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Christ University Institute of Management, Kengeri

Hopes

from the

New GovernmentNew GovernmentNew Government

June 2014, Volume V, Issue 47

Hopes from the new Government

Upasana Gurung, F1

The citizens of India have high expectations from the new government that was sworn-in on 26th

May, 2014, and especially from the Prime Minister Mr Narendra Modi who gave us reasons to hope for

positive changes from the new government through his powerful speeches that have resonated all over

India.

The common man of India expects that the new government will stabilize the rising prices of

food products, petroleum, and other necessities which

have been continuously rising in the recent years.

The youth and the unemployed are hoping that the

new government will take into consideration the unem-

ployment, and take the criminal activities seriously so that

the crime rate in India reduces to its minimum level. Peo-

ple also wish that the new government would emphasize

on foreign-business affairs and make the best deals with

other countries, which Mr Modi has showcased in Gujarat which will potentially create better employ-

ment opportunities for the educated and the qualified.

There are retailers hoping that the new government will reverse the anti-FDI (Foreign Direct In-

vestment) stand on not allowing any foreign direct investment in multi-brand Retail since FDI will help

in taking the retailing sector to new highs and improve profitability through the efficient management of

Supply Chain.

People of India have expectations that the upcoming government will focus on cutting down tax-

es. The high taxes on products, goods and income must be reduced, therefore promoting savings. People

are expecting that the Union government will maintain good relations with the State governments so that

it will be easy for the new government to implement GST which would reduce the burden of different

types of tax.

The government must take steps towards the prosperity of the APMC (Agricultural Produce Mar-

ket Committee). Farmers hope that the FCI (Food Corporation of India) will also procure advanced stor-

age and distribution technologies for better management of food to help create self-sufficiency in India.

Other key approbations include a ban on future trading of essential commodities, the setting up of a cen-

tral price stabilization fund, a ministerial-level mechanism at the national and regional levels for coordi-

nated policy-making.

What does the nation expect from

the next Finance Minister?

Aswathy Edison, F1

Mr Arun Jaitley has been

chosen as the new Finance Minister

in the Narendra Modi led BJP gov-

ernment that took charge on May

27th, 2014. Mr Jaitley would also

handle the Ministry of Corporate Af-

fairs. He will also be given an addi-

tional responsibility of the Defense

Ministry till they reorganize the Cab-

inet.

At a Glance:

Mr Jaitley, a lawyer by pro-

fession, was the leader of the opposi-

tion in the Rajya Sabha during the

UPA regime. His educational qualifi-

cations are B.Com (Hons.) and LLB

from the prestigious Sri Ram College

of Commerce, University of Delhi

and Faculty of Law, University of

Delhi, respectively.

What are the challenges for the

new finance minister?

Macro-economic Balance

The top most priority should be

the restoration of the macro-

economic balance of the country.

The economic growth has been

around 4.7% for the past 2 years. The

manufacturing output of the country

shows a dismal figure and has not

improved much.

Gross Fixed Investment has been

increasing by only a small figure of

0.2%.

This has been blamed on the pol-

icy paralysis and decision making

process of the previous government.

The BJP government is expected to

focus on a balanced and stable devel-

opment of the Indian economy.

On the manufacturing issue, they

aim to convert India into cost com-

petitive labor intensive mass manu-

facturing hub. The BJP manifesto

suggests development of labor inten-

sive sectors such as textile, infra-

structure, housing and tourism to

combat the issue of unemployment.

Improving the Fiscal Deficit

As pointed out by Mr. Arvind

Viramani, former Chief Economic

Advisor, the Ministry should aim to

achieve a fiscal deficit target of 3%

and 0% for the revenue deficit within

two years with the goal of halving

the difference from 2013-14 in each

year. This could be achieved by a

reduction of government subsidies

on areas such as consumption ex-

penditure and petroleum sector. As

suggested in the BJP manifesto, the

government will tackle the issue

without comprising the availability

of funds for development of India.

Taxation

One of the most pressing issues

is the Retrospective amendments to

tax law introduced by the UPA gov-

ernment. This has been opposed by

the business sectors and the image of

the country as a conducive invest-

ment destination has taken a hit. The

BJP government will likely combat

the issue by simplifying the tax re-

gime. Initial pronouncements from

the Government indicate that they

are, in principle, opposed to retro-

spective amendments to laws. It will

also focus on the faster implementa-

tion of Goods and Service Tax

(GST).

