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MOSL: Morning India (17/August/18): 1. EcoScope (States’ spending growth strong in 1QFY19); 2. Technology (Expert Speak - Continued double-digit growth expected in ERD services); 3. Crompton Gr. Con (Annual Re

MOrning India (17/August/18): 1. EcoScope (States’ spending growth strong in 1QFY19); 2. Technology (Expert Speak - Continued double-digit growth expected in ERD services); 3. Crompton Gr. Con (Annual Report Update)

 

Today’s top research theme

EcoScope: States' spending growth strong in 1QFY19; Growth in general government tax receipts robust

• Aggregate fiscal deficit of 18 states that have published their fiscal data up to June 2018 touched a four-year high of 13.6% of budget estimates (BE) in 1QFY19. Despite a healthy increase in receipts, strong spending growth led to higher fiscal deficit in 1QFY19.
• Aggregate spending of the states grew 15.1% in 1QFY19 - the fastest pace in six quarters. While revenue spending grew the fastest in nine quarters, capital spending increased for the first time in five quarters.
• Gross receipts grew at a six-quarter high of 14.3% YoY in 1QFY19, although tax collection growth was tepid at 8.2%. Non-tax receipts grew much rapidly.
• Total receipts of the general government (18 states + center) grew strongly by ~21% YoY to 17.1% of BE in 1QFY19 - the highest in at least eight years. Better receipts supported higher spending, which also reached 22.8% of BE. Overall, fiscal spending is likely to support economic activity in ; however, with general government spending budgeted to grow at the slowest pace in four years, we continue real GDP growth to remain at sub-7% in FY19.

Piping hot news

Maruti Suzuki hikes prices by up to ₹6,100

• Country’s largest carmaker Maruti Suzuki India (MSI) on Thursday hiked prices of its vehicles by up to ₹6,100 in order to partially offset increase in commodity and distribution costs and adverse foreign exchange rates. The price change varies across models and is up to ₹6,100 (ex-showroom Delhi), the company said in a statement. The new prices are effective from Thursday, it added. MSI sells a range of vehicles from entry level Alto 800 to mid-sized sedan Ciaz. These were priced between ₹2.51 lakh and ₹11.51 lakh (ex-showroom Delhi) before the hike