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‘TN govt may get into reform mode after local body polls’

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4 years ago

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Palanivel-Thiaga-Rajan

The DMK-led Tamil Nadu government may get into reform mode post the local body elections likely to be held by the end of 2021, say party leaders and industry experts.

“Though a white paper on the Tamil Nadu government finances spoke about the necessity to hike tax rates and other things for those who can bear it, the state budget that was presented was a usual one. Perhaps the state government may get into reform mode after the local body elections,” K.C. Palanisamy, former AIADMK MP and MLA, told IANS.

Palanisamy said the local body elections may be held before the end of 2021 or February 2022.

Finance Minister Palanivel Thiaga Rajan after declaring ‘once in a generation reforms a must’ and ‘business as usual’ approach cannot continue while presenting the white paper on the state government’s finances, came out with a relatively populist budget.

As per the white paper, reforms/restructuring in state government undertakings, statutory boards, power utilities, mobilisation of tax revenues, mode of subsidy deliveries were on the cards.

“As a debutant Finance Minister, he might have taken a soft approach with his first budget which is an interim budget,” Palanisamy said.

Industry experts said Finance Minister Rajan’s budget is nothing but a status quo or an extension of the previous AIADMK government’s budget.

“The white paper set the expectation that the Finance Minister will provide a reform budget to reduce the state debt. One could agree that he needed more time to come up with the actual reforms but least expected was the transformation roadmap, a timeline,” Sriram Seshadri, Founder and Managing Partner, Disha Consulting and formerly Partner and Managing Director, Accenture India, told IANS.

According to him, a white paper lays down the problem, analysis, probable solution.

On the other hand, the government’s white paper laid out the problem statement which was well known and the expectations were there on reform proposals in the budget which surprisingly did not happen, Seshadri said.

“As an economist, I feel satisfied that the budget didn’t provide for any of the poll promises. For an economist the white paper gave an expectation that there would be a reform and transformation roadmap but the budget was disappointing,” he added.

According to him, nothing was there in the budget for beefing up the state revenues while the debt was increasing.

“Tamil Nadu will cross the debt of Rs six lakh crore mark by 2021 end. Only solace is during the budget discussions in the state Assembly, the Finance Minister has said some of the poll promises will not be met such as revising the old pension scheme for government employees,” Seshadri added.

He said if there is a reform agenda with the DMK government it has to be rolled out soon and not wait for the next year’s budget.

However, he agreed that the government will take some reform steps mainly targeted subsidies to poor sections of the society, refine the rules for ration cards and revenue optimisation initiatives like tax reforms.

“Already Tamil Nadu’s economy is the fourth largest in the country and will slip to fifth or sixth place soon. Hence, the state should regain the momentum, cut the red tape and enable ease of doing business both in MSME and large industries,” Seshadri said.

While the government’s popularity endures it should take some tough decisions to reduce government spending, disinvestment and make announcements to attract investment, he said.

“Sterlite Copper (copper smelter unit of Vedanta Ltd in Tuticorin) closure is one of the stumbling blocks for investors to invest in a big way because there is no guarantee to their investment. The government should enable reopening of Sterlite within the guidelines of the pollution control norms. Likewise closely monitor to optimize revenue on the natural resources, mining and sand. The government gets less than Rs 1,000 crore revenue whereas the potential is much higher,” he added.

However, the signs of change in the government are seen in the budget by not implementing its populist poll promises like Rs 1,000 per month dole to the female head of the family.

“Instead the government had decided to conduct a study to identify eligible beneficiaries. This move is new as in the past the state government used to disburse financial assistance for almost all ration card holders,” K. Puhazhendi, Director, Perfint Healthcare, told IANS.

Referring to Rajan’s statement that the governance will be data-based, Puhazhendi said the government can mine data available in its own departments/municipal corporations.

The smart ration cards are linked with Aadhar cards.

Puhazendhi said the government employees themselves form a big database so that undeserved subsidies can be stopped.

“Data on property taxpayers, land owners, vehicle registrations, power consumers, ration card holders, data about government employees, shops and business establishments, factories and other data are available with different departments,” Puhazhendi said.

The government can collate and gather from the people with help of door-to-door data gathering. This could be a starting point to build a database and target the subsidies and other government schemes, he added.

Stressing that the government’s focus should be on making each department, municipal corporations self-financing, Puhazhendi called for a freeze on government hiring and investment should be made in information technology systems to digitise the services.

It is high time the state government goes in for public-private partnership in the tourism sector. The state government owns several hotel properties which are in need of private investment and management.

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HDFC Bank clocks over 12 pc rise in Q3 net profit

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20 hours ago

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January 17, 2026

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Mumbai, Jan 17: India’s largest bank by market capitalisation, HDFC Bank, on Saturday reported a 12.17 per cent rise year-on-year in net profit for the December quarter of the current financial year (Q3 FY26).

The bank’s consolidated net profit increased to Rs 19,806.63 crore in Q3, compared to Rs 17,656.61 crore in the same quarter last financial year (Q3 FY25).

The bank’s core income also showed steady growth during the quarter. Net interest income rose 6.4 per cent year-on-year to Rs 32,615 crore from Rs 30,653 crore in year-ago period.