Non-Performing Assets

The NPA and Capital Adequacy

of Public Sector Banks have been a

major concern for the banking sector

and the Government. The public sec-

tor banks were forced to provide

long term credit at less than adequate

returns and collaterals which is one

of the key reasons for creation of

NPA’s. These public sector banks

need to be recapitalized to grow and

also comply with the Basel 3 norms.

Mr. Viramani has suggested on re-

ducing the government holding to go

below 50% and using to recapitalize

the banks without increasing the fis-

cal deficit.

Inflation

The Consumer Price Inflation has

been between 8 and 11.5% mainly

due to the rise in agricultural prices.

It is felt that neglect by the previous

Government of the key agriculture

sector has led to supply shocks of

key commodities.

The suggestions by Mr. Viramani

for the new government on the above

issue are revamp of Food Corpora-

tion of India, restraining of Mini-

mum Support Prices for the next few

years, and abolishing of Adminis-

tered Price Mechanism to name a

few.

The Finance Minister should

address the pressing issues of India

and take immediate solutions. The

vision of Mr Narendra Modi is to

transform India into a global power

on the basis of development of five

core areas i.e. Talent, Trade, Tour-

ism, Tradition and Technology. To-

gether, let’s hope for a better future.

How will the new government handle the slew of cases like Vodafone that will repair the negative in-

ternational sentiments seen so far?

Aswathy Edison, F1

The introduction of retrospective amendments to tax law by the UPA government had generated a

lot of tension for the overseas investors, by making India, a tax uncertain jurisdiction to do business in. Spe-

cifically, an amendment was made to the Income Tax Act retrospectively (from 1961) to bring offshore in-

direct transfer of Indian assets (Vodafone like transactions) within the purview of the Indian Tax law. This

created an image of India as an unfriendly investment destination in the minds of the investors.

At a Glance:

Vodafone Tax Issue

In the year 2007, Vodafone entered the Indian telecom

sector and they took over Essar’s stake in Hutchison Essar

popularly known as Hutch, then for an amount of US$ 5.46

billion. The problem arises because its subsidiary exchanged

cash for shares with a similar holding company for Hutchison

Essar, located in Cayman Islands. The Vodafone defense was

it was an offshore transaction done between two nonresident companies.

The battle between Vodafone and Indian Tax authorities erupted when the Indian tax authorities

claimed that it was an indirect transfer of an Indian asset (telecom business in India) which was taxable in

the country and therefore, the buyer should have deducted applicable withholding tax while making pay-

ment of the purchase price of this business.

The Supreme Court was on Vodafone’s side by pointing out that the relevant laws of the country do

not consider an off shore transaction and is not liable to pay taxes. This led to a retrospective amendment of

the tax laws by the Indian government to overrule the Supreme Court's verdict and lead to a revival of the

tax demand against Vodafone. The quantum of tax demanded together with interest for late payment is Ru-

pees 11,000 Crores.

BJP’s stand on the issue:

The BJP has stated its commitment towards the simplification and rationalism of tax regime. It fo-

cuses on introducing more stable tax policies and avoids the retrospective tax issue. As quoted by the new

law and telecom Minister Ravi Shankar Prasad, "Retrospective amendments in law should normally be

avoided, as it is very evident that India needs foreign investment.”

The aim of BJP is to remove the uncertainties from the minds of investors and make India business

friendly. As of now, sources indicate that BJP intends to make some changes in tax rules which will be an-

nounced during the budget presentation in July

Sources: The Hindu

businesstoday.intoday.in

Expectation from the new Government led by Narendra Modi

Sudeshna Bhattacharya, F1 and Srijita Mukherjee, F2

Narendra Modi has taken charge as the 15th Prime Minister of India. He has floated the idea of building “a

hundred new cities”, a high speed rail network across the subcontinent. He has been inspired by China’s model on

high growth and top-down development. Bharatiya Janta Party (BJP) has proposed easing of labor and land-

acquisition laws as it is one of the root cause of failure of big infrastructure projects. Mr. Modi has a plan to attract

investors by eliminating red tape and streamlining government policy and decision-making.

