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Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
Jeena Scriptech Indian-Budget-2013-Review
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Jeena Scriptech Indian-Budget-2013-Review

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Budget 2013 and Stock Market Implications on the The Indian & Global Economy Backdrop presented by Gaurav A Parikh, Managing Director, Jeena Scriptech Alpha Advisors, Part 1 - How the Government Plans …

Budget 2013 and Stock Market Implications on the The Indian & Global Economy Backdrop presented by Gaurav A Parikh, Managing Director, Jeena Scriptech Alpha Advisors, Part 1 - How the Government Plans to make Money and Part 2 - How We should Plan to Make Money-Sensex & Sectors

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  • 1. www.jsalphaa.com
  • 2. Disclaimer Investments, Trading and Speculation in Securities and Derivatives Instruments across all Asset Classes that include Equities, Commodities and Currencies carry inherent risks that rest solely with the Investor, Trader or Speculator. Jeena Scriptech Alpha Advisors Pvt Ltd (JSAA) shall, therefore, not be responsible in any way for actions based on the contents of the website herein. As per Securities and Exchange Board of India (SEBI) disclosure requirements, JSAA, its directors, employees, clients, affiliates and associates may hold long or short positions in securities and derivative instruments recommended for investment or disinvestment respectively. JSAA is an Investment Advisor, Consultant and Trainer in Capital Markets and is now, under the recent January 2013 Investment Advisor Guidelines, required to be registered with SEBI as such. It has initiated the process to do so. It does not accept Monies or Securities for Management.2 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 3. Presentation on Budget 2013 ~ A Review Jointly organised by All India Vaish Federation Jain International Trade Organisation BSE Brokers Forum at the K C College Auditorium, Mumbai Thursday February 28, 2013 ~ 6:30 pm - 8:30 pm by GAURAV A PARIKH Managing DirectorJEENA SCRIPTECH ALPHA ADVISORS PVT LTD
  • 4. INDIA ~ A BLESSED ECONOMY4 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 5. Presentation Sequence First Part How The Government Plans to Make Money Union Budget 2013 The Indian & Global Economy Backdrop Second Part How We should Plan to Make Money Sensex ~ Sectors5 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 6. Let’s Pray for Post Budget 2013 ! “Dear God… I Pray for a FAT Bank Balance & a THIN Body! Please Don’t Mix these up as you did last year !... Amen !6 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 7. Perception v/s Reality7 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 8. FIRST PART HOW THE GOVERNMENT PLANS TO MAKE MONEY The Indian & Global Economy Backdrop Union Budget 20138 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 9. Global Backdrop Economists caused the Crisis, failed to spot it and have little or no idea how to fix it Much of the last 30 years of Macroeconomics was “spectacularly useless at best, and positively harmful at worst” Paul Krugman, Nobel Prize in Economics 20089 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 10. HIGH ANXIETY Investor Anxieties Omni- Near Term present Long Term Current Low GDP USA Valuations Interest & Indo-Pak & Fiscal Growth High & PIIGS OIL v/s Exchange Tensions/ Inflation Rate Rate Deficit Woes Price Terrorism10 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 11. Confirmation of the Crisis ! Bush & Obama Two sides of the same coin11 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 12. Just Don’t have any Clue what to do !12 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 13. PIIGS ~ Deficit as % of GDP ~ Pulling Back Up13 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 14. IT’S EASY TO BE CRITICAL !14 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 15. A Glib Forecast made last Year in 2012 Budget Speech 2012 “Taking a bird’s eye view of