The Fall and Rise of the U.S. Economy, from the Wall Street Crash until Now

In his inaugural speech, president Trump painted a gloomy picture of an America that was broken and is in dire need of fixing. In fact, as this graph shows, the U.S. economy he inherits has been improving steadily over the past six years, with unemployment showing in an equally steady decline.

unemployment

The graph pulsates and changes color to indicate the state of the nation. Larger circles indicate higher levels of unemployment, and vice versa. Green means GDP growth, more so if darker green. Red indicates crisis moments, when the Gross Domestic Product contracts – by more, as the shade of red darkens.

The graph starts in 1929, an ominous year for the economy of the U.S., and indeed the world. The Wall Street Crash sets off the Great Depression, which causes hardship on a scale not seen for generations – before or since.

Unemployment almost triples, from 3.14% in 1929 to 8.67% in 1930, almost doubles again by the next year to 15.82%, and adds another 8% by 1932. The rate peaks in 1933, when almost a quarter of the workforce – 24.75% – is out of a job. By that time, the benefits of president F.D. Roosevelt’s New Deal start to kick in.

Nifty 50 Journey to 10,000 level

But the massive programme for Relief, Recovery and Reform (which also included the beginning of Social Security) did not translate into a smooth or swift recovery. Unemployment stubbornly stayed in the double digits throughout the rest of the decade, and even ticked up four and a half percentage points again, to 18.91% in 1938. Only by 1941 did the unemployment rate dip below 10% again, and the mobilisation effort that followed U.S. entry into war the next year led to the historically low unemployment rate of 1.2% in 1944. Never since has the U.S. unemployment rate ever been as low as that – nor ever as high again as 11 years previously.

Post-war America, in the public imagination, turned from military victory to the commercial conquest of the world, bringing stability and growth in the domestic economy. Point in case: the Employment Act of 1946, which extended the federal government’s powers to fight inflation and unemployment – although the bill stopped short of advocating full employment, as so nearly achieved a few years earlier. But in reality, as this graph shows, peace did not bring immediate prosperity. Between 1945 and 1949, GDP contracted and unemployment crept up again, to 5.9%. But from 1950 onwards, growth returns, and unemployment goes down again.

By 1954, the Dow Jones had returned to pre-Crash levels, officially ending the Recession. Apart from two ‘red’ years this decade – 1954 and 1958 – the economy keeps growing and growing, all the way to the early 1970s. Unemployment gradually drops to a low of 3.6% in 1968; but starts to creep up again even before the Oil Crisis, which turns the start of the next decade red, and leads to ‘stagflation’ – low growth plus high inflation.

President Reagan oversees an even bigger contraction of GDP in the early 1980s, but the rest of the decade sees a recovery to growth and lower unemployment – only perforated by the Savings and Loan Crisis of 1989, a financial meltdown that was felt well into the 1990s. However, the Clinton years witness another long stretch of economic growth, the establishment of NAFTA and the balancing of the federal budget.

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The presidency of George W. Bush was hit by the stock market crash of 2000, and by 9/11 a year later. The ensuing war on two fronts – in Afghanistan and Iraq – doesn’t seem to have a negative impact on the home front, where growth stays strong and unemployment stays low. But the fact that the European Union overtakes the U.S. as the world’s largest economy in 2007 could be seen as a sign of underlying weakness – but that warning is soon rendered obsolete by the financial crisis that erupts the next year. Dubbed the Great Recession, it sees a serious contraction of the economy and a spike in unemployment spike at 10%. Measures taken by president Obama avert an even worse crisis, and the economy starts to grow again, although the so-called ‘jobless recovery’ leaves many ordinary Americans wondering when or even whether they will reap the benefits of the improving economy.