There are a large number of infrastructure projects that were stuck during the regime of UPA government.

Lack of quick and robust decision making has resulted in project costs overruns making it necessary to re-examine

their viability and sustainability. The projects that are close to completion should be funded to complete. The pro-

jects that are no longer viable should be dropped and taken off the books. In power and road sectors, the output pric-

es need to be determined with clarity to enable revenue-generation.

While the earlier UPA-2 government led by Dr Manmohan Singh had set up a Cabinet Committee on Invest-

ments (CCI) in January 2013 to untie red tape hurdles, it has had a contrarian effect of holding up investments worth

Lakhs of Crores of Rupees. There is a bill pending before the Parliament called the Real Estate Regulation and De-

velopment Bill and it is expected that the new BJP government will pass it after June 2014. Few public transporta-

tion projects are stuck mid-way e.g. Metro and monorail in south Mumbai. Waterway is a very effective mode of

transportation. India is currently using only 1% of its waterways for transportation of cargo, passengers, etc. due to

their perceived lack of economic viability.

The concern over poor growth is exacerbated by the poor show in the two major industries of Mining and

Manufacturing. Chart 2 gives the components of India’s Gross Domestic Product (GDP) by sectors. Manufacturing

grew rapidly in the period 2004 to 2008, then at a slower pace till 2010, and has subsequently stagnated. The share

of agriculture in total GDP is dropping, but is not offset by the number of jobs being created in the services or the

manufacturing sectors. Between 1998 and 2004, close to 50 million new jobs were created (NSS survey), while in

the decade after 2004, only 27 million jobs were added.

Jawaharlal Nehru National Urban Renewal Mission (JnNURM) is the flagship program of the Congress led

UPA Government. The first phase of the mission ended on 31st March, 2014. Senior BJP leaders want to re-invent

the current mission and will focus on building 100 new cities instead of reviving old ones.

UPA planned to launch the US$ 40 billion for the second phase of its urban renewal mission to cover infra-

structure deficit throughout the country for urbanization programs. But BJP is not keen on carrying forward

JnNURM as most of the infrastructure projects planned under JnNURM remain incomplete.

List of JNNURM Projects under UPA II Scheduled to be completed as on 31.03.2014 but which are yet to be

completed:

References:

http://www.milinddeora.in/media-center/we-will-not-let-congress-become-a-one-man-show-milind-deora/

http://timesofindia.indiatimes.com/city/pune/Bleak-outlook-for-infrastructure-projects/

articleshow/34654631.cms

Name of the State Name of the

City Project Title

Approved Cost

( in Rupees

Crores)

Date of CSMC /

CCEA / CCI

Meeting/Project

Approval

Total ACA

Commitment

(Central

Share)

Andhra Pradesh Hyderabad Water Supply Distribution Network for

Ramachandranpuram Municipality 7,889.52 25-02-14 2,761.33

Andhra Pradesh Hyderabad Water Supply Distribution Network for

Patancheru Municipality 5,819.87 25-02-14 2,036.95

Goa Panaji Solid Waste Management, Panaji 8,947.76 25-02-14 7,158.20

Goa Panaji Construction and Development of St.

Inez Nallah/Creek 1,956.21 4-03-14 1,564.96

Gujarat Ahmedabad Automation (SCADA based) of the

water supply system 3,336.48 23-04-13 1,167.76

Subsidies: A cause to the downfall of the economy

Challapalli Kalyana Karthik, F2

The UPA government has given many subsidies in their entire term which is believed to be done to attract

votes and that has been a great burden for the economy. The UPA government never tried to recognize the effects of

those subsidies on the economy. The chart

here shows the veritable explosion of subsi-

dies given by the government between FY

2004-05, when the United Progressive Alli-

ance government took control, and FY 2012-

13.

The chart clearly shows that the subsi-

dies grew by a whopping 460 percent. The

government could not stick to the planned

expenses which turned bad. These subsidies

amounted to unsustainable 2.5 percent of

GDP in FY-2013. The subsidies mostly con-

centrated on food, petroleum, and fertilizers.

