Government today said it has decided to implement end-to-end computerisation of food supply in cooperation with states as part of efforts to finetune the Public Distribution System in the country.
"To modernise the Public Distribution System, we have decided to have end-to-end modernisation. That is from the godowns of FCI to state ration shops, every movement will be computerised", Minister of State for Consumer Affairs,Food and Public Distribution, K V Thomas told reporters in Chennai.This is a 50:50 Joint Venture with states, with half the cost being given by the Centre and the balance being borne by the state governments, he said.Govt alrady approved the first phase of the end-to-end computerization of Targeted Public Distribution System that will cost the Centre and states about Rs 884 crore.
Congress party president Sonia Gandhi's son-in-law Robert Vadra on Saturday reacted on Facebook against allegation levelled by anti-corruption activist Arvind Kejriwal and said that "he can handle all the negativity".
Activist Arvind Kejriwal today said he was ready to face defamation case if his allegations against Congress president Sonia Gandhi's son-in-law Robert Vadra are proven false."I am ready to face defamation charges if the allegations against Robert Vadra are proven wrong. Why is the Congress silent on the merits of the case?" Kejriwal said.His remarks came a day after he and lawyer Prashant Bhushan alleged that Vadra had bought property worth crores of rupees between 2007 and 2010 with an "unsecured interest free loan" of Rs 65 crore given by DLF.The Congress today dismissed the demand for a probe into the allegations and dubbbed the activists as "B Team of BJP"."An inquiry into what? Is a business transaction between two private entities duly reported to the statutory authorities illegal? Is it a crime?", party spokesman Manish Tewari told reporters here.Asked about Kejriwal daring Vadra to file a defamation case against him, he said "we do not need advice from such a person who is making charges to further his politics".
After its board meeting here, Sebi said "there have been demands for dematerialization of assets/records other than securities, such as, Warehouse receipts, Fixed Deposits with banks and corporates, Insurance Policies, Investment products of Post Office, etc."
To expand the list of asset classes which can be held in demat form, Sebi said, it has decided to initiate steps that would enable an investor to view the details of his holdings and transactions across all asset classes through a single consolidated statement.
"The board approved proposal to amend the Sebi (Depositories & Participants) Regulations to enable depository to share the necessary information/data with its Strategic Business Unit (SBU) with respect to the assets/instruments held by them for the purpose of generation of consolidated statement," Sebi said.
Under Sebi regulations, the depositories are permitted to take up activities assigned by the central government or by a regulator in the financial sector, through the establishment of a Strategic Business Unit (SBU).
In another decision regarding the depositories, Sebi said its board approved a proposal to amend the existing norms to enable the market regulator and the depositories to take action against issuers found non-compliant with regulations related to timely dematerialisation of shares, maintenance of proper records etc.
These regulations also include issuers' agreement with the depositories, carrying out reconciliation of share capital, among others.
Sebi said it has come across instances of non-compliance such as lack of reconciliation of issued or listed capital and actual share capital by the issuer company and its appointed RTA (Registrar and Transfer Agent).
"In order to enable appropriate action by Sebi in such cases (currently possible under the Depositories Act), the board approved proposal to suitably amend the D&P regulations to enable Sebi to take appropriate action against non-compliant issuers or their agents... and to empower depositories to take appropriate action against such issuer or agent as per their bye-laws," the release said.
Addressing the media after meeting Sebi top officials, Finance Minister said that he has been told that there was no systemic risk in the capital market and the stock exchange NSE had come out with a statement explaining the incident. He said the NSE had said it is investigating the matter and market regulator Sebi (Securities and Exchange Board of India) would take necessary actions.While at its board meeting in Mumbai on Saturday, Sebi decided to prepare draft guidelines in this regard with an aim to make uniform rules for different classes of foreign investors such as FIIs, NRIs, foreign venture capital investors (FVCIs) and QFIs (qualified financial investors).
"With a view to rationalise/harmonise different routes for foreign portfolio investments, Sebi will prepare draft guidelines based on the guidance of the Working Group on Foreign Investment in India (WGFII), for consideration of the Government so that uniform guidelines are made for various categories of investors such as FIIs, FVCIs, NRIs, QFIs etc," Sebi said in a statement after the board meeting.
Sebi also relaxed its rules regarding the debt limit allocation mechanism for FIIs (foreign institutional investors), which have emerged as a significant force to the Indian capital market over the years.