Unemployment has now fallen to what has come to be considered a natural low, of 5%. Could it ever return to the catastrophic levels of the early 1930s – or the near-full employment of the mid-1940s? As the Trump era begins, it remains to be seen whether the new president’s policy changes will extend the virtuous cycle of rising growth and falling unemployment – or punctuate it with a red mark for recession, followed by rising jobless rates.

source : howmuch

Know the Portions of Your Rs.100 Bank Deposit.

In all the noise about rising bad loans, a deposit deluge in the aftermath of demonetization and the collapse of credit growth, it’s time to take stock of where public funds are lying right now in the economy.

In a report from the Reserve Bank of India, the credit-deposit ratio as of the month of May was 72%, which means that out of Rs.100 deposited in the bank, Rs.72 used for lending and the rest Rs.28 was used to buy government bonds. In the same time of the previous year, banks have used Rs.76 out of Rs.100 deposit for lending and had left the rest Rs.24 in bonds. This is as per the stock of deposits on the 30th of the month.

1001Source : Centre for Monitoring Indian Economy

Taking a look at the additional credit-deposit ratio, which shows what portion of the new flow of deposits, is getting placed in the credit. And this reflects the slump in credit growth in 2016-17.

By the time of March-end the additional credit-deposit ratio was 42%, this shows that more than half of the deposits that came in were placed in government bonds. These are low-yielding and very safe assets. This could be easily understood by the fact that the deposit stream following the demonetization of Rs.500 and Rs.1000 currency bills left a little choice to the banks to buy nothing but the government bonds as the loan demand is very less. Moreover, during the demonetization period, this was even lesser in the month of November, it was 1% only which aroused to nearly 13% in the month of December.

Trouble in India’s Credit System of banks having foremost NPAs

Now, if we talk about the month of May where the credit-deposit ratio was 72%, the large amount of share is still placed with industry through the loans accompanied by credit to services as well as individuals.

Share/Portion of Rs.100 Deposited

Out of every Rs.72 lent, nearly Rs.17 only went to personal loans and services each, and approximately Rs.28 or 29 went to build or run the factories. A share of Rs.10 went to agriculture. The share of personal loans has aroused in one year to approximately 25% of total non-food credit from 21%. On the other side, the industry has dropped to 38% from 41% while farming maintained its portion of nearly 14%. Basically, only Rs.25 of every Rs.100 deposited in a bank comes back to the people in the form of loans like home loans, car loans and other credits.

It is known that the banks are burdened with a big heap of bad loans. Approximately Rs.14 of every Rs.72 lent is now classified as stressed portion, which means it neither originate any income for the banks or due to the late payments by the borrowers to lenders.

Nifty 50 Journey to 10,000 level

NIFTY 50 is a broad based index consisting of 50 large and liquid companies listed on National Stock Exchange of India (NSE). NIFTY 50 is the benchmark index of India, reflecting the overall conditions of Indian equity market as well as Indian economy. Over the years, NIFTY 50 has be-come the most widely used benchmark for exchange traded products in Indian equity market.

NIFTY 50 & GDP growth rate

Growth rate of India’s GDP is fairly captured in the growth story of NIFTY 50. Over the years, India has been one of the fastest growing large economies of the world which is also reflected in the rise of NIFTY 50 Index.

Performance of NIFTY 50 and GDP Growth Rate

nifty 50 and growthNIFTY 50 values as on financial year end & on days of reaching multiples of 1000 levels and GDP growth rate for respective financial year.

Beginning FY 2003-04, Indian economy was in a boom phase driven mainly by investments until it was disrupted by the global financial crisis of 2008. Large fiscal stimulus helped spur the growth process and so India began to recover much before most economies of the world.

Recovery had been hampered by temporary shock in FY 2016-2017, while since beginning of FY 2017-18, market has picked momentum primarily on back of introduction of GST & several other reforms intro-duced by the Government of India.

