Trading Calls For Last trading Session of 2017:Good Bye 2017 Trade and Positional Picks

Buy Adani Power(Cash/Future) @ 42.65 Target 42.25--44 Stop Loss 38.75 Lot Size 20000

Buy Hind Zinc(cash/Future) @ 311--310 Target 317 Stop Loss 306 Lot Size 3200

Buy National Aluminium Above 86.80 Target 88 Stop Loss 83 Lot Size 8000

Buy Vedanta (cash/Future) @ 333--332.50 Target 339 Stop Loss 327 Lot Size 1750

Buy Tech Mahindra (Cash/Future) around 497 Target 510--512 Stop Loss 492 Lot Size 1100 

Buy Hexa Tradex (cash) @60 Target 66--70+ Stop Loss 57 

Buy Shalimar Wires (cash) @ 22--18 Target 29+ Stop Loss 14 

Buy Waterbase Ltd (cash) @ 361.50 Target 400+ Stop Loss 345

Buy Sahyadri Industries (cash) @ 260--250 Target 300+ Stop Loss 220

Buy Allcargo Logistics(Cash) @ 208--200 Traget 250--280+ Stop Loss 175

Buy Sarla Performance Fibres (cash) @ 69--66 Target 100+ Stop Loss 58

"TRADE WITH CAUTION AND MAINTAIN STOP LOSS AT ALL TIME"

  PATIENCE IS THE KEY TO SUCCESS---Ask Your father

MORE WILL UPDATE SOON!! 

Dow Jones 30 and NASDAQ 100 Price Forecast December 28, 2017, Technical Analysis

US stock markets did very little during the trading session on Wednesday, as quite frankly there is an enough volume out there to push the futures markets around. Obviously, the CFD markets follow suit, and with this I think it’s probably going to be a few days before we get a significant move.

Dow Jones 30

The Dow Jones 30 went sideways of course, but I think the most important level at this point is the 24,700 level, as it is a bit of a “floor. If we can bounce from there, the market should then go to the 24,850 level which has been a bit of a ceiling. I believe that the choppiness continues to offer potential opportunities, but for short-term traders only. I would stick to a very tight range, and perhaps use the stochastic oscillator as a signal as well. Overall though, you would not be blamed for sitting on the sidelines as there is a much going on.

NASDAQ 100

The NASDAQ 100 was very quiet initially during the trading session, but then eventually settled on a slightly negative session. I believe that the 6400-level underneath is the “floor” in the market, and looking at the stochastic oscillator it’s likely that we will go looking towards that area. Otherwise, we could turn around towards the 6450 handle, but at this point in the year, it’s very difficult put on large position, but I do recognize that the NASDAQ 100 is bullish overall and longer term, so I believe that the attitude of this market will continue to be the same going into 2018, so if you are more of a longer-term trader, you may be able to start building up a position slowly and add as it works out in your favor.

MORE WILL UPDATE SOON!!

E-mini S&P 500 Index (ES) Futures Technical Analysis – December 28, 2017 Forecast

Based on Wednesday’s close at 2685.50 and the earlier price action, the direction of the index today is likely to be determined by trader reaction to the Up trending Gann angle at 2687.75 and the down trending Gann angle at 2684.00.

March E-mini S&P 500 Index futures are trading slightly better early Thursday. Yesterday, stock market volume was extremely low so we have to take the price action with a grain of salt. We could continue to see another low volume today as investors prepare for the long holiday week-end.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, we’ve seen sideways to lower price action since December 18. A trade through 2698.00 will signal a resumption of the uptrend. The main trend will turn down on a move through 2651.75.

The short-term range is 2651.75 to 2698.00. Its retracement zone at 2674.75 to 2669.50 is the first downside target. Since the trend is up, look for a technical bounce on the first test of this area.

The intermediate range is 2622.50 to 2698.00. If 2669.50 fails as support, look for the selling to extend into its retracement zone at 2660.25 to 2651.25.

