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Public debt rises to Rs 6 lakh crore in June quarter


India’s public debt rose sharply to Rs 6 lakh crore in the April-June period 2014 from Rs 5,63,911 crore in the corresponding period last year. For fiscal year 2014-15, gross and net market borrowing of Rs 6 lakh crore and Rs 4.61 lakh crore, respectively, show an increase of 6.4 percent and 1.6 percent over 2013-14, a finance ministry statement said. In April-June quarter of 2013-14, gross market borrowing was over Rs 5.63 lakh crore and net borrowing was over Rs 4.53 lakh crore.

During Q1 of FY15, the government issued dated securities worth Rs 1.98 lakh crore, higher than Rs 1.51 lakh crore in Q1 of last fiscal. “Net market borrowings during the quarter at 26.6 percent of Budget Estimates were, however, lower than 28.6 percent of BE in the previous year, reflecting higher repayments in the first quarter this year,” the statement added.

The public debt of Rs 6 lakh crore excludes liabilities under the ‘Public Account’. “Liquidity conditions in the economy remained comfortable during the quarter, barring period of advance tax outflows, with the liquidity deficit, as reflected by net borrowings from RBI under Liquidity Adjustment Facility (LAF)…” it said.

The statement further said that the cash position of the Government during Q1 of FY15 was comfortable and remained in surplus mode during the quarter barring a few occasions.

Adani buys Australia coal mine royalty rights from Linc


Adani Enterprises  has agreed to pay Australian dollar (A$) 155 million (USD 145 million) to Linc Energy to buy out the Australian firm’s rights to future royalties from Adani’s huge but delayed Carmichael coal project, already four years behind schedule.

The deal comes amid growing questions on whether Adani will eventually go ahead with a project to build what would become Australia’s biggest coal mine, amid opposition from green groups and a slump in coal prices to five-year lows. A final decision to go ahead with the project, in Northeastern Australia, would mean spending A$16.5 billion to dig the mine, build a rail line and a port. “This agreement reflects Adani’s confidence in the progress of Carmichael mine, which received final federal environmental approvals from the Australian government last month,” Adani said in a statement emailed to Reuters.

“The agreement…underlines Adani’s consistent commitment to ensure that the high-quality coal from the Carmichael mine is cost-efficient.” The agreement announced by Singapore-listed Linc on Thursday means Linc is walking away from a A$2 per tonne royalty, indexed to inflation, on the first 20 years of production from the coal mine.

Adani bought Carmichael from Linc Energy amid a coal boom in 2010, paying A$500 million in cash upfront and agreeing to pay the royalty stream. In 2010, Adani said it aimed to open the mine by 2014 and at the time Linc said it could earn more than A$3 billion in revenue over the life of the royalty stream.

Linc chief executive Peter Bond said the two companies agreed on the A$155 million price tag based on the risks of the current weak coal price and “all the other risks of the coal industry at the moment”. “I actually have a lot of confidence that Adani will get the pit going,” Bond told Reuters by phone from Brisbane. “It’s more about us focusing our strategy into cashing up the balance sheet and driving towards a more focused outcome like drilling our shale in South Australia.”

Modi to launch plan for every household to have bank a/c


Modi gifPrime Minister Narendra Modi will promise on Thursday to provide a bank account for every Indian household when he launches a major initiative that could save billions of dollars in welfare spending and help mend strained state finances.

India has grown to become Asia’s third largest economy, but nearly two-fifths of its 1.27 billion people do not have a bank account. This leaves them dependent on moneylenders and other informal financing routes. In a keynote speech this month, Modi made financial ‘inclusion’ a top priority of his administration.

He followed this up by writing 725,000 emails to bank officials urging them to support the initiative. “There is an urgency to this exercise as all other development activities are hindered by this single disability,” he said in a Twitter post. Modi won India’s biggest electoral mandate in 30 years in May with a promise to revive India’s flagging economy.

So far, he is yet to launch the big-bang reforms needed to break out of a cycle of low growth and high inflation. Some commentators say his emphasis on the new banking and insurance programme seeks to cement his support base among poor households with small savings. Over 40 percent of Indians live on less than one dollar a day.