the entire economy and keeping in mind the difficult global environment, I expect India’s GDP growth in 2012-13 to be 7.6 %, +/- 0.25 %” Think he meant +/ - 2.5% !15 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 16. GDP Growth Rates GDP Growth Rate % 11 10 9.3 9 8.4 9.6 8 9.3 7 8.1 6.2 6 6.7 5 4 5 3 2 GDP Growth Rate 1 0 2013-2014(BE) 2012-13(AE) 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 (RE) *2013-2014 GDP Growth Rate estimated in the range of 6.1% - 6.7%16 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 17. IT’S EASY TO BE CRITICAL !17 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 18. FY 13 ~ % DEFICITS & GDP GDP Growth Rate % > 5 The Lowest in Recent Years ~ High Inflation Rs 10,028,118 crs and an Economic Slowdown US $ 1.8 Trillion Current Account Deficit as a % of our GDP > 4.6 Oil & Gold Imports are the Culprits for this US $ 83 b record CAD Fiscal Deficit as a % of our GDP > 5.2 How do we Fund It ? How do we Reduce It? Rs 520925 crs US $ 96 b18 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 19. IT’S EASY TO BE CRITICAL !19 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 20. Oil & Gold Imports OIL & GOLD DOMINATE OUR IMPORTS In FY 12 of Total Imports of US $ 489 b Oil was US $ 155 b > 31.7% Gold was US $ 56 b > 11.5 %20 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 21. Exports & Imports Growth21 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 22. Government Tells us Not to Buy Gold They say the surging Gold Imports & Slowing of Exports is causing this High Current Account Deficit22 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 23. CAD as a % of GDP23 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 24. Oil & Gold as a % of GDP24 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 25. Yet Government Itself Protects Asset Value of the Country by Investing in More Gold ! How do We Protect Asset Value in Volatility & Uncertainty & Nervousness!?25 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 26. Gold in our Fx Reserves Year End 2012 2011 2010 2009 2008 2007 2006 Dec 31 (Dec 28) (Dec 30) (Dec 31) (Jan 1,’10) (Jan 2,’09) (Dec 28) (Dec 29) Fx Res 297 297 297 284 255 276 177 (US $ b) of which Gold => 28 27 22.5 18.3 8.5 8.4 6.5 yoy % (0.7) - 4.6 11.4 (7.6) 56 29 %GDP 5.1 exp 6.5 8.4 8.4 6.8 9.3 9.4 Growth FY 13 FY 12 FY 11 FY 10 FY 09 FY 08 FY 07 Sensex 19317 15455 20509 17465 9647 20287 13787 yoy % 25 (25) 17 81 (52) 47 4726 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 27. FX Reserves27 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 28. Gold reserves of 20 largest gold holding countries OFFICIAL GOLD HOLDINGS - December 2012 Top 20 Countries Metric Tonnes % of reserves United States 8,134 76 Germany 3,391 73 Italy 2,452 73 France 2,435 72 China 1,054 2 Switzerland 1,040 11 Russia 935 10 Japan 765 3 Netherlands 613 60 India 558 10 Taiwan 424 6 Portugal 383 91 Venezuela 364 75 Saudi Arabia 323 3 Turkey 320 15 United Kingdom 310 16 Lebanon 287 30 Spain 282 30 Austria 280 56 Source - World Gold Council Belgium 228 4028 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 29. Gold Prices29 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 30. Gold Prices30 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 31. Gold Import & Gold Price31 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 32. Gold Price Trend in 2013? So What Will Happen to Gold in 2013 ? With Real Interest rates Rising in the US and the Fear factor dropping, Gold is unlikely to show any strong bullishiness in the near term ~ it may in fact go sub US $ 1500 per oz before moving up later again32 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 33. Gold & Real Interest Rates ~Inverse corelation33 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 34. Fear Factor ~ VIX corelated with Gold/Oil34 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 35. Three Idiots ! ~ Exchange ~ Inflation ~ Interest The Three Idiots ! Exchange Inflation Interest35 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 36. Exchange Rate So What will Happen