 

Daily Technical Forecast

Based on Wednesday’s close at 2685.50 and the earlier price action, the direction of the index today is likely to be determined by trader reaction to the Uptrending Gann angle at 2687.75 and the downtrending Gann angle at 2684.00.

Overtaking 2687.75 will indicate the presence of buyers. This could trigger a rally into downtrending Gann angles at 2691.00 and 2694.50. The latter is the last potential resistance angle before the 2698.00 main top.

The inability to overcome 2687.75 will signal the presence of sellers. A move under the downtrending angle at 2684.00 and the uptrending Gann angle at 2682.00 will indicate the selling is getting stronger. This could trigger an acceleration to the downside into the short-term 50% level at 2674.75, a longer-term uptrending Gann angle at 2672.50 and the short-term Fibonacci level at 2669.50.

MORE WILL UPDATE SOON!!

Golden year of IPOs! Top 12 stocks which listed in 2017 gave 100-500% return; do you own any?

In the big-ticket fundraising, Avenue Supermarts was the only IPO which is trading with gains of little over 90 percent, followed by AU Small Finance Bank, and ICICI Lombard General Insurance.

The year 2017 will go down as a golden year for IPOs as India Inc raised over USD 11 billion in the year, and the outlook for 2018 doesn’t look bad either.

As many as 153 initial public offers, including SME, hit the Indian stock market this year, raising USD 11.6 billion, according to an EY report.

Most of the IPOs which debuted on the bourses in 2017, including SMEs have given positive returns to investors with some rising as much as 500 percent in the same period.

Stocks which more than doubled investors’ wealth include names like Meera Industries from the SME segment rose 508 percent, followed by Apex Frozen Foods which rallied 318 percent, and Shankara Building Products rose 234 percent in the same period.

The euphoria in the primary market got fueled by massive returns which investors made in secondary markets with both Sensex and Nifty50 inching towards record highs. The S&P BSE Sensex climbed Mount 34K, while the Nifty50 broke past 10,500 in December.

The IPO pipeline is likely to remain robust for the year 2018, but a repeat of 2017 seems difficult. Some rough estimates show that fundraising up to Rs 25,000-35,000 crore is already in the pipeline.

The long-term growth story from a market is expected to witness many companies hitting the primary market in 2018 to capitalize on the confidence of investor. About 30 companies are already lined up to make debut in Indian bourses with estimated fund raise of above Rs 25,000-35,000 crore by the end of 2018.

It is expected to witness promising trend in primary market with actual figures still anticipated to outgrow current numbers. Further, the revival in the global market coupled with strengthening Indian economy and improved fundamental is expected to keep bullish sentiment buoyant in long-term.

IPOs is an excellent opportunity for investors to participate in new sector offerings like asset management and diagnostics, staffing last year which emerged new sectors where companies raised capital for.

Big gains for retail investors

Qualified (FII & DII) Institutional Investors, Non-Institutional Investors (NII) and retail investors are the main categories of investors who participate in the offering.

Retail investors have made big gains this time. But, before putting your money in the primary markets, investors should do their own research as every IPO might not be worth investing, suggest experts.

IPO markets have been very buoyant in 2017. “On the basis of one analysis done by us, taking over-subscription and listing gains into consideration, the retail category would have made an average return of 1.4 percent per IPO on allocation just on listing if they had applied to all the IPOs without evaluating,” Bismillah Chowdhary, CIO, Edelweiss Tokio Life told Moneycontrol.

This would translate to 47 percent absolute return if we sum up all the IPOs return which has hit the market in 2017. Overall returns can be increased further by analysing and subscribing to good IPOs, and holding them for the long term if the company is well-positioned to grow and capture market share in the future

Record Fundraising

Many big-ticket IPO’s hit D-Street in the year 2017 such as GIC, The New India Assurance, HDFC Standard Life, SBI Life, AU Small Finance, Reliance Nippon, Cochin Shipyard, Avenue Supermarts, HUDCO, Godrej Agrovet, and India Energy Exchange.

