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MOSL: Morning India (21/November/19): 1. EcoScope (States’ spending increases in 2QFY20, leading to wider deficit); 2. P&G Hygiene (Annual Report Update); 3. South Indian Bank; 4. Power Monthly (Periodical)

Morning India (21/November/19): 1. EcoScope (States’ spending increases in 2QFY20, leading to wider deficit); 2. P&G Hygiene (Annual Report Update); 3. South Indian Bank; 4. Power Monthly (Periodical)

 

Today’s top research idea

Ecoscope: States’ spending increases in 2QFY20, leading to wider deficit

• The brightest spot in 2QFY20 fiscal accounts of 18 states (~90% of all states) was strong spending.  It rose 16.6% YoY in 2QFY20 as against a decline of 0.2% in 1QFY20, which lead to 8.7% growth in 1HFY20.
• Total receipts of the states grew 5.5% in 1HFY20 on account of higher grants-in-aid received from the center in 2QFY20. As a result of faster growth in spending, fiscal deficit of states' stood at 37.6% of BE in 1HFY20, higher than 31.8% in 1HFY19.
• Such strong spending, however, is unlikely to continue in 2HFY20 because the combined fiscal deficit of general government (states + center) has reached ~73% of BEs in 1HFY20, second-highest in a decade, as receipts grew slowly than spending.

Piping hot news

Privatisation push: Cabinet approves strategic sale of BPCL, 4 other PSUs

The Cabinet Committee on Economic Affairs on Wednesday approved the strategic disinvestment of the Centre’s entire stake in Bharat Petroleum (BPCL), Shipping Corp, THDC India, and NEEPCO, and most of its stake in Container Corp, while giving up management control in these companies. It also gave an in-principle approval for the government to reduce stake in certain state-owned companies to below 51 per cent in some while retaining majority stake management control.