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Good news for economy! FDI up 56% in November
Foreign direct investment (FDI) into India went up by an impressive 56% to USD 2.53 billion in November 2011, signalling improvement in investor sentiment.
The cumulative flows of USD 22.83 billion for the April-November period have crossed USD 19.43 billion which came in the full fiscal of 2010-11, according to officials. Analysts feel that if the trend continues, the FDI in the current financial year would well cross USD 30 billion, a development which will have a positive effect on rupee in the foreign exchange market.
In the face of selling pressures in the stock market from the foreign institutional investors and rising trade deficit, the rupee has declined by about 15% since August.
While the FII inflows are considered "hot money", the FDI is quite stable. The improvement in FDI inflows in November comes after two months of declining trend. The country had received USD 1.62 billion overseas investment in November 2010. In September and October, the inflows were down by 16.5% and 50% year-on-year respectively. During the April-November period, the FDI was up by 62.81% from USD 14.02 billion a year ago.
"At this rate we would be able to cross USD 30 billion figure by end of the current fiscal," the official added. In 2010-11, FDI into equity had dipped 25 per cent to USD 19.43 billion, from USD 25.6 billion in 2009-10. In 2008-09, FDI stood at USD 27.3 billion. Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are major sources of FDI for India.
Sectors which attracted the maximum funds include services, construction activities, power,computers and hardware, telecom and housing and real estate.
Link
---------- Post added at 10:22 PM ---------- Previous post was at 10:22 PM ----------
Indirect tax kitty goes up by 16%
NEW DELHI: After months of slowdown in collection of indirect taxes, there was some optimism with the figures of December 2011 when central excise registered a growth of nearly 10% at Rs 12,546 crore, and the total indirect tax revenue went up by 16% to Rs 2.86 lakh crore in April-December, 2011, or 75% of the budget estimates of Rs 3.93 lakh crore for the current fiscal.
In September and November, the growth in excise collection was -8.7% and -6.5% respectively. Even in October 2011, the excise duty growth was as low of 5%. However, the sudden rise in collection is seen as primarily coming from small-scale industries that may have cleared their duties in December after crossing the threshold limit. The customs duty collection went up by 4% in December.
"We will meet the budget target of Rs 3,92,908 crore for 2011-12," said S K Goel, chairman of the Central Board of Excise and Customs (CBEC).
Speaking to reporters on Tuesday, Goel said there was robust growth in the service tax collection at 49%, which will make up for the loss on
duty forgone on petroleum products. The government is set to lose at least Rs 36,000 crore in this fiscal after it slashed duties on petroleum products in June.
On Tuesday afternoon, finance minister Pranab Mukherjee met the chairmen of CB E C and the Central Board of Direct Taxes and reviewed revenue collection with the chief commissioners of northern zone. The customs duty collection in December was Rs 12,608 crore as compared to Rs 12,109 crore in the previous year and in April-December, the total customs duty realized was Rs 1,12,670 crore as against the budget target of Rs 1,51,700 crore
for this fiscal. On the excise front, the duty collected in April-December period was Rs 1,05,411 crore as against the budget estimate of Rs 1,59,208 crore for 2011-12.
The growth in service tax has been phenomenal at Rs 67,706 crore in April-December period as against Rs 49,357 last year. This makes for 83% of the year's target for service tax where budget estimate was Rs 82,000 crore.
Goel said the growth in customs duty could also be a result of devaluation of the rupee and should not be seen as increase in imports only, though there could be some marginal increase.
Link
---------- Post added at 10:23 PM ---------- Previous post was at 10:22 PM ----------
Sensex up 350 points on rating upgrade, rate cut hopes
Indian stocks rallied 2.2 per cent on Tuesday to their highest close in a month, on expectations easing inflation pressure will pave the way for the central bank to begin unwinding tight monetary policy this month and rating upgrade by Moody’s.
The key index never looked back and surged all the way to settle at 16,165.09, showing a sharp rise of 350.37 points or 2.22 per cent. This is highest closing level since December 9. The 50-issue Nifty of the National Stock Exchange also flared up by 106.75 points or 2.25 per cent to one-month high of 4,849.55.
The sentiment was helped after a finance ministry official said Moody’s Investors Service has upgraded the short-term ceiling on foreign currency bank deposits.
Foreign investors pumped in Rs 324 crore on Tuesday alone, taking the net investment to Rs 951 crore in January so far. The rally was led Reliance Industries (3.99 per cent) and ICICI Bank (3.85 per cent), together adding over 100 points to the Sensex.
The Reserve Bank of India (RBI), is expected to cut banks’ cash reserve ratio from 6 per cent currently. “The buzz of an impending CRR cut has been doing the rounds for quite some time. What the RBI says about the outlook on interest rates will also be crucial,” said Amar Ambani, Head of Research, IIFL.
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Re gains 81p against $ on Moody’s move
MUMBAI: The rupee recorded its sharpest gain against the dollar in recent weeks by firming up by 81 paise to close at 51.71 on Tuesday from its previous close of 52.72. Sentiments in the forex market saw a marked improvement after Moody's upgrade was announced.
Besides, sentiment also improved after positive news from Europe that a budget agreement for euro zone nations might come into place sooner than expected. Also, there was support from FIIs who bought $211 million last week.
From being the worst performer in 2011, rupee has been the best performer among Asian currencies this year, gaining 2.6% against the dollar.
According to Moses Harding, executive vice-president at IndusInd Bank, although the sentiment has improved, the current account situation continues to be bad with exports not picking up and oil prices continuing to be high. Overseas investors also reduced their short positions on the local currency. The three month dollar was traded at 52.83 as compared to 53.59 on Monday.
