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On 1st of February, Finance Minister  Nirmala Sitharaman  will present the Union Budget for Financial Year 2020-21. It will be the first full Budget of Narendra Modi's second term as Prime Minister. The economy was in the news for most of last year, not for positive reasons. Every Budget presents challenges to the government, but some are more challenging than others. This Budget comes at a particularly difficult time for the Indian economy and is keenly awaited to see how the government will try to defeat the economic challenges that face the country.What will be the biggest challenges facing the finance minister in the Budget? How will the Budget tackle the jobs crisis? Can the government spend its way out of trouble? And what is going in favour of the government?A K Bhattacharya answers these questions and more in this Business Standard special podcast. Here you can also read Budget2020 News

The government is likely to overshoot the budget deficit target previously set for the current fiscal year, three officials have warned, as a slowing economy creates a big shortfall in tax collections and prompts new stimulus plans. Budget 2019 New Finance Minister Nirmala Sitharaman presents her first budget on July 5, for the fiscal year ending March 2020. It is also the first budget of Prime Minister Narendra Modi's second term after his government was returned in a landslide election win last month. Since becoming prime minister in 2014, Modi succeeded in improving public finances, trimming the fiscal deficit to 3.4% of gross domestic product (GDP) from 4.5% in 2013/14, mostly through subsidies cuts and fuel taxes. He is now, however, under pressure to loosen the purse strings to follow through on election promises such as increased spending on roads and housing and tax cuts for companies and individuals. Read Complete Article

Finance Minister Arun Jaitley addressed the customary post-budget meeting of the central board of the Reserve Bank on Monday. InterimBudget Post the meeting, Jaitley said India needs fewer and mega banks which are strong. "India needs fewer and mega banks which are strong because in every sense from borrowing rates to optimum utilisation the economies of scale as far as the banking sector is concerned are of great help," Jaitley said. On interim dividend, RBI Governor Shaktikanta Das said the central bank will take the decision based on the report by Bimal Jalan-led Committee. Das also said that the RBI will discuss the issue of transmission of rate cut with bank chiefs on February 21. Earlier this month, the Reserve Bank cut the benchmark interest rate by 0.25 per cent to 6.25 per cent.

Budget 2018 India's oil ministry is pushing for a cut in excise duty on petrol and diesel in the upcoming 2018/19 budget 2018 to cushion the impact of rising oil prices on its vast consumer base, two oil ministry officials told Reuters on Monday. Prime Minister Narendra Modi, who faces elections in key states later this year, and a nationwide election in early 2019, has faced pressure over a rise in retail prices of petrol and diesel to a record level. India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for about 40-50 percent of the pump prices. A litre of petrol costs 72.23 rupees ($1.13) while diesel is sold at 63.01 rupees. Petrol and diesel account for about half of India's refined fuel consumption. "We can only recommend. It is up to the finance ministry to take a decision," a senior oil ministry official said. A cut in excise duty on petrol and diesel in the budget, due to be unveiled on ...

India Ratings and Research on Thursday projected the country's economic growth to improve to 7.1 per cent next financial year from 6.5 per cent this year, buoyed by robust consumer demand and low commodity prices. In its outlook for 2018-19, the agency said there will be a gradual pick up in growth momentum owing to structural reforms like GST and Insolvency and Bankruptcy Code (IBC) in place. "While the implementation of GST is likely to benefit the economy over the medium to long-term, the same cannot be said about the impact of demonetisation," India Ratings & Research (Ind-Ra), a subsidiary of Fitch Ratings, said. Ind-Ra expects gross domestic product (GDP) to grow 7.1 per cent year-on-year in 2018-19, it said. The projection is a tad lower than 7.4 per cent growth estimated by Asian Development Bank (ADB) and International Monetary Fund (IMF) for next financial year. Ind-Ra said but for demonetisation and goods and services tax (GST) impl...