The 10,000 milestone that NIFTY 50 has reached is a faithful representation of India’s growth prospects.

nifty1

Journey to 10,000 level

From its base value of 1000 in November 1995, the NIFTY 50 reached the 2000 mark in December 2004, taking 9.1 years to double. Thereafter, the journey of NIFTY 50 was swift wherein it reached the 6000 mark in only 2.9 years. It took another 6.4 years to reach the 7000 mark in May 2014 from 6000 in December 2007. The 9000 level was achieved in March 2017 which was relatively faster from 7000 level taking only 2.8 years.

The flagship index ‘NIFTY 50’ hit the 10,000 mark on July 25, 2017, taking only 4.3 months to move from 9000 to 10000.

Time takenMethodology

The NIFTY 50 Index tracks the performance of a portfolio of the 50 largest and most liquid Indian securities. The companies are filtered for liquidity on the basis of impact cost which is the cost of executing a transaction in a security in proportion to its index weight, measured by market capitalization at any point in time. NIFTY 50 methodology delivers the most replicable and reliable benchmark index for the Indian equity market.

Index is rebalanced on semi – annual basis. The cut-off dates are January 31 and July 31 of each year, i.e. for semi-annual review of indices, average data for six months ending the cut-off date is considered. Four weeks prior notice is given to market from the date of change.

NIFTY 50 Index has an inception date of November 3, 1995. The index was constructed using a unique concept of impact cost, which helps in the selection of highly liquid stocks and results in the creation of a replicable index. Initially constituents were weighted on the basis of full market capitalization and from June 26, 2009 onwards, the computation was changed to free float methodology.

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Performance

Since inception, NIFTY 50 has given annualized returns of 11.2% while having annualized volatility of 24.5%. Volatility in recent periods has reduced from over 24% since inception to close to 8-11% in more recent times (6 month to 1 year period). The return to risk ratio of NIFTY 50 has also improved substantially over the years from 0.46 since inception to 1.98 in the last 6 month period.

NIFTY 50 as on July 24, 2017 was trading at P/E of 25.45x and P/B of 3.55x which are lower than the previous highs of 28.5x on Feb 11, 2000 and 6.6x on Jan 08, 2008 respectively.

NIFTY 50 Performance – Price Return Index (Nov’95 to Jul’17)

performance

Nifty 50 Performance – Return and Risk

risk vs return

Calendar Year Performance

In terms of calendar year returns, since 1996, NIFTY 50 has given more than 50% return in 4 calendar years and more than 30% return in 7 calendar years. NIFTY 50 has fallen by over 20% only in 2 calendar years, giving positive returns in 15 out of 23 years.

Calender Year wise performance of NIFTY 50

calender wise

At the time of inception, NIFTY 50 represented 13 sectors while there are 12 sectors as of June 30, 2017. Over the years weight allocation in these sectors has undergone a significant change. IT sector was not represented at the time of inception, but now represents around 11.6% of weight in the index as on June 30, 2017.

Sector weights for 1995 is as on date of inception (Nov 03, 1995) and for 2017 & 2005 as on June end.

sectorwise

From 1995 to 2017, weights of financial services sector has increased from 19.7% to 35% and for metals and consumer goods have declined from 11.6% to 4% and 18.8% to 11.2% respectively. Other sectors like chemicals & textiles which represented 5.4% and 5.5% respectively at the time of inception, no longer form part of NIFTY 50.

 

Japanese investors Nomura India Fund owned $13 billion of Indian stocks and bonds

“India is the only country among major emerging markets that satisfies all the conditions — a sizable economy, high growth rate and yield, and political stability,” said Go Ikeda, a senior fund manager at Mitsubishi UFJ Kokusai Asset Management Co.

“Investors are looking at where the growth will be in the medium to long term, without having to worry about short-term swings in the market.”Kazuto Wada, an executive director at Nomura, Japan’s largest brokerage.

Indian economy that’s growing at 7 percent annually with reforms showing tangible progress.

India’s economy is expanding at about seven times the pace of Japan’s, buoyed by a burgeoning middle class and more one than million young people joining the labor force every month. Indian shares have hit multiple records this year amid optimism about Prime Minister Narendra Modi’s policies.

