Why Karnataka's new government has a job on its hands despite 8.5% growth

In 2016, Karnataka recorded the second-highest number of farmer suicides-1,212, behind only Maharashtra

Karnataka is grappling with income inequality, an agrarian crisis and child malnutrition even though its economy grew at 8.5%–second-highest among 10 states and union territories in 2017–to a gross domestic product of Rs 9.5 lakh crore ($141 billion) in 2017-18, according to the latest economic survey.

The 2018-19 budget for the state is Rs 2.09 lakh crore ($31 billion), which is 12% more than the budget estimate of Rs 1.86 lakh crore for 2017-18. There has been an increase in the state’s revenue as well. Karnataka’s tax revenue for 2018-19, including goods and services tax (GT) compensation, is estimated to be Rs 1.03 lakh crore ($15 billion), an increase of 13% over the revised estimate for 2017-18.

The economic survey 2017-18 highlights Karnataka’s progress on the per capita income front too. With a per capita income of Rs 142,267 per annum, Karnataka’s citizens are India’s 10th richest, behind Delhi, Haryana, Maharashtra, and Kerala in 2015-16 according to national accounts.

This prosperity, however, has not led to equal distribution of wealth, robust agriculture or good access to public health systems.

Bengaluru city earns five times as much as poorest district, Kalaburagi

Income disparity is high in the state. Bengaluru urban is the richest pocket with a per capita income of Rs 320,346 per annum. Kalaburagi in the north is the poorest, with a per capita income of Rs 65,493 per annum, almost one-fifth that of the state’s capital city.

Source: Karnataka Economic Survey 2017-18; Figures in Rs

In primary education (grades I to V), Yadgir in northeast Karnataka suffers a dropout rate–calculated by subtracting the sum of promotion and repetition from 100 in every grade–of 12.3%. In Bengaluru Urban, this rate is 2.9%. Yadgir’s average primary dropout rate exceeds Mizoram’s (10.1%), according to the District Information System on Education (DISE) 2015-16.

Source: District Information System on Education 2015-16; Figures in %

This inequality is evident in health indicators as well. For example, in Dakshin Kannada, nearly 92% households reported improved sanitation in 2015-16. But in Yadgir, this rate stood at 18.1%, according to National Family Health Survey 2015-16.

Markets remain listless; Bank of Baroda drops 7% Edit

Markets remain listless; Bank of Baroda drops 7%

Benchmark shares indices continued to trade firm led by gains in index heavyweights ITC and Reliance Industries and IT majors.

At 10:30am, the S&P BSE Sensex was up 22 points at 27,797 and the Nifty50 was down 4 points at 8,572. In the broader market, the BSE Midcap and Smallcap indices were trading flat with mixed bias. Market breadth was firm with 1011 advances and 948 declines on the BSE.

ITC was up 1.3% on renewed buying interest while Reliance Industries was up over 1%.

IT majors continued to trade firm with Infosys and TCS were up 0.5%-0.9% each.

On the losing side, Bank of Baroda was down 7% after the state-owned bank reported 60% year-on-year (YoY) drop in net profit at Rs 424 crore for the quarter ended June 30, 2016 (Q1FY17) due to higher provisions and lower net interest income. Further, the bank’s gross net performing assets (NPA) as a percentage of total loans rose to 11.15% at the end of the June 2016 quarter as compared to 9.99% in the March quarter and 4.13% in the June 2015 quarter.

Sun Pharma was down 2% on the back of weak earnings from its overseas subsidiary Taro Pharmaceuticals.(more)

Nifty hovers above 8,550; Tata Motors up 4%

Nifty hovers above 8,550; Tata Motors up 4%

Markets have shrugged off the clearance of GST in the upper house and are trading in a narrow range with Sensex and Nifty swinging between negative and positive zone.

By 10:25 am, the S&P BSE Sensex was up 48 points at 27,746 and the Nifty50 gained 14 points to trade 8,559. Broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up 0.5% each.

"Contrary to popular belief, the passage of the GST Constitutional Amendment marks only the beginning of a fairly tedious procedure that should ultimately result in the implementation of a unified GST in India at best by 2HFY18. Even as the adoption of a unified GST is one of the most remarkable tax reforms from a long-term perspective, in the short-term we highlight that this is likely to result in (1) a mild pick-up in inflation as hitherto untaxed goods and services are now brought under the tax net, (2) a meaningful loss of jobs in the informal sector as this sector will no longer be able to fly under the radar of the taxman and (3) consequently trigger pro-electorate measures in the form of higher revenue expenditure from FY18 onwards as the Modi-led BJP Government begins preparing for the 2019 General Elections," adds Ritika Mankar Mukherjee, Senior Economist, Ambit Capital.(more)

RBI decision on expected lines: FinMin

Economic affairs secretary Shaktikanta Das on Tuesday said RBI's move to keep the policy rate intact was on the expected lines.