to the Exchange Rate of the Rupee against the US $ ? You Tell Me !36 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 37. Rupee Depreciation37 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 38. High Inflation And is India Winning the Battle against High Inflation !? This you can easily relate to !38 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 39. Inflation Trend39 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 40. UNION BUDGET 2013 Sensex screams “Kai Po ‘CHI’ !” …heart flows but head slows ! Intention needs to be backed by Ability & Implementation An Unconvinced India Balancing Act Lower RE Plan Expenditure in FY 13 & High Disinvestment Target in FY 1440 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 41. Union Budget 2013 ~ A Few Highlights Investment Allowance of 15% Introduced Incremental Taxes of Rs 18000 crs with surcharge on the super rich & higher taxes on expensive goods STT marginally reduced GST Roadmap yet not definite though Rs 9000 crs introduced to compensate States Inflation Indexed Bonds to be introduced Simplification for FII Registration Debt Exchange, SME Listing without IPO Lower RE FY 13 of Plan Expenditure Ambitious Disinvestment Target for FY 14 RGESS liberalised41 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 42. (in crore of Rupees) Budget at a Glance 2011-2012 2012-2013 2012-2013 2013-2014 Actuals Budget Estimates Revised Estimates Budget Estimates 1 Revenue Receipts 751437 935685 871828 1056331 2. Tax Revenue (net to centre) 629765 771071 742115 884078 3. Non-Tax Revenue 121672 164614 129713 172252 4 Capital Receipts (5+6+7) 552928 555241 558998 608967 5. Recoveries of Loans 18850 11650 14073 10654 6. Other Receipts 18088 30000 24000 55814 7. Borrowings and other liabilities* 515990 513590 520925 542499 8 Total Receipts (1+4) 1304365 1490925 1430825 1665297 9. Non-Plan Expenditure 891990 969900 1001638 1109975 10. On Revenue Account of which, 812049 865596 919699 992908 11. InterestPayments 273150 319759 316674 370684 12. On Capital Account 79941 104304 81939 117067 13 Plan Expenditure 412375 521025 429187 555322 14. On Revenue Account 333737 420513 343373 443260 15. On Capital Account 78639 100512 85814 112062 16 Total Expenditure (9+13) 1304365 1490925 1430825 1665297 17. Revenue Expenditure(10+14) 1145785 1286109 1263072 1436169 18. Of Which, Grants for creation of Capital 132582 164672 124275 174656 19. Capital Expenditure (12+15) 158580 204816 167753 229129 20 Revenue Deficit (17-1) 394348 350424 391245 379838 -4.4 -3.4 -3.9 -3.3 21 Effective Revenue 261766 185752 266970 205182 Deficit (20-18) -2.9 -1.8 -2.7 -1.8 22 Fiscal Deficit 515990 513590 520925 542499 {16-(1+5+6)} -5.7 -5.1 -5.2 -4.8 23 Primary Deficit (22-11) 242840 193831 204251 171814 -2.7 -1.9 -2 -1.542 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 43. Rupee Comes From Borrowings & Other liabilities 27 p. Non-debt Capital receipts 3 p. Corporation -tax 21 p. Non-tax Revenue 9 p. Service tax & other taxes 9 p. Income – Tax 12 p. Customs 9 p.43 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 44. Rupee Goes To Non-Plan Assistance to State & UT Govts. 4 p. Central Plan 21 p. Other Non- Plan Expenditure 11 p. Subsidies 12 p. Defence 10 p.44 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 45. Revenue Receipts (In crore of Rupees) 2011-2012 2012-2013 2012-2013 2013-2014 Actuals Budget Revised Budget Estimates Estimates Estimates REVENUE RECEIPTS Tax Revenue Gross Tax Revenue 889176 1077612 1038037 1235870 Corporation Tax 322816 373227 358874 419520 Taxes on Income 170343 195786 206095 247639 Wealth Tax 788 1244 866 950 Customs 149328 186694 164853 187308 Union Excise Duties 145608 194350 171996 197554 Service Tax 97509 124000 132697 180141 Taxes on Union Territories 2785 2310 2656 2758 Less - NCCD transferred to the National Calamity Contingency Fund/National Disaster Response Fund 3998 4620 4375 4800 Less - States’ share 255414 301921 291547 346992 Centres Net Tax Revenue 629765 771071 742115 884078 Non-Tax Revenue Interest receipts 20252 19231 16595 17764 