Sumitomo Mitsui Asset Management Co.’s Indian bond fund, co-managed with Kotak Mahindra Asset Management, took in a net 24 billion yen ($214 million) from December through June, lifting total assets to about 87 billion yen as of July 10.

Japanese investment trusts’ holdings of Indian securities more than doubled to 898 billion yen in June from a year earlier, data from Investment Trusts Association, Japan show.

The rupee has gained 5.8 percent versus the dollar in the past six months in Asia’s top performance. The nation’s 10-year bond yield of 6.45 percent ranks second after Indonesia among major Asian economies and compares with 0.07 percent in Japan.

The combined assets of three India funds run by Nissay Asset Management Corp. have topped 100 billion yen since their launch 2015.

For Franklin Templeton’s Michael Hasenstab, “unprecedented” structural reforms by Modi and relatively high yields make India a “sweet spot” among emerging markets. On July 1, India introduced a goods and services levy designed to unify the nation into a common market and widen the tax net.

noumura

Kato shared his views in an interview in Tokyo on Friday.

Key Point

Why is India so popular now?

  • India is becoming a popular destination because of improvements in fundamentals.
  • The fiscal deficit has narrowed and is likely to shrink further, while the current-account deficit has also decreased. Inward direct investment can finance the current-account gap, which is positive for the rupee and currency stability.
  • Inflation has been under control and the Reserve Bank of India has gained credibility for curbing it.
  • A series of positive news including the ruling party’s win in state elections have helped boost Prime Minister Narendra Modi’s government; the goods and services tax roll out has led to limited disruption, nd the impact from the scrapping of high-value currency bills has been smaller than expected.

How does India compare with other countries?

  • Stocks in developed markets look relatively expensive and face more downside risks, while bond yields in those markets may rise amid hawkish tone of major central banks.
  • India’s defensive character also makes it stand out; it is less dependent on exports and when the global economy is weakening, because domestic demand is solid, the impact from a slowdown is less.
  • The South Asian country’s reliance on China is low in terms of trade and the two don’t compete in terms of the goods they sell in global markets. That makes India resilient to external shocks.
  • India is a net importer of oil and falling crude prices contribute to a lower trade deficit and slower inflation. Foreign ownership of Indian bonds is also relatively low, which shields it at a time of capital flight.

What is your outlook on RBI’s monetary policy, impact on bonds?

  • Even if the RBI cuts rates, yields are unlikely to drop sharply because the move has been priced to a certain extent. The 10-year rate will probably stay above 6 percent, which remains relatively high, while the rupee may also remain stable. The real yield will still be high and the nation’s debt will continue to be attractive for foreigners.

What is your outlook for the rupee?

  • The rupee is likely to trade steady, near the 65 per dollar area. From a valuation standpoint, the currency seems to have become expensive but a narrower current-account deficit and ability to finance it with the direct investment should be supportive.

Rupee

What does the India bond fund hold now?

  • Rupee bonds account for about 70 percent of total assets, while dollar-denominated notes make up the rest. The fund is becoming cautious about its dollar-bond holdings on prospect for higher interest rates.
  • Duration of the dollar notes is also relatively shorter at about three years, while that of local-currency securities is longer at about 6 to 6.5 years as yields are under pressure because of stable inflation outlook

With assistance by Garfield Clinton Reynolds

India’s Market cap is likely to strike $4 trillion in 6-8 years

Although, Indian equities may have generated negative returns in 2015 losing up to 5% with Sensex and Nifty, the longer term prospects for the Indian market seems to be brighter in the upcoming years.

According to some experts, India’s equity market capitalization is very close to reach $3 trillion by the end of 2020. The Indian market which entered the $2 trillion market capitalization club recently in the previous month will very soon is going to enter the $4 trillion club in the upcoming 6-8 years.