These companies raised between Rs 1,000 crore to Rs 11,000 crore from the D-Street but most of them failed to give benchmark-beating returns. General Insurance Corporation of India which raised over Rs11000 crore is down a little over 9 percent from its listing price.

The New India Assurance too failed to keep the momentum going and has plunged 18 percent since listing. SBI Life Insurance, Reliance Nippon, and Godrej Agrovet failed to hold gains and are trading 3-8 percent lower.

In the big-ticket fundraising, Avenue Supermarts was the only IPO which is trading with gains of little over 90 percent, followed by AU Small Finance Bank, and ICICI Lombard General Insurance.

The current fiscal year witnessed many companies listing on Indian bourses making it record high fund raise coupled with overwhelming issue size. A large company like New India Assurance raised about Rs 9,600 crore, while SBI Life Insurance pocketed Rs 8,400 crore from the primary market.

However, not many large size companies managed to trade above its issue price despite listing with premium. Given the valuation concerns for new stocks and poor fundamental outlook, many investors initiated to trade off with listing gain which further created a negative sentiment for the stocks.

For the rest of the IPO’s which have given good returns, investors may keep a mental trailing stop loss of say 10 percent below the current reigning price if they are not able to track their performance and valuations closely

The Laggards

A general tendency of the retail investor in the primary market is to gain from premium listing while undermining the core fundamental.

Further, the overheated valuation number ahead of its earnings outlook has truncated the short-term rally with many stocks turned negative. Not every stock which made its way to D-Street made money for investors.

We have taken companies which have raised more than Rs 100 crore from the primary markets and as many as 14 stocks gave negative returns post listing.

Stocks which disappoint investors include names like CL Educate, S Chand, The New India Assurance, Music Broadcast, GIC, Godrej Agrovent, Khadim India, Shalby, Matrimony, Bharat Road, MAS Financial Services, SBI Life Insurance, GTPL Hathway, Reliance Nippon, and Capacite Infraprojects.

There are only 25 percent issuers who go with the flow while the rest of them try and take advantage of bullish sentiment, manage to hype it well and get an expensive issue through.

For IPOs which have not made money despite strong liquidity flow into primary markets, investors should rethink their investment strategy.

It is better for the investors’ to take an exit call especially for the ones which have not made money and diversify themselves to the other stocks with good fundamentals which will help them to build up their wealth.

MORE WILL UPDATE SOON!!

Technical View: Nifty forms ‘Spinning Top’ pattern; tread with caution in January series

Investors are advised to tread with caution in January series as the momentum seems to be waning and if the index consistently trades below 10,470 then further correction towards 10,400 cannot be ruled out while a close above 10552 levels could change the game in favour of bulls.

   

The Nifty 50 which started on a bullish note on Thursday failed to hold gains and closed near its opening level making a ‘Spinning Top’ kind of indecisive pattern on the daily candlestick charts.

Spinning Top is often regarded as a neutral pattern which suggests indecisiveness on the part of both bulls as well as bears. It can be formed in an uptrend as well as in a downtrend.

The index opened higher came under selling pressure in the last 30-minutes of trade and pulled the index below 10500. It hit an intraday low of 10,460 before closing the day at 10,477.90 whch was also around its 5-days exponential moving average, down 12 points.

Investors are advised to tread with caution in January series as the momentum seems to be waning and if the index consistently trades below 10,470 then further correction towards 10,400 cannot be ruled out while a close above 10552 levels could change the game in favour of bulls.

The Nifty 50 registered a spinning kind of indecisive formation as it signed off the expiry session on a negative note. However, as we have been pointing out for last couple of trading sessions, weakness on lower time frame is getting more pronounced as for almost last three sessions.