Dividend and Profits 50608 50153 55443 73866 External Grants 2962 2887 2762 1456 Other Non Tax Revenue 46835 91207 53790 78000 Receipts of Union Territories 1015 1136 1123 1166 Total Non Tax Revenue 121672 164614 129713 172252 Total Revenue Receipts 751437 935685 871828 105633145 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 46. (in crore of Rupees) 2012-2013 2012-2013 2013-2014 Capital Receipts 2011- 2012 Budget Revised Budget Actuals Estimates Estimates Estimates Non-debt Receipts Recoveries of loans and advances 18850 11650 14073 10654 Miscellaneous Capital 18088 30000 24000 55814 Receipts Total 36938 41650 38073 66468 Debt Receipts Market Loans 436211 479000 467384 484000 Short term borrowings 126866 9000 45746 19844 External Assistance (Net) 12449 10148 2214 10560 Securities issued against Small Savings -10302 1198 8626 5798 State Provident Fund (Net) 10804 12000 10000 10000 Other Receipts (Net) -44048 2245 -7895 12297 Total 531980 513590 526075 542499 Total Capital Receipts 568918 555241 564148 608967 DRAW-DOWN OF CASH BALANCE -15990 ... -5150 ... Total Receipts 1304365 1490925 1430825 1665297 Financing of Fiscal Deficit 515990 513590 520925 542499 Receipts under MSS (Net) ... 20000 ... 20000 excludes recoveries of short-term loans and advances from States, loans to 17968 11445 22995 11400 Government servants, etc.46 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 47. FF Debt Receipts (in crore of Rupees) 2012-2013 2013-2014 2011- 2012 2012-2013 Revised Budget Actuals Budget Estimates Estimates Estimates Market Loans 436211 479000 467384 484000 Short term borrowings 126866 9000 45746 19844 External Assistance (Net) 12449 10148 2214 10560 Securities issued against Small Savings -10302 1198 8626 5798 State Provident Fund (Net) 10804 12000 10000 10000 Other Receipts (Net) -44048 2245 -7895 12297 Total 531980 513590 526075 542499 DRAW-DOWN OF CASH BALANCE -15990 ... -5150 ... Financing of Fiscal Deficit 515990 513590 520925 542499 Total Capital Receipts 568918 555241 564148 608967 Total Receipts 1304365 1490925 1430825 166529747 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 48. (in crore of Rupees) NON-PLAN EXPENDITURE A. Revenue Expenditure 2011-2012 2012-2013 2012-2013 2013-2014 Actuals Budget Estimates Revised Estimates Budget Estimates 1. Interest Payments and Prepayment Premium 273150 319759 316674 370684 2. Defence Services 103011 113829 108925 116931 3. Subsidies 217941 190015 257654 231084 4. Grants to State and U.T. Governments 51523 64211 57901 76981 5. Pensions 61166 63183 63836 70726 6. Police 33106 35611 37131 40895 7. Assistance to States from National Calamity Contigency Fund/National Disaster Response Fund (NDRF) 2459 4620 4375 4800 8. Other General Services (Organs of State, tax collection, external affairs etc.) 19225 21382 21095 22903 9. Social Services (Education, Health, Broadcasting etc.) 19444 20784 21304 23114 10. Economic Services (Agriculture,Industry, Power, Transport, Communications, Science & Technology, etc.) 21751 24105 21965 24334 11. Postal Deficit 5716 5727 5838 6717 12. Expenditure of Union Territories without Legislature 3853 3875 4147 4395 13. Amount met from National Calamity Contigency Fund/ Contribution to National Disaster Response Fund (NDRF) -2459 -4620 -4375 -4800 14. Grants to Foreign Governments 2163 3114 3229 4144 Total Revenue Non-Plan Expenditure 812049 865596 919699 99290848 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 49. NON-PLAN EXPENDITURE (in crore of Rupees) 2011-2012 2012-2013 2012-2013 2013-2014 B. Capital Expenditure Actuals Budget Estimates Revised Estimates Budget Estimates 1. Defence Services 67902 79579 69579 86741 2. Other Non-Plan Capital Outlay 11478 23971 8102 30131 3. Loans to Public Enterprises 479 465 469 417 4. Loans to State and U.T. Governments 72 85 3407 80 5. Loans to Foreign Governments 248 550 700 ... 