For the knowledge, the Indian market’s present market capitalization is $2 trillion which is more than many big countries like Brazil, Korea, Taiwan, Indonesia and also Russia.

SENSEX2

The market reported a record hike in the recent 5 months courtesy rectified by the Narendra Modi- led Indian government, the supposition of higher earnings for the country recover in the growth of the economy and a steady political environment.

The S&P BSE Sensex rose more than double in the previous 10 years, on the other hand, the market cap rose over 250 percentage in the exact same time period. Currently, India’s share in the market capitalization of the world is at 2.6% which is 0.2% more than its average of 2.4% in the past years. Considering a recent report, the market capitalization of the world has increased 17.6% within a year. On the other side, the market cap of India has increased 33% within a year.

 

market cap

Source : MOSF,Industry

Market capitalization is said to be the function of growth in earnings, liquidity and rate of interest. In FY17, India has recorded better growth in earnings than expected, which combined with an unparalleled inflow of domestic liquidity has forced market cap of India share of the market cap of the world.

In the FY17, Indian market rose approximately 17% followed by MSCI EM which has also raised over 17%, the growth rate of Korean market is 16%, Taiwan market is up by 9% and Indonesian market rose nearly 8% in the same time period.

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Mentioned countries were the top performers among prime global markets in local currency terms. Among prime markets, Russia which has recorded 18% growth has provided negative returns.

The United States is currently holding the top position in the names of the largest market cap in the world with $26.9 trillion, followed by China having a market cap of $6.7 trillion and Japan having a market cap of $5.6 trillion.

Analysts and Experts are expecting 10 to 12% CAGR growth in the Indian market cap which is approx. $4-5 trillion in the next 6 to 8 years which will bring India above UK market cap which stands at $3.5 trillion.

 

Trouble in India’s Credit System of banks having foremost NPAs

To run the economy efficiently and for a proper growth of the economy, there must be a steady banking system in the country. But the continuous inflating of NPAs (Non-Performing Assets) is one of the major hindrances that obstruct the operations of Indian Lenders.

Here are the well-known and big Indian Banks and the total of NPAs they had on their accounts until quarter of March.

1.Indian Overseas Bank

2. IDBI Bank

3. Central Bank

4. Bank of India

5. Punjab National Bank

6. Oriental Bank

7. Dena Bank

8. Canara Bank

And before reading any further,

There’s no need to panic as the Government of India remains committed to support these banks wherein it’s the single largest shareholder.

Indian Overseas Bank

IOBANK

The gross NPA of Indian Overseas Bank has risen to 22.39% of its total lending which is Rs.35,098.25 Crores.

The bank recorded a loss of Rs.646.66 Crores in the March quarter in comparison to the net loss of Rs.936.19 Crores in the March quarter previous year.

IDBI Bank

IDBI

The gross NPA of IDBI Bank has risen to 21.25% of its total lending which is Rs.44,752.59 Crores.

The bank recorded a loss of Rs.3,199.76 Crores in the March quarter this year which is almost double the net loss of Rs.1,735.81 Crores in the March quarter previous year.

Central Bank

CENTRAL

The gross NPA of Central Bank has risen to 17.81% of its total lending which is Rs.27,251.33 Crores.

The bank recorded a loss of Rs.591.77 Crores in the March quarter this year in comparison to Rs.898.04 Crores in the March quarter previous year.

Bank of India

BANK OF INDIA

The gross NPA of Bank of India has risen up to 13.22% of its total lending which is Rs.52,044.52 Crores.

The bank recorded a net loss of 10.46 billion INR for March quarter in comparison to the loss of 35.87 billion INR in the previous year.

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Punjab National Bank

PUNJAB

The gross NPA of PNB is 12.53% of its total lending which is Rs.55,370.45 Crores.

The bank recorded a loss of Rs.22,415 Crores as a comparison to Rs.42,252 Crores in the March quarter last year.

Oriental Bank

OBC

The gross NPA of Oriental Bank is 13.73% of its total lending which is Rs.22,859.27 Crores.

