ArcelorMittal, global steel major, has scrapped the proposed Rs 30,000 crore steel factory in Karnataka due to global steel crisis and asked state to change the usage policy for 1,800 acres of land it has acquired for the plant in Bellary, the government said on Monday.
“ArcelorMittal has backed out,” said Chief MinisterSiddaramaiah ahead of Invest Karnataka, the state’s investor meet that begins in February 3.
The steel giant had signed a pact during the global investors meet in 2010 to set up six million tonnes per annum (TPA) steel plant in Bellary in Northern Karnataka, which has rich iron ore resources. The plant would have entailed investments of Rs 30,000 crore.
State industries minister R V Deshpande attributed the change in ArcelorMittal’s stance to the global steel crash caused by a glut in production in China, the world’s largest consumer of steel.
BAD LOANS For the year-ending March 2015, gross NPAs of scheduled commercial banks stood at Rs 3.02 lakh crore in absolute terms, or 4.6 per cent of total advances. Six months later, this rose to 5.1 per cent. The stressed advances ratio — stressed assets is defined as bad loans plus loans that have been restructured by banks — increased to 11.3 per cent in September 2015 from 11.1 per cent in March. Private estimates of stressed assets, however, are significantly higher and vary between 17.5 per cent and a quarter of all bank advances.
Incremental investments, or projects being implemented, saw an uptrend in Q3FY16, reports fe Bureau in Mumbai, citing CMIE data. However, the uptick appears unsustainable since it was driven by a one-off spend by a private telecom player and, moreover, the government is expected to prune capex towards the end of the year so that it can rein in the deficit. Given how stalled projects increased for the second consecutive quarter, albeit at a gradual pace, it’s hard to see any meaningful improvement in the investment climate.
Standard Chartered points out that Rs 10.8 lakh crore of aggregate stalled projects pose a major headwind to any revival.
New announcements slowed in the three months to December, led by the private sector; this is the first slowdown since late 2013. Given capacity utilisation is at around 70-75%, capex will pick up in FY17 only if there’s better visibility on demand and the global economy shows signs of a sustainable recovery.
“In response to a number of inquiries Qualcom has received from various Indian wireless operators regarding the sale of Qualcomm’s BWA spectrum, Qualcomm.
The 7th Pay Commission’s recommendations will take a heavy toll on fragile finances of states and force them to scale back their development spends, Niti Aayog Member Bibek Debroy says.
He felt that once the Centre implements the recommendations, it’s “impossible” for the states to hold back a hike in their employees’ salaries.
“There are serious repercussions arising from the 7th Pay panel report, as in the two earlier Pay Commissions, on finances of states, which will go for a toss,” he told PTI over the weekend here.
“Typically, what every state does is that if starved for cash, slash capital expenditure or development spends,” Debroy, one of three full-time members of the National Institution for Transforming India (Niti Aayog), said.
Over the years, most states have improved their finances on the back of faster growth and the states are better-placed than the Centre on the fiscal front.
He added that the Railways, which is already reeling under financial constraints, will also suffer as wages go up.
In a big bonanza for the central employees and pensioners, the Pay Commission last week recommended a 23.55 per cent increase in salaries, allowances and pension, along with a virtual one-rank-one-pension for civilians, involving an additional outgo of Rs 1.02 lakh crore per annum.
Dissenting with the majority decision, two members of CCI said a penalty of Rs 666 crore should be imposed as the company was in violation of competition norms. However, this was overruled by the CCI Chairman and two other members who said the JP group was not a dominant player in the relevant market — that is development and sale of residential units in their Integrated Townships in Noida and Greater Noida.
The Commission also asked the company and other players in the real estate sector to take appropriate voluntary measures to address the concerns of the flat buyers.
CCI Chairman Ashok Chawla and two members — Sudhir Mital and U C Nahta — said that JP Associates and Jaypee Infratech Ltd — did not “enjoy a position of dominance in the market for provision of services for the development and sale of residential apartments in Noida and Greater Noida”.
Dissenting with the majority order, two CCI members — S L Bunker and Augustine Peter — ruled that JP Group enjoyed dominant position in this case and directed it to “cease and desist” from indulging in anti-competitive practices.
The 137-page order came after CCI’s probe into the alleged abuse of dominant position with regard to development and sale of residential units in JP Group’s Integrated Townships in Noida and Greater Noida.
As per the majority order, the investigation by CCI’s Director General found that the market share of Jaypee Group was much less than the rival competitor and it did not have any commercial advantage over its competitors due to its economic strength or due to its size or resources.
The central government, it was officially confirmed on Friday, managed to rein in its fiscal deficit for 2014-15 at four per cent of Gross Domestic Product (GDP), against the 4.1 per cent pegged in the Budget Estimate (BE) and its Revised Estimate (RE).
Tentative indications in this regard had been issued recently but were awaiting confirmation.
However, in the first month, April, of the new financial year, 2015-16, the deficit was Rs 1.27 lakh crore or 23 per cent of the full-year BE of Rs 5.56 lakh crore, due to front-loading of spending. This was higher than the 21.4 per cent of the BE in April 2014.
