NBFC stocks rally as RBI unveils new banking norms

RBI on Tuesday disallowed credit enhancements in transactions where banks buy loans from NBFCs (Non-Banking Financial Company). The regulator has proposed that banks follow the pass-through certificate (PTC) route instead. Currently, most priority sector portfolio sales by NBFCs to banks are done through the credit enhancement route. "For NBFCs, if the buyouts happen through PTCs rather than assignments, capital requirements will rise Shares of non-banking finance companies (NBFCs) such as Bajaj Financer, Reliance Capital, M&M Financial Services and Srei Infrastructure Finance Ltd posted gains for the second day after the Reserve Bank of India (RBI) released draft guidelines for licensing of new banks in the private sector. The RBI has proposed new regulations for non-banking finance firms (NBFCs), mostly centered on minimizing the regulatory arbitrage opportunities available to NBFCs as compared to banks. One of the major changes proposed by the RBI is to bring the capital adequacy requirements and asset classification and provisioning norms for NBFCs in line with the banks.

Suggestions to improve the growth of dairy farming in india

1. Cooperative banks and other national banks should come forward to extend liberal credit facilities to the farmers particularly small and marginal farmers for the development of dairy enterprise.
2. Establishing a veterinary service center to improve the efficiency of the artificial insemination scheme, veterinary services must be provided to the farmer door on all bases at a reasonable cost.
3. The changing cropping pattern should aim to produce sufficient green and dry fodder to livestock population in the village and encourage the farmer to take up fodder cultivation on a commercial basis.   

RBI reports show the imparting a downward bias

The Annual Report for 2010-11, a statutory publication of the Reserve Bank of India's central board, covers two broad areas — assessment of macro economy in 2010-11 as well as prospects for 2011-12 and working and operations of the RBI and its financial accounts. The economy returned to a high growth path in 2010-11. However, there were significant challenges: investment slowed, fiscal consolidation was achieved through one-off and cyclical factors and inflation remained sticky on the back of new pressures. In response, the RBI has raised the policy rates by 475 basis points (on a cumulative basis) since March, 2010. The central bank's medium-term target for inflation has been 3 per cent. After growing slightly above its recent trend in 2010-11, the economy can be expected to decelerate this year. But quite significantly, the growth rate will still be around 8 per cent. However, there is a possibility of global problems getting magnified and imparting a ‘downward bias' to India's growth rate. Indian equities may have shrugged off the latest increase in policy rates, but the outlook for the markets remains cautious amid concerns over stubborn inflation and the Reserve Bank of India's continued hawkishness

Some important facts about Dairy Farming

The study reveals that married males are deeply involved in dairy farming. Majority of dairy farmers completed the primary level of education and many are illiterate. Majority of Hindu peoples are involved in dairy farming and they are belongs to backward community. Many dairy farmers in India living in thatched houses with poor quality of life and low standard of living. The occupational status of the dairy farmers are non-agricultural labour and majority of farmers work landless or marginal farmers. The study reveals that majority of dairy farmers were doing milk extraction with the help of labours only. Many dairy farmers were selling their milk to middle man only and remaining sold to co-operative or directly. The dairy farmers were consumes less than 1 litre  milk per day. The middle man exploit the dairy farmers by giving only Rs.17 per litre and this milk is sold on Rs20 per litre by middle man. This is the major draw back in Indian dairy farmers.

Milk Production and Marketing

India hold the largest ruminant livestock population, live animals milk and milk products sales were the major sources of income for dairy farmers. The milk traders have made more profit then milk procedures. Milk procedures face many problems such as lack of knowledge in dairy production and management system, in adequate input supply and services financial weakness and cost of feed. Market problems are critical issues raised by dairy farmer capacity development and training is a key factor to enhance to skill of farmers and pastoralists in dairy production, processing and marketing. High factorial count mainly reflect poor hygiene and long time lag between milk and sales of milk. The bulking of milk from many areas and production system cause health risk if the milk is not pasteurized or adequately boiled. Future efforts will focused on improving milk quality by informal market agent (small traders, small retail outlets) by training and extension on appropriate handling containers.

Main problems faced by Dairying Farmers

Although there is a remarkable improvement of dairy enterprises in recent years, the dairy farmers faced some problems in developing their dairy enterprise. The major constraint hindering the development of dairy sector is:

Shortage of feed: 

          Shortage of green fodder and feed concentrate is the root cause of poor performance of dairy sector in general as the genetic milk production potential of crossbred cow could not be exploited fully in absence of proper nutrition.