The Nifty 50 hardly moved in a range of around 90 points and that too after witnessing consolidation breakout kind of situation in last Tuesday’s session. This is clearly suggesting that market is running out of steam. Hence, it looks prudent for traders to wait for signs of strength rather buying the dip in anticipation of a fresh breakout.

 further added that if the weakness persists then Nifty 50 should initially head towards 10426 levels where as correction shall get accelerated if it slips below 10400 on closing basis. Contrary to this any strength beyond 10552 on closing basis shall take the indices towards 10650 levels.

India VIX fell down by 1.54 percent at 12.29. VIX has to hold below 13-12.50 zones to support the overall Bullish bias in the market.

On the options front, for the January series, maximum Put open interest is at 10000 followed 10300 strike while maximum Call OI is at 10700 followed by 10800 and 10500 strike.

OI scattered at the beginning of new series and option band signifies a broader trading band between the range of 10300 to 10700 for the next coming sessions

The Nifty50 index formed a Spinning Top candle followed by a Bearish Engulfing on previous session. It witnessed a choppy start but volatility was seen in last hour of the session as it fell down from its intraday high of 10534 to 10460 levels.

Nifty has to continue to hold above 10450 zones to extend its move towards 10550 then 10600 while on the downside major support is seen at 10400 levels.

MORE WILL UPDATE SOON!!

Top 5 ‘must buy’ stocks which can give up to 37% return in the year 2018:

We believe that returns in 2018 from equity markets will primarily be dependent on the interplay between domestic liquidity and earnings growth.

The Nifty gained over 40 percent since NDA government came to power in 2014 supported by series of reforms initiated by the government, which emboldened foreign investors (FIIs) and domestic investors about the prospects of the domestic economy and possible recovery in earnings.

Further, the healthy domestic flow has been a major force for the recent rally as a shift from physical assets to financial assets by retail investors post demonetization resulted in heavy flows in equities.

We believe that returns in 2018 from equity markets will primarily be dependent on the interplay between domestic liquidity and earnings growth.

Earnings growth has been a laggard and markets are discounting a bounce back in FY19. Any slip in earnings growth will be detrimental to the performance of equity markets in 2018.

The probability of recovery in earnings growth is reasonable because of low base created due to demonetization and GST. Therefore, the probability of performance in equity markets is expected to remain high in 2018 too but certainly not as high as current fiscal.

Here is a list of top 5 stocks which could give up to 37% return in the year 2018:

Ramkrishna Forgings (RFL): BUY| Target Price of Rs975| Return 16%

Ramkrishna Forgings (RFL) is the second largest forging company in India after Bharat Forge (BFL) with an aggregate capacity of 150,000 MT. RFL has concluded its major expansion drive and is currently in the process of improving the utilisation of newly commissioned facility.

Further, as India’s economy is set to witness healthy growth on the back of reforms and visible improvement in global economy, we expect demand for automotive parts to remain healthy and hence for forging works.

Despite a sharp upsurge in stock price during last six months due to improving financials and healthy outlook, we believe that the stock still trades at attractive valuation considering a massive discount of ~50% in FY20E earnings against BFL.

However, as healthy improvement in return ratios (RoE at 21% in FY20E) is comparable with that of BFL (23% RoE in FY20E), we expect the valuation gap to shrink in the ensuing period. We maintain BUY recommendation on the stock with a Target Price of Rs975.

Apollo Tyres Ltd: BUY| Target Price Rs305| Return 13%

Apollo Tyres (ATL) currently enjoys ~28% market share in the TBR segment. As radialisation forms only 45% of domestic TB tyre market, we see a significant scope for radialisation in the domestic CV segment, which would benefit manufacturers like ATL, going forward.

We expect ATL’s market share in radial tyre segment to improve on the back of capacity expansion to meet the rising demand. Further, ATL is expected to benefit immensely with the recent imposition of Anti Dumping Duty in Chinese TBR.

Looking ahead, with the likely pick-up in utilisation from Hungary unit and possible improvement in price as no new capacity is coming up in the European region except for Korea-based Nexen, we expect ATL’s European operations to witness improvement. We have BUY rating on the stock with a Target Price of Rs305.