6. Others -238 -346 -318 -302 Total Capital Non-Plan Expenditure 79941 104304 81939 117067 Total Non-Plan Expenditure 891990 969900 1001638 110997549 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 50. PLAN EXPENDITURE (in crore of Rupees) 2011-2012 2012-2013 2012-2013 2013-2014 Budget Revised Budget Actuals Estimates Estimates Estimates A. Revenue Expenditure 1. Central Plan 241276 303528 243772 320038 2. Central Assistance for State & Union Territory Plans 92460 116985 99601 123222 State Plans 90072 113170 96068 118873 Union Territory Plans 2388 3815 3533 4349 Total Revenue Plan Expenditure 333737 420513 343373 443260 B. Capital Expenditure 1. Central Plan 67083 87499 73413 99030 2. Central Assistance for State & Union Territory Plans 11556 13013 12401 13032 State Plans 10058 11079 11079 11057 Union Territory Plans 1498 1934 1322 1975 Total Capital Plan Expenditure 78639 100512 85814 112062 Total - Plan Expenditure 412375 521025 429187 555322 Total Budget Support for Central Plan 308359 391027 317185 419068 Total Central Assistance for State & UT Plans 104016 129998 112002 136254 TOTAL EXPENDITURE* 1304365 1490925 1430825 166529750 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 51. DEBT SERVICING (in crore of Rupees) 2011-2012 2012-2013 2012-2013 2013-2014 Budget Revised Budget Actuals Estimates Estimates Estimates 1. Repayment of debt 111933 124302 116669 167072 2. Total Interest Payments 273150 319759 316674 370684 3. Total Debt Servicing (1+2) 385083 444061 433343 537756 4. Revenue Receipts 751437 935685 871828 1056331 5. Percentage of 2 to 4 36.35% 34.20% 36.32% 35.09%51 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 52. 17181452 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 53. 1. Deficits have been calculated on the basis of the following estimates of GDP. (i) 2012-2013 (RE) ` 10028118 crore. (ii) 2013-2014 (BE) ` 11371886 crore 2. GDP Estimates as per revised series with 2005-06 as base year, have been adopted for working out deficit as percentage of GDP.53 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 54. 54 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 55. 55 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 56. Central Plan Outlay by Sectors (including IEBR of PEs etc) (in crore of Rupees) 2011-2012 2012-2013 2012-2013 2013-2014 Actuals Budget Estimates Revised Estimates Budget Estimates Agriculture and Allied 16194 17692 15971 18781 Activities Rural Development 47471 50729 43704 56438 Irrigation and Flood 506 1275 428 1200 Control Energy 121855 154842 148230 158287 Industry and Minerals 36235 57227 39228 48010 Transport 107532 125357 103023 133488 Communications 6586 15411 8257 12380 Science Technology & 11735 16592 12119 17587 Environment General Economic 19696 24777 21017 31602 Services Social Services 135480 178906 158339 193043 General Services 5305 8701 5860 9307 GRAND TOTAL 508596 651509 556176 68012356 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 57. State and U.T. Plan Outlay by Ministries/Departments (in crore of Rupees) 2011-2012 2012-2013 2012-2013 2013-2014 Budget Revised Actuals Budget Estimates Estimates Estimates Agriculture and 7844 9217 8400 9954 Cooperation Finance 80076 99543 85543 102957 Panchayati Raj 3917 5050 3734 6500 Statistics and Programme Implementation 2507 3955 3950 3955 Road Transport and Highways 2199 2267 2267 2267 Tribal Affairs 2049 2517 1673 2517 DONER 1537 1700 1581 1780 Union Territories 3887 5749 4856 6324 Total Central Assistance for State and Union Territory Plans 104016 129998 112002 136254 State and Union57 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 58. 58 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 59. 