QBiz: Railways Eye More Investments, FM’s Assurance on Bad Loans

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Union Railway Minister Suresh Prabhu. (Photo: PTI)

1. Railway Budget 2016-17 to Focus on Attracting More Investments Says Suresh Prabhu: FE

Railway Minister Suresh Prabhu on Friday said the 2016-17 Railway Budget will focus on attracting investments for augmenting present and future facilities.

The government is already in the process of finalising the Budget and would continue with the measures started last year for development of Railways, he said, adding that the BJP government had complied with the majority of announcements and promises it made in last year’s Railway Budget.

“Kerala along with Andhra Pradesh is one of the first states to sign an MoU with Indian Railways for this venture,” he said, adding that the government’s endeavour was to make the state one of Railways’ investment hubs in the country.

Read more here.

2. Markets Snap 4-Day Losing Streak Over Crude Prices, All Eyes on China: ET

Indian markets regained some ground on Friday, but posted its biggest weekly loss in over six years, reflecting the uncertainly in global markets.

While strong trade in European markets and recovery in global crude prices pulled Indian markets from their 52-week lows on Friday, finance minister Arun Jaitley’s statement that Indian banks are well equipped to deal with bad loans and markets needn’t panic helped to calm nerves on Dalal Street.

The Sensex recovered over 560 points from its intra-day low of 22,600 on Friday, before ending 34 points, or 0.15 per cent, higher at 22,986. NSE Nifty bounced back 165 points before closing 5 points, or 0.07 per cent, higher at 6,980, though still remaining below the psychological level of 7,000.

We have seen short sellers covering the market, and this has led to some stability in stocks. However, if China opens weak on Monday, then markets may come under further pressure.
UR Bhat, Managing Director, Dalton Capital Advisors

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3. Markets Need Not Panic, Bad Loans Being Tackled Says Arun Jaitley: BS

Finance Minister Arun Jaitley on Friday said Indian banks were equipped well to deal with bad loans, and that markets need not panic since the current turmoil that has pulled down key stock indices in the country is driven by external factors.

“The media reports on bad position of public banks are not fully correct,” the finance minister tweeted, a day after Reserve Bank of India Governor Raghuram Rajan also said the some claims by analysts on the issue were “wild” and verged on scare-mongering.

Bad loans are there, but banks are equipped to deal with the issues. The government is committed to protect the banks and give them the capital requirements. The RBI is also giving guidance.
Arun Jaitley, Finance Minister 

“In the past few days there has a been a major sell off in markets. Obviously, this has created a chain reaction across the world. Indian markets are also being significantly impacted by this,” he said, adding in India, however, there was an over-reaction.

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4. Govt Orders Merger of NSEL With Financial Technologies: BS

Government on Friday ordered the merger of crisis-hit National Spot Exchange (NSEL) with its parent Financial Technologies, confirming its draft order issued nearly one-and-a-half years ago.

This is the first case of the government ordering merger of two private companies invoking a rarely used clause in the Companies Law.

The final order was passed a day after a high level meeting chaired by Economic Affairs Secretary Shaktikanta Das that reviewed the steps taken to recover money in the Rs 5,574 crore payment crisis that erupted at NSEL – part of Jignesh Shah-led FTIL group – in late 2013.

Reacting to the development, Financial Technologies (India) (FTIL) said the final order is “highly disappointing” and it places the interest of trading clients higher than that of the shareholders of a listed company.

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5. 13 National Highway Projects Worth Rs 10,300 Cr Approved: BS

The ministry of road, transport and highways has approved 13 national highways projects worth Rs 10,300 crore. The total length of the roads is 670 km and will be executed on EPC (Engineering, Procurement Construction), BOT (Toll) and hybrid annuity model. The projects would be spread across Maharashtra, Rajasthan, Chattisgarh, Andhra Pradesh, Uttar Pradesh, Tamil Nadu and Madhya Pradesh.

The government is planning to award these projects by March this year. The project was approved by the Expenditure Finance Committee (EFC) meeting which was held under the chairmanship of Secretary Road, Transport and Highways, Sanjay Mitra.

We had a meeting today (Friday) and we have approved 13 National Highway projects having total project cost of Rs 10,300 crore. Out of the total 13 projects, three will be implemented on BOT (Toll) and Hybrid annuity each and the remaining seven projects will be on EPC mode.
Sanjay Mitra, Chairmanship of Secretary Road, Transport and Highways

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6. Budget 2016: Slowing IIP and High Inflation Cast Shadow on FM’s Plans: ET

Industrial growth contracted for a second month in December while retail inflation spurted to a 17-month high in January, capturing the dilemma facing Finance Minister Arun Jaitley ahead of the Budget.

Any attempt to raise government spending to spur growth could force a delay in further interest rate cuts by the Reserve Bank of India because of rising prices.

The Index of Industrial Production (IIP) fell 1.3 percent in December after a revised 3.4 percent decline in November, according to data released by the statistics office on Friday. The November fall had been previously pegged at 3.2 per cent. The slump was partly because of floods in Chennai, a major manufacturing hub.

The separately released consumer price index (CPI) showed retail inflation at 5.69 percent in January, the highest since August 2014, making for a toxic mix of macro numbers at the start of the new calendar.

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7. Gold Heads For Best Week in Four Years on Safe-Haven Appeal: ET

Gold eased on Friday after soaring 4 per cent the previous day, but was still set for its best week in four years, lifted by stock market turmoil that has sent investors rushing for safe haven assets.

Spot gold was down 1 per cent at $1,234.30 an ounce by 1423 GMT, but has still risen more than 5 percent this week, the biggest weekly gain since October 2011.

Prices fell on Friday as the dollar extended gains after better than expected US retail sales data. Prices hit a one-year high of $1,260.60 on Thursday.

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8. Government Mulls Over Raising Time Frame of Long-Term Capital Gains Tax to Three Years: ET

The government is discussing whether to increase the time limit for applicability of long-term capital gains tax from one year to three years, according to The Economic Times.

The debate revolves around whether the definition of ‘long-term’ should be raised from one year to three years — a change that would force investors to hold on to their bets for three long years to escape tax.

Today, gain on a listed security is taxfree — for both retail and institutional investors — if a stock is sold a year after its purchase. If this period is changed from one year to three years, investors would end up paying 15 percent tax on such exits made before three years.

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9. IDBI Bank Posts Rs 2,183.68 Crore Loss in Q3: Livemint

IDBI Bank reported a net loss of Rs.2,183.68 crore for the three months ended 31 December 2015, the largest by any bank in the quarter so far, owing to rising provisions for bad loans and lower other income.

The state-owned bank had reported a profit of Rs.102.79 crore a year ago.

The bank’s provisions for the quarter stood at Rs.3,722.67 crore as compared with Rs.956.25 crore reported in the same period a year ago. The provisions for the July-September quarter stood at Rs.1,289.31 crore.

Read more here.

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