The bank recorded a net loss of Rs.1,218.01 Crores for March quarter in comparison to Rs.21.62 Crores in the March quarter previous year.

Dena Bank

DENA

The gross NPA of Dena Bank is 16.27% of its total lending which is Rs.12,618.73 Crores.

The net loss of the bank has increased to Rs.575 Crores in the March this year in comparison to Rs.326 Crores in the March previous year.

Canara Bank

CANARA

The gross NPA of Canara Bank is 9.63% of its total lending which is Rs.34,202.04 Crores.

Surprisingly, the bank recorded a profit of Rs.2.14 billion in the March quarter this year as a comparison to a loss of Rs.39.05 billion in the previous year.

Market Cap to GDP Ratio Signals Upside for equity

Weak earnings, lackluster IPO market and inconsistency make market cap lag GDP growth.

The market cap to GDP ratio is currently well below 100 percent, indicating that equity has room to move higher.

This ratio measures the value of all the stocks listed on Indian exchanges against the GDP and is used by analysts to see if the stock market is rightly valued.

As a thumb rule, when the ratio moves well above 100 per cent, stocks are said to be expensive and when it is far below 100 percent, stocks are assumed to be cheap.

Based on the GDP growth estimate for 2016-17 (which was revised down recently), the current market cap to GDP stands at 74 per cent. While this is an improvement from the 64 percent recorded in 2012-13, the current level is almost half of the 149 percent recorded in the bull market frenzy of 2006-07.

Market cap to GDP

Weak earnings

The poor performance of listed companies has led to the diminishing market cap/GDP ratio. Revenue of companies in the CNX 500 index has been declining over the past few years. While revenue for these companies has grown by 5.4 per cent annually between 2011-12 and 2015-16, net profit has been more or less flat (0.2 percent) during this period.

There has been a vast difference in the sector-wise growth too. For example, while revenue and profit for software companies have grown (annually) by a vigorous 16 and 18 per cent, respectively, capital goods companies’ sales and earnings have declined annually by 4.4 and 11.7 percent, respectively, during this period.

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Lackluster IPO market

Another reason for a poor Market cap/GDP ratio could be lackluster IPO market. Market capitalization can rise rapidly only when fundraising takes place actively. But, due to constriction in demand and companies postponing their capital expenditure, the primary market in the country has not been too strong.

The Indian IPO market also went through a lean phase since 2010. Between 2005 and 2010, the number of new initial public offerings was 345, nearly three times the offers made between 2011 and 2016.

Foreign Fund Flows also have an impact on Market Cap. While foreign portfolio investors have mostly been pumping money into the Indian equity market, there have been periods when they have turned net sellers, due to global upheavals, influencing market capitalization. Between 2011-12 and 2014-15, FPIs net purchased 3,74,813 crore of stocks. But, in 2015-16, FPIs pulled out 14,172 crores, leading to falling in stock prices.

Inconsistency

The lower ratio could also be a result of a difference in their constituents. For instance, companies within the agriculture sector contribute close to 2 percent of the total market capitalization of BSE-listed companies. The contribution of agriculture to the GDP is much higher at 17 per cent.

Similarly, in the GDP estimates for 2015-16, banking, finance and business services contribute close to 20.6 per cent. But banking, financial and information technology companies account for close to 24 per cent of BSE’s market cap. Such variations make the comparison across market cap and GDP very difficult.

Aditi Nayar, Senior Economist, ICRA, says, “The correlation between GDP and market cap growth rates is not direct. Moreover, the growth in various indexes also reflects the possible political, geopolitical and sector-specific risks. Besides, the unlisted companies are many. In some sectors, their component is very high.”

Be alert Bitcoins are not approved by RBI

The Reserve Bank recently stated that it has not approved the use of virtual currencies, and had warned people to invest in the instruments like Bitcoins.

