Pages

Tuesday, March 15, 2011

Radiation warning sign Exposure can lead to cancer

By Richard Warry BBC News
Radiation warning sign Exposure can lead to cancer

The Japanese authorities say radiation levels from the Fukushima Daiichi nuclear plant climbed to potentially harmful levels for a brif interval on Tuesday.

Residents living within 30km (18 miles) of the plant have been advised to leave the area, or to stay indoors, and try to make their homes airtight.

Experts have stressed that swift action should be able to minimise any impact on human health.

What are the immediate health effects of exposure to radiation?

Exposure to moderate levels of radiation - above one gray - can result in radiation sickness, which produces a range of symptoms.

Nausea and vomiting often begin within hours of exposure, followed by diarrhoea, headaches and fever.

After the first round of symptoms, there may be a brief period with no apparent illness, but this may be followed within weeks by new, more serious symptoms.

At higher levels of radiation, all of these symptoms may be immediately apparent, along with widespread - and potentially fatal - damage to internal organs.

Exposure to a radiation dose of four gray will typically kill about half of all healthy adults.

For comparison, radiation therapy for cancer typically involves several doses of between one and seven gray at a time - but these doses are highly controlled, and usually specifically targeted at small areas of the body.
Radiation dose Effect

Source: World Nuclear Association

2 mSv/yr (millisieverts per year)


Typical background radiation experienced by everyone (average 1.5 mSv in Australia, 3 mSv in North America)

9 mSv/yr


Exposure by airline crew flying New York-Tokyo polar route

20 mSv/yr


Current limit (averaged) for nuclear industry employees

50 mSv/yr


Former routine limit for nuclear industry employees. It is also the dose rate which arises from natural background levels in several places in Iran, India and Europe

100 mSv/yr


Lowest level at which any increase in cancer is clearly evident.

350 mSv/lifetime


Criterion for relocating people after Chernobyl accident

1,000 mSv single dose


Causes (temporary) radiation sickness such as nausea and decreased white blood cell count, but not death. Above this, severity of illness increases with dose

5,000 mSv single dose


Would kill about half those receiving it within a month

How is radiation sickness treated?

The first thing to do is to try to minimise further contamination by removing clothes and shoes, and gently washing the skin with soap and water.

Drugs are available that increase white blood-cell production to counter any damage that may have occurred to the bone marrow, and to reduce the risk of further infections due to immune-system damage.

There are also specific drugs that can help to reduce the damage to internal organs caused by radioactive particles.

How does radiation have an impact on health?

Radioactive materials that decay spontaneously produce ionising radiation, which has the capacity to cause significant damage to the body's internal chemistry, breaking the chemical bonds between the atoms and molecules that make up our tissues.

The body responds by trying to repair this damage, but sometimes it is too severe or widespread to make repair possible. There is also a danger of mistakes in the natural repair process.

Regions of the body that are most vulnerable to radiation damage include the cells lining the intestine and stomach, and the blood-cell producing cells in the bone marrow.

The extent of the damage caused is dependent on how long people are exposed to radiation, and at what level.
Radiation and cancer

Most experts agree even small doses of ionising radiation - as low as 100 millisieverts - can increase the risk of cancer, but by a very small amount.
In general, the risk of cancer increases as the dose of radiation increases. Exposure to one sievert of radiation is estimated to increase the lifetime risk of fatal cancer by around 5%.
The thyroid gland and bone marrow are particularly sensitive to ionising radiation.
Leukemia, a type of cancer that arises in the bone marrow, is the most common radiation-induced cancer. Leukemias may appear as early as a few years after radiation exposure.
Other cancer can also result from exposure to radiation, but may not develop for at least a decade. These include cancers of the lung, skin, thyroid, breast and stomach.

What are the most likely long-term health effects?

Cancer is the biggest long-term risk. Usually when the body's cells reach their "sell-by date" they commit suicide. Cancer results when cells lose this ability, and effectively become immortal, continuing to divide and divide in an uncontrolled fashion.

The body has various processes for ensuring that cells do not become cancerous, and for replacing damaged tissue.

But the damage caused by exposure to radiation can completely disrupt these control processes, making it much more likely that cancer will result.

Failure to properly repair the damage caused by radiation can also result in changes - or mutations - to the body's genetic material, which are not only associated with cancer, but may also be potentially passed down to offspring, leading to deformities in future generations. These can include smaller head or brain size, poorly formed eyes, slow growth and severe learning difficulties.

Are children at greater risk?

Potentially yes. Because they are growing more rapidly, more cells are dividing, and so the potential for things to go wrong is greater.

Following the Chernobyl nuclear reactor accident in the Ukraine in 1986, the World Health Organization recorded a dramatic increase in thyroid cancer among children in the vicinity.

This was because the radioactive materials released during the accident contained high levels of radioactive iodine, a material that accumulates in the thyroid.

What risk does Fukushima pose currently?

The Japanese authorities have recorded a radiation level of up 400 millisieverts per hour at the nuclear plant itself.

A sievert is essentially equivalent to a gray, but tends to be used to measure lower levels of radiation, and for assessing long-term risk, rather than the short-term acute impact of exposure.

Professor Richard Wakeford, an expert in radiation exposure at the University of Manchester, said exposure to a dose of 400 millisieverts was unlikely to cause radiation sickness - that would require a dose of around twice that level (one sievert/one gray).

However, it could start to depress the production of blood cells in the bone marrow, and was likely to raise the lifetime risk of fatal cancer by 2-4%. Typically, a Japanese person has a lifetime risk of fatal cancer of 20-25%.

Prof Wakeford stressed only emergency workers at the plant were at risk of exposure to such a dose - but it was likely that they would only be exposed for short periods of time to minimise their risk.

The level of exposure for the general population, even those living close to the plant, was unlikely to be anywhere near as high.

How can the Japanese authorities minimise the cost to human health?

Prof Wakeford said that provided the Japanese authorities acted quickly, most of the general population should be spared significant health problems.

He said in those circumstances the only people likely to be at risk of serious health effects were nuclear workers at the plant or emergency workers exposed to high levels of radiation.

He said the top priority would be to evacuate people from the area and to make sure they did not eat contaminated food. The biggest risk was that radioactive iodine could get into their system, raising the risk of thyroid cancer.

To counter that risk, people - in particular children - could be given tablets containing stable iodine which would prevent the body absorbing the radioactive version.

The Japanese already have a lot of iodine in their natural diet, so that should help too.

How does Fukushima compare to Chernobyl?

Professor Gerry Thomas, who has studied the aftermath of the Chernobyl disaster, said: "It is very unlikely that this will turn into anything that resembles Chernobyl.

"In Chernobyl you had a steam explosion which exposed the reactor core, which meant you had a lot of radiation shooting up into the atmosphere."

Prof Thomas said although the Chernobyl disaster had led to a rise in thyroid cancer cases, the only people affected were those living in the immediate area of the explosion and who were young at the time.

