A freebie once granted can hardly be discontinued. All that can happen is to substitute it with a bigger freebie, notes A K Bhattacharya.
Fitch Ratings on Tuesday raised India's growth forecast for the current fiscal to 7.2 per cent, from 7 per cent projected in March, saying elevated consumer confidence will drive spending, besides increased investments. In June update to its global economic outlook report, Fitch said it expects inflation to decline to 4.5 per cent by end of this year and RBI to cut policy interest rates by 25 basis points to 6.25 per cent.
Dr T V Somanathan is the first finance secretary to be appointed Cabinet secretary since 1985. His appointment at this juncture seems to carry much meaning for the forthcoming trajectory of reforms and restructuring of India's steel frame.
The Union government could target a fiscal deficit of 5.8-6 per cent of nominal GDP for 2023-24, and it should continue its capital expenditure push and look to simplify the personal income tax regime, economists recommended Finance Minister Nirmala Sitharaman and her team during their pre-Budget interaction on Monday. Starting last week, Sitharaman had eight pre-Budget consultations this time. More than 110 invitees representing seven stakeholder groups participated in these meetings, the finance ministry said in a statement. The stakeholder groups included representatives and experts from agriculture and agro-processing industry; industry, infrastructure & climate change; financial sector and capital markets; services and trade; social sector; trade unions and labour organisations; and economists.
The government on Friday scrapped a minimum price threshold that it had set previously for exports of onion as it looked to pass on the benefit of international glut to Indian farmers. The government had previously fixed a $550 per tonne as the minimum export price (MEP), which essentially meant farmers could not sell their produce overseas at lower than this rate.
The Survey is authored by Chief Economic Advisor V Anantha Nageswaran and his team.
What stood out in his 15-year journey as a member of the political executive at the Centre was his glowing record as India's most successful and effective finance minister. Both as prime minister and finance minister, he understood the importance of gradualism, except when the economy or the polity was in a crisis.
Striking a different note from its peers, US brokerage Bank of America Securities has maintained that the Reserve Bank will leave rates unchanged next week, recognising growth-focused and capex-driven fiscal expansion, which though poses huge price pressure and interest rate risks later. The RBI's rate setting panel Monetary Policy Committee (MPC) will begin its deliberations next Monday and announce the policy moves on Wednesday (February 9) in the backdrop of a massive spike in bond yields post the Budget. Almost all major central banks are in the process of hiking rates to tame inflation.
The government may roll out a new foreign trade policy (FTP) of a shorter term of two-three years in a bid to keep pace with the fast-evolving scenarios in international trade which have been triggered by recent disruptions, such as the pandemic and the Russia-Ukraine war. An FTP is an elaborate policy guideline and strategy to promote the export of goods and services, with a duration of five years usually. The existing policy came into force on April 1, 2015, and was valid for five years, before multiple extensions.
The government has decided to postpone the release of the new Foreign Trade Policy (FTP) and extend the existing one by six months on account of global uncertainties and currency fluctuations. The government was scheduled to announce the new FTP by the end of September. The current policy was to end on September 30.
Sitharaman exhorted the states to work together with the Centre, stating that while the Union government sets the direction of economic growth, it is for the states to ensure effective implementation on the ground.
The highlights of the RBI's fourth monetary policy review of fiscal year 2022-23 announced by Governor Shaktikanta Das.
The government should frame new policies to assure growth.
India needs to create buffers for future economic downturns.
Very gradual fiscal consolidation glide path with looser-than-expected fiscal policy; good quality spending mix and reasonable assumption on fiscal math; and focus on privatisation, asset monetisation and long-term funding for infrastructure investments, according to Morgan Stanley, are the three key themes from the Budget 2021.
The government may be staring at a modest slippage in fiscal deficit for 2022-23 (FY23), with the Ministry of Finance seeking parliamentary approval for additional spending through a second and final tranche of supplementary demands for grants. On Monday, as the Budget session of Parliament resumed, Finance Minister Nirmala Sitharaman sought Parliament approval for additional gross spending of Rs 2.7 trillion in FY23 (which ends on March 31). While net cash outgo is pegged at Rs 1.48 trillion, the rest will be matched by savings or enhanced receipts, the finance ministry said.
The World Bank on Tuesday raised the growth forecast for the Indian economy to 7 per cent for the current fiscal year on the back of recovery in agri sector and rural demand. World Bank had in June projected India to grow at 6.6 per cent for FY24. According to the World Bank Report released on Tuesday, India's growth continues to be strong despite a challenging global environment.
The size of Reserve Bank's balance sheet increased by 11.08 per cent to Rs 70.47 lakh crore as on March 2024, leading to the highest-ever dividend payout to the government, according to the central bank's annual report. In actual terms, the increase was Rs 7,02,946.97 crore over Rs 63.45 lakh crore as on March 2023.
'It would be reasonable to assume that Modi 3.0 would be more focused on projects and schemes which do not require any legislative change or which have the support of its coalition partners,' asserts A K Bhattacharya.
The government on May 17 formed a five-member committee.
Will help in reviving the economy and push investment.
The government on Friday came out with Foreign Trade Policy (FTP) 2023 which seeks to boost the country's exports to $2 trillion by 2030 by shifting from incentives to remission and entitlement based regime. Unlike the practice of announcing 5-year FTP, the latest policy has no end date and will be updated as and when needed, said Director General of Foreign Trade (DGFT) Santosh Sarangi while briefing media about FTP 2023. Earlier, Commerce and Industry Minister Piyush Goyal unveiled FTP 2023 which will come into effect from April 1, 2023.
The additional outgo to combat the impact of COVID-19 will significantly erode the fiscal consolidation achieved by the state governments in the past three years, an RBI report said on Tuesday. In its study of the state budgets of 2020-21, the RBI report which has dwelled on the theme 'COVID-19 and its Spatial Dimensions in India', said that Gross Fiscal Deficit (GFD) of the states would spiral during the current fiscal.
Government looking at cushioning slowdown due to demonetisation with sops and higher outlay for micro, small and medium enterprises, agriculture, and affordable housing.
The finance minister continues to be backed by the same policy team in charting out the broad strategy as in the few earlier Budgets.
'The prime minister's comment on 'revdi culture' was welcome. But I am disappointed he did not follow up on that.' 'All political parties, including the BