Do it yourself

  Deposit Rates Grow Faster than Lending Rates in December 2022 (CARE Ratings) In December 2022, the rate of increase flipped with deposit rates growing faster than lending rates on fresh loans. ·          The weighted average lending rate (WALR) on fresh rupee loans of SCBs increased by 02 bps (basis points) from 8.86% in November 2022 to 8.88% in December 2022. ·          The weighted average domestic term deposit rate (WADTDR) on outstanding rupee term deposits of SCBs increased by 16 bps from 5.62% in November 2022 to 5.78% in December 2022. ·          Private Sector Banks (PVB) and Public Sector Banks (PSB) have maintained high spreads between lending and deposit rates, with PVBs seeing higher spreads, as banks raised rates amid RBI’s tightening moves. Rate hikes and subsequent faster resets in lending rates vs. deposit rates have led to NIM expansion...

  It’s almost a week since the union budget for FY24 was presented in the parliament. The budget documents have been analysed by a variety of experts. Most of these experts have focused their opinion on the budget as per their professional affiliations and/or ideological orientation. If I may sum up the consensus opinions, it would be as follows: ·          Development economists have criticized the budget for inadequate allocation to the social sector, especially education, health, rural welfare, MNREGA etc. ·          Market economists and strategists have commended the budget for higher allocation towards capital expenditure and commitment to fiscal discipline despite political expediency. ·          Accounting and tax professionals have spoken about the changes proposed in the tax laws to ease compliance and plug tax evasion loopholes. ·   ...

  Largely as expected; capex sustainability core focus (Phillips capital) Budget fared well across categories – prudent fiscal position, steep rise in capex allocations, continued focus on sustainability, Atmanirbhar Bharat, and social upliftment. Capex budgetary allocations have risen sharply in FY24 (up 37% vs. 23% in FY23); including IEBR, growth stands at 32%/10% in FY24/23. Incremental capex allocation in FY24 is highest for railways, roads, infra spending by states, and energy; defence and housing are muted; additional allocation of Rs 550bn has been made towards OMCs and BSNL capital infusion. Sharp drop in food and fertiliser subsidy (Rs 1.6tn) is in the expected lines. MNREGA allocations have also see a sharp decline to Rs 600bn vs. Rs 894bn in FY23RE. Fiscal deficit for FY24/23 is in line with our expectation – at 5.9%/6.4% of GDP; gross/net borrowing expectedly remains elevated at Rs 15.4tn/11.8tn, marginally higher vs. FY23. We expect this to keep yields elevated in the...

  Prologue: If you find these observations completely trivial, that is precisely the idea. The budget speech and most of the promises made thereunder sound trivial, lacking specifics. As expected, the budget speech of the finance minister, while presenting the last full budget of the union government before the next general election, sounded like an election manifesto. The finance minister counted the achievements made in the past nine years (since 2014) of her party’s government; and made many promises for the future, totally lacking on specifics. Perhaps for the first time in the history of independent India, the finance minister used “We will” and “will be” to make all the budget proposals. The general convention has been to say “I propose to” or “is proposed”. Besides, the nomenclatures of an overwhelming number of central sector schemes now use “PM” as prefix. It is obvious that the central government is too conscious to ensure that the electorate must know that the benef...