Silver’s smart run to continue in 2010

Till now, market analysts have been going ga-ga over the rise and rise of gold prices but silver has been shining better than gold in 2009 and this trend is set to continue in 2010 also.

Driven by demand from auto sector for silver-zinc batteries which are used in ‘smart automobiles’ and an array of portable electronic devices, the silver’s shining story will continue in the coming year also.

Silver ready (.999 fineness) prices are hovering around Rs 27,850 per kg in the Mumbai bullion market.

Demand for silver in the coming year is expected to rebound to normal levels in 2010 as the emergence of key new markets for silver would help to boost prices further.

Also, re-stocking of inventories for more of silver’s traditional uses will be a powerful demand driver in the near-term.

Silver prices are mainly driven by the fact that traditional industrial end-users of silver, such as the global electronics industry have in recent weeks begun to replenish severely depleted inventories.

During the financial crisis, silver inventories had run down sharply and it may take approximately six-months to fully rebuild the inventories to normal levels, Singh said.

An important factor to understand in the case of silver is that demand from the industrial sector tends to be quite inelastic. This means that buyers have few options and have to pay at prevailing prices.

Key Features of India Budget 2009-10

Key Features of India Budget 2009-10:

• The government to abolish to the controversial Commodity Transaction Tax (CTT) in line with recommendation of Economic Advisory Council of Prime Minister.

• Branded jewellery exempt from excise duty. Duty on gold re-imposed. Customs duty hike on gold and silver. Tax exemption holiday for gems, jewellery and textiles.

• Target for agriculture credit raised to Rs 3,25,000 crore (Rs 3250 billion) in 2009-10 from Rs 2,87,000 crore. Incentives in interest rates to farmers to pay back agriculture loans in time. Additional allocation of Rs 1,000 crore for accelerated irrigation project.

• Allocations for highways being stepped up by 23 per cent. Indian Infrastructure Financial Corporation Limited to evolve financing mechanism for giving increased support to infrastructure projects.

• Indian Infrastructure Finance Company Limited will re-finance commercial bank loans upto 60 per cent in critical projects through public private partnership to the tune of Rs 1,00,000 crore (Rs 1,000 billion) to raise investment in the sector.

• Allocation for urban poor for provision for housing and basic amenities to be raised to Rs 3,973 crore (Rs 39.73 billion) in the current year. Allocation for Jawaharlal Nehru Urban Renewal Mission increased by 87 per cent to Rs 12,887 crore (128.87 billion).

• Central assistance for storm-water drainage project increased to Rs 500 crore (Rs 5 billion) from Rs 200 crore (Rs 2 billion) in the Interim Budget.

• Income Tax returns to be made simpler.

• Banks and insurance firms to remain in public sector. Rs 100 crore (Rs 1 billion) to be given as one time grant in aid to expand banks in unbanking areas.

• Export Credit Guarantee scheme extended till March 2010.

• Growth rate in 2008-09 dipped to 6.7 per cent from average 9 per cent growth in previous three fiscal years. Pranab said he intends to make pre-budget consultations with state finance ministers an annual affair.

• Fiscal deficit grew from 2.7 per cent to 6.8 per cent of GDP. Total fiscal stimulus during 2008-09 amounts to Rs 1,86,000 crore (Rs 1,860 billion).

• India infrastructure finance company IIFCL is given greater flexibility; used to take care of asset liability mismatch and free up capital for financing new projects; can facilitate incremental lending to infra sector

• IIFCL will finance 50% of projects; involving total investment of Rs1 trillion, public investment in infra to get a big boost. Asked my colleagues in the state governments to remove policy bottlenecks

• Budgetary allocation to highways and railways being stepped up by 23%; railways Rs15,000 crore. JNUURM allocation up by 87%.

• Scheme for urban poor housing to Rs3,973 crore; Rajiv Gandhi Awas Yojana; slum free India. Mumbai drainage allocation up

• Accelerated power development and reform progamme: Rs2,080 crore / 160% increase in allocation

• Natural gas: long distance highway to facilitate a national gas grid

• Agriculture: Rs2.87 trilliion to Rs3.25 trillion; interest subvention scheme for farmer; govt shall pay an additional 1% subvention to those who paid their loans on time — Rs411 crore over the interim budget

• Farm loan waiver covered 40 million farmers; six months extension on account of delayed monsoon. Maharashtra loan waiver coverage review; a task force. Accelerated irrigation development programme:75% increase in allocation

• Kautilya advice: return to frbm targets at the earliest after the negative effects of the global economy are overcome. Medium term perspective await the 13th FC.

• To bring fiscal deficit under control need institutional controls; will cover subsidy, expenditure and disinvestments

• Fertilizer subsidy: a nutrient based subsidy scheme as opposed to product based scheme; unshackling of fertilizer manufacturers will ; direct transfer of subsidy to the farmer

• Oil and petroleum subsidy: Three-fourths of our oil consumption is met through imports. Task force

• Direct tax reforms: asked the department to work on saral-2 form. We need a tax system that generates revenue on a sustained basis. More reforms spread over 5 years.

• Disinvestment: people participation; banks/insurance to remain in public sector; recall of nationalization/socialist credentials; 40 years ago on this day.

Railway budget 2009-2010: Imp Points

Here are the highlights of the railway budget 200-2010 presented in parliament Friday by Railways minister Mamta Banerjee.

No increase in passenger fare and freight tariff

budget to have inclusive growth and expansion of railway network to every corner of the country

Plan outlay of rs.40,745 cr. proposed for 2009-2010, passenger amenities get high priority, to get 119% increase

Traffic receipts during 2008-09 increase by 11.4 % while freight loading grew @ 5% Special trains for perishable farm produce, facilities for transportation of rural craft.

Works for 7 new lines, gauge conversion of 17 lines and doubling of 13 lines to be taken up.

Faster parcel services proposed on three routes


Tatkal scheme to be made passenger friendly

Railway tickets to be made available through post offices and ‘mushkil aasaan’ mobile vans

Concession for press persons increased to 50%

Monthly ticket of rs. 25/- for unorganized sector/poor under ‘izzat’ scheme “only ladies’ emu trains at Delhi, Kolkata and Chennai

‘Yuva trains’ from rural hinterland to metros at concessional fare

12 new point-to-point ‘duranto’ trains

57 new trains, extension of 27 trains and increase in frequency of 13 trains and air-conditioned double-decker trains proposed

50 stations to be upgraded to world class stations

Long distance trains to have on-board doctors and infotainment services

Handicapped and aged persons to have more amenities

Special trains to ferry perishable agro products and rural handicrafts

Special fund for the development of north east railway

Quazigund-Anantnag line to be completed by next month

6560 railway staff quarters to be constructed and group‘d’ employees to get scholarships for their girl child

Railways to come out with while paper on financial status and vision-2020 document