Subsidies as a percentage of total central government spending have increased from a little over 9% in 2004-

05 to almost 14% in the interim budget estimates for 2014-15. While fertilizers rose to Rupees 68, 000 Crores, food

subsidies have gone up 4.5 times to Rupees 1.15 Lakh Crores.

It is obvious that the

Narendra Modi gov-

ernment will have a

greater work to do

with little reserves in

their hands. People

now will expect the same from the new government but it will not be easy to meet the expectations of people. The

government has made so many promises during their election campaigns and we would see as to whether the new

government will stick to the promises made.

But recent news says a swathe of ministries from Finance, Fertilizer and Petroleum are going to make a case

for reduction in subsidies before Narendra Modi, a move that will push up the monthly expenditure for the people of

our country but is expected to help the government cut wasteful spending and revive investment.

The new government, when in opposition, repeatedly protested against increase in prices of cooking gas and

diesel, while backing the Food Security Act that offers supply of subsidized grains. But now, the petroleum ministry

is backing an immediate increase of around Rs 250 a cylinder for subsidized cooking gas.

This may not be a good sign for the new government as the people will be having more expectations on the

newly formed government and it will be a huge task for the government to reach those expectations.

http://timesofindia.indiatimes.com/business/india-business/Finance-fertilizers-and-petroleum-ministries-to

-seek-subsidy-cuts/articleshow/35492337.cms

Rediff.com – business column.

Subsidies FY-05 FY-13 Growth Incremental

Total subsidies to the Rich 26,191 162,526.43 520.54% 136,335.43

Total subsidies to poor 19,776 95,127.57 381.02% 75,351.57

Fate of Public Sector Enterprises under Narendra Modi

Purnima Singh, F2

The UPA government had drawn plans of raising money for the government by selling stakes and by

disinvestment of Public sector undertakings, but our new PM Mr.

Modi isn’t keen on the idea of disinvestment, instead he has been

known for reviving sick PSU units. We can take the instance of Gu-

jarat State Fertilizers and Chemical Limited which has been quoted

a lot in this perspective; this company witnessed a turnaround from

a 400-cr loss-making unit in 2003 to a firm that earned a 15 percent

return on equity. This was attributed mainly to the free hand given

to top bureaucrats with no interference from government. Mr. Nar-

endra Modi is also keen to revive manufacturing sector, hence the

PSU turnaround is big on his agenda. There are talks that this Modi model can be implemented with vanilla

disinvestment, keeping majority shareholding with government while selling stakes in profitable PSUs. It

also includes the sale of firms that are beyond revival or those firms where government has already diluted

its stake. But overall, government would like to keep majority stakes in all the companies and would try to

turn them around.

Public sector banks are suffering from huge NPA problems. With Mr. Modi becoming the Prime

minister,

more account-

ability should

be brought

into these

public sector

banks and

there should

be reduction

of political

interferences

in the work-

ing of banks.

Public sector

banks are cur-

rently not in

good shape owing to the distressed economy; they have accumulated huge Non-performing assets, and have

to restructure many loans. The new government may clearly think about fresh capital infusion and govern-

ment may also sell some of its stake in these banks so that they can raise some money from the market. It is

expected that managements of PSUs will be increasingly professionalized which would transform these or-

ganizations into true commercial organizations run on arm length basis.

http://profit.ndtv.com/news/interviews/article-arvind-panagariyas-five-tips-for-modi-government-

389235

Corporate Column

Sai Nanthini R.K, F2

We interviewed Mr Sridharan, Analyst at a research firm S.M.A.R.T Advisors to gain insights on

what do the people in the Finance world expect from the new government.

1. What markets want from the new government which is formed by

BJP?

A: We have all seen how the Modi euphoria has fuelled the Indian stock markets in recent times. The

stock markets may be running ahead at a brisk pace, but the Indian economy still has a lot of catching up

to do. According to me the bullish pace is in the Power, Energy and Infra sector. This bullish effect of the-

se sectors will make even steel and automobile sectors to go up. Due to this cyclical sector also has the

same impact. But when we talk about defensive sectors (IT & Pharma), these markets are expecting a re-

vival. According to me even FII's are expected to rise because when these sectors show a growth pace. It

reflects a positive high on Modi government.