Thursday, March 10, 2011

Stock Exchanges and Stock Indices--National and International

Handout No.14
Stock Market
A stock market / share market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008. The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11 times the size of the entire world economy.
Brief History of Stock Market:
In 12th century France the courratiers de change were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. Because these men also traded with debts, they could be called the first brokers. In 1602, the Dutch East India Company issued the first share on the Amsterdam Stock Exchange. It was the first company to issue stocks and bonds. The Amsterdam Stock Exchange is also said to have been the first stock exchange to introduce continuous trade in the early 17th century. There are now stock markets in virtually every developed and most developing economies, with the world's biggest markets being in the United States, United Kingdom, Japan, India, China, Canada, Germany, France and the Netherlands.
Stock market crash:
A stock market crash is often defined as a sharp dip in share prices of equities listed on the stock exchanges. In parallel with various economic factors, a reason for stock market crashes is also due to panic and investing public's loss of confidence. Often, stock market crashes end speculative economic bubbles.
There have been famous stock market crashes that have ended in the loss of billions of dollars and wealth destruction on a massive scale. An increasing number of people are involved in the stock market, especially since the social security and retirement plans are being increasingly privatized and linked to stocks and bonds and other elements of the market. There have been a number of famous stock market crashes like the Wall Street Crash of 1929, the stock market crash of 1973–4, the Black Monday of 1987, the Dot-com bubble of 2000, and the Stock Market Crash of 2008.
One of the most famous stock market crashes started October 24, 1929 on Black Thursday. Another famous crash took place on October 19, 1987 – Black Monday.

Stock Market Indices:
International
BBC Global 30 - world stock market index of 30 of the largest companies by stock market value in Europe, Asia and the Americas.
iShares MSCI EAFE Index (EFA) - provides investment results generally equivalent to publicly traded securities in the European, Australasian and Far Eastern markets. Maintained by Morgan Stanley Capital International.
MSCI World - free-float weighted equity index. Index includes stocks of all the developed markets. Common benchmark for world stock funds.
S&P Global 1200 - global stocks index covering 31 countries and around 70 percent of global market capitalization.
United States
AMEX Composite - composite value of all of the stocks traded on the American Stock Exchange.
Dow Jones Indexes - leading global index provider.
Dow Jones Industrial Average - one of the most widely quoted of all the market indicators. Consists of 30 of the largest publicly traded firms in the U.S.
Dow Jones Wilshire 5000 - designed to track the performance of all publicly traded companies based in the U.S.
NASDAQ Composite - broad market index of all of the common stocks and similar securities traded on the NASDAQ stock market.
NYSE Composite - covers all common stocks listed on the New York Stock Exchange.
Russell Indexes - leading U.S. equity index family for institutional investors.
Russell 3000 Index - measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.
S&P 500 - stock market index containing the stocks of 500 Large-Cap corporations. Comprises over 70% of the total market cap of all stocks traded in the U.S. Owned by Standard & Poor's.
Africa
Egypt
Case 30 - index of the Cairo & Alexandria Stock Exchange; includes the top 30 companies in terms of liquidity and activity.
Morocco
MASI Index - stock index of the Casablanca Stock Exchange.
South Africa
Johannesburg All Share Index
Asia and Pacific
S&P ASIA 50
Australia
All Ordinaries - index of shares listed on the Australian Stock Exchange (ASX).
S&P/ASX 200
China
SSE Composite - index of all listed stocks (A shares and B shares) at Shanghai Stock Exchange.
Hong Kong
Hang Seng Indexes - record daily changes of the largest companies of the Hong Kong stock market (represent about 67% of capitalization of the Hong Kong Stock Exchange).
India
BSE SENSEX 30 - includes the 30 largest and most actively traded stocks on the Bombay Stock Exchange.
S&P CNX Nifty - index for 50 large companies on the National Stock Exchange of India.
Indonesia
JSX Composite - index of all stocks traded on the Jakarta Stock Exchange.
Japan
Nikkei 225 - stock market index for the Tokyo Stock Exchange.
Malaysia
FTSE Bursa Malaysia Index
New Zealand
NZX 50
Pakistan
KSE 100 - index acting as a benchmark to compare prices on the Karachi Stock Exchange.
Philippines
PSEi Index - index acting as a benchmark to compare prices on the Karachi Stock Exchange.
Singapore
ST Index
South Korea
KOSPI - index of all common shares on the Korean Stock Exchanges.
Taiwan
TSEC - capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange.


Canada
S&P/TSX Composite - index of the stock prices of the largest companies on Toronto Stock Exchange.
Europe
Dow Jones Euro Stoxx 50 - free-float market capitalization-weighted index of 50 Eurozone stocks. Provides a blue-chip representation of Supersector leaders in the Eurozone.
FTSEurofirst Index Series - provides pan-European indices. Joint product of FTSE Group, the leading global index provider, and Euronext, an integrated cross border European exchange.
FTSEurofirst 300 Index - free-float capitalization-weighted price index. Measures the performance of Europe's largest 300 companies by market capitalization. Covers 70% of Europe's market cap.
OMX Baltic Index - covers stock exchanges in Estonia, Latvia and Lithuania.
OMX Nordic 40 - market value-weighted index of the 40 most-traded stock classes of shares in Copenhagen, Helsinki, Reykjavik and Stockholm.
S&P Europe 350 - free float market cap weighted index. Covers at least 70% of European equity market capitalization.
Belgium
BEL20
Czech Republic
PX Index
Denmark
OMX Copenhagen 20
Finland
OMX Helsinki 25
France
CAC 40 - contains 40 stocks selected among the top 100 market capitalisation and the most active stocks listed on Euronext Paris.
Germany
DAX - measures the performance of the Prime Standard’s 30 largest German companies in terms of order book volume and market capitalization.
Ireland
ISEQ 20 - represents the 20 most liquid and largest capped equities quoted on the Irish Stock Exchange.
Italy
S&P/MIB Index - capitalization weighted index developed by S&P and Borsa Italiana.

Netherlands
AEX Index - index of Euronext Amsterdam, consists of the 25 most active securities in the Netherlands.
Poland
Warsaw Stock Exchange WIG Index
Portugal
PSI-20
Russia
MICEX Index - capital-weighted price index of the 30 major and most liquid Russian stocks traded at the Moscow Interbank Currency Exchange.
RTS Index - index of 50 Russian stocks traded on the RTS Stock Exchange.
Spain
IBEX 35
Sweden
OMX Stockholm 30 Index
Switzerland
Swiss Market Index (SMI) - includes the twenty largest and most liquid SPI stocks; represents about 85% of the free- float market capitalization of the Swiss equity market.
United Kingdom
FTSE 100 Index (Financial Times Stock Exchange Index) - capitalization-weighted index of the 100 most highly capitalized companies traded on the London Stock Exchange.
Middle East
Israel
TA-25 - index tracks the prices of the shares of the 25 companies with the highest market capitalization on the Tel-Aviv exchange.
Jordan
ASE Market Capitalization Weighted Index
Oman
MSM 30
South America
iShares S&P Latin America 40 Index (ILF)
Argentina
MERVAL - index of the Buenos Aires Stock Exchange.
Brazil
Bovespa Index - index of about 50 stocks that are traded on the Sao Paulo Stock Exchange.

Mexico
Indice de Precios y Cotizaciones (IPC) - index of 35 stocks traded on the Bolsa Mexicana de Valores.
Bombay Stock Exchange:
Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage of over 136 years of existence. What is now popularly known as BSE was established as "The Native Share & Stock Brokers' Association" in 1875.

BSE is the first stock exchange in the country which obtained permanent recognition (in 1956) from the Government of India under the Securities Contracts (Regulation) Act (SCRA) 1956. It migrated from the open out-cry system to an online screen-based order driven trading system in 1995. Earlier an Association Of Persons (AOP), BSE is now a corporatised and demutualised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI). With demutualisation, BSE has two of world's prominent exchanges, Deutsche Börse and Singapore Exchange, as its strategic partners.

