Money & Banking

December 30, 2006

WPI inflation rises further to 5.43% 

Inflationary pressures heightened at the close of the year, touching 5.43% for the week ended December 16^th, one basis point short of the fiscal’s highest inflation rate. The inflation stood at 5.32% in the previous week. Inflation has touched it’s highest level of 5.44% the fiscal on June 17^th which prompted the government to relax imports of wheat, pulses and sugar, besides banning export of sugar to augment supply of these essential commodities.

 

January 1, 2007

Assocham asks RBI to roll back CRR to previous level of 4.5% 

Industry body Assocham has asked the RBI to roll back the CRR from the current level of 5.5% to the previous level of 4.5%.The chamber believes that the series of hikes in CRR has created liquidity crunch in the money market to the extend that the call rates touched 19% mark, highest in last 9 years.

 

January 2, 2007Key IFCI investor’s entry soon  

The Govt is vetting a proposal to induct a strategic investor into the financial institution, which has been forced to stop it’s lending activity after it’s business fortunes dipped over 6 years ago. A combination of aggressive lending in the early part of the last decade, which later resulted in a good deal of the portfolio turning into bad loans and higher cost of borrowing saw red ink being splashed all over IFCI balance sheet.

 

January 3, 2007Tech Funds top returns chart in 2006 

Technology mutual funds yielded an average return of 46% in 2006, matching the sensex growth and out performing most sectorial indices. The funds mainly invest in stocks of large and mid size IT or software companies.

 

January 4, 2007

CST to be cut by 1% from April, centered to fill in state’s loss 

The Central Sales Tax(CST) will be cut by 1% to 3% from April 1^st 2007.To compensate the states for the resulting revenue loss, they would be permitted to tax 44 new services currently outside the service tax net and an additional 33 services currently being taxed by the centre. Further the legal changes would be made to allow states to levy VAT on imports. States will also get the right to levy VAT on tobacco hitherto taxed by the centre.