Pitfalls

• Quality dairy animals are in short supply. Artificial insemination service for breeding better cattle has limited coverage, barely reaching an estimated 10% of bovines.
• Inability to feed cattle adequately throughout the year.
• Animal health cover is getting increasingly neglected. In many states, over 70-80% of the veterinary budget is used up for staff salaries and transportation, with little left to buy medicines and other supplies.
• Limited investment in setting up or expansion of milk procurement network. The rapid expansion in milk processing capacities has not kept pace with production and procurement.

Positive Aspects

• Dairying is crucial in providing employment and supplementary income to the bulk of rural families in rural India. The main beneficiaries are women, who contribute over 70% of labour in cattle rearing.
• Crop residues and by products fed to the cattle form the basis of grain saving dairying appropriate to mixed farming system.

• The buffalo is India's milking machine, accounting for more than half of the country's milk production: It is not able for its efficiency as a converter of coarse feeds into

The Reserve Bank of India(RBI) raised the key policy rate by 25 basis points

The Reserve Bank of India (RBI) is likely to maintain its hawkish stand and further increase key policy rate up to January 2012 to tame inflationary pressures, say experts. The Reserve rate increase by RBI may have some impact on economic growth.

Importance of stocks

A stock is a small share that represent a partial ownership of a company. Stock or issued by companies to raise capital every stock is limited to a particular number of shares. Investors buy stocks with the belief that the company will grow continuously or two raise the value of the share. Accruing stock from a new company is consider more risky then buying shares from well-established company but only those company which are list on public exchange like the New York Stock Exchange (NYSE) or the National Association of Securities Dealers Automated Quotation system (NASDAQ)  are capable for stock trading. The share from the companies listed on public exchange can we bought and sold on open market. The stock market is one of the most important source for companies to raise money. This allows business to be publicly traded or raise additional financial capital for expansion by selling share of ownership of the company in public market.

Reduction about stock prices

To know about the future stock prices there are some important points which is helpful to predict the stock prices.

1. Be aware of all the news which is related to market you would be very much carefull about the company condition whose stocks you wish to buy.
2. Good stock research is key thing to get success in the stock market.
3. Study about the chart pattern is very important for those who are interested in stock trade. Chart pattern help to understand the weakness and strengthen of the stock to predict to future price targets.
4. Observe the volume of stock on a daily basis and calculate the percentage rise or fall in the increase volume trade.

RBI sells US Dollors

RBI (Reserve Bank of India) sells US dollors to save the rupees from a sharp slide as investors fled for safety amide crisis in Europe.

RBI hike repo rate to eliminate  to inflation accelerator it makes credit costly. According to C. Rangarajan there is no other option for RBI. Housing price raise upto 15 to 20 percent. Automobile and housing loan became costly.

According to Union Finance Minister Pranab Mukherjee RBI hike rate only to control the inflation.

Dairying an Instrument of Social and Economic Change

Milk production in India is dominated by small and marginal landholding farmers and by landless labouers who, in aggregate, own about 70 percent of the the national milch animal herd. These farmers; maintain an average  herd of one or two milch animals, comprising cows and or buffaloes. The animals nutritional requirements are largely met by agricultural waste and bye products. Ample labour and a small land base encourage farmers to practice dairying as an occupation subsidiary to agriculture. While income from crop production is seasonal, dairying provides a stable, year-round income, which is an important economic incentive for the small-farmer to take to dairying. It is not surprising that the small farmer to take dairying. It is not surprising that the small farmer and the landless labourer are more often than not victims of moneylenders and of natural calamities.Dairying as subsidiary source of income, is a real relied to most of these weaker; froups in society. Often one two milk animals enables these farmers to generate sufficient additional income to break the vicious subsistence agricultural-debt cycle. Dairying is an economic activity, which evens out cash flows to households, in contrast to income from crops, which comes only at the end of a season. Further, dairying provides for an indirect income insurance against risks from crops, such as crop failure due to drought or pests.