Over the past 136 years, BSE has facilitated the growth of the Indian corporate sector by providing it with cost and time efficient access to resources. There is perhaps no major corporate in India which has not sourced BSE's services in raising resources from the capital market.

Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in handling of transactions through its electronic trading system. The companies listed on BSE command a total market capitalization of USD Trillion 1.06 as of July, 2009. BSE reaches to over 400 cities and town nation-wide and has around 4,937 listed companies, with over 7745 scrips being traded as on 31st July 09.

The BSE Index, SENSEX, is India's first and most popular stock market benchmark index. Sensex is tracked worldwide. It constitutes 30 stocks representing 12 major sectors. The SENSEX is constructed on a 'free-float' methodology, and is sensitive to market movements and market realities. Apart from the SENSEX, BSE offers 23 indices, including 13 sectoral indices. It has entered into an index cooperation agreement with Deutsche Börse and Singapore Stock Exchange. These agreements have made SENSEX and other BSE indices available to investors across the globe. Moreover, Barclays Global Investors (BGI), at Hong Kong, the global leader in ETFs through its iShares® brand, has created the exchange traded fund (ETF) called 'iShares® BSE SENSEX India Tracker' which tracks the SENSEX. The ETF enables investors in Hong Kong to take an exposure to the Indian equity market.

The BSE On-line Trading (BOLT): BSE On-line Trading (BOLT) facilitates on-line screen based trading in securities. BOLT is currently operating in 25,000 Trader Workstations located across over 359 cities in India.

BSEWEBX.com: In February 2001, BSE introduced the world's first centralized exchange-based Internet trading system, BSEWEBX.com. This initiative enables investors anywhere in the world to trade on the BSE platform.

Surveillance: BSE's On-Line Surveillance System (BOSS) monitors on a real-time basis the price movements, volume positions and members' positions and real-time measurement of default risk, market reconstruction and generation of cross market alerts.

Scrip-wise Weights in SENSEX:

Company Weight in Index (%)
RELIANCE
12.74
INFOSYS TECH
10.20
ICICI BANK L
7.92
LARSEN & TOU
6.77
HOUSING DEVE
5.21
I T C LTD
5.10
HDFC BANK LT
5.04
STATE BANK O
4.50
ONG CORP LTD
3.77
TCS LTD.
3.55
BHEL
3.30
BHARTI ARTL
3.06
TATA STL
3.00
STERLITE IN
2.43
HIND UNI LT
2.03
NTPC LTD
1.99
TATA MOTORS
1.82
HINDALCO IN
1.80
MAHINDRA & M
1.75
MARUTISUZUK
1.71
TATA POWER
1.67
WIPRO LTD.
1.63
GRASIM INDUS
1.48
HEROHONDA M
1.42
JAIPRAK ASSO
1.27
REL INFRA
1.15
SUN PHARMACE
1.02
DLF LIMITED
0.98
REL COM LTD
0.91
ACC LTD
0.79
S&P CNX Nifty:
S&P CNX Nifty is a well diversified 50 stock index accounting for 23 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds.

S&P CNX Nifty is owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialised company focused upon the index as a core product. IISL has a Marketing and licensing agreement with Standard & Poor's (S&P), who are world leaders in index services.
• The total traded value for the last six months of all Nifty stocks is approximately 44% of the traded value of all stocks on the NSE
• Nifty stocks represent about 63% of the Free Float Market Capitalization as on Dec 31, 2010.
• Impact cost of the S&P CNX Nifty for a portfolio size of Rs.50 lakhs is 0.06%.
• S&P CNX Nifty is professionally maintained and is ideal for derivatives trading


SEBI:
Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992. The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities and Exchange Board of India as “…..to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto” SEBI is headquartered in the popular business district of Bandra-Kurla complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennai and Ahmedabad.
Chairmen of SEBI:
Shri U. K. Sinha, February 18 2011—till date
Shri C.B.Bhave Feb, 2008—February 17, 2011
Shri M.. Damodaran February 18, 2005 to February 18, 2008
Shri G. N. Bajpai February 20, 2002 to February 18, 2005
Shri D. R. Mehta 21, 1995 to February 20, 2002
Shri S. S. Nadkarni January 17, 1994 to January 31, 1995
Shri G. V. Ramakrishna August 24, 1990 to January 17, 1994
Dr. S. A. Dave April 12, 1988 to August 23, 1990

Wednesday, March 9, 2011

Stock Exchanges and Stock Indices--Part One

Handout No.13
Stock Market Concepts
Acquisition
When one company purchases a majority stake in the acquired.
American Depository Receipt (ADR)
A negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas.
American Depository Share (ADS)
A share issued under deposit agreement that represents an underlying security in the issuer's home country. The terms American depositary receipt (ADR) and American depositary share (ADS) are often thought to mean the same thing. However, an ADS is the actual share trading, while an ADR represents a bundle of ADSs.
Annual General Meeting (AGM)
A mandatory yearly meeting of shareholders that allows stakeholders to stay informed and involved with company decisions and workings.
Annual Report
A company's annual statement of financial operations. Annual reports include a balance sheet, income statement, auditor's report, and a description of the company's operations.
Annuity
A financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years.
Arbitrage
The difference between price of a security in two different exchanges. The difference can be used to make profits by persons holding a security to sell the same at an exchange where its price is high and buy it at an exchange where it is available at a lower price.
Back door listing
A strategy of going public used by a company that fails to meet the criteria for listing on a stock exchange. To get onto the exchange, the company desiring to go public acquires an already listed company.
Bad Debt
A debt that is not collectible and therefore worthless to the creditor. This debt, once considered to be bad, will be written off by the company as an expense.
Balance Sheet
A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
Balanced Fund
A mutual fund that invests its assets into the money market, bonds, preferred stock, and common stock with the intention to provide both growth and income.
Bankruptcy
The state of a person or firm unable to repay debts.
Basis Point
A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.
Bear Market
A market condition in which the prices of shares are falling or are expected to fall.
Best Bid
The highest quoted bid for a particular share among all those offered by competing market makers.
Blue Chip
A nationally recognized, well-established and financially sound company.
Bond
A debt investment with which the investor loans money to an entity (company or government) that borrows the funds for a defined period of time at a specified interest rate


Book Building
The process by which an underwriter attempts to determine at what price to offer an IPO based on demand from institutional investors.
Book Closure
A company's announcement of a dividend or bonus to investors.
Book Value
The net asset value of a company, calculated by total assets minus intangible assets (patents, goodwill) and liabilities.
Boom
A period of time during which sales or business activity increases rapidly.
Bottom
The lowest point or price reached by a financial security, commodity, index or economic cycle in a given time period, which is followed by a steady increase.
Broker
An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.
Bubble
A surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs.
Bull Market
A financial market of a certain group of shares in which prices are rising or are expected to rise.
Bullion
Gold and silver that is officially recognized as high quality (at least 99.5% pure), and is in the form of bars rather than coins.
CAGR
The year-over-year growth rate of an investment over a specified period of time. It's an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate
Capital Gain
An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold.
Capital Gains Tax
A type of tax levied on capital gains incurred by individuals and corporations. Capital gains are the profits that an investor realizes when he or she sells the capital asset for a price that is higher than the purchase price.
Cash Flow Statement
This document provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter.
Choppy Market
A stock market condition whereby prices swing up and down considerably but with no resulting overall price movement in either direction.
Closely Held Shares
The shares held by individuals closely related to a company.
Closing Price
The final price at which a security is traded on a given trading day.
Commodity
A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services.
Commodity Index
An index that tracks a basket of commodities to measure their performance.
Common Shareholder
An individual, business or institution that holds common shares in a company, giving the holder an ownership stake in the company. This will also give the holder the right to vote on corporate issues such as board elections and corporate policy, along with the right to any common dividend payments.
Crash
A major decline in a financial market.
Demat – Dematerialization
The move from physical certificates to electronic book keeping.