2. How is economy of India expected to witness a change?

A: The thumping victory which Modi has received this election is based on hope, trust and belief that In-

dia will improve and progress under this dynamic leadership. He has promised us that the Gujarat model

of development would be replicated across the country, and we sincerely hope that he delivers.

When we look at the year 1996-2006, India emerged as a major and influential power on strength

of its high economic growth rate. Economy can witness a change, if Modi concentrates on handling the

foreign policy issues.

Besides this, the biggest challenge is fighting inflation. The good thing is that economic revival is

high on the government's agenda. And while we will give the new government the benefit of doubt when

it comes to reforms and policy making, we are of the view that it could be some time before these are ef-

fectively implemented.

3. Modi government is inheriting a battered and bruised economy from the previous government.

Inflation is at an all time high, with prices of commodities sky-rocketing. Unemployment rate is bur-

geoning in every state. But ever since the victory news of Modi came trickling in, Indian market wit-

nessed unprecedented amount of foreign investments coming in, with investors showcasing faith in

him. Can this alone be a clear cut indication that the market is buoyant and full of hope from the

new government? : A: My answer is, it can be partially Yes. Here the government has to face 3 key issues:

Subsidies - It costs around 2% of the overall GDP in the last fiscal year. Hence now it's the BJP gov-

ernment responsibility to work out a feasible formula without hampering our national GDP with a bal-

anced subsidy allocation.

Privatisation - Indian government needs some solid privatization's policy where in dormant stakes of

state-run entities can be sold or disinvested to bring in much needed capital, in order to control India's

raising fiscal deficit.

Jobs - The new government has promised to originate ten million plus jobs in the next 3 years. This

one of the challenge waiting for Modi's government.

There are certain other issues also to be faced by Modi Government. Now that all eyes would be on

Modi to unleash the new wave of economic reforms and changes.

Market Round – Up

K. Alekhya (F2), B. Suma Sravya (F1)

Flipkart acquires Myntra, gears up to take on Amazon: Flipkart has bought fashion portal Myntra

in a deal estimated to be worth $370 million as it squares off against Amazon for dominance of India's

fast-growing online retail market. May 24th, 2014 (ET).

Investors pump in over Rupees 1 trillion in MF schemes in April: Investors pumped in more than

Rupees 1.12 lakh Crores in various mutual fund schemes in April, making it the highest amount in

three years. May 21st 2014 (ET).

FIIs pour in Rupees 1 lakh Crores since Narendra Modi declared BJP’s PM Candidate: As per latest

data compiled by capital markets regulator SEBI, the net investments by FIIs into Indian equity mar-

kets stood at Rupees 88,772 Crores since the announcement. The same for debt markets was at Rupees

13,399 Crores. May 19th, 2014 (ET).

Infrastructure sector to get a push under Modi government: The infrastructure sector will be a big fo-

cus area for the Narendra Modi-led BJP government at the Centre as high-speed bullet trains, building

modern cities and expediting work on the transportation are the promises BJP made to revive growth

and create employment in the country. – May 16th, 2014 (ET)

FPIs can invest up to US$ 81 billion in debt securities: Foreign Portfolio Investors (FPIs), a newly cre-

ated class of overseas investors, will be able to invest up to $30 billion in government debt and up to

$51 billion in corporate debt securities under the new FPI regime, which would come into force next

month. – May 4th, 2014 (BS)

The RBI Column

Pawanpreet Kaur, F2

RBI to propose steps to reduce window dressing

by banks and the reasons for which RBI governor

has introduced these steps are:

To improve liquidity towards the year-end

which will prevent a situation where banks are

unwilling to lend money to the other banks.

Banks tend to shore up balance sheets for a

variety of reasons, some of which are:

Reduce the size of risk weighted assets

to qualify for lower capital require-

ments.

To increase the size of assets to meet

the government performance require-

ment.

Reduced window dressing w.r.t NPA.

RBI’s monetary policies takeaways:

RBI kept all the important rates unchanged

but reduced the SLR by 50 basis points to

22.50%. This is done in order to release li-

quidity and make credit available at lower

rates to the private sector and it will also help

government as banks will now be able to

move their government securities from held-to

-maturity to mark-to-market and thus the gov-

ernment will have to borrow at market deter-

mined rates and the borrowings will thus

come down easing inflation a little.