The regulator said that "with effect from January 1, 2014, FIIs shall be allowed to re-invest during the calendar year to the extent of 50 percent of their debt holdings at the end of the previous calendar year". "The utilisation period for government and corporate debt limits will be reduced to 30 days and 60 days, respectively," Sebi said.
"Within the FII-debt limit," Sebi said, "the unutilised limit in respect of the corporate debt infra long term bonds category may be availed by the FIIs/sub-accounts without obtaining prior Sebi approval till the overall FII investments reach 90 percent of the limit." Thereafter, the auction mechanism shall be initiated for allocation of remaining limits, it added.
Finance Minister P Chidambaram was replying to queries on fall of about 900 points or close to 16 per cent in Nifty within seconds in a flash crash like situation yesterday morning, which led to a halt in trading at NSE for about 15 minutes.
"I was assured there was no systemic risk," he said.
Asked further about the issue, the minister on a lighter note said he did not understand the technical issues like 'algo trade and non-algo trade' and read out the statement issued by NSE yesterday.
The NSE had said there was no technical glitch in its system and blamed the crash on erroneous orders worth over Rs 650 crore for multiple trades by broker Emkay Global in various stocks at low prices on behalf of an "institutional client".
While NSE said it is investigating into the incident, sources have said market watchdog Sebi had also begun a probe yesterday itself into the 'flash crash'.
Sebi is looking into all aspects of the incident, including the probability of technical problems or any intentional manipulative activities by some vested interests, as per a senior regulatory official.
The incident occurred on a day when expectations were high for an upward rally on bourses, following some big-ticket reform measures approved by the government on Thursday, including on FDI in sectors like insurance and pension.
Sebi is looking into the entire trading pattern of broker concerned Emkay Global, which has been disabled by NSE from trading, as also the trade details of the affected stocks.
Sebi would look into whether adequate safeguard mechanism was in place to avoid a 'flash crash' like situation, as the so-called freak trades were executed in a number of well-known blue chip stocks, including some large banking shares.
While there is no circuit filter in large blue-chip stocks, market systems are supposed to be well-prepared to handle any mischief or large erroneous trades.
The regulator is also concerned that instances of 'freak trades' seem to be on the rise.
NSE has said the abnormal orders were 'non-algo' in nature and were entered for an erroneous quantity which resulted in executing trades at multiple price points across the entire order book. The exchange has also identified these orders to a specific dealer terminal.
Sebi is already looking into issues related to algorithmic trade -- a latest-technology mechanism that allows execution of orders at a very high speed to take benefit of smallest of the change in share price.
This trade mechanism has been criticised in various quarters on apprehensions that it helps market manipulators to take benefit of the high-speed technology.
Sebi has been looking at ways to avoid 'flash crash' like situations in Indian markets for quite some time.
Economic Times reports:
Sebi, in its board meeting in Mumbai on Saturday, will also consider several other measures, such as changing the norms for debt limit for foreign investors, and collapsing various categories of investors such as foreign institutional investors, foreign venture capital investors and non-resident Indians into a single class of investors called qualified financial investors (QFI), said a person familiar with the development.
At present, there are instances of FII funds being allowed from a particular country, but QFIs from the same country not being allowed to invest in the Indian stock markets. By merging these categories, Sebi hopes to do away with ambiguity.
The board is likely to suggest measures to ensure the compliance of minimum public shareholding of 25%. Promoters who own more than 75% will have to reduce holdings by June 2013. The regulator may also indicate penalties or other punitive action in case of non-compliance.
The potential penalties will be discussed at Saturday's meeting. As of June 2012, as many as 216 companies, including 16 public sector undertakings, have less than 25% public shareholding.
Individuals from 45 countries are currently eligible to invest in India under the QFI framework. This list will now be expanded to 52 countries, and residents of seven countries - Argentina, South Korea, Turkey, Kuwait, Qatar, Ireland and Latvia - will be allowed to invest through the QFI route. Sebi will enter into bilateral agreements with the regulators in these countries.
As per existing norms, the category of QFIs includes individuals, groups or associations and residents (not FIIs) of countries that are members of the Financial Action Task Force or signatories to the International Organisation of Securities Commission. QFIs have a separate limit of $1 billion for investment in corporate debt securities and debt schemes of Indian mutual funds. They can also invest up to $3 billion in infrastructure debt, which is part of the overall cap of $45 billion that foreign investors can invest annually in India's debt market.