Dalal Street
A term that refers to the Bombay Stock Exchange, the major stock exchange in India. The street is home not only the Bombay Stock Exchange but also a large number of other financial institutions.
Day Trader
A stock trader who holds positions for a very short time (from minutes to hours) and makes numerous trades each day. Most trades are entered and closed out within the same day.
De-merger
A corporate strategy to sell off subsidiaries or divisions of a company.
Debenture
A type of debt instrument that is not secured by physical asset or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond in order to secure capital.
Debt
An amount of money borrowed and owed by one party to another.
Debt Fund
An investment pool, such as a mutual fund or ETF, in which core holdings are fixed income investments.The fee ratios on debt funds are lower, on average, than equity funds because the overall management costs are lower.
Deflation
A general decline in prices, often caused by a reduction in the supply of money or credit. It is the opposite of inflation.
Delisting
The removal of a listed security from the exchange on which it trades.
Derivative
A security whose price is dependent upon or derived from one or more underlying assets. The derivative is a contract between two or more parties. Its value is determined by fluctuations in the underlying asset like commodities, bonds, stocks, etc
Disinvestment
The action of an organization or government selling or liquidating an asset or subsidiary.
Diversification
A risk-management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.
Dividend
Distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Downgrade
A negative change in the rating of a security.
EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization
EBITDA is a good metric to evaluate profitability
EPS - Earnings Per Share
EPS is the earning on each share of a company
ESOP - Employee Stock Ownership Plan
A qualified, defined contribution, employee benefit plan designed to invest primarily in the stock of the sponsoring employer.
FCCB - Foreign Currency Convertible Bond
A type of convertible bond issued in a currency different than the issuer's domestic currency.
FDI - Foreign Direct Investment
An investment abroad, usually where the company being invested in is controlled by the foreign corporation.
FII - Foreign Institutional Investor.
Fiscal Year
Any 12-month period that a company uses for accounting purposes.
Fund Of Funds
A mutual fund that invests in other mutual funds.
Fundamental Analysis
Fundamental analysis is to produce a value that an investor can compare with the security's current price in hopes of figuring out what sort of position to take on that stock.


GAAP - Generally Accepted Accounting Principles
The common set of accounting principles, standards and procedures that companies use to compile their financial statements.
GDR - Global Depositary Receipt
A bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank.
Gilt Fund
A mutual fund that invests in several different types of medium and long-term government securities in addition to top quality corporate debt.
Going Public
The process of selling shares that were formerly privately held to new investors for the first time. Also known as Initial public offering (IPO).
Growth Fund
A diversified portfolio of stocks that has capital appreciation as its primary goal, and thereby invests in companies that reinvest their earnings into expansion, acquisitions, and/or research and development.
Haircut
The difference between prices at which a market maker can buy and sell a security.
Hammering
The rapid and concentrated sale of a stock thought to be overvalued by the market.
Hedge
Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract.
Hedge Fund
An aggressively managed portfolio of investments that uses advanced investment strategies such as leverage, long, short and derivative positions in both domestic and international markets with the goal of generating high returns.
Holding Period
In a long position, holding period refers to the time between an asset's purchase and its sale. In a short sale, the length of time for which the short position is held.
Initial Public Offering – IPO
The first sale of stock by a private company to the public.