Borrowers do not have to be unduly worried

about higher interest rates on loans as the key

rate, the repo rate, has been left unchanged. At

the same time, depositors don't need to fear a

lower return as there is no pressure on banks

to immediately cut rates. The repo rate is that

at which the Central Bank lends funds to

banks.

The proposal to provide more liquidity sup-

port through term repos -- seven-day and 14-

day repos with reduction in the overnight

route will help financial markets gain flexibil-

ity in liquidity management. It would also

provide risk protection for investments in cor-

porate debt through credit enhancements on

such instruments. This could attract more in-

vestors to India's shallow debt market, some-

thing the central bank has long wanted.

RBI is contemplating a secondary market

trading in retail inflation-linked bonds

launched in December 13. As a result, inves-

tors in such bonds can choose an early exit

depending on prevailing consumer price lev-

els and need not be locked in through the en-

tire 10-year tenor of the bond.

Key recommendations by the Nachiket Mor

committee on speeding up credit to those at

the bottom of the pyramid are expected to be

implemented soon, which means better access

to financial services through the use of tech-

nology, new products and new entities to link

people to the formal financial system. Also

they recommended bank accounts for all us-

ing Aadhaar cards.

RBI panel moots centralized bill payment system:

RBI has suggested setting up of a mechanism for

centralized bills payment system in the country, pri-

marily by incorporating two organizations - Bharat

Bill Payment Services or BBPS, and the Bharat Bill

Payment Operating Units or BBPOUs.

The panel known as GIRO (Government Internal

Revenue Order) is a centralized process that allows

payments for utility bills, educational fees and insur-

ance premium by just visiting the bank branch. GAG

(advisory group) has submitted its report to the Cen-

tral Bank, recommending a tiered structure where

BBPS will be the authorized standard setting body

while the BBPOUs will be the authorized operational

units, working in compliance with the standards set

by the BBPS.

GIRO is a big step forward in the bill payment

system in the country as:

Despite the advent of online or mobile

(banking) transactions, India has a huge bill

payments market that is diverse as well as

complex

A large portion of the bill payments continues

to be done at billers' locations in the form of

cash and by checks (albeit a small portion) by

customers.

Stock Market Analysis

Sooraj Kumar C. F1

The past two months has been a fairy tale journey for the Indian markets as well as Indian politics, with the markets being driven

by investor sentiments and the investors being driven by the man widely believed to be India’s savior. A thumping victory for Narendra

Modi-led BJP in the Lok Sabha polls ushers in prospects of a stable government at the Centre and economic reforms which electrified the

markets. The Indian stock market surpassed 25000 levels for first time on the day of counting, the benchmark Sensex jumped 4.9 percent,

and the broader Nifty scaled a fresh peak by rising 5 percent the same week. In 2014, overseas investors have so far invested 6.5 billion

rupees in Indian equities, contributing to a 14 percent gain in the main stock indices.

Shares of Realty, Power, Refinery, Metal, Banking and Consumer Durables companies where those which found momentum on

positive hopes. It could be clearly seen that market participants were ignoring data which showed retail inflation rising to a three month

high of 8.59 percent. This might constrict the space for the Reserve Bank to ease interest rates in the monetary policy review in June.

Among the S&P sectorial indices, Realty rose by 13.03 percent followed by PSUs 12 percent, Power 11.86 percent, Oil & Gas

8.98 percent, Metal 8.41 percent and Bankex 8.10 percent. Twenty four scrips out of the 30 share Sensex ended higher while the remain-

ing six finished lower.

Major gainers were BHEL (18.30%), SSLT (17.30%), Tata Power (12.50%), Coal India (12.20%), NTPC (11.40%), SBI

(11.10%), ONGC (10.70%), Gail India (10.50%), Maruti Suzuki (9.22%), RIL (8.35%), Hero Motocorp (8.22%), Axis Bank (7.68%),

ICICI Bank (6.54%), ITC(6.38%), HDFC Bank (6.27%), L&T (6.16%), Tata Steel (5.65%) and Tata Motors (5.22%).