The launch of the Jan Dhan Yojana, or the Scheme for People’s Wealth, comes weeks after Modi blocked a global trade deal, saying it threatened the interests of poor farmers.

Tracking 100 days of Modi ‘sarkar’


modi

May 20, 2014 : Modi elected leader of BJP Parliamentary Party

May 20, 2014 : Modi Invites Nawaz Sharif to swearing-in-ceremony

May 26, 2014 : Sworn in as Prime Minister of India

May 27, 2014 : Modi constitutes SIT to get back black money

May 30, 2014 : Don’t include me in textbooks, tweets Modi

June 2, 2014: India’s 29th state Telangana is born

June 14, 2014 : Dedicates INS Vikramaditya to the nation

June 15, 2014 : Modi visits Bhutan, meets PM of Bhutan

June 16, 2014 : Addresses Bhutan Parliament

June 20, 2014 : Controversy over Modi’s ‘Hindi’ directive

June 30, 2014 : Witnesses successful launch of PSLV-C23

July 4, 2014 : Modi’s first visit to Jammu and Kashmir

July 8, 2014 : NDA’s 1st Rail Budget presented

July 10, 2014 : Modi hails NDA Government’s maiden General Budget

July 15, 2014 : Modi meets Chinese President at the BRICS Summit

July 16, 2014 : Prime Minister meets Russian President Putin

July 23, 2014 : World Bank President Jim Yong Kim meets the PM

August 1, 2014 : Kerry meets Modi in prelude to Washington summit

August 3, 2014 : Modi’s historic address to Constituent Assembly of Nepal

August 12, 2014 : Modi says Pakistan raging proxy war

August 15, 2014 : Modi addresses nation of Independence Day

August 19, 2014 : Modi invites people’s ideas on replacing plan panel

August 20, 2014 : India should stay ahead of world in technology: PM

August 23, 2014 : Sri Lanka must ensure justice for Tamils: Modi

 

Ratan Tata invests in Snapdeal.com


Ratan Tata, Tata Sons Chairman Emeritus, has invested in online marketplace Snapdeal.com. “Mr Tata has made a personal investment in the company,” Snapdeal cofounder and CEO Kunal Bahl said.

The investment amount, however, was not disclosed. “This stands testimony to the growth and success that we have seen in a short span of 4 years,” Bahl said. Snapdeal, which has raised about USD 400 million since its inception, has invested about USD 100 million in logistics and operations to expand its presence in the USD 3 billion Indian eCommerce market. “An investment by a legendary and respected figure like Mr Tata is an excellent validation of our focused strategy on building a long term enterprise and marks the start of a very important phase for the company,” Bahl said. Snapdeal has seen 600 per cent growth year-on-year for the last two years, he added.

Snapdeal currently houses over 5 million products across 500 diverse categories from over 50,000 sellers. The city-based firm had raised USD 100 million (about Rs 600 crore) in May from Temasek, BlackRock Inc, Myriad, Premji Invest and Tybourne, while in February, it had received funding worth USD 133.7 million (about Rs 830 crore) from its existing investor, eBay and others.

A report by consulting firm Technopak pegs the USD 2.3 billion e-tailing market to reach USD 32 billion by 2020. Snapdeal rival Flipkart on July 29 announced a USD 1 billion funding, which is the largest in the fledgling ecommerce sector.

A day later, world’s largest e-tailer Amazon said it will pump in USD two billion to bolster business here. Another report by consultancy firm PwC and industry body Assocham suggests that e-commerce firms are expected to spend up to USD 1.9 billion by 2017-2020 on infrastructure, logistics and warehousing.

Rooting out Islamic State won’t be easy, says Obama


President Barack Obama vowed to punish the Islamic State killers of American journalist James Foley on Tuesday but said rooting out the militant group in Iraq and Syria will not be fast or easy.

As Obama spoke, the United States was moving ahead with surveillance flights over Syria to identify targets for a potential presidential order to launch air strikes against Islamic State targets in what would be a direct US military intervention into a country embroiled in a three-year civil war. “America does not forget. Our reach is long. We are patient. Justice will be done,” Obama told veterans gathered at a convention of the American Legion in Charlotte, North Carolina.