59 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 60. IMMEDIATE INDIAN CHALLENGES High Inflation… High Food Prices Cooling off Interest Rates Eye on Crude Oil Prices Corruption… Like Freedom, it’s our Birthright and we shall have it ! Real & Sustainable Economic Recovery Infrastructure… FDI & FII…. Handling Strong Inflows Political Stability… Changing & Collapsing Coalitions and New Compulsions….60 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 61. SOME EXPECTATIONS AND TARGETS Vision Plan……continuing modern economic reforms with financial inclusion Sustainable GDP Growth for Years ahead Bring Fiscal Deficit down to below 3% of the GDP from the current 5.2% Take Manufacturing from the current 16% of GDP to 25% in a few years Schedule Commitments for Direct Tax Code (DTC) and Goods & Services Tax (GST) Raise Tax/GDP back from low 4% /5% towards high 11.9% recorded in FY 200861 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 62. Mkt Cap & GDP in Absolute & Relative Terms 2012-13 2013-14 Revised Estimates Budget Estimates In Rs Crs 10,028,118 11,371,886 BSE Market Capitalisation in Rs Crs 65,38,038 as on Feb 28, 2013 Mkt Cap /GDP 0.65 0.5762 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 63. GDP growth Rate at Factor Cost63 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 64. Trends in Consolidated Fiscal Deficit Source – Planning Commission64 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 65. Money ! Money ! Money ! ~ But How ! How does Government Make Money !? Deficit involves Funding it and taking Initiatives to Reduce It How does the Government Go about this…65 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 66. Government Modes to Create Funds Market Borrowings ~ Interest Cost remains high at 43% of Tax Revenues Increase Tax Revenues Higher GDP Growth Rate, Widening Base , Increasing Rates Decrease Plan & Non Plan Expenditure Reduce Fuel Subsidies in Non Plan ~ Also Amazingly RE FY 2-13 shows lower Plan Expenditure of Rs 429000 crs against BE of @ Rs 521000 crs ! ~ to fund higher RE Non Plan Expenditure & restrict Fiscal Deficit to 5.2% of GDP ~ Lower Expenditure => Growth Sacrifice ? Attract FDI Prioritize over FIIs ~ Infrastructure Spending of a Trillion Dollars planned in the 12th Plan with 47% Private Participation Sell Assets Disinvestment ~ Target is an ambitious Rs 55814 crs for FY 2014 ! Print Money ~ Inflationary ~ Government had little Option66 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 67. Financing the Fiscal Deficit So How Does the Government Finance the Fiscal Deficit ? 89% through Market Loans !67 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 68. FINANCING THE FISCAL DEFICIT… Rs Crs 2011- 2012 2012-2013 2012-2013 2013-2014 Actuals Budget Revised Estimates Budget Estimates Estimates Debt Receipts Market Loans 436211 479000 467384 484000 Short term borrowings 126866 9000 45746 19844 External Assistance (Net) 12449 10148 2214 10560 Securities issued against Small Savings -10302 1198 8626 5798 State Provident Fund (Net) 10804 12000 10000 10000 Other Receipts (Net) -44048 2245 -7895 12297 Total 531980 513590 526075 542499 DRAW-DOWN OF CASH BALANCE -15990 ... -5150 ... Financing of Fiscal 515990 513590 520925 542499 Deficit Total Capital Receipts 568918 555241 564148 608967 Total Receipts 1304365 1490925 1430825 166529768 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 69. High Level of Borrowing to Fund the Fiscal Deficit Government Borrowings - Rs. Cr69 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 70. 70 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 71. Tax Revenue Receipts71 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 72. Total Expenditure ~ Where has he spend what he said he will in Plan Expenditure ! The FM has sharply reduced Plan Expenditure in the RE FY 13 from Rs 521025 crs to Rs 429187 crs ! ~ And claims he has jumped it over 33% for the BE FY 14 to Rs 555322 crs ! This is to fund the RE of Non Plan Expenditure for FY 13 which is now Rs 1001638 crs up from Rs 969900 crs and to also keep the Fiscal Deficit down to 5.2% of GDP from the earlier targeted 4.6% !72 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 73. Composition of Expenditure – Rs. Cr73 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 74. 74 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 75. Composition of Subsidies Trends & Composition of Subsidies75 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 76. FDI v/s FII76 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 77. 