BJP-led NDA government coming into power helped the Indian rupee to increase for the third straight week by 125 paisa to close

at 11-month high of Rupees 58.79 to a US Dollar. The reason for this uptrend was a sustained Dollar selling by exporters and banks amid

increased capital inflows.

Stock of the Month-Sesa Sterlite

Shares Outstanding (Million): 2,964.68

Market Cap (Million); Rs 820,028.88

Beta: 1.44

Dividend: 1.75

Yield (%): 1.17

News and Events:

Sesa Sterlite Limited, formally known as Sesa Goa Limited, is a diversified global metals and mining company.

Effective August 12, 2013 Sesa Goa Limited, a 55.1% owned unit of Vedanta Resources acquired 70.5% interest in Vedanta Alumi-

num Limited (VAL) and raised its interest to 59%.

August 17 2013, the company Sesa Goa and Sterlite Industries (India) Ltd announced the merger of Sterlite and the Madras Alumi-

num Company Limited (MALCO).

Economic Rollers

Simmy Kumari, F2

Source: Finance Ministry, Office of Economic Advisory, HDFC Securities Report, Ministry Of Commerce,

RBI, http://www.tradingeconomics.com/india/

Rates Rates as on 01st May, 2013 Rates as on 01st June, 2014

Repo Rate 7.25% 8%

Reverse Repo Rate 6.25% 7%

CRR 4% 4%

SLR 23% 22.5%

MSF 8.25% 9%

Base Rate 9.70-10.25% 10-10.25%

Call Money Rate (Weighted average) 7.27% 8.58%

91 days T-Bill (Primary) Yield 7.31% 8.86%

364 days T-Bill (Primary) Yield 7.21% 8.92%

10 years Govt. Securities Yield 7.4% 8.81%

WPI 5.96% 5.2%

CPI 6.7% 8.59%

CBLO 8.9-9% 7-8.10%

Food Inflation 9% 9.8%

IIP Growth 1.1% -0.5 (Contraction)

Forex Reserves US$ 296370 million US$ 314925

PHOTOFIND

Nilanjana Chatterjee, F2

.

Finance Quiz

Srinivas Rahul Chaganti, F2

1. _______________chief executive officer (CEO) of Tata Consultancy Services Ltd, received a nearly

60% jump in annual pay in 2013-14 to Rs.18.68 crore, making him the highest paid CEO in India’s IT

industry.

2. _____________ was named the vice-chairman of the India Today Group. He resigned from The Indian Express

newspaper to join IT.

3. The Reserve Bank of India (RBI) has approved the appointment of K.V. Kamath as non-executive

chairman of ___________ bank for three years effective from 1 May, 2014 until 30 April 2017.

4. Reserve Bank of India (RBI) hiked the amount of foreign exchange that individuals can take out of

the country to $_______in the fiscal year from $75,000 earlier?

5. ____________, India’s second largest smart phone brand, has named Vineet Taneja as its new chief

executive officer (CEO).

6. Whom did TATA Motors join hands with to sell Tata Safari Storme merchandise online?

7. India after overtaking ___________ and ___________ countries is now world No. 2 in textile exports.

8. India slips to ___________spot on FDI (Foreign Direct Investment) confidence index.

9. __________and_________ are providing technology for Bangalore-based startup Notion Ink

10. Which are the three Andhra based NBFC’s (Non-Banking Financial Corporation) whose registration

is cancelled by RBI?

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1.

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2.

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ICIC

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Micro

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eBay In

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7.

Germ

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Crossword

Samyuktha Reddy, F2

Horizontal:

1. India's second largest telecom operator ----------- expects better administration and more transparency in

business under Narendra Modi-led NDA government. The company has witnessed the good governance in

Gujarat, where it is a market leader

4. Handset makers in India want the new BJP-led government to rationalise local tax structures and reduce

import duty on devices under Rs 2,000 from existing seven percent to --- percent on an immediate basis.

7. The IT and telecom industry stakeholders are expecting policy stability, better technology enabled ----------

--- and technology adoption from the new Narendra Modi-led Bharatiya Janata Party (BJP) government in

the coming days.