Iceberg Order
A large single order that has been divided into smaller lots, usually by the use of an automated program, for the purpose of hiding the actual order quantity.
In And Out
The purchase and sale of a security within a short period of time, usually on the same day.
Income Fund
A mutual fund that seeks to provide stable current income by investing in securities that pay interest or dividends.
Index
A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is essentially an imaginary portfolio of securities representing a particular market or a portion of it.
Index Fund
A portfolio of investments that is weighted the same as a stock-exchange index in order to mirror its performance.
Inflation
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.
Inorganic Growth
A growth in the operations of a business that arises from mergers or takeovers, rather than an increase in the companies own business activity.
Insider Trading
The buying or selling of a security by someone who has access to material, nonpublic information about the security. Insider trading can be illegal or legal depending on when the insider makes the trade. It is illegal when the material information is still nonpublic.
Institutional Investor
A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions.
Liquidity
The degree to which an asset or security can be bought or sold in the market without affecting the asset's price.
Maturity Date
The date on which the principal amount of a note, draft, acceptance bond or other debt instrument becomes due and is repaid to the investor and interest payments stop.
Medium Term
An intermediate period of time to hold an asset.
Mid Cap
Companies having a market capitalization between Rs 500 crore and Rs 1,000 crore
Monetary Policy
The actions of a reserve bank of india, that determine the size and rate of growth of the money supply, which in turn affects interest rates.
Money Market
The securities market dealing in short-term debt and monetary instruments.
Mutual Fund
A security that gives small investors access to a well-diversified portfolio of equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed.
NAV - Net Asset Value
The total value of the fund's portfolio less liabilities.
Open End Fund
A type of mutual fund where there are no restrictions on the amount of shares the fund will issue. If demand is high enough, the fund will continue to issue shares no matter how many investors there are. Open-end funds also buy back shares when investors wish to sell.
Oversubscribed
A situation in which the demand for an initial public offering of securities exceeds the number of shares issued.
P/E Ratio - Price-Earnings Ratio
PE ratio or PE multiples is the ratio arrived by dividing Current market Price by Earnings per share of that stock.
Pension Fund
A fund established by an employer to facilitate and organize the investment of employees' retirement funds contributed by the employer and employees.
Portfolio
The group of assets - such as stocks, bonds and mutuals - held by an investor.
Preferred Stock
A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock.
Company
A company that has issued securities through an initial public offering and which are traded on at least one stock exchange.
Public Offering
he sale of equity shares or other financial instruments by an organization to the public in order to raise funds for business expansion and investment.
Redemption
The return of an investor's principal in a security, such as a stock, bond, or mutual fund.
Registrar
An institution or organization that is responsible for keeping records of bondholders and shareholders.
Sensex
An abbreviation of the Bombay Exchange Sensitive Index (Sensex) - the benchmark index of the Bombay Stock Exchange (BSE). It is composed of 30 of the largest and most actively-traded stocks on the BSE.
Warrant
A derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame.
Write-Off
A reduction in the value of an asset or earnings by the amount of an expense or loss.
YOY - Year Over Year
A method of evaluating two or more measured events that compares the results of measurement at one time period with those from another time period, on an annualized basis.
Yield
Yield is the annual rate of return for any investment and is expressed as a percentage.
Derivatives
The term "Derivative" indicates that it has no independent value, i.e. its value is entirely "derived" from the value of the underlying asset. The underlying asset can be securities, commodities, bullion, currency, live stock or anything else. In other words, Derivative means a forward, future, option or any other hybrid contract of pre determined fixed duration, linked for the purpose of contract fulfillment to the value of a specified real or financial asset or to an index of securities. With Securities Laws (Second Amendment) Act,1999, Derivatives has been included in the definition of Securities.
Futures Contract
Futures Contract means a legally binding agreement to buy or sell the underlying security on a future date. Future contracts are the organized/standardized contracts in terms of quantity, quality (in case of commodities), delivery time and place for settlement on any date in future. The contract expires on a pre-specified date which is called the expiry date of the contract. On expiry, futures can be settled by delivery of the underlying asset or cash. Cash settlement enables the settlement of obligations arising out of the future/option contract in cash.
Option contract
Options Contract is a type of Derivatives Contract which gives the buyer/holder of the contract the right (but not the obligation) to buy/sell the underlying asset at a predetermined price within or at end of a specified period. The buyer / holder of the option purchases the right from the seller/writer for a consideration which is called the premium. The seller/writer of an option is obligated to settle the option as per the terms of the contract when the buyer/holder exercises his right. The underlying asset could include securities, an index of prices of securities etc.
Under Securities Contracts (Regulations) Act,1956 options on securities has been defined as "option in securities" meaning a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji, a mandi, a teji mandi, a galli, a put, a call or a put and call in securities.
An Option to buy is called Call option and option to sell is called Put option. Further, if an option that is exercisable on or before the expiry date is called American option and one that is exercisable only on expiry date, is called European option. The price at which the option is to be exercised is called Strike price or Exercise price.
Therefore, in the case of American options the buyer has the right to exercise the option at anytime on or before the expiry date. This request for exercise is submitted to the Exchange, which randomly assigns the exercise request to the sellers of the options, who are obligated to settle the terms of the contract within a specified time frame.
As in the case of futures contracts, option contracts can be also be settled by delivery of the underlying asset or cash. However, unlike futures cash settlement in option contract entails paying/receiving the difference between the strike price/exercise price and the price of the underlying asset either at the time of expiry of the contract or at the time of exercise / assignment of the option contract.
The operations in the Indian market have been confined to call options known as teji, put options known as mandi, their combination in the form of straddles known as jhota or do ranga and bhav-bhav on stocks only. While in option trading markets in the world, options with exercise prices are available so that the call options are accordingly labeled as in-the- money, at-the-money or out-of-money in the Indian markets only out-of-moneycall options, i.e.options with an exercise price higher than the current stock price are traded. Hence the name teji for a value, the option premium. The buyer of the option is called teji lagaii-wal. Similarly, the put options traded are also those which are out-of-money options, i.e.,options with an exercise price lower than the present stock price. The writers of such options agree to buy a share in the event of its price falling below the exercise price, i.e., mandi , in consideration for a premium. The writer of an option of this type is called mandi khaii-wal while the buyer is a mandi lagaii-wal. Both teji and mandi usually have the expiry time at the stroke of 15 minutes before closing the time of trading of the next business day.
Index Futures and Index Option Contracts
Futures contract based on an index i.e. the underlying asset is the index, are known as Index Futures Contracts. For example, futures contract on NIFTY Index and BSE-30 Index. These contracts derive their value from the value of the underlying index.
Similarly, the options contracts, which are based on some index, are known as Index options contract. However, unlike Index Futures, the buyer of Index Option Contracts has only the right but not the obligation to buy / sell the underlying index on expiry. Index Option Contracts are generally European Style options i.e. they can be exercised / assigned only on the expiry date.
An index, in turn derives its value from the prices of securities that constitute the index and is created to represent the sentiments of the market as a whole or of a particular sector of the economy. Indices that represent the whole market are broad based indices and those that represent a particular sector are sectoral indices.
In the beginning futures and options were permitted only on S&P Nifty and BSE Sensex. Subsequently, sectoral indices were also permitted for derivatives trading subject to fulfilling the eligibility criteria. Derivative contracts may be permitted on an index if 80% of the index constituents are individually eligible for derivatives trading. However, no single ineligible stock in the index shall have a weightage of more than 5% in the index. The index is required to fulfill the eligibility criteria even after derivatives trading on the index has begun. If the index does not fulfill the criteria for 3 consecutive months, then derivative contracts on such index would be discontinued.
By its very nature, index cannot be delivered on maturity of the Index futures or Index option contracts therefore, these contracts are essentially cash settled on Expiry.
Bond Index
A bond index is used to measure the performance of bond markets. The index is used as a benchmark against which investment managers measure their performance. It is also used as a measure to compare the performance of different asset classes. The government bond market is the most liquid segment of the bond market.
Volatility Index
Volatility Index is a measure of expected stock market volatility, over a specified time period, conveyed by the prices of stock / index options. It depicts the collective sentiment of the market on the implied future volatility.
Currency Futures
Currency futures are contracts to buy or sell a specific underlying currency at a specific time in the future, for a specific price. Currency futures are exchange-traded contracts and they are standardized in terms of delivery date, amount and contract terms.
Currency future contracts allow investors to hedge against foreign exchange risk. Since these contracts are marked-to-market daily, investors can--by closing out their position--exit from their obligation to buy or sell the currency prior to the contract's delivery date.
Depository
A depository is an organisation which holds securities (like shares, debentures, bonds, government securities, mutual fund units etc.) of investors in electronic form at the request of the investors through a registered Depository Participant. It also provides services related to transactions in securities.
Depositories are registered with SEBI
At present two Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) are registered with SEBI.
Dematerialisation
27.Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited into the BO’s account with his DP.