The government had formed a working group in November 2009 on foreign investments in India to look into various types of foreign fund flows that were taking advantage of arbitrage opportunities across respective standalone regulations. The group has recommended the dissolution of various categories of investors into QFI - a single window for portfolio investment in India that does not distinguish between investors. Based on these suggestions, the regulator is preparing a draft guideline for the government's consideration.
http://economictimes.indiatimes.com/markets/regulation/sebi-may-allow-investors-from-7-more-countries-to-invest-in-indian-equity-and-debt-markets/articleshow/16690972.cms
Promising more reforms, the Finance Minister, P Chidambaram today expressed confidence that the Bills on FDI in insurance and pension will be passed in Parliament for which he will soon open dialogue with the Opposition parties including the BJP.
"There is a difference of opinion (on the issue of 49 per cent FDI in insurance). I intend to meet the leaders of Opposition and convince them. I can convince the opposition parties that this clause (of raising the FDI cap) can be kept," he said on his first visit to the financial capital after taking over as Finance Minister.
The Minister said that he was convinced that the two amendment Bills crucial for the economy Bills will be passed by Parliament and sought media's cooperation in this regard.
Asked by a reporter as to whether there would be more reforms after the second instalment that was announced during the week, he said, "I don't know why you are saying this is second instalment. There will be more. There will be more issues to be addressed. There will be more."
However,the government is set to go slow in bringing reforms in the banking sector including amending the Banking Regulation Act, 1949.
Banking reforms require Parliament nod though last month finance minister P Chidambaram initiated the process of introducing the much awaited bill in the Lok Sabha.
Besides, the government also does not want to antagonise the banking trade unions.
"It would first focus on issues that can be easily implemented and would not require a Parliament route. Reforms in the banking sector needs Parliament approval and it seems unlikely that the government would take it up during the current tenure," said a finance ministry official. http://www.hindustantimes.com/Images/popup/2012/9/26-09-biz4.jpg
Earlier, the Reserve Bank of India said that it would give fresh banking licences to private entities only after the government amended the Banking Regulation Act. However, now the finance ministry is trying to work out a method by which licences can be granted without amending the act.
The bill was aimed at providing more teeth to the central bank. The RBI would be able to supersede the board of directors of a banking company if required and appoint an administrator to manage it for a total period not exceeding 12 months. The bill also proposes to increase voting rights of shareholders. It also proposed raising of voting rights of individual investors to 26% in private sector banks.
"We will strongly protest amendment of the Banking Regulation Act, if the government decides to move with it as it would detrimental to the developmental needs of the Indian economy," said CH Venkatachalam, general secretary, All India Bank Employees Association (AIBEA).
There is a wave of cheer rippling through the stock market as the Sensex flirted with the 19,000 level last week and the Nifty briefly climbing above 5,800. Stock portfolios are sporting a healthier glow and those who had sworn off stock markets have begun wondering if they should dip a toe into it.Business Line reports.
It was a quiet start to the week with the indices etching minor gains in the earlier part. But the Union Cabinet approval of key proposals concerning insurance, pension and commodities market sent stock prices shooting higher on Thursday.
Doubts regarding the passage of the amendments in Parliament coupled with profit booking dragged prices lower on Friday. The flash crash on NSE added to the nervousness in that session.
Global cues were benign. Better than expected US jobs report helped US stock indices close at the highest level since 2007. But doubts about slowing global economy and European debt problems continued to play on the back of investor minds.
NSE derivative volumes were dull in the first half of the week but became robust thereafter. Cash volumes are also at record levels this week. FIIs net purchased stocks through the week, albeit at a slower pace. They have purchased $21 billion in equity and debt through the exchanges so far this year. Derivative open interest at Rs 139,000 crore is not high enough to cause trouble. Put call ratio is also close to 1 implying that many bears have closed their short positions.
Industrial production data to be revealed next week and earnings for the second quarter will preoccupy market participants as they once more take stock of company valuations. Infosys's earnings will be keenly awaited after the stock's debacle on the last occasion it announced its quarterly earnings.
Sensex (18,938.7)
The Sensex hit the intra-week high of 19,137 on Friday before reversing in that session. The negative divergence in the daily chart implies that the index is losing momentum from a short-term time-frame.