Obama, who ordered air strikes against the militant group in Iraq and is considering them for Syria, said he would do whatever is necessary to go after those who harm Americans. “Rooting out a cancer like ISIL won’t be easy and it won’t be quick,” he said. ISIL is the acronym the United States uses for Islamic State. Launching air strikes into Syria would add an unpredictable element to a civil war that Obama has taken great pains to stay out of a year after stepping back from attacking the government of Syrian President Bashir al-Assad for using chemical weapons on his own people.

White House spokesman Josh Earnest said there was no plan to coordinate with the Syrian government on how to counter the threat from Islamic State. Syria has appealed for coordination. “As a matter of U.S. policy we have not recognized the Assad regime as the leader of Syria. There are no plans to change that policy and there are no plans to coordinate with the Assad regime as we consider this terror threat,” he said.

Govt announces four new governors


Yet another UPA appointed Governor Sheila Dikshit resigned today as the Narendra Modi government named former Uttar Pradesh Chief Minister Kalyan Singh as the nominee for Rajasthan along with three others for Maharashtra, Karnataka and Goa.

Appointed in March on the eve of Lok Sabha elections, Sheila Dikhsit, who has been facing pressure, quit the post as Kerala Governor after her meeting with President Pranab Mukherjee and Home Minister yesterday. Continuing with the filling up of vacancies caused by the sacking, resignation or retirements of incumbents appointed during the previous regime, the Government today picked 82-year-old Singh for Rajasthan, where Margaret Alva completed her tenure earlier this month.

Gujarat Speaker Vajubhai Vala was named for Karnataka where H R Bharadwaj had also completed his tenure recently. Former Union Minister C Vidyasagar Rao will take the place of K  Shankaranarayanan, who quit as Governor of Maharashtra on Sunday after he was shunted to Mizoram. 71-year Mridula Sinha, former President of BJP’s Mahila Morcha, was appointed as Governor of Goa in place of B V Wanchoo who was among those asked to quit after the change of guard at the Centre.

According to a Rashtrapati Bhavan communique, 82-year-old Kalyan Singh will take over in Jaipur in the vacancy caused by the retirement of Margaret Alva earlier this month. A two-time Chief Minister, Singh was was convicted for a day by the Supreme Court on October 24, 1994 for violating the commitment made to the Supreme Court on ensuring the safety and protection of the Babri Masjid.He went out of BJP on two occasions but returned to its fold.

SC’s coal block ruling may have wider economic impact


A mass cancellation of coal blocks awarded since 1993 could cost the country up to USD 3 billion in additional imports and hurt financial firms that have lent to the sector, broking firms said on Tuesday. The Supreme Court ruled on Monday that the allocation of more than 200 coal blocks at the centre of a cronyism scandal was illegal.

The Supreme Court is due to decide on September 1 whether to cancel the allocations, or to impose some sort of penalty. Shares in resource stocks fell further following a broad sell-off on Monday after the ruling, which jeopardised projects built around the blocks and threatens to exacerbate a shortage of the fuel. “The ruling creates uncertainty and has to be resolved quickly.

I hope the Supreme Court gives a clear roadmap in September,” said Samir Arora, a fund Manager at Helios Capital in Singapore. The government’s awards of the blocks to steel, cement and power companies has been at the centre of a scandal Indian media has dubbed “Coalgate”, with the Comptroller and Auditor General (CAG) report in 2012 saying the underpriced sales had cost the exchequer up to USD 33 billion. Analysts said a mass cancellation of the blocks would be a worst-case scenario and add to a shortage of coal for power plants. Coal is used to generate more than two-thirds of India’s electricity.

Investors look for more gains as U.S. S&P 500 index hits 2,000 milestone


The U.S. S&P 500 stock index broke through the landmark 2,000 level on Monday, marking a six-year rally which has benefited many Americans from Wall Street to Main Street.

During that time the unemployment rate has fallen from a high of 10 percent in December 2009 to a low of 6.1 percent in June of this year, but the rally is still seen as largely benefiting wealthier Americans as paltry wage rises have left most Americans with little to invest in retirement accounts.

