Crude oil prices tread water for the week as uncertainty about demand continued to weigh on the market. Prices were down slightly on the week, with the benchmark West Texas Intermediate settling on Friday at $81.24 a barrel, compared with $81.50 a week ago. Not even relatively bullish forecasts for oil demand, such as the International Energy Agency’s report on Friday raising its forecast by 70,000 barrels a day for 2010, or the decline in the dollar could propel oil prices forward. One analyst even predicted crude oil prices dipping below $60 a barrel in the second half of the year. Ronald-Peter Stöferle, a raw materials analyst at Austria’s Erste Bank, said that oil is relatively expensive by historical standards, and current prices are not justified by demand.

Convergence with International Financial Reporting Standards (IFRS) by 2011 has become mandatory. The Ministry of Corporate Affairs (MCA) recently announced dates for achieving convergence with IFRS by next year. This landmark announcement has set to rest the uncertainty surrounding IFRS convergence in India. While the countdown to convergence has already begun, companies are confronted with formidable challenges, on the verge of initiation of the actual transition process. They have innumerable queries awaiting reply. Several important issues need to be addressed urgently. The phased approach to IFRS convergence - which is consistent with the current proposal in the United States of America - will greatly smoothen the IFRS convergence journey for both medium-sized as well as small listed companies. Transition from the Indian Generally Accepted Accounting Practices (IGAAP) to the International Financial Reporting Standards (IFRS) has gained momentum over the last few months.

Mamata Banerjee, the Union Railway Minister, under the leadership of Prime Minister Manmohan Singh, played safe and presented a please-all budget on 24th February, which according to her is aimed at “not only growth but also the common man”. With her decision to keep railway tariffs unchanged for the next year, she managed to bring cheer to the masses but could not provide concrete answers as to how she would meet expenditures to overhaul the 157-year-old railway network. Through the budget, she made way for the private players to join as partners in important projects. This will allow the railways to raise money and fund key projects. The proposed budget laid an outlay of Rs 41,426 crore. Of these, Rs 4,411 crore will be spent on laying new railway lines covering 1,002 km and Rs 1,302 crore will be spent on passenger amenities. This is the highest ever planned outlay to provide an efficient railway network through dedicated freight and passenger corridors.

The markets have already given a thumbs up to the Budget as the Sensex soared before giving up some gains. Industry stalwarts have been analyzing what aided markets despite low expectations prior to the Budget. Also apprehensions with respect to the extent of the stimulus withdrawal possible in the Budget had kept market participants away from investing. Union Budget 2010-11 is not a gamechanging Budget but is an incremental and conservative one to keep the economy on track. For the pharma industry the increase in the weighted deduction for in-house R&D from 150% to 200% is a positive. It will be effective till 31st Mar ’12. The finance minister’s decision to improve food security and healthcare systems in the country is also highly commendable. In the current years’ Budget, the government increased the outlay to the healthcare sector to Rs 22,300 crore from Rs 19,534 crore. The annual rural health survey for effective spend under the NRHM scheme and the convergence of NREGA with wider health insurance coverage through Rashtriya Swasth Bima Yojana is an innovative step to increase healthcare cover in rural India. The only positive step to help indigenous manufacture of consumables and implants is the import duty waiver for the manufacture of orthopedic implants.