It is difficult to parrot the same view every week. But the index is moving in a sideways range with a slight upward bias over the last three weeks. It reached the critical long-term resistance at 18,800 on September 21 and is tantalisingly hovering in the resistance band between 18,826 and 19,136 that we had indicated. At the risk of sounding boring, we have to repeat that investors need to tread carefully as long as this band is not cleared emphatically.
A confluence of wave targets makes this a formidable resistance. But what if the index powers ahead instead of reversing lower? We will then have to revise our counts from an irregular flat to a triangle from the 21,108 peak that has ended at 16,598. The up-move since then would have to be a fresh leg of the long-term bull-market. We will wait for a break above 19,150 before switching over to the other count. Medium-term trend support continues at 17,700.
The short-term trend is positive since the index is currently in a running correction that denotes bullishness. Short-term targets for the index are 19,280 and 19,611. Target on a strong move above 19,611 is 19,992.
To put it simply, the index could move to 19,600 on a strong move above 19,150. Short-term supports are at 18,418 and 17,982.
Nifty (5,746.9)
The Nifty hit the intra-week peak at 5,815 on Friday before easing up slightly. The movement in the index since September 21 appears to be a corrective wave that is moving in the direction of the prevailing trend instead of against it (running correction).
We retain the medium-term target at 5,870 since 1:1 extrapolation of the move from 4,531 trough gets us there. It is on a strong move above this level that we would have to revise the counts as explained under the discussion on the Sensex.
Short-term targets if the index continues moving higher in the coming sessions are 5,920 and 6,025. Short-term supports will be available at 5,638 and 5,586. Traders can play long as long as the index trades above the first support.
Global cues
Most global indices closed the week in positive territory. CBOE volatility index moved to the lower end of its current range at 13.6 reflecting bullish sentiment among US investors.
The Dow recouped all the losses made in the previous week to close the week with 173 points gain. Short-term supports stay at 13,240 and then 13,000. Close below the first support is required to indicate a reversal in short-term uptrend. If the index manages to hold above this level, it can move higher to 13,784 or 14,043. Close below 13,000 is needed to indicate a reversal in medium-term trend.
Some of the other Asian emerging markets such as Philippines and Thailand are going at full throttle with the benchmarks of these countries hitting new life-time highs last week.
Weekly movement of gold is mimicking the movement in the Sensex. The metal is moving at the critical long-term resistance band over the last three weeks without giving an indication of the direction in which it will break-out.
lokeshwarri.sk@thehindu.co.in
http://www.thehindubusinessline.com/features/investment-world/article3972339.ece?ref=wl_companies
Proposals for investment in the Indian economy witnessed a slowdown during the three months ended September 2012, the sixth consecutive quarter of decline.
A total of 293 new investment proposals worth Rs 57,400 lakh crore were made during the quarter, compared to 735 projects worth Rs 2,37,500 crore in June 2012 quarter and 931 projects worth Rs 2,32,800 crore in quarter ended September 2011.
This was the lowest level of fresh investment commitments since September 2004, according to the Centre for Monitoring Indian Economy (CMIE). But the manufacturing sector saw fresh investment commitments rising by 19 per cent to Rs 27,600 crore vis-à-vis the year ago period, though this was significantly lower than the proposals worth Rs 77,300 crore in March 2012 and Rs 79,900 crore in December 2011.
Sectors like mining and electricity, on the other hand, witnessed a drop in fresh investments during the quarter under review.
As of the September quarter, the total quantum of investment made across 18,348 projects in the country stood at Rs 142 lakh crore, a five per cent increase from Rs 135 lakh crore across 18,870 projects in September 2011.
But in a worrying sign, implementation of 612 projects worth 7.75 lakh crore was stalled during the September 2012 quarter, compared to 474 projects worth Rs 4.74 lakh crore in September 2011.
What is more, commissioning of new projects during the September quarter also witnessed a decline. Projects worth Rs 42,600 crore were commissioned during September 2012, 47 per cent lower than the value of projects commissioned a year ago. This was the poorest achievement with respect to commissioning of projects since the September 2007 quarter.
But the good news is that fewer fresh investment proposals were stalled on the drawing board during the quarter ended September 2012 with respect to year-ago levels.
During the quarter under review, only 104 fresh commitments worth Rs 37,200 crore were held up, compared to 137 projects worth Rs 1.98 lakh crore crore in September 2011.
CMIE noted that the quarterly investment estimates are likely to undergo significant changes over time, as information on projects usually comes out with a lag of several weeks.
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