They also urge that it doesn’t have any license or approved authorization to any entity or company to operate such schemes or deal with Bitcoins or any virtual currency. And if any user, holder, investor, trader etc. dealing with virtual currencies, they are doing it on their own risk.

RBI also says that the person investing in such virtual currencies is revealing themselves to potential financial, operational, legal, customer protection and security related risks.

bitcoin ponzi scam

The apex bank also made a deep observation to the notification made on December 2013, which alerts the investors regarding the same.

RBI also reveals that the virtual currencies stored in e-wallets were opened to hacking and users were opened up to lack of money in case of any problems or disputes in the absence of any regulations.

The central bank had also indicated issues surrounding valuation, and reveals that there was no latent asset and there was lots of supposition made on it. And also added in his words, that the people who trade on uncontrolled platform will definitely face legal and financial problems very soon.

Budget 2017-18 sector/stock Impact ( positive and negative )

Auto Sector – Tractors

There is an overall positive impact on this sector. Government committed to double farmer income in five years.

The companies like Escorts, HMT, and VST Tillers fall under this sector.

Banks ( Public Sector )

There is a positive impact on overall banks public sector. Resolution of financial firms amendments to help banking sector. Government allocated Rs 10,000 crore for recapitalization of PSU banks.

The banks like SBI, Bank of Baroda, and PNB fall under this sector.

Cement – Major

There is positive impact on this sector. Government allocated Rs 3.96 lakh crore for infrastructure.

Such as UltraTech Cement, Shree Cements, and Ambuja cements comes under this sector.

Cigarettes

Government hikes excise duty on various lengths of cigarettes by 2.5% & 6%. Thus, this sector shows negative impact.

The cigarette companies like ITC, Godfrey Phillip, and VST are few examples of this sector.

Computers – Software – Training

Government hiked allocation for women skill development to Rs 1.84 lakh crore in FY 2018. It’s all ready to set up 100 India-International skill centres. Government to undertake reforms in UGC to improve higher education. It is creating innovation fund for secondary education. Thus, there is a positive and good impact on this sector.

The companies like Zee Learn, Aptech, and NIIT falls under this category.

Construction & Contracting – Civil

National highway allocation at Rs 64,000 crore. So, this sector proves to be a positive impact.

Such as the companies like NCC, Ashoka Buildcon, and Hind Construction are the examples of civil sector.

Construction & Contracting – Housing

Instead of build-up area, carpet area will be counted for affordable housing. Government proposes to finish 1 crore houses by 2019 for those living in kachcha houses. Economic Survey: Over Rs 16,000 crore made available to self-help groups. Hence, there is positive impact on this sector.

The companies like Ashiana housing, Peninsula, and Land Nila comes under this sector.

Union budget sector wise

Construction & Contracting – Real Estate

Government proposes to make changes in capital gains tax for housing. Re-financing of housing loans to give impetus to real estate sector. Affordable housing to be given infra status. Thus, there is a positive impact on this sector.

The real Estate companies like DLF, Oberoi Realty and Godrej Prop are few examples of this sector.

Engineering & Capital goods

Government doubles lending target of banks to Rs 2.44 lakh crore. Government allocated Rs 3.96 lakh crore for infrastructure, announces a new trade infrastructure export scheme. So, there is a positive impact on this sector.

The companies like Larsen, Adani Ports, and Siemens are few examples of this sector.

Electric Equipment

Economic Survey shows that over 20 crore LED bulbs have been issued via Ujjwala Yojana. Hence, there is good impact on this sector.

The companies like Havells India, Crompton Greave, and Techno Electric falls under this sector.

Electricals

Defence expenditure excluding pension at Rs 2.74 lakh crore. Therefore, it creates a good impact on this sector.

Bharat Electricals, CG Consumer, and Genus Power are few examples of this sector.

Engineering

Positive impact is shown by this sector, as government proposes to invest Rs 1.31 lakh crore in railways in 2017-18.