Monday, March 7, 2011

Union Budget 2011-12

OPPORTUNITIES
 Swift and broad based growth in 2010-11 has put the economy back to its pre-crisis growth trajectory. Fiscal consolidation has been impressive.
 Significant progress in critical institutional reforms that would set the pace for double-digit growth in the near future.
 Dynamism in the rural economy due to scaled up flow of resources to the rural areas.
CHALLENGES
 Structural concerns on inflation management to be addressed by improving supply response of agriculture to the expanding domestic demand and through stronger fiscal consolidation.
 Implementation gaps, leakages from public programmes and the quality of outcomes pose a serious challenge.
 Impression of drift in governance and gap in public accountability is misplaced.
 Corruption as a problem to be fought collectively. Government to improve the regulatory standards and administrative practices.
 Inputs from colleagues on both sides of House are important in the wider national interest.
 Budget 2011-12 to serve as a transition towards a more transparent and result oriented economic management system in India.
 Gross Domestic Product (GDP) estimated to have grown at 8.6 per cent in
 2010-11 in real terms. Economy has shown remarkable resilience.
 Continued high food prices have been principal concern this year.
 Consumers denied the benefit of seasonal fall in prices despite improved
 availability of food items, revealing shortcomings in distribution and marketing systems.
 Monetary policy measures taken expected to further moderate inflation in coming months.
 Exports have grown by 29.4 per cent, while imports have recorded a growth of 17.6 per cent during April to January 2010-11 over the corresponding period last year.
 Indian economy expected to grow at 9 per cent with an outside band of +/- 0.25 per cent in 2011-12.
 Average inflation expected lower next year and current account deficit smaller.
SUSTAINING GROWTH
Fiscal consolidation
• Fiscal consolidation targets at Centre and States have shown positive effect on macro-economic management of the economy.
• Amendment to Centre’s FRBM Act, 2003 laying down the fiscal road map for the next five years to be introduced in the course of the year.
• Proposal to introduce the Public Debt Management Agency of India Bill in the next financial year.
Tax Reforms
 Direct Taxes Code (DTC) to be finalised for enactment during 2011-12. DTC proposed to be effective from April 1, 2012.
 Areas of divergence with States on proposed Goods and Services Tax (GST) have been narrowed. As a step towards roll out of GST, Constitution Amendment Bill proposed to be introduced in this session of Parliament.
 Significant progress in establishing GST Network (GSTN), which will serve as IT infrastructure for introduction of GST.
Expenditure Reforms
 A Committee already set up by Planning Commission to look into the extant classification of public expenditure between plan, non-plan, revenue and capital.
Subsidies
 Nutrient Based Subsidy (NBS) has improved the availability of fertiliser;
 Government actively considering extension of the NBS regime to cover urea.
 Government to move towards direct transfer of cash subsidy to people living below poverty line in a phased manner for better delivery of kerosene, LPG and fertilisers. Task force set up to work out the modalities for the proposed system.
People’s ownership of PSUs
 Overwhelming response to public issues of Central Public Sector Undertakings during current year.
 Higher than anticipated non-tax revenue has led to reschedulement of some disinvestment issues planned for current year.
 Rs. 40,000 crore to be raised through disinvestment in 2011-12.
 Government committed to retain at least 51 per cent ownership and management control of the Central Public Sector Undertakings.
INVESTMENT ENVIRONMENT
Foreign Direct Investment
 Discussions underway to further liberalise the FDI policy.
Foreign Institutional Investors
 SEBI registered mutual funds permitted to accept subscription from foreign investors who meet KYC requirements for equity schemes.
 To enhance flow of funds to infrastructure sector, the FII limit for investment in corporate bonds issued in infrastructure sector being raised.
Financial Sector Legislative Initiatives
 To take the process of financial sector reforms further, various legislations proposed in 2011-12.
 Amendments proposed to the Banking Regulation Act in the context of additional banking licences to private sector players.
Public Sector Bank Capitalisation
 Rs.6,000 crore to be provided during 2011-12 to enable public sector banks to maintain a minimum of Tier I CRAR of 8 per cent.
Recapitalisation of Regional Rural Banks
 Rs. 500 crore to be provided to enable Regional Rural Banks to maintain a CRAR of at least 9 per cent as on March 31, 2012.
Micro Finance Institutions
 “India Microfinance Equity Fund” of Rs.100 crore to be created with SIDBI.
 Government considering putting in place appropriate regulatory framework to protect the interest of small borrowers.
 “Women’s SHG’s Development Fund” to be created with a corpus of Rs.500 crore.
Rural Infrastructure Development Fund
 Corpus of RIDF XVII to be raised from Rs.16,000 crore to Rs.18,000 crore.
Micro Small and Medium Enterprises
 Rs. 5,000 crore to be provided to SIDBI for refinancing incremental lending by banks to these enterprises.
 Rs. 3,000 crore to be provided to NABARD to provide support to handloom weaver co-operative societies which have become financially unviable due to non-repayment of debt by handloom weavers facing economic stress.
 Public sector banks to achieve a target of 15 per cent as outstanding loans to minority communities under priority sector lending at the earliest.
Housing Sector Finance
 Existing scheme of interest subvention of 1 per cent on housing loan further liberalised.
 Existing housing loan limit enhanced to Rs. 25 lakh for dwelling units under priority sector lending.
 Provision under Rural Housing Fund enhanced to Rs. 3,000 crore.
 To enhance credit worthiness of economically weaker sections and LIG households , a Mortgage Risk Guarantee Fund to be created under Rajiv Awas Yojana.
 Central Electronic Registry to prevent frauds involving multiple lending on the same immovable property to become operational by March 31, 2011.
Financial Sector Legislative Reforms Commission
 Financial Sector Legislative Reforms Commission set up to rewrite and streamline the financial sector laws, rules and regulations.
 Companies Bill to be introduced in the Lok Sabha during current session.
AGRICULTURE
• Removal of production and distribution bottlenecks for items like fruits and vegetables, milk, meat, poultry and fish to be the focus of attention this year.
• Allocation under Rashtriya Krishi Vikas Yojana (RKVY) increased from Rs. 6,755 crore to Rs. 7,860 crore.
Bringing Green Revolution to Eastern Region
 To improve rice based cropping system in this region, allocation of Rs. 400 crore has been made.
 Integrated Development of 60,000 pulses villages in rainfed areas
 Allocation of Rs. 300 crore to promote 60,000 pulses villages in rainfed areas.
Promotion of Oil Palm
 Allocation of Rs. 300 crore to bring 60,000 hectares under oil palm plantations.
 Initiative to yield about 3 lakh Metric tonnes of palm oil annually in five years.
Initiative on Vegetable Clusters
 Allocation of Rs.300 crore for implementation of vegetable initiative to provide quality vegetable at competitive prices.
Nutri-cereals
 Allocation of Rs. 300 crore to promote higher production of Bajra, Jowar, Ragi and other millets, which are highly nutritious and have several medicinal properties.
National Mission for Protein Supplement
 Allocation of Rs. 300 crore to promote animal based protein production through livestock development, dairy farming, piggery, goat rearing and fisheries.
Accelerated Fodder Development Programme
 Allocation of Rs. 300 crore for Accelerated Fodder Development Programme to benefit farmers in 25,000 villages.
National Mission for Sustainable Agriculture
 Government to promote organic farming methods, combining modern technology with traditional farming practices.
Agriculture Credit
 Credit flow for farmers raised from Rs. 3,75,000 crore to Rs. 4,75,000 crore in 2011-12.
 Interest subvention proposed to be enhanced from 2 per cent to 3 per cent for providing short-term crop loans to farmers who repay their crop loan on time.
 In view of enhanced target for flow of agriculture credit, capital base of NABARD to be strengthened by Rs. 3,000 crore in phased manner.
 Rs. 10,000 crore to be contributed to NABARD’s Short-term Rural Credit fund for 2011-12.
Mega Food Parks
 Approval being given to set up 15 more Mega Food Parks during 2011-12.
Storage Capacity and Cold Chains
 Augmentation of storage capacity through private entrepreneurs and warehousing corporations has been fast tracked.
 Capital investment in creation of modern storage capacity will be eligible for viability gap funding of the Finance Ministry.
Agriculture Produce Marketing Act
 In view of recent episode of inflation, need for State Governments to review and enforce a reformed Agriculture Produce Marketing Act.
Infrastructure and Industry
 Allocation of Rs. 2,14,000 crore for infrastructure in 2011-12. This is an increase of 23.3 per cent over 2010-11. This also amounts to 48.5 per cent of total plan allocation.
 Government to come up with a comprehensive policy for further developing PPP projects.
 IIFCL to achieve cummulative disbursement target of Rs. 20,000 crore by March 31, 2011 and Rs. 25,000 crore by March 31, 2012.
 Under take out financing scheme, seven projects sanctioned with debt of
 Rs. 1,500 crore. Another Rs. 5,000 crore will be sanctioned during 2011-12.
 To boost infrastructure development, tax free bonds of Rs. 30,000 crore proposed to be issued by Government undertakings during 2011-12.
National Manufacturing Policy
 Share of manufacturing in GDP expected to grow from about 16 per cent to 25 per cent over a period of 10 years. Government will come out with a manufacturing policy.
 Two Committees set up for greater transparency and accountability in procurement policy; and for allocation, pricing and utilisation of natural resources.
 Issues relating to reconciliation of environmental concern from various departmental activities including those related to infrastructure and mining to be considered by a Group of Ministers.
 National Mission for hybrid and electric vehicle to be launched.
 Financial Assistance to be made available for metro projects in Delhi, Mumbai, Bengaluru, Kolkata and Chennai.
 Capital investment in fertiliser production proposed to be included as an infrastructure sub-sector.
Exports
 Of 23 suggestions made by Task Force on Transaction Cost, constituted by the Department of Commerce, 21 suggestions already implemented. Action to be taken on the remaining two suggestions. Transaction Cost of Rs. 2,100 crore will thus be mitigated.
 Self assessment to be introduced in Customs to modernize the Customs administration.
 Proposal to introduce scheme for refund of taxes paid on services used for export of goods.
 Mega Cluster Scheme to be extended for leather products. Seven mega leather clusters to be set up during 2011-12.
 Jodhpur to be included for the development of a handicraft mega cluster.