77 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 78. Disinvestment Mere Paas Maa Hai ! ~ Tere Paas kya hai !? Mere Paas LIC Hai ! FY 2012-13 Target was Rs 33000 crs but achieved is Rs 21000 crs FY 13-14 Target is Rs 55814 Crs ! & Rs 14000 crs is to be infused in PSU Banks !78 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 79. Disinvestment Total Disinvestment (Cumulative Till date) -1,31,51179 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 80. M3 – Money Supply (Annual)80 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 81. M3 – Money Supply81 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 82. Face of the Current Lok Sabha….Alliances Lok Sabha - Party Positions Parties Providing Support to UPA govt. Main Opposition Parties Party Name Member Party Name Member Indian National Congress (INC) 204 Bharatiya Janata Party(BJP) 115 Janata Dal (United) (JD(U)) 20 Dravida Munnetra Kazhagam(AIADMK) 18 Shiv Sena(SS) 11 Nationalist Congress Party(NCP) 9 Rashtriya Lok Dal(RLD) 5 Jammu and Kashmir National Conference(J&KNC) 3 Shiromani Akali Dal(SAD) 4 Others 36 Telangana Rashtra Samithi(TRS) 2 Asom Gana Parishad(AGP) 1 Total Support for UPA Govt. 270 Total NDA 158 Parties Providing Outside Support to UPA govt. Other Parties All India Trinamool Congress(AITC) 19 Samajwadi Party(SP) 22 Communist Party of India (Marxist)(CPI(M)) 16 Bahujan Samaj Party(BSP) 21 Biju Janata Dal (BJD) 14 All India Anna Dravida Munnetra Rashtriya Janata Dal (RJD) 3 Kazhagam(AIADMK) 9 Janata Dal (Secular)(JD(S)) 3 Telugu Desam Party(TDP) 6 Total 49 Total 6482 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 83. SECOND PART HOW WE SHOULD PLAN TO MAKE MONEY Sensex ~ Sectors83 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 84. Market Dynamics Liquidity ~ Courtesy FIIs Momentum ~ Global Cues Sentiment ~ Global Cues Valuation ~ Sensex EPS84 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 85. FIIs Equity Inflows & Outflows Sensex % Year Net Investment US($) Movement in the million Year 2005 10707 42 2006 8106 47 2007 17655 47 2008 (11974) Outflow (52) 2009 17458 81 2010 29362 17 2011 @(500) Outflow (25) 2012 24372 26 As on Feb 26,2013 and in the First Two Months 2013 FIIs Inflows have reached @ US $ 8.5 Billion with 1756 Registered FIIs and 6347 Sub Accounts yet Sensex has slipped sub 19000 post budget from closing level of 19426 in 2012 after teasing once going over 2000085 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 86. SENSEX - 2000 to date February 28, 2013… Timing & Tactical Strategies Year Open High Low Close P/E P/BV DY 2000 5,209.54 6,150.69 3,491.55 3,972.12 24.48 3.81 1.14 2001 3,990.65 4,462.11 2,594.87 3,262.33 17.60 2.51 1.83 2002 3,262.01 3,758.27 2,828.48 3,377.28 15.22 2.30 2.14 2003 3,383.85 5,920.76 2,904.44 5,838.96 15.02 2.49 2.14 2004 5,872.48 6,617.15 4,227.50 6,602.69 17.26 3.28 2.01 2005 6,626.49 9,442.98 6,069.33 9,397.93 16.21 3.94 1.58 2006 9,422.49 14,035.30 8,799.01 13,786.91 20.18 4.75 1.35 2007 13,827.7 20,498.11 12,316.10 20,286.99 22.25 5.32 1.10 2008 20,325.2 21,206.77 7,697.39 9,647.31 18.22 4.2 1.29 2009 9,720.55 17,530.94 8,047.17 17,464.81 18.08 3.42 1.43 2010 17,473.45 21,108.64 15,651.99 20,509.09 21.71 3.67 1.12 2011 20,621.61 20,664.80 17,295.62 18,141.40 20.53 3.52 1.11 2012 15,534.67 19,612.18 15,358.02 19,426.71 17.14 3.08 1.63 2013 19,513.45 20,203.66 18,793.97 18,861.54 17.67 3.03 1.5386 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 87. Good Positive Sensex % Returns In The Long Term From ABSOLUTE%/CAGR % High Low Current Opening Year 21207 7697 18862 Sensex Jan 10, 2008 Oct 27, 2008 Feb 28,2013 17 years 18 Years 22 Years 1991 1027 1965 /19.5 649 /12 1737 /14.2 7 Years 8 Years 12 Years 2001 3990 432 /27 93 /8.5 373 /13.8 4 Years 5 Years 9 Years 2004 5872 261/38 31 /5.5 221 /13.987 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 88. Market Dynamics : Sensex Returns since Inception BSE SENSEX Currently 18862 as on Feb 28,2013 16.2 % CAGR In 35 Years since Inception in 1986 with the base of 100 set for 1978/988 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 89. VALUATION PARADOX 1992-2004 Historical Evidence to support Macro Valuations Date SENSEX PE G-Sec Yield Jan-92 2302.54 37.36 11.00 7000 Sensex and PE Ratio, Bubble or. . . 