India scores and research on Thursday projected the usa's monetary growth to enhance to 7.1 in line with cent next economic yr from 6.5 in step with cent this year, buoyed by way of sturdy consumer demand and coffee commodity costs. In its outlook for 2018-19, the enterprise said there can be a gradual pick out up in boom momentum attributable to structural reforms like GST and Insolvency and financial disaster Code (IBC) in vicinity. "whilst the implementation of GST is possibly to advantage the economy over the medium to lengthy-time period, the identical can't be said about the effect of demonetisation," India ratings & studies (Ind-Ra), a subsidiary of Fitch rankings, said. Ind-Ra expects gross home product (GDP) to grow 7.1 in keeping with cent yr-on-yr in 2018-19, it said. The projection is a tad decrease than 7.4 per cent boom estimated with the aid of Asian improvement financial institution (ADB) and international economic Fund (IMF) fo...

Pushed with the aid of decrease refunds and a demonetisation-subsidized better base, direct taxes have come to the help of the government in its warfare to satisfy its financial deficit target for 2017-18. Direct tax series, net of refunds, has risen 18.7 in step with cent till Monday, in opposition to the 15.7 in step with cent projected within the Budget Estimates (BE). In absolute terms, the parent touched Rs 6.89 trillion, representing 70.3 in keeping with cent of the BE of Rs nine.8 trillion. which includes refunds, gross direct tax collection rose thirteen.five in step with cent to Rs eight.11 trillion. This may be attributed to lower refunds, to the music of Rs 1.22 trillion as on Monday, in opposition to Rs 1.34 trillion at this time a 12 months earlier than, in addition to a higher tax base due to demonetisation. Direct tax series has proven significant improvement throughout all parameters, in terms of increase in each zone. The increase of general gross dire...

At a time while Finance Minister Arun Jaitley and his team could be getting set for Union Budget 2018-19 , the private equity enterprise is looking for a pass-via of losses on the fund stage for category 1 and category 2 alternative funding finances (AIFs). according to the existing rules, if there are losses in a fund on the cease of its existence, the same can't be passed onto its investors. ‘‘this is a big trouble with VC or infra funds. Over a fund lifestyles of 8-to-9 years, a fund might also emerge as with one or loss-making corporations,” says Gopal Srinivasan, president, Indian non-public equity & task Capital affiliation. The policies say that earnings can be surpassed onto traders, but losses have to be kept at the fund degree. interestingly, Sebi’s unique challenge capital rules of 1996 allowed this. those were replaced by using Sebi’s AIF guidelines in 2012. ‘‘If the pass-via is authorized, investors will take greater risks. They won’t mind taking losses i...

Budget 2018 The "Housing for All by 2022" mission has set the stage for a robust recovery in the residential property market. In the past two years, we have seen an unprecedented focus on reforms channelised through the Benami Transactions (Prohibition) Amendment Act 2016, demonetisation, Real Estate Regulatory Act (RERA) and the Goods and Services Tax (GST) regime. So, this time, the Budget for FY2018-19 will be much more critical than ever. The provisions, if moved in positive directions, will have the power to continue the momentum and cement home buyers' confidence. While so many tough decisions have already been taken, it will be worthwhile to rationalise further the direct tax structures impacting home buyers. I believe that there is room for improvement in some of the prime income tax (IT) provisions meant to incentivise the home buyers. Deduction on home loan interest: The IT Act has provisions under which a home buyer can claim a deduction on home...

Budget 2018 Agriculture Ahead of the Union Budget, Finance Minister Arun Jaitley on Sunday said the agriculture sector was the top priority for the government because the country’s economic growth is not “justifiable and equitable” unless the benefits are “clear and evident” in the farm sector. Therefore, the government’s priority is to ensure the gains reach the farmers and the growth is visible even in the farm sector, he said at an event here. According to latest data from the Central Statistics Office (CSO), the country’s economic growth is expected to slow to a four-year low of 6.5 per cent in FY18, the lowest under the Modi-led government, mainly due to poor performance of agriculture and manufacturing sectors. The CSO has pegged farm and allied sector growth to slow to 2.1 per cent in the current fiscal year from 4.9 per cent in the preceding year. “India is one of the fastest growing economies in the world and the growth is benefitting people in different sector...