The gains in U.S. stocks have outpaced those in other major world stock markets in the past year and have been one of the top investments in 2014, beating the safe havens of gold and bonds. Furthermore, the gains have come faster than anticipated; in the most recent Reuters poll, analysts forecast 2,000 would be reached towards the end of the year.

Markets have been able to reach the target earlier in part due to the Federal Reserve’s policy of injecting liquidity into the market through its bond-purchase program to keep interest rates low in recent years. The index fell short of 2,000 at the close, ending Monday trading at 1997.94.

Even though the Fed’s program is winding down, investors expect the rally will continue as economic growth has recovered this year and low mortgage interest rates have supportedhousing market activity.

“I continue to think this bull market has several years to go,” said Steven Einhorn, vice chairman of hedge fund Omega, which manages $10.5 billion. He predicted this year that the S&P 500 index would reach the 2,000 level.

The benchmark S&P 500, the proxy for the U.S. equity market, encompasses the largest companies across various industries and is widely followed by pension funds, mutual funds and other institutions, with more than $5.14 trillion in assets benchmarked to the index.

Wage and salary earners have benefited from the S&P’s rise. The average balance of a Vanguard 401(k) defined-contribution retirement account in July was $102,104 or nearly double the level of $56,030 during the Great Recession of 2008, according to the Vanguard Group.

“The rise in the S&P 500 is a virtual twin to the rise in the total U.S. stock market, so of course investors, and especially index fund investors, who received their fair share of those returns, feel wealthier,” said John Bogle, Vanguard’s founder and former CEO, who started the first S&P index fund in 1975.

Euro falls, stocks rise on ECB stimulus bet


The euro fell to a near one-year low against the dollar and euro zone stocks and bonds rallied on Monday as investors positioned for rising chances of further policy easing by the European Central Bank.

ECB President Mario Draghi said late on Friday that the bank was prepared to respond with all its available tools should inflation in the euro zone drop further.

Investors speculated this meant the ECB was more likely to embark on an asset purchase program, or quantitative easing, or adopt other stimulus measures in coming months which would weigh on the euro and boost assets such as stocks and bonds.

“The key message is that Draghi stands ready for more action if needed,” Franz Wenzel, chief strategist at AXA Investment Managers in Paris, said.

“Whether they’re going to do quantitative easing remains to be seen but we’re fairly confident that the financial engineers at the ECB will find other tools. At this juncture, we don’t exclude quantitative easing at the end of this year.”

A weak German business sentiment index, Ifo, also added pressure on the euro in European trade, as it reinforced concerns about Germany, the euro zone’s biggest economy.

The euro skidded to $1.3185 EUR= in early Asian trade, its lowest since September 2013, from around $1.3246 late in New York on Friday. It was last trading at $1.3190, down about 0.3 percent on the day, amid lower than usual volumes due to a holiday in London.

The euro zone’s blue-chip Euro STOXX 50 index .STOXX50E was up 1.2 percent to 3,135.38 points after climbing to a three-week high in early deals. Both Germany’s DAX.GDAXI and France’s CAC 40 .FCHI gained 1.2 percent.

The MSCI All-Country World index .MIWD00000PUS was up 0.1 percent at 429.03 points.

Spanish ES10YT=TWEB and Italian IT10YT=TWEB 10-year yields fell 8 bps to 2.31 percent and 2.51 percent, respectively, while Portuguese yields PT10YT=TWEB fell 14 bps to 3.12 percent.

“The … market has interpreted Draghi’s statement as meaning that broad-based asset purchases, or quantitative easing, has now become more likely,” said Lutz Karpowitz, currency strategist at Commerzbank.

The Ifo business climate index dropped for a fourth straight month in August and the Ifo Institute said it was likely to cut its 2014 growth forecast for Germany to 1.5 percent from 2 percent.

Also sounding dovish was Bank of Japan Governor Haruhiko Kuroda who vowed over the weekend to press ahead with aggressive monetary easing for as long as needed to convince the public that deflation was dead and buried.

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