Disinvestment
process in focus, CAG report dampen investor sentiments; domestic bourses may
rally on FII flows
Domestically, the government's
Economic Survey had pegged GDP growth for fiscal year 2013 at 7.6%. Earlier, the
Centre for Monitoring Indian Economy (CMIE) had also scaled down FY13 GDP growth
forecast to 6.7% on poor monsoon.
According to C Rangarajan -
Chairman of the PM's economic advisory council; fiscal deficit is likely to be
5.06% of the GDP, while current account deficit is expected to be 3.6% of the
GDP. According to him, FY13-end inflation figure is expected to be 6.5-7%. The
food inflation is expected to remain high in the coming months. In recent years
the advisory panel has been optimistic about India
To
address the fiscal deficit woes, Finance Minister P Chidambaram has asked
officials to expedite the process of disinvestment so that state-owned companies
could hit stock markets in time and help the government achieve the target of Rs
30,000 crore in the current fiscal.
Meanwhile, three CAG reports
focus on the alleged losses to the government because of violation of norms in
allocation of coal blocks, the concession agreement and land given to DIAL, and
award of UMPP to companies like Reliance Power and Tata Power. The CAG report
states that allocation of coal blocks during the period from 2004 to 2009 was a
bigger scam than 2G, and has pegged presumptive losses to the government on
these allocations at Rs. 1.86 lakh crore for 17.40 billion tonne of coal. The
CAG said 25 firms including Essar Power, Hindalco, Reliance Power, Tata Steel,
Tata Power and JSPL were benefited from this coal blocks.
At the
current level of 17691.08, the Sensex trades at a PE of 16x FY12E street
earnings. Going ahead, markets would take a cue from the crop output from the
present monsoon season, changes in rupee levels and behavior of crude oil
prices.
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