BLACK MONEY
 Five fold strategy to be put into operation to deal with the problem of generation and circulation of black money.
 Membership of various international fora engaged in anti money laundering,
 Financial integrity and Economic development, Exchange of information for tax purposes and transparency, secured.
 Various Tax Information Exchange Agreements (TIEA) and Double Taxation
 Avoidance Agreements (DTAA) concluded. Foreign Tax Division of CBDT has been strengthened to effectively handle increase in tax information exchange and transfer pricing issues.
 Enforcement Directorate strengthened three fold to handle increased number of cases registered under amended Money Laundering Legislation.
 Finance Ministry has commissioned study on unaccounted income and wealth held within and outside the country.
 Comprehensive national policy to be announced in near future to strengthen controls over prevention of trafficking on narcotic drugs.
STRENGTHENING INCLUSION
 National Food Security Bill (NFSB) to be introduced in the Parliament during the course of this year.
 Allocation for social sector in 2011-12 (Rs. 1,60,887 crore) increased by 17 per cent over current year. It amounts to 36.4 per cent of total plan allocation.
Bharat Nirman
 Allocation for Bharat Nirman programme proposed to be increased by Rs. 10,000 crore from the current year to Rs. 58,000 crore in 2011-12.
 Plan to provide Rural Broadband Connectivity to all 2,50,000 Panchayats in the country in three years.
MGNREGA
• In pursuance of last years budget announcement to provide a real wage of Rs. 100 per day, the Government has decided to index the wage rates notified under the MGNREGA to the Consumer Price Index for Agricultural Labour. The enhanced wage rates have been notified by the Ministry of Rural Development on January 14, 2011.
• From 1st April, 2011, remuneration of Anganwadi workers increased from Rs. 1,500 per month to Rs. 3,000 per month and for Anganwadi helpers from Rs. 750 per month to Rs. 1,500 per month.
Scheduled Castes and Tribal Sub-plan
 Specific allocation earmarked towards Schedule Castes Sub-plan and Tribal Sub-plan in the Budget.
 Allocation for primitive Tribal groups increased from Rs. 185 crore in 2010-11 to Rs. 244 crore in 2011-12.
Education
 Allocation for education increased by 24 per cent over current year.
Sarva Shiksha Abhiyan
 Rs. 21,000 crore allocated, which is 40 per cent higher than Budget for 2010-11.
 Pre-matric scholarship scheme to be introduced for needy SC/ST students studying in classes IX and X.
National Knowledge Network
 Connectivity to all 1,500 institutions of Higher Learning and Research through optical fiber backbone to be provided by March, 2012.
Innovations
 National Innovation Council set up to prepare road map for innovations in India.
 Special grant provided to various universities and academic institutions to recognise excellence.
Skill Development
 Additional Rs. 500 crore proposed to be provided for National Skill Development Fund during the next year.
 An international award with prize money of Rs. 1 crore being instituted for promoting values of universal brotherhood as part of National celebrations of 150th Birth Anniversary of Gurudev Rabindranath Tagore.
Health
 Plan allocations for health stepped-up by 20 per cent.
 Scope of Rashtriya Swasthya Bima Yojana to be expanded to widen the coverage.
Financial Inclusion
 Target of providing banking facilities to all 73,000 habitations having a population of over 2,000 to be completed during 2011-2012.


Unorganised sector
 Exit norms under co-contributory pension scheme “Swavalamban” to be relaxed.
 Benefit of Government contribution to be extended from three to five years for all subscribers who enroll during 2010-11 and 2011-12.
 Eligibility for pension under Indira Gandhi National Old Age Pension Scheme for BPL beneficiaries reduced from 65 years of age to 60 years. Those above 80 years of age will get pension of Rs. 500 per month instead of Rs. 200 at present.
Environment and Climate Change
Forests
 Rs.200 crore proposed to be allocated for Green India Mission from National Clean Energy Fund.
Environmental Management
 Rs. 200 crore proposed to be allocated for launching Environmental Remediation Programmes from National Clean Energy Fund.
Cleaning of Rivers and Lakes
 Special allocation of Rs. 200 crore proposed to be provided for clean-up of some more important lakes and rivers other than Ganga.
Some Other Initiatives
 To boost development in North Eastern Region and Special Category States, allocation for Special Assistance doubled.
 Rs. 8,000 crore provided in current year for development needs of Jammu and Kashmir.
 Allocation made in 2011-12 to meet the infrastructure needs for Ladakh (Rs. 100 crore) and Jammu region (Rs. 150 crore).
 Allocation under Backward Regions Grant Fund increased by over 35 per cent.
 Funds allocated under Integrated Action Plan (IAP) for addressing problems related to Left Wing extremism affected districts. 60 selected Tribal and backward districts provided with 100 per cent block grant of Rs. 25 crore and Rs. 30 crore per district during 2010-11 and 2011-12 respectively.
 A lump-sum ex-gratia compensation of Rs. 9 lakh for 100 per cent disability to be granted for personnel of Defence and Para Military forces discharged from service on medical ground on account of disability attributable to government service.
 Provision of Rs. 1,64,415 crore, including Rs. 69,199 crore for capital expenditure to be made for Defence Services in 2011-12.
 To build judicial infrastructure, plan provision for Department of Justice increased by three fold to Rs. 1,000 crore.
Census 2011
 To enumerate castes other than Schedule Castes and Schedule Tribes in Census 2011, ‘caste’ to be canvassed as a separate time bound exercise.
IMPROVING GOVERNANCE
UID Mission
 From 1st October, 2011 ten lakh Aadhaar numbers will be generated per day.
IT Initiatives
 Various IT initiatives taken for efficient tax administration. These include
 e-filing and e-payment of taxes, adoption of ‘Sevottam’ concept by CBEC and CBDT, web based facility for tax payers to track the resolution of refunds and credit for pre-paid taxes and augmentation of processing capacity.
 Under Mission mode projects, funds released to 31 projects received from States/UTs for computerisation of Commercial taxes. This will allow States to align with roll out of GST.
 Bill to amend the Indian Stamp Act proposed to be introduced shortly.
 A new scheme with an outlay of Rs. 300 crore to be launched to provide assistance to States to modernise their stamp and registration administration and roll out e-stamping in all the districts in the next three years.
 A new simplified form ‘Sugam’ to be introduced to reduce the compliance burden of small tax payers falling within presumptive taxation.
 Three more benches of Settlement Commission to be set up to fast track the disposal of cases.
 Steps initiated to reduce litigation and focus attention on high revenue cases.
Corruption
 Group of Ministers constituted to consider measures for tackling corruption.
 Recommendations to be made in a time bound manner.
 Performance Monitoring and Evaluation System in pursuance of recommendations of Second Administrative Reforms Commission, 62 departments covered under Performance Monitoring and Evaluation System (PMES) to assess their effectiveness.