Organised Dairy Units

Over 70 percent of the milk produced in our country is by small, marginal and landless farmers. There are about 100 million farm holdings in our; country. There are nearly 70 million households who maintain a milk herd of 108 million heads of cattle i.e. 64 million cows and 44 million buffaloes, engaged in milk production, of which more than 10 million are in the cooperative sector. Livestock reargin including dairying is not only a source of employment and income, but is also a storehouse of wealth, an asset that often helps tide over inforeseen demands for liquid cash. Medium and large holdings with a holding size of over 4 hectares account for only 8.8 percent of the total holdings. 77.4 percent of the farm holdings i.e. 77 million holdings posses lank sizes less than 2 hectares. Income from dairying contributes nearly a third of the rural households gross income, and in the case of landless wage earning households, nearly a half.

Contribution to GDP

Agriculture contributes to the GDP ( Gross Domestic Product) to the extent of 25 percent of which one fourth is through livestock products. With 13 percent of world trade being global, India has immense potential to be a partner in world trade. A growth rate of 4.5 percent has been achieved by the dairy sector during the past decade as compared to the 2 percent growth recorded by the agricultural sector as a whole. In fact, an annual production of 12000 million tonnes of milk can be achieved by the year 2010, only if the growth rate is kept at a rate of not less than 5.5 percent. Efforts must be made to bring about substantial increases in productivity to the tune of 12 - 15 kg for crossbreds, 5 - 8 kg for indigenous cows and 8 - 12 kg for buffaloes. Dairy sector ranks first among the individual agriculture commodities in terms of total value of production. The value of milk and its products is 70000 crore rupees and that of dairy industry as a whole is 105000 crore rupees.

Milk Production in India state-wise

This table below shows that the milk production in India state-wise.

Estimates of Milk Production - Statewise
(000 tonnes)
State	2001-02	2002-03	2003-04	2004-05	2005-06	2006-07	2007-08	2008-09
All India	84406	86159	88082	92484	97066	100869	104840	108463
Uttar Pradesh	14648	15288	15943	16512	17356	18095	18861	19537
Andhra Pradesh	5814	6584	6959	7257	7624	7939	8925	9570
Rajasthan	7758	7789	8054	8310	8713	9375	9536	9491
Punjab	7932	8173	8391	8554	8909	9168	9282	9387
Gujarat	5862	6089	6421	6745	6960	7533	7911	8386
Maharashtra	6094	6238	6379	6567	6769	6978	7210	7455
Madhya Pradesh	5283	5343	5388	5506	6283	6375	6572	6855
Bihar **	2664	2869	3180	4743	5060	5450	5783	5934
Haryana	4978	5124	5221	5222	5299	5367	5442	5745
Tamil Nadu	4988	4622	4752	4784	5474	5560	5586	5673
Karnataka	4797	4539	3857	3917	4022	4124	4244	4538
West Bengal	3515	3600	3686	3790	3891	3982	4087	4176
Kerala	2718	2419	2111	2025	2063	2119	2253	2441
Orissa	929	941	997	1283	1342	1431	1625	1672
J & K	1360	1389	1414	1422	1400	1400	1498	1498
Jharkhand	940	952	954	1330	1335	1401	1442	1466
Uttaranchal	1066	1079	1188	1195	1206	1213	1221	1230
Chhattisgarh	795	804	812	831	839	849	866	908
Himachal Pradesh	756	773	786	870	869	872	874	884
Assam	682	705	727	739	747	751	752	753
Delhi	294	296	299	303	310	289	282	285
Tripura	90	79	84	86	87	89	91	96
Manipur	68	69	71	75	77	77	78	78
Meghalaya	66	68	69	71	73	75	77	77
Goa	45	46	48	57	56	57	58	59
Nagaland	57	58	63	69	74	67	45	53
Sikkim	37	45	48	46	48	49	49	49
Chandigarh	43	43	44	43	46	46	47	47
Pondicherry	37	37	40	41	43	45	46	46
A&N Islands	23	26	25	24	20	23	24	26
Arunachal Pradesh	42	46	46	48	48	49	50	24
Mizoram	14	15	15	16	15	16	17	17
D&N Haveli	8	8	8	4	5	5	5	4
Lakshadweep	2	2	1	1	2	2	2	2
Daman & Diu	1	1	1	1	1	1	1	1
Source: Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture, GoI

This table shows that Uttar Pradesh is the highest milk producing state in India, Andhra Pradesh is the second largest milk producing state in India and Rajasthan is 3rd largest milk producing state in India. In 2009 the milk production in UP is 19537 tonnes, in Andhra Pradesh milk production is 9570 tonnes and in Rajasthan milk production is 9491 tonnes.