HDFC Bank said its core net interest margin stood at 3.35 per cent on total assets and 3.51 per cent based on interest-earning assets.

Operating profit before provisions and contingencies grew 8.4 per cent to Rs 27,097.80 crore from Rs 25,000.40 crore in the year-ago period.

Provisions for the quarter declined by 10 per cent to Rs 2,837.9 crore, compared with Rs 3,153.85 crore in the same quarter last financial year.

On the asset quality front, the bank reported mixed trends. Gross non-performing assets declined 2.3 per cent YoY to Rs 35,178.98 crore from Rs 36,018.58 crore.

However, net NPAs rose marginally by 3.4 per cent to Rs 11,981.75 crore from Rs 11,587.54 crore a year ago.

The ratio of gross NPAs to gross advances improved to 1.24 per cent from 1.42 per cent, while net NPAs as a percentage of net advances stood at 0.42 per cent compared to 0.46 per cent last year.

According to the bank’s exchange filing, HDFC Bank’s total balance sheet size stood at Rs 40,890 billion as of December 31, 2025, up from Rs 37,590 billion a year earlier.

Average deposits grew 12.2 per cent year-on-year to Rs 27,524 billion, while CASA deposits increased by 9.9 per cent to Rs 8,984 billion.

The bank’s lending book also expanded steadily. Gross advances rose 11.9 per cent year-on-year to Rs 28,446 billion as of December 31, 2025.

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Sensex, Nifty end week on flat note amid optimism on Q3 earnings, trade deal

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1 day ago

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January 17, 2026

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Mumbai, Jan 17: The Indian equity benchmarks closed this week almost unchanged amid optimism towards Q3 earnings and renewed India-US trade discussions, even as caution persisted due to increasing geopolitical tensions.

Profit-booking in pharma, consumer durables, and autos weighed on indices during the week, while PSU banks and metals outperformed.

Nifty added 0.04 per cent during the week and 0.11 per cent on the last trading day, to touch 25,694. At close, the Sensex was up 187 points or 0.23 per cent on the last trading day at 83,570. It dipped 0.01 per cent during the week.

Analysts said investors focused on Q3 earnings, where IT and bank numbers provided a layer of confidence on growth and demand. The prolonged geopolitical tensions made FIIs risk-averse in emerging markets and raised bond yields.

On the earnings front, the IT sector gained attention after the industry’s bellwether revised its revenue guidance upward, while the broader IT space reported better-than-expected earnings growth.

The banking sector also showed encouraging trends, with early results showing continued improvement in asset quality and better earnings performance.

Collectively, these trends set a constructive tone for the Q3 FY26 season and continue to strengthen investor confidence in domestic earnings recovery, an analyst said.

Bank Nifty posted a confident close, forming a bullish candlestick, while the RSI (Relative Strength Index) confirmed strength with a bullish crossover and is currently placed near 61.

Broader indices outperformed the benchmark indices during the week, with the Nifty Midcap 100 up 0.20 per cent, while Nifty Smallcap 100 advanced 0.46 per cent.

Investors remain focused on the US Supreme Court’s verdict on the legality of US President Donald Trump’s tariffs which is expected soon, but timeline is not certain.

They also keep an eye on key global macro indicators, including US PCE inflation and GDP prints, which will offer cues on the Federal Reserve’s rate outlook.

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Sensex, Nifty close week with gains over positive cues

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2 days ago

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January 16, 2026

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Mumbai, Jan 16: The Indian equity markets ended marginally higher on Friday, before surrendering most of their intra-day gains in the afternoon session.

At the closing bell, the Sensex added 187 points, or 0.23 per cent to settle at 83,570. The Nifty advanced 28 points, or 0.11 per cent, to close at 25,694.

The broader markets performed in line with the benchmark indices, as Nifty Midcap 100 index lost 0.07 per cent, while the NSE Smallcap 100 declined 0.34 per cent.

The benchmark Nifty opened on a muted note at 25,696, advanced to an intra-day high of 25,873 driven by a rally in IT stocks amid stronger-than-expected December quarter results. Nifty, however failed to sustain higher levels and eventually slipped to an intraday low of 25,662, reflecting profit-taking at elevated levels.

On the sectoral front, IT, realty and banking stocks outperformed. Nifty IT was the top gainer, up 3.34 per cent. Nifty Pharma and consumer durables slipped 1.30 per cent and 1.15 per cent, respectively.

The Nifty Bank index also surged around 0.84 per cent, inching up to 60,082 closer to setting a new record high mark.

Analysts said the IT sector outperformed, supported by an upward revision in revenue growth projections from a leading industry bellwether, coupled with expectations of increased technology spending.

Meanwhile, investor focus also shifted to banking counters, as early results reflected notable improvements in asset quality and margin profiles, further strengthening sentiment in the sector.

In the derivatives segment, market breadth remained marginally positive, with 131 stocks advancing against 82 declines.

Analysts predict that better-than-expected results in Q3 FY26 could trigger stock-specific action but foreign institutional selling is expected to continue in the near term.

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