8. The ---- unit in Tiruchi was started with a vision of fostering the economy and generating employment in

the region. Hit by recessionary conditions and dwindling orders, fabrication units of Tiruchi are drawing up a

wish list for the new government at the Centre. The industry hopes that the new government would come to

their rescue by giving a boost to the power sector and provide preference in placing orders for power plant

equipment to the public sector major, ----, on whose well being hinges the fate of the ancillary units in Tiru-

chi.

9. The Deutsche bank's domestic broking arm has maintained its end-year ------ target of 28,000.

Vertical:

2. Last November, the Finance Ministry had announced classifying------ as a notified jurisdictional area since

the island nation has not been providing information requested by tax authorities under exchange of infor-

mation provisions of the double taxation avoidance pact. With the notification, all payments made to ------

would attract 30 per cent withholding tax and Indian entities receiving money from there will be required to

disclose the source of funds. The move was a part of efforts to curb possible tax evasion by entities through ----

--, which is one of the largest sources of Foreign Direct Investment (FDI) into India.

3. --------- Resources chairman Anil Agarwal expects the new government to adopt reforms and forward-

looking policies for unlocking the untapped potential of the country's natural resources sector. "We expect the

new government to have clear reforms and forward looking policies on top of their agenda that can open up

this sector's potential to contribute and strongly impact the GDP growth of the country," Mr Agarwal said in a

statement.

5. Power sector firms expressed optimism that the new government led by the Bharatiya Janata Party (BJP)

will provide a conducive investment environment and will ensure political -------------.

6. ------- is the second-biggest expense in India's import bill. India's incoming government is expected to relax

tough gold import restrictions in the country after its predecessor raised duty on bullion and tightened move-

ment of the precious metal.

10. ------------ party pins hopes on new regime in India for a political solution. The political party leadership,

welcoming the new regime in India, has expressed hope that the Narendra Modi-led government will pressure

Sri Lankan President Mahinda Rajapaksa to deliver on his promises to the country's Tamils.

Cro

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2.

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Answers for PhotoFind:

1. Arun Shourie, an eminent Indian journalist, author and politician. He has worked as an economist

with the World Bank, a consultant to the Planning Commission of India, editor of the Indian Ex-

press and The Times of India and a minister in the Government of India (1998–2004).

2. Satya Nadella, Indian-born, naturalized American engineer, business executive, and the current

CEO of Microsoft Corporation.

3. Sumitra Mahajan, an Indian politician with the BJP. Eighth time MP of the Lok Sabha and the

longest-serving woman member.

4. Logo of Saradha Group of Companies. A financial scam that was caused by the collapse of

a Ponzi scheme run by Saradha Group.

5. Vineet Taneja, CEO, Micromax. Ex-IT business head, Samsung India

6. Myntra founder Mukesh Bansal and Flipkart founders, Sachin and Binny Bansal. Flipkart has

bought Myntra in a deal estimated to be worth $370 million.

NISHKA TEAMNISHKA TEAMNISHKA TEAM

Nishka is a monthly finance magazine brought by the students of the finance club of Christ

University Institute of Management, Kengeri Campus. The idea behind coining this issue of

the magazine is to establish a learning among the students, which helps them to gain an

insight about the world of finance.

Faculty Coordinator

Prof. Shrikant Rao

Coordinators

Niharika Shadra, F1

Niken Jain, F2

Editor

George P Job, F2

Neha Mishra , F2

Introduction

Upasana Gurung, F1

Article coordinators

Ashwathy Edison, F1

Sudeshna Bhattacharya, F1

Article writing

Kalyana KarthiK, F2

Purnima Singh, F2

Srijita Mukherjee, F2

RBI Column

Pawanpreet Kaur, F2

Finance Buzz

Vyom Goel, F2

Market Round-Up

B.S Sravya, F1

Katepalli Alekhya, F2

Economic Rollers

Simmy Kumari, F2

tock Analysis

Sooraj Kumar, F1

Anwesh Jain, F1

Crossword

Samyuktha Reddy, F2

Quiz

Rahul Srinivas, F2

Photofind

Nilanjana Chatterjee, F2

Corporate interview

Sai Nanthini, F2

Designing

Krishnendu Kundu, F2

Niken Jain, F2

CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT, KENGERI CAMPUS

Please mail your valuable feedback/reviews to nishka@mba.christuniversity.in

(For private circulation only)