TAGUP
 Recommendations of Technology Advisory Group for Unique Projects (TAGUP) submitted and accepted in principle.
BUDGET ESTIMATES 2011-12
 Gross Tax receipts are estimated at Rs. 9,32,440 crore.
 Non-tax revenue receipts estimated at Rs. 1,25,435 crore.
 Total expenditure proposed at Rs. 12,57,729 crore.
 Increase of 18.3 per cent in total Plan allocation.
 Increase of 10.9 per cent in the Non-plan expenditure.
 XI Plan expenditure more than 100 per cent in nominal terms than envisaged for the Plan period.
 Increase of 23 per cent in Plan and Non-plan transfer to States and UTs.
 Fiscal Deficit brought down from 5.5 per cent in BE 2010-11 to 5.1 per cent of GDP in RE 2010-11.
 Fiscal Deficit kept at 4.6 per cent of GDP for 2011-12.
 Fiscal Deficit to be progressively reduced to 3.5 per cent by 2013-14.
 “Effective Revenue Deficit” estimated at 2.3 per cent of GDP in the Revised
 Estimates for 2010-11 and 1.8 per cent for 2011-12.
 All subsidy related liabilities brought into fiscal accounting.
 Net market borrowing of the Government through dated securities in 2011-12 would be Rs. 3.43 lakh crore.
 Central Government debt estimated at 44.2 per cent of GDP for 2011-12 as against 52.5 per cent recommened by the 13th Finance Commission.
TAX PROPOSALS
Direct Taxes
 Exemption limit for the general category of individual taxpayers enhanced from Rs. 1,60,000 to Rs. 1,80,000 giving uniform tax relief of Rs. 2,000.
 Exemption limit enhanced and qualifying age reduced for senior citizens.
 Higher exemption limit for Very Senior Citizens, who are 80 years or above.
 Current surcharge of 7.5 per cent on domestic companies proposed to be reduced to 5 per cent.
 Rate of Minimum Alternative Tax proposed to be increased from 18 per cent to 18.5 per cent of book profits.
 Tax incentives extended to attract foreign funds for financing of infrastructure.
 Additional deduction of Rs. 20,000 for investment in long-term infrastructure bonds proposed to be extended for one more year.
 Lower rate of 15 per cent tax on dividends received by an Indian company from its foreign subsidiary.
 Benefit of investment linked deduction extended to businesses engaged in the production of fertilisers.
 Investment linked deduction to businesses developing affordable housing.
 Weighted deduction on payments made to National Laboratories, Universities and Institutes of Technology to be enhanced to 200 per cent.
 System of collection of information from foreign tax jurisdictions to be strengthened.
 A net revenue loss of Rs. 11,500 crore estimated as a result of proposals.
Indirect Taxes
 To stay on course for transition to GST.
 Central Excise Duty to be maintained at standard rate of 10 per cent.
 Reduction in number of exemptions in Central Excise rate structure.
 Nominal Central Excise Duty of 1 per cent imposed on 130 items entering in the tax net.
 Lower rate of Central Excise Duty enhanced from 4 per cent to 5 per cent.
 Optional levy on branded garments or made up proposed to be converted into a mandatory levy at unified rate of 10 per cent.
 Peak rate of Custom Duty held at its current level.
Agriculture and Related Sectors
 Scope of exemptions from Excise Duty enlarged to include equipments needed for storage and warehouse facilities on agricultural produce.
 Basic Custom Duty reduced for specified agricultural machinery from 5 per cent to 2.5 per cent.
 Basic Custom Duty reduced on micro-irrigation equipment from 7.5 per cent to 5 per cent.
 De-oiled rice bran cake to be fully exempted from basic Custom Duty. Export Duty of 10 per cent to be levied on its export.
Manufacturing Sector
• Basic Custom Duty reduced for various items to encourage domestic value addition vis-à-vis imports, to remove duty inversion and anomalies and to provide a level playing field to the domestic industry.
• Rate of Export Duty for all types of iron ore enhanced and unified at 20 per cent ad valorem. Full exemption from Export Duty to iron ore pellets.
• Basic Custom Duty on two critical raw materials of cement industry viz. petcoke and gypsum is proposed to be reduced to 2.5 per cent.
• Cash dispensers fully exempt from basic Customs Duty.
Environment
 Full exemption from basic Customs Duty and a concessional rate of Central Excise Duty extended to batteries imported by manufacturers of electrical vehicles.
 Concessional Excise Duty of 10 per cent to vehicles based on Fuel cell technology.
 Exemption granted from basic custom duty and special CVD to critical
 parts/assemblies needed for Hybrid vehicles.
 Reduction in Excise Duty on kits used for conversion of fossil fuel vehicles into Hybrid vehicles.
 Excise Duty on LEDs reduced to 5 per cent and special CVD being fully exempted.
 Basic Customs Duty on solar lantern reduced from 10 to 5 per cent.
 Full exemption from basic Customs Duty to Crude Palm Stearin (a glycerylester of stearic acid, derived from animal fats created as a byproduct of processing beef) used in manufacture of laundry soap.
 Full exemption from basic Excise Duty granted to enzyme based preparation for pre-tanning.
Infrastructure
 Parallel Excise Duty exemption for domestic suppliers producing capital goods needed for expansion of existing mega or ultra mega power projects.
 Full exemption from basic Customs Duty to bio-asphalt and specified machinery for application in the construction of national highways.
Other Proposals
 Scope of exemptions from basic Customs Duty for work of art and antiquities extended to apply for exhibition or display in private art galleries open to the general public.
 Exemption from Import Duty for spares and capital goods required for ship repair units extended to import by ship owners.
 Concessional basic Custom Duty of 5 per cent and CVD of 5 per cent available to newspaper establishments for high speed printing presses extended to mailroom equipment.
 Jumbo rolls of cinematographic film fully exempted from CVD by providing full exemption from Excise Duty.
 Out right concession to factory-built ambulances from Excise Duty.
 Relief measures proposed for raw pistachio, bamboo for agarbatti, lactose for the manufacture of homoeopathic medicines, sanitary napkins, baby and adult diapers.
 Proposals relating to Customs and Central Excise estimated to result in a net revenue gain of Rs. 7,300 crore.
Service Tax
 Standard rate of Service Tax retained at 10 per cent, while seeking a closer fit between present regime and its GST successor.
 Hotel accommodation in excess of Rs. 1,000 per day and service provided by air conditioned restaurants that have license to serve liquor added as new services for levying Service Tax.
 Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning.
 Service Tax on air travel both domestic and international raised.
 Services provided by life insurance companies in the area of investment and some more legal services proposed to be brought into tax net.
 All individual and sole proprietor tax payers with a turn over upto Rs. 60 lakh freed from the formalities of audit.
 To encourage voluntary compliance the penal provision for Service Tax are being rationalised. Similar changes being carried out in Central Excise and Custom laws.
 Proposals relating to Service Tax estimated to result in net revenue gain of Rs. 4,000 crore.
 Proposals relating to Direct Taxes estimated to result in a revenue loss of Rs. 11,500 crore and those related to Indirect Taxes estimated to result in net revenue gain of Rs. 11,300 crore.