80.00 Mar-92 4285 69.53 11.00 Apr-93 2122.3 20.58 12.75 6000 SENSEX 70.00 Dec-93 3346.06 32.45 12.75 60.00 Jan-94 3994.86 38.74 12.75 5000 Apr-94 3746.1 22.53 12.50 50.00 Aug-94 4588.16 27.59 12.35 4000 40.00 Jan-95 3618.54 21.76 12.35 3000 Nov-95 2994.29 13.47 14.00 30.00 Apr-96 3826.72 18.93 14.00 Nov-96 2890.5 28.08 13.85 2000 PER 20.00 Jan-97 3382.47 32.86 13.85 1000 10.00 Jul-97 4305.76 38.71 13.05 0 0.00 Apr-98 4006.81 36.15 12.15 Jan-94 Jan-96 Jan-97 Jan-98 Jan-00 Jan-04 Jan-92 Jan-93 Jan-95 Jan-99 Jan-01 Jan-02 Jan-03 Nov-98 2810.66 25.36 12.25 Jan-99 3315.57 21.39 12.25 Dec-99 5005.82 28.70 11.36 Feb-00 5446.98 31.23 10.42 Sensex PE Ratio and Interest Rates Oct-00 3711.02 16.86 11.69 Inverse Correlation or Convergence? Jan-01 4326.72 19.66 10.70 Sep-01 2811.6 10.50 9.10 Feb-02 3562.31 13.30 7.4 80.00 16.00 Oct-02 2949.32 10.29 7.12 70.00 INTEREST RATES 14.00 Apr-03 2959.79 9.84 5.89 Dec-03 5838.96 15.79 5.1 60.00 12.00 Jan-04 5695.67 15.00 5.1 50.00 10.00 Feb-04 5667.51 16.20 5.3 Mar-04 5590.6 15.54 5.1 40.00 8.00 Apr-04 5655.09 13.59 5.12 30.00 6.00 May-04 4759.62 11.11 5.1 Jun-04 4795.46 11.19 5.2 20.00 4.00 Jul-04 5170.20 12.07 5.8 PER 10.00 2.00 Aug-04 5192.08 11.95 5.9 Sep-04 5583.61 12.85 6.4 0.00 0.00 Oct-04 5672.27 13.05 6.9 Jan-95 Jan-03 Jan-92 Jan-93 Jan-94 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-04 Nov-04 6234.29 14.35 7.289 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 90. Sensex EPS Growth Trend Sensex EPS Growth Trend FY13-15E : 16% CAGR FY01-12 : 16% CAGR 1586 1375 1182 1124 1024 833 820 834 718 523 450 348 272 216 236 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13E FY14E FY15E90 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 91. Growth Rates ~GDP & Sensex EPS ~Bottoming Out ? FY 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 GDP 5.5 4 8.1 7 9.5 9.6 9.3 6.7 8.4 8.4 6.5 5 Sensex -0.63 -12.5 84.05 15.96 73.36 15.24 22.11 -38.4 79.85 10.8 -10.6 10.9 Sensex 9.3 15.3 27.9 29.3 16.2 37.3 16 -1.5 1.7 22.8 9.7 5.2 EPS91 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 92. Sensex going forward : Likely to Aggressively Optimistic SENSEX at end 2013 ? Sensex at 18862 on Feb 28, 2013 SENSEX VALUE = SENSEX EPS X SENSEX PE Outlook Sensex Levels Likely Optimistic Aggressive 1375 1425 EPS FY 2014>>>> 1300 10 13000 13750 14250 PER 15 19500 20625 21375 20 26000 27500 28500 25 32500 34375 35625 EPS FY 2014 projected from Base Sensex EPS of 1182 in FY 2013 with 10% Growth in FY 1492 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 93. Market Credibility & Sanctity continues being Compromised BSE SME Platform ~ Quantity not Quality Channel Nine Entertainment ~ Loss Making ~ Preferential Allotment made at Rs 750 & Rs 130 transferred within days to New Owner Promoter at Rs 25 ~ then after another PA at Rs 10 followed by a liberal Bonus of 3:1 ! lowering holding cost to just Rs 2.50 ! Comes an IPO a few days ago in Feb 2013 at Rs 25 IPO Gradings Mislead ~ Poorly Graded Issues become Wealth Creators while Highly Graded Issues become Wealth Destroyers Yet 230000 Shareholders are flying KFA ! ~ Remember the Fate of GTB ! Midcap Mayhem ~CEBCO,Arshiya,Core,Tulip, plunging in a free fall India & Insider Trading are Inseparable !93 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 94. SECTORS ON OUR HORIZON Clients have Access to Specific Selections Oil & Gas IT FMCG Power Banking Defence Construction Equipment Real Estate94 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 95. www.gauravblog.com95 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 96. Thank You Gaurav A Parikh www.jsalphaa.com www.gauravblog.com gaurav@jsalphaa.com +91 982016259796 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013
  • 97. Contact in Mumbai Jeena Scriptech Alpha Advisors Pvt Ltd ~ Fort HO Tel: +91 22 42304138/50/54 Email: care@jsalphaa.com Website: www.jsalphaa.com97 Jeena Scriptech Alpha Advisors Pvt Ltd 03 March 2013

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