Airlines Budget 2018 Higher salaries and tax-free income from West Asian and southeastern airlines have for long snatched pilots away from Indian carriers. Now, a surcharge levied by the Indian government on high-income individuals is proving to be a burden. Airlines now hope that the upcoming budget will give them relief. Finance minister Arun Jaitley, in the last budget, had proposed to increase the surcharge on income tax for individuals with a total income of over Rs 10 million from 12 per cent to 15 per cent. Commanders of Indian airlines normally fall under the Rs 10 million salary bracket and have to pay the surcharge. But in order to make their salary package attractive, airlines bear the expense of surcharge. A senior government official said that in their budgetary demands, airlines have asked for abolishing the surcharge part or give exception to companies where this tax is borne by the employer. “ Indian carriers are grappling with the pilot shortage and ...

Run-up Budget 2018 Actual construction of highways and rural roads has lagged the capital spending done on these two sectors, while the capital spend on railways has produced commensurate results in the first eight months of the financial year, according to the data tabled in Parliament. About 73 per cent of the capital spend for highways has been used till November 2017, but only 33 per cent of planned highways are complete. The budget for rural roads has been spent thriftily, but only 25 per cent of planned rural roads have been upgraded, though the planned habitations to be connected has been fairly on track. About 60 per cent of designated railway capital spending has produced commensurate results. Roads — including highways and rural roads — and railways are one of the most capital intensive expenditures of the Union Budget, after the defence sector. While the former totals Rs 1.3 trillion, the latter alone, at Rs 865 billion, represents the biggest chunk of ca...

Budget 2018 Agriculture Sector Small landholding : Since the bulk of farmers have less than 2 hectares of land, there is a difficulty in getting the benefits of ‘economics of scale’ Limited access to technology and extension: Farmers still do not have access to better technology. Also, effective dissemination of information from lab to land remains a challenge Storage : We need to come a long way in terms of availability and access of agricultural storage facilities for farmers Price volatility : The agri sector faces the Cobweb phenomenon, so there always exists a need to ensure farmers get remunerative prices Market integration : Farmers need to be better connected to the end-consumer. The number of stakeholders across the value chain needs to be reduced Industry ask Better environment for start-ups in food and agri business Greater technological investments in the field of agriculture Simplified leasing norms for setting up processing infrastructure ...

Union Budget 2018 Trade Unions want the government to allocate more funds in the Union Budget for employment generation and claimed that opening up the retail market to foreign players would lead to further loss of jobs. Though Finance Minister Arun Jaitley had said suggestions made by TU leaders during a pre-budget consultation meet last month would be considered, the leaders felt the government's economic exercise was only meant to benefit corporate house. The leaders of two major central unions claimed thousands of people had lost their jobs because the government's demonetisation decision had adversely affected small and medium industries, forcing them to either shut down or sack workers. "We want the government to spend the maximum in job creation. We think after such a big loss of jobs in India because of demonetisation, the government should bring back jobs lost and generate more jobs," All India Trade Union Congress (AITUC) general secretar...

Budget 2018 In order to give momentum to affordable housing projects, the Modi government has identified land available with six loss-making central public sector enterprises, which it plans to use to build 'houses for all' under the Pradhan Mantri Away Yojana (Urban). The six companies, including IDPL, HMT, Hindustan Antibiotics and Tungabhadra Steel Products, have about 3,000 acres. According to a senior government official, some of the projects would be completed before 2022. Under PMAY (U), people can avail benefits under various components to buy a house in urban areas. "We have put all such proposals on a fast track. The land available with sick CPSEs is in prime areas. In some cases, we will allow mixed use," the official told Economic Times. "We expect more such projects in the near future as the government has decided to exit loss-making entities," said an executive with NBCC. NBCC has been appointed as the land management agency...