In absolute terms, the fiscal deficit was checked at Rs 501,880 crore in 2014-15 against the RE of Rs 512,628 crore and the BE of Rs 531,177 crore.
The deficit is estimated at 3.9 per cent of GDP for 2015-16.
April 2015 had no tax receipts; rather, refunds amounted to Rs 2,813 crore. Non-tax revenue was Rs 28,126 crore or 12.7 per cent of the full-year target of Rs 2.22 lakh crore. Total receipts for the month were Rs 27,094 crore or 2.2 per cent of the full-year BE of Rs 12.22 lakh crore, compared with 0.6 per cent for April 2014.
Non-plan expenditure for the month was Rs 1.19 lakh crore or 9.1 per cent of the full-year target of Rs 13.12 lakh crore. For April 2014, it was eight per cent of the full-year target. Plan spending for April 2015 was Rs 35,160 crore, about 7.6 per cent of the BE of Rs 4.65 lakh crore, compared with four per cent for the year-ago period.
As a norm, successive governments front-load spending for the financial year, while most revenues come during the second half.
Investments into Indian markets through participatory notes (P-Notes) has surged to the highest level in over seven years at Rs 2.72 lakh crore (over $43 billion) in March 2015.
P-Notes, mostly used by overseas HNIs (High Networth Individuals), hedge funds and other foreign institutions, allow such investors to invest in Indian markets through registered Foreign Institutional Investors (FIIs).
This saves time and costs for investors, but the flip side is that the route can also be used for round tripping of black money.
According to the data released by Securities and Exchange Board of India (Sebi), the total value of P-Note investments in Indian markets (equity, debt and derivatives) rose to Rs 2,72,078 crore at the end of March from Rs 2,71,752 crore in the preceding month.
This is the highest investment since February 2008, when the cumulative value of such investments stood at Rs 3.23 lakh crore.
Inflows from overseas investors hit a record high as they pumped in over Rs.2.7 lakh crore into the Indian capital markets last fiscal, which ended on March 31, 2015.
Foreign Institutional Investors made a net equity investment of Rs. 1.09 lakh crore in 2014-15, and a further Rs. 1.64 lakh crore into debt markets — Rs. 2.73 lakh crore in all, as per the latest data available with Central Depository Services Ltd (CDSL).
This was the highest net inflow by FIIs since being allowed to invest in Indian capital markets (equity and debt) over two decades ago in November 1992. The previous high was in 2012-13, when the net investments climbed to Rs. 1.68 lakh crore.
These investors got re-christened as FPIs or Foreign Portfolio Investors in the current fiscal under a new regulatory regime that promises to make it easier for them to invest in India. They have emerged as the key drivers of the market rally here and are likely to remain so.
FIIs had made a net infusion of nearly Rs. 80,000 crore into equity markets during 2013-14, while a record high amount of Rs. 1.4 lakh crore was pumped in the preceding financial year.
This is the fourth time in history that net FII inflows for a year have crossed the Rs. 1 lakh crore mark and analysts are optimistic about the current fiscal year as well. However, they had pulled out about Rs.28,000 crore from the debt markets in 2013-14.
According to market analysts, foreign investors remained bullish on the Indian equities and debt markets throughout the fiscal year 2014-15, mainly on account of several reform measures taken by the Central Government.
Experts believe that the inflows will remain equally strong or become even better in the current fiscal in view of Parliament clearing Bills related to insurance, coal allocation and mining as well as assurances in the Budget to revisit controversial tax areas like General Anti-Avoidance Rule.
Corporates and business houses provided 90 per cent donations to national political parties in 2013-14, even as Bharatiya Janata Party was the only party not to furnishdetails of financial assistance to the Election Commission.
Advocacy group Association for Democratic Reforms in a report on Wednesday said total donations received by Congress, NCP and CPI during 2013-14 rose by Rs 62.69 crore – an increase of whopping 517 per cent from the previous financial year.
The ADR said donations to Congress rose from Rs 11.72 crore in 2012-13 to Rs 59.58 crore in 2013-14 which is an increase of 408 per cent. In 2012-13, donations declared by BJP was more than the aggregate declared by Congress, NCP, CPI and CPI-M during 2013-14.
BJP had declared a total of Rs 83.19 crore received above Rs 20,000 during 2012-13.
The Food Corporation of India’s (FCI) procurement operations could come to a halt by February unless it is paid a good part of its outstanding dues of a record Rs 58,000 crore soon.
For the Centre, which has admitted to a tax revenue buoyancy overestimate of R1 lakh crore, and could face a shortfall of R20,000 crore in disinvestment receipts, the demand from the FCI could not have come at a worse time.
Official sources told FE that for FCI, which is somehow managing the minimum support price (MSP) operations of wheat and rice at present thanks to the three short-term bank loans of R20,000 crore taken since the start of the current fiscal, the ability to sustain the operations is already waning. These loans carry an interest of 11.28%, which gets added to the government’s food subsidy burden.
The food ministry has requested the finance ministry for R1.47 lakh crore (including R92,000 crore budgeted for FCI’s MSP functions and overall food subsidy arrears from previous years) in the current fiscal, a tall order given the Centre’s strained fiscal situation.