Contents in today's MORNING INSIGHT
¾ Economic News
¾ Corporate News
Railway Budget 2016-17
¾ The railway budget 2016-17 pursues the long term plan to make Indian Railways the prime mover of the economy and various new initiatives have been spelt out towards the same. A 'Performance measurement Report' enumerating the progress on already announced initiatives has been provided. Railways has lagged expectations on implementation of the proposals. We believe that, efficient execution of new and existing initiatives will indeed improve the passenger revenues while also attracting more freight traffic to Railways.
¾ Lower-than-expected revenues more than off-set the benefits of lower diesel prices and cost rationalizing, leading to an Operating Ratio (OR) of 90% in FY16RE v/s BE target of 88.4%. Implementation of 7th Pay Commission recommendations will weigh on FY17BE numbers with OR expected to be 92%. Improvement in economic growth will be needed to achieve the targeted OR, especially if the crude price rises sharply.
¾ The plan size for FY16 is expected to be near the budgeted levels of Rs.1trn and it has been increased to Rs.1.21trn for FY17BE, reflecting focus on growth. However, the RM will have to rely on Extra Budgetary Support from newer sources (like LIC, from which it has received firm commitments) and market borrowings, for financing the same.
Bulk deal
Gainers & losers
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