Kajaria Ceramics: BUY| Target Price Rs851| Return 18%

Kajaria Ceramics (KCL) has a market share of ~10% in domestic ceramic tiles industry, including the unorganised players (unorganised segment accounts for 60% of domestic tiles volume).

We believe that over the years, the Company has laid a strong foundation for growth by focusing on creating a strong brand, new product introduction, increasing distribution footprint and a higher share of JVs.

In our view, Kajaria is well-placed to capitalise on the burgeoning opportunity in tiles industry in coming years. Kajaria Ceramics’ own facility at Gailpur went on stream in Sept’17 to manufacture high-value ceramic floor tiles with a capacity of 3.5msm taking the total annual capacity of the unit to 30.1msm.

Based on expected EPS of Rs22.4, the stock currently trades at a reasonable PE multiple of 32.3x FY19E earnings. We maintain our BUY recommendation on the stock with a Target Price of Rs851.

Asian Granito Ltd: BUY| Target Price of Rs701| Return 30%

Asian Granito Ltd. (AGL) is the third largest listed tile player in India with a total manufacturing capacity of 32msm. Currently, the unorganised industry controls over half of the ceramic tile market in value terms and 60% in volumes.

With the rollout of GST, there would be a complete audit trail of transactions post introduction of E-Way bill w.e.f. Feb’18. This will make it extremely difficult for the unorganised players to evade tax, which in turn will benefit the large organised players like Kajaria, Somany, and AGL.

The recent reduction in GST to 18% from the initial rate of 28% should hasten the process of formalisation of the sector, in our view. Going forward, we expect AGL’s growth momentum to accelerate further owing to the faster formalisation of industry post GST roll-out, increasing focus on premiumisation, higher A&P spend and enhanced distribution footprint.

Considering visible improvement in growth trajectory coupled with attractive valuations of 15.3x FY20E earnings (45% discount to market leader Kajaria), we maintain our BUY rating on the stock with a Target Price of Rs701.

Federal Bank: BUY| Target Price of Rs150| Return 37%

Federal Bank (FBL) has delivered consistent growth in operating profit and loan book over the last few quarters. The Bank showed greater resilience on asset quality front with its gross and net NPAs remaining within the Management’s comfort zone in 2QFY18.

We believe that Federal Bank will continue to deliver further improvement in operational performance led by improving loan book growth along with changing portfolio-mix. The Bank continues to witness moderation in SMA-2 balance, which clearly suggests fresh slippage during 1HFY18 was more of a one-off event.

Notably, the Bank is gradually coming out of the scenario marked with higher provisioning and continued stress on asset quality for last few quarters.

Looking ahead, we expect the strong traction in earnings to continue owing to robust growth in loan book, moderate credit cost, and healthy margins. We reiterate our BUY recommendation on the stock with a Target Price of Rs 150.

MORE WILL UPDATE SOON!!

Cautious on broader markets in 2018, Q3 earnings could definitely look better; 5 best picks to keep on radar

The valuation picture looks little stretched by all means. Is it fair to call this market a ‘buy on dips'

The Nifty is currently trading at TTM P/E & P/B multiple of 26.8 & 3.54 respectively. The average TTM P/E & P/B multiple of Nifty since January 2000 is 19.1 & 3.6, respectively. The markets have risen in the past few months on the back of strong liquidity and expectations of earnings recovery in second half of FY18.

We are cautious on the broader markets since there are various risks related to USD depreciation, crude run up, higher inflation expectations, firming up of bond yields and relatively high TTM valuations. However, we have a bottom up approach in stock selection and any correction in these stocks because of dampening in general markets shall remain a “buy on dip”.

We believe earnings in second half of FY18 and first half of FY19, Budget in 2018, RBI Bi-monthly Policy review, Build up to general elections in 2019, US FED announcements, US tax rate cuts & further developments here are key things to watch out for.

