Niveshak April 2012 Issue with Page Flip version

Thursday, April 5, 2012 , Posted by Team Niveshak at Thursday, April 05, 2012

Dear Niveshaks,
It is the budget season in the country and all the newspapers across the nation are abuzz with analyses of two of the most important budgets, the Railway Budget and the Union Budget.
The Railway Budget was seen as a golden opportunity for Trinamool Congress nominated Dinesh Trivedi to make a mark in Union Politics. However, with an increase in prices ranging from 2 paise to 30 paise per kilometer, across different sections of the Railways, Mr. Trivedi did his reputation no good. The budget will be remembered more for the political drama that unfolded between him and Ms. Mamta Banerjee. With strong demands to roll-back the fare hike, Mr. Trivedi had no option but to resign leaving the TMC to nominate Mr. Mukul Roy as his successor.
The Union Budget rolled out no such surprises, with Mr. Pranab Mukherjee, now a veteran at presenting budgets, presenting a satisfactory blueprint for the next financial year. The crux of the budget was aimed at maintaining the delicate balance between growth (currently at 6.9%, but pegged to reach levels of 7.6%), inflation (which has seen a continued decline) and the burgeoning fiscal deficit (currently at 5.9%, but pegged to lower down to 5.1%).
For the individual investor, an increase in the income tax slab to Rs.2 lakh brings much cheer. However, the provident fund rate reduced by 125 basis points to 8.25% to offset some of the benefits. The auto industry is likely to take a hit, with an increase in prices highly likely. This is mainly due to an increase in excise duty to 12% from the cur-rent 10% levels. The retail sector saw some cheer with the FM committing to allow FDI in Multibrand retail in the near future and also setting august as the deadline to implement Goods and Services Tax.
Overall, the budget was in line with the expectations of many and did not dish out too many surprises. The cover story this edition, features a detailed analysis of the Union Budget, what it means for a company and to the individual.
The last fiscal seems to have overcome some of the gloominess that existed in the market, with top CEO’s pocketing handsome salaries. Indra Nooyi, the Indian born CEO of PepsiCo pocketed a hefty $17 million in compensation, while the Indian born CEO of Citigroup Inc., Vikram Pandit pocketed a handsome $14.5 million.
Protest-hit Maruti Suzuki has decided to invest Rs.900 crore more at its upcoming R&D centre at Rohtak. This comes in the backdrop of a strong shift in customer focus from petrol cars to diesel ones. The Rs.900 crore investment is over and above the Rs.1700 crore investment in the plant in Gurgaon, which is set to be operational by mid-2013.
This month’s issue brings to you an insight into the Union Budget of Indian Government 2012-2013. The article of the month explains the legal aspects of algorithmic, high frequency and flash trading. The issue also features interesting reads on the investment strategies of India and China in African continent, scenario of weather based insurance index in India and the concept of sovereign credit ratings. This month’s classroom section explains to you the concept of ‘Quantitative Easing’.
With summer placements about to begin for most of our readers, we, at Niveshak wish you all the very best in your respective internship stints.
We would also like to thank our readers for mailing their wonderful articles and appreciation e-mails. It is your constant encouragement and enthusiasm that keeps us going.
Kindly send in your suggestions and feedback to and as always,
Stay invested.

Team Niveshak
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