Few examples of this sector are Quess Corporation, Shanthi Gears, and LG Balakrishnan.

Fertilizers

Government will take steps to make sure farmers get better prices for harvest. Government committed to double farmer income in five years. Economic Survey shows that focus of government has been holistic development of Agriculture. Thus, this shows us a positive impact on fertilizer sector.

The companies like Coromandel Int, GSFC, and GNFC falls under this sector.

Impact of Demonetization on Real Estate & its effective resolution plan

Food Processing

This sector is showing good impact as government is going to set up dairy processing fund.

Nestle, Britannia, and GlaxoSmith Con are few of the food processing companies which comes under this sector.

Hospitals & Medical Services

This sector is not showing positive impact. New rules for pricing medical devices should benefit common man.

Apollo Hospital, Fortis Health, and Narayana Hruda are the few examples of this sector.

Hotels

5 special tourism zones are to be set up in partnership with states. Thus, goods results are going to be announced soon by this sector.

The Hotels like Indian Hotels, EIH, and Mahindra Holiday comes under this sector.

Infrastructure – General

Government is trying to expand airport capacity over next 10-15 years, with participation of private sector. There would be Increase in allocation for infrastructure. At least 25 stations re-development contracts will be awarded in 2017-18. Thus, good impact is shown by this sector.

Companies like Larsen, Adani Ports, and Siemens are few examples of this sector.

Refineries

Government will cut basic customs duty on LNG to 2.5% from 5% and proposes to create integrated PSU oil major. This shows positive impact on this sector.

Few examples of this sector are Reliance, ONGC, and IOC.

Oil Drilling and Exploration

Government is all ready to set-up new crude oil reserves. It shows a positive impact to this sector.

ONGC, GAIL, and Cairn India are few of the oil drilling and exploration companies.

Personal Care

Government raises allocation for MNREGA from Rs 38500 crore in FY 2017 to Rs 48000 crore in FY 2018. A good impact is shown by this sector.

Companies like HUL, Godrej Consumer, and Dabur India comes under this sector.

Plastics

Long-term irrigation fund set up in NABARD, additional corpus Rs. 20,000 crore which is showing a very good impact on this sector.

Supreme India, Astral Poly Tech, and Jain Irrig (D) are few plastic companies which fall under this sector.

Power – Generation & Distribution

A positive impact is there in this sector. Countervailing duty on machinery for renewable energy cut to 6%. Focus on solar continues as 7000 stations to be solar powered. Government is going to take up second phase of solar power development for additional 20,000 MW.

Such as NTPC, Power Grid Corporation, and NHPC are the few companies which come under this sector.

Power – Transmission & Equipment

Government is going to achieve 100% rural electrification by May 1, 2018. Thus, positive impact is shown by this sector.

GE T&D India, Kalpataru Power, and GE Power India are few of the power transmission and equipment companies.

Real Estate

Government reduces existing tax rate for personal income of Rs 2.5-5 lakh to 5% from 10%. Government doubles lending target of banks to Rs 2.44 lakh crore. So, there is a positive impact on this sector.

Companies like Aditya Birla, DLF, and Oberoi Realty fall under this sector.

Retail

Government reduces existing tax rate for personal income of Rs 2.5-5 lakh to 5% from 10%. It is showing a good impact on this sector.

Aditya Birla, Future Retail, and Trent are few companies which come under this sector.

Textiles – Denim

Economic Survey reveals that Rs 6,000 crore were announced to boost employment & exports in apparels industries, which results in the very good impact on this sector.

The companies like Arvind and Nandan Denim fall under this sector.

Textiles – General

Government proposes to carry-forward the MAT to 15 years from 10 years, which will show a positive impact on the companies like Bombay Rayon, Sutlej Textiles, and Garware Wall.

Transport & logistics

There is a positive impact on this sector as transport sector allocated Rs 2.41 lakh crore.

Interglobe Avi, Container Corp, and Aegis Logistics are few of the companies in this sector.