In our view, earnings should be robust due to lower base of demonetisation and GST. However the Budget could be more populist since it would be targeting FY19 elections. The RBI policy might remain circumspect given our commodity dependence and the high chances of crude rise.

Fed hike/s would lead to lower liquidity in the EMs while tax cuts would lead to a widening of fiscal deficit and lead to USD depreciation. All these events will certainly have mixed impact on Indian equities and the broader indices would be volatile at best.

2017 has been a great year for Indian equities as the market grew by around 25 percent. Do you see same kind of rally in 2018 also and what is your Nifty target for December 2018?

We do not have targets for NIFTY. As highlighted above, the market would be more volatile and under pressure in CY18 compared to CY17.

The domestic liquidity supported markets in the year 2017. Will that liquidity support continue in 2018 as well or do you see some tapering of flows?

Flows will naturally taper from earlier levels due to factors discussed above.

After Gujarat elections there are as many as 8 state assembly elections lined up before general elections in the year 2019. Do you see a change in tactics of the Modi government or a policy shift in policy framework – from reformist to populist? What are you key expectations from the last full-fledged Budget, especially after Gujarat elections results?

Lower-than-expected seats in Gujarat elections have made the BJP led government cautious. The government has also ushered a major reform in the form of GST and too much reformist action might be negative for FY19 re-election prospects. Given this background, we expect a populist Budget this year.

Everyone is saying corporate earnings were far better-than-expected in September quarter. Do you see December quarter earnings laying foundation stone of earnings recovery?

Q3FY18 would definitely seem better due to a lower base in the previous year. We do expect this and subsequent quarters to lead the next phase of rally in the stock markets.

As we move to 2018, what are your 5 best picks for 2018?

Ashoka Buildcon

We expect higher contribution of roads and financial closure of HAM projects to lead to a better margin profile and working capital improvements ahead. We expect a re-rating of the stock led by (a) execution ramp-ups, (b) more EPC/hybrid annuity project wins and (c) declining interest rates.

Cadila Healthcare

The company has more than 150 pending approvals with USFDA & has been consistently receiving approvals (over 40 approvals in FY17). Strong US growth combined with accelerating growth in domestic market will help Cadila’s earnings to grow at 30 percent between FY17-20.

We also expect Cadila to get higher valuation as compared to peers owing to no overhang of regulatory issues and robust pipeline.

Pokarna

Company is amongst the few listed granite companies in India with fully integrated operations from captive quarries to own marketing. In Quartz, there is huge opportunity to capitalise in USA market. Tie up with IKEA is expected further boost sales.

Power Mech Projects

Robust order book is likely to drive execution visibility in FY18/19. Sluggishness in the domestic ETC market is likely to be offset by higher share of O&M, AMC and international market.

Granules India

We expect multi-year traction in the business, where immediate triggers would be utilisation of the newly built capacities, new ANDA launches from Hyderabad facility & improvement in Omnichem JV realization.

Medium to longer term would be driven by complex generics from the US facility, traction in the Private label OTC sales & introduction of Oncology portfolio.

MORE WILL UPDATE SOON!!

Populist Budget likely! Top 4 factors which are likely to move Indian markets in 2018

While the tangible benefits of structural reforms of formalizing the economy will show over time, government’s fiscal policies have been in the right direction and are helping the economy to remain robust.

   

In India, the disruption caused by a multitude of reforms was evident in slow GDP growth, impact on the MSME sectors and job losses.

While the tangible benefits of structural reforms of formalising the economy will show over time, government’s fiscal policies have been in the right direction and are helping the economy to remain robust.

Additionally, various reforms at the ground level prompted India’s significant rise in the World Bank’s Ease of Doing Business 2018 report uplifting the global investor community’s perception of India.

1) Credit offtake to gain momentum

The roll out of the public sector bank recapitalisation plan in 2018 should spur the credit offtake to corporate entities and MSMEs, which had slowed down substantially.