He said one has to wait for the Budget to know the government strategy on the fiscal consolidation road map. The Budget is expected to be tabled in Parliament on February 29.

Read our full coverage on Union Budget 2016

The finance ministry is grappling with the issue of fiscal consolidation road map. It has received all sorts of advices-- to defer the road map by one more year, stay on the path and not to tie itself with any fiscal deficit number.

As RBI expected inflation would be 5% in FY17, Das said one has to see how inflation turns from here.

Markets extend losses; Sensex down 100 points

Markets have turned weak in the afternoon session as selling pressure intensified across the board. The weakness in European equities on account of lowering crude oil prices has also dented the sentiments.

At 2:35 pm, the S&P BSE Sensex shed 113 points at 24,711 and the Nifty50 lost 45 points at 7,509.

The RBI at its sixth bi-monthly monetary policy review on Tuesday kept the repo rate unchanged at 6.75%. The cash reserve ratio (CRR), or the portion of a bank’s money maintained with the central bank in cash, was also unchanged at 4%. The RBI, however, indicated that rates would continue to soften, prompted by benign inflation and weak economic and industrial growth.

Markets remain under pressure; Indigo flies on debut

Markets are still reeling under pressure weighed down by technology, metal and oil & gas shares.

The possibility of a Fed rate hike in December has also dampened the investors’ sentiment. Markets had a knee jerk reaction yesterday to BJP’s loss in Bihar elections thus fearing that the key reforms may again get stalled in the winter session of Parliament, which begins end of November.

At 11 AM, the Sensex was at 25,950, down by 170 points while the Nifty opened at 7,853 levels, down by 63

Shares of Interglobe Aviation, the company that operates IndiGo airlines, made its debut today, listing at Rs 856, up 12 per cent.

The top gainers on the Sensex are Hero Motocorp, Bajaj Auto, M&M, Axis Bank  and Maruti, all up between 0.7-1.5% each

The top losers on the Sensex are GAIl, BHEL, Hindalco, Dr Reddy’s, and ONGC, all down between 1-4% each
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(updated 9:40 am)

Markets, extending their losses from yesterday, opened the session on a lower note tracking weak global cues as investors are wary of a possibility of the US Fed rate hike in December.

At 9:40 AM, the Sensex was at 26,018, down by 102 points while the Nifty opened at 7,877 level, down by 38

Interglobe,The broader markets are displaying a divergent trend with BSE Midcap index was down by 0.3% while BSE Smallcap index is up by 0.2%. The market breadth is positive with 669 advances against 459 declines on the BSE.

Also, market participants would be on an edge today as some of the notable companies are expected to announce their quarterly results today.

On the earnings front, Hindalco, NMDC, J Kumar Infra among others are likely to release their results today

GLOBAL MARKET

Asian shares are trading lower on prospects of an interest rate hike by the Federal Reserve in the month of December on the back of strong US jobs data indicating a strong US economy. Japan’s Nikkei, Hong Kong’s Hang Seng dropped between 0.5-1.2%. Meanwhile, China’s Shanghai Composite is ytrading flat with a positive bias.

SECTORS AND STOCKS

Sectorally, BSE Consumer Durables is up 1% while BSE Metal index is down 1.1%

The top gainers on the Sensex are Axis Bank, Tata Motors, Bajaj Auto, Hero Motocopr and ICICI Bank, all up between 0.6-1% each

The top losers on the Sensex are BHEL, Hindalco, Dr. Reddy’s Gail and ONGC, all down between 1.4-2.6% each.

Tata Motors has extended its gains from yesterday and has advanced nearly 1% on the Sensex on the back of a new proposed cost cutting plan of JLR.

ONGC has slipped again today on the back of a disappointing quarter. The stock is down by 2.7%

Hindalco is expected to announce the quarterly results today. The stock has dipped 2.5%

Extending its losses for the second day, Dr. Reddy’s has dropped another 1.7% on the back of the warning letter issued by the US Food and Drug Administration (USFDA)

Shares of Interglobe Aviation, the company that operates IndiGo airlines, will make their trading debut today on the bourses. Interglobe has fixed the issue price at Rs 765 per share .

JSW Steel’s crude steel production fell 2 per cent to 10.22 lakh tonnes in October this year.  The stock has dropped 0.5%

Nestle India is likely to remain in focus after Maggi returned to shop shelves in 100 cities on Monday, five months after the instant noodles brand was pulled out of the markets over safety concerns. The stock has reacted marginally and is up by 0.4%

Article Source: Business Standard