Link
Foreign direct investment (FDI) into India went up by an impressive 56% to USD 2.53 billion in November 2011, signalling improvement in investor sentiment.
The cumulative flows of USD 22.83 billion for the April-November period have crossed USD 19.43 billion which came in the full fiscal of 2010-11, according to officials. Analysts feel that if the trend continues, the FDI in the current financial year would well cross USD 30 billion, a development which will have a positive effect on rupee in the foreign exchange market.
In the face of selling pressures in the stock market from the foreign institutional investors and rising trade deficit, the rupee has declined by about 15% since August.
While the FII inflows are considered "hot money", the FDI is quite stable. The improvement in FDI inflows in November comes after two months of declining trend. The country had received USD 1.62 billion overseas investment in November 2010. In September and October, the inflows were down by 16.5% and 50% year-on-year respectively. During the April-November period, the FDI was up by 62.81% from USD 14.02 billion a year ago.
"At this rate we would be able to cross USD 30 billion figure by end of the current fiscal," the official added. In 2010-11, FDI into equity had dipped 25 per cent to USD 19.43 billion, from USD 25.6 billion in 2009-10. In 2008-09, FDI stood at USD 27.3 billion. Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are major sources of FDI for India.
Sectors which attracted the maximum funds include services, construction activities, power,computers and hardware, telecom and housing and real estate.
Link
---------- Post added at 10:22 PM ---------- Previous post was at 10:22 PM ----------
Indirect tax kitty goes up by 16%
NEW DELHI: After months of slowdown in collection of indirect taxes, there was some optimism with the figures of December 2011 when central excise registered a growth of nearly 10% at Rs 12,546 crore, and the total indirect tax revenue went up by 16% to Rs 2.86 lakh crore in April-December, 2011, or 75% of the budget estimates of Rs 3.93 lakh crore for the current fiscal.
In September and November, the growth in excise collection was -8.7% and -6.5% respectively. Even in October 2011, the excise duty growth was as low of 5%. However, the sudden rise in collection is seen as primarily coming from small-scale industries that may have cleared their duties in December after crossing the threshold limit. The customs duty collection went up by 4% in December.
"We will meet the budget target of Rs 3,92,908 crore for 2011-12," said S K Goel, chairman of the Central Board of Excise and Customs (CBEC).
Speaking to reporters on Tuesday, Goel said there was robust growth in the service tax collection at 49%, which will make up for the loss on
duty forgone on petroleum products. The government is set to lose at least Rs 36,000 crore in this fiscal after it slashed duties on petroleum products in June.
On Tuesday afternoon, finance minister Pranab Mukherjee met the chairmen of CB E C and the Central Board of Direct Taxes and reviewed revenue collection with the chief commissioners of northern zone. The customs duty collection in December was Rs 12,608 crore as compared to Rs 12,109 crore in the previous year and in April-December, the total customs duty realized was Rs 1,12,670 crore as against the budget target of Rs 1,51,700 crore
for this fiscal. On the excise front, the duty collected in April-December period was Rs 1,05,411 crore as against the budget estimate of Rs 1,59,208 crore for 2011-12.
The growth in service tax has been phenomenal at Rs 67,706 crore in April-December period as against Rs 49,357 last year. This makes for 83% of the year's target for service tax where budget estimate was Rs 82,000 crore.
Goel said the growth in customs duty could also be a result of devaluation of the rupee and should not be seen as increase in imports only, though there could be some marginal increase.
Link
---------- Post added at 10:23 PM ---------- Previous post was at 10:22 PM ----------
Sensex up 350 points on rating upgrade, rate cut hopes
Indian stocks rallied 2.2 per cent on Tuesday to their highest close in a month, on expectations easing inflation pressure will pave the way for the central bank to begin unwinding tight monetary policy this month and rating upgrade by Moody’s.
The key index never looked back and surged all the way to settle at 16,165.09, showing a sharp rise of 350.37 points or 2.22 per cent. This is highest closing level since December 9. The 50-issue Nifty of the National Stock Exchange also flared up by 106.75 points or 2.25 per cent to one-month high of 4,849.55.
The sentiment was helped after a finance ministry official said Moody’s Investors Service has upgraded the short-term ceiling on foreign currency bank deposits.
Foreign investors pumped in Rs 324 crore on Tuesday alone, taking the net investment to Rs 951 crore in January so far. The rally was led Reliance Industries (3.99 per cent) and ICICI Bank (3.85 per cent), together adding over 100 points to the Sensex.
The Reserve Bank of India (RBI), is expected to cut banks’ cash reserve ratio from 6 per cent currently. “The buzz of an impending CRR cut has been doing the rounds for quite some time. What the RBI says about the outlook on interest rates will also be crucial,” said Amar Ambani, Head of Research, IIFL.
Link
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Re gains 81p against $ on Moody’s move
MUMBAI: The rupee recorded its sharpest gain against the dollar in recent weeks by firming up by 81 paise to close at 51.71 on Tuesday from its previous close of 52.72. Sentiments in the forex market saw a marked improvement after Moody's upgrade was announced.
Besides, sentiment also improved after positive news from Europe that a budget agreement for euro zone nations might come into place sooner than expected. Also, there was support from FIIs who bought $211 million last week.
From being the worst performer in 2011, rupee has been the best performer among Asian currencies this year, gaining 2.6% against the dollar.
According to Moses Harding, executive vice-president at IndusInd Bank, although the sentiment has improved, the current account situation continues to be bad with exports not picking up and oil prices continuing to be high. Overseas investors also reduced their short positions on the local currency. The three month dollar was traded at 52.83 as compared to 53.59 on Monday.
Link