Whilst this will facilitate banks to clean up their balance sheets, it will also enable them to ride the recovery in credit cycle led by a gradual revival in the private investments cycle.

With robust growth in retail credit, I expect the wholesale credit growth to recover to early teens in 2018-19.

2) Infrastructure thrust to boost job creation

Government’s focus on reviving government capex and removing the stumbling blocks by resolving land acquisition, arbitration issues etc has helped construction companies struggling with stressed balance sheets to improve their order book position.

Considering the forward and backward linkages associated with the infrastructure sector, an increase in infrastructure spending will boost construction-related industries like cement, steel etc. Needless to say, the cascading impact on consumption growth led by the resultant job creation is tremendous.

3) Consumption growth to remain buoyant

India’s economy will continue to be consumption-led and will be backed by gradual job creation across income classes, normalisation of monsoon in past two years, support from crop insurance, adjustment of wages under the 7th pay commission and the continuing wave of populist government measures like farm loan waivers with general elections in sight in 2019.

4) Real estate sector to see an uptick

The residential real estate which has been suppressed for some years now will start seeing an uptick in demand mainly in the mid-income and affordable housing segment led by government incentives and improved consumer sentiment.

I expect prices to stabilise which have been on a downward trajectory for a while. While income yielding assets like IT/Office space will continue to maintain momentum, the warehousing/industrial space segments are likely to make a comeback with the government’s recent grant of infrastructure status to the logistics industry and continued focus on its ‘Make in India’ initiative.

However, we should not lose sight of the emerging headwinds like a potential shock from the crude oil prices, related inflationary pressures and hardening of interest rates.

Also, the results of the recent Gujarat elections may prompt the government to go for populist measures with general elections in sight in 2019. All these factors can disturb the fiscal deficit.

Hence, it is imperative to address the fundamental issues of Indian agricultural sector rather than doling out immediate and short-term benefits.

MORE WILL UPDATE SOON!!

Budget 2018: Govt may allocate Rs 90,000 cr for road projects under PMGSY

It was learnt that Centre and states will share the financial burden in the ratio of 60:40 as the government has set itself a target of completing the work under the programme before 2019 Lok Sabha elections

  

The Modi government will present its fourth Budget in 2018. While it is anticipated to be a “populist budget” ahead of a stream of assembly elections next year, the Budget may see an allocation of Rs 90,000 crore for development of roads under Pradhan Mantri Gram Sadak Yojana (PMGSY) spread over three years.

The government is expected to spend approximately Rs 1,00,000 crore on building new roads, including the ones in areas affected by Left-Wing Extremism (LWE) and upgrading roads already built under PMGSY.

The Budget is anticipated to push rural infrastructure in a big way and may allocate an additional Rs 11,000 crore for roads in LWE, through PMGSY.

“Infrastructure creation, even the rural infrastructure, is core to India’s future growth story,” Finance Minister Arun Jaitley, had said at the annual general meeting of Federation of Indian Chambers of Commerce and Industry (Ficci).

Pradhan Mantri Gram Sadak Yojana, which began in 2000, was aimed at providing “all-weather road connectivity” to unconnected villages in India. As per the government data, 47,447 kilometer of roads were constructed till 2016-17.

Rural Development

Out of 1,38,210 roads project sanctioned, 83.7 percent were completed as of December 2017. Out of 1,78,000 habitations where these rural roads were to be built, roads in the remaining 47,000 areas are targeted to be completed by March 2019.

It was learnt that Centre and states will share the financial burden in the ratio of 60:40 as the government has set itself a target of completing the work under the programme before the next Lok Sabha elections in 2019.

During the 2017-18 Budget, Jaitley had allocated Rs 27,000 for the rural roads programme to promote the country’s “sprawling rural economy in the aftermath of demonetisation”. During the Budget 2016-17, the government had earmarked Rs 19,000 for the same.

MORE WILL UPDATE SOON!!