The government has announced excise duty exemptions till March 31, 2017 To promote digital payments, the upcoming budget may offer incentives to companies which manufacture equipment like PoS machines and micro ATMs. According to sources, the government may cut or eliminate excise duty on manufacturing of micro ATMs, finger print readers, biometric cards and PIN cards. Further, import duty may also be reduced on components used in the manufacturing of micro ATMs, they said, adding the excise duty exemption given by the government on these machines may be further extended. The government has announced excise duty exemptions till March 31, 2017. The 'Committee on Digital Payments', headed by former finance secretary Ratan P Watal, had suggested incentives to encourage digital payments in India. It had suggested withdrawal of all charges levied by government departments and utilities on digital payments and bear the cost of such transactio...

The school education and literacy budget increased 3.2% in 2016-17 The 2017-18  Budget  is an opportunity for the government to concentrate on improving school education for over 260.5 million children who enrolled in elementary and secondary school in 2015-16–children who will form the core of India’s working-age population, one billion by 2030, the largest in the world. “Business as usual” will not solve the problem, submitted Pratham, an education nonprofit, in a pre-budget consultation with India’s finance ministry. “Unless major shifts are undertaken on an urgent basis to build children’s foundational skills, we are losing huge opportunities each year for improving the life chances of an entire generation of children and youth in this country,” the consultation note added. IndiaSpend reached out to the education ministry for a comment on the 2017-18 Budget , but we had not received a response at the time of...

Instances of crop failure due to adverse climatic conditions is another major issue faced Industry size:  All Categories: $236 billion ( Rs 1,600,000 cr) Employment figure:  90 million person days  Contribution to Gross Value Added (GVA): Agriculturecontributes 15.4% of GVA Key Issues or Areas of Concern Infrastructure development initiatives for post-harvestproducts are in its preliminary phase. Post-harvest losses account for Rs 92,651 cr. Instances of crop failure due to adverse climatic conditions is another major issue faced by the agricultural economy.  PMFBY (Pradhan Mantri Fasal Bima Yojana) has shown a good uptake from the farmers which minimises risk of cropfailure through insurance but the overall loss still remains a big challenge. Large cultivable area still remains unirrigated, thereby limiting the per unit productivity of agricultural operations. Industry demand...

India's demonetisation drive has impacted gold demand in the short term but buying is showing signs of revival and post the presentation of the national  Budget 2017  on February 1, the market will be back to normal, says the India chief of World Gold Council. "In November and December (during the demonetisation drive) certainly there was some impact. But people have started buying again. We hope soon after the budget, buying will normalise," Somasundaram P.R., Managing Director, India, World Gold Council, told IANS in an interview. He also said demonetisation will have a positive impact on the gold industry in the long run as it will curb grey market trades substantially. "Overall impact of demonetisation will be positive -- industry will come under organised business. Of course the transition will take some time," he said. "Business during the demonetisation period was hurt as people were mostly busy exchanging old notes and genui...

Budget 2017 IDMA said all excisable goods used for R&D purposes should be exempted from central excise duty The pharmaceutical industry has asked the government to bring in more clarity in terms of tax structure and provide incentives on research and development (R&D) as part of its  Budget   wish-list. The industry players also want the government to provide a road map towards bringing down corporate income tax down to 25 per cent. The Indian Drug Manufacturers Association (IDMA), a body comprising mostly home-grown pharma firms, said all excisable goods used for R&D purposes should be exempted from central excise duty. "Introduce parity in the input (12 per cent) and output (6 per cent) rate of excise duty for pharmaceutical products," it said. The association has also suggested that the government allow utilisation of CENVAT credit for payment of service tax on reverse charge basis. On the other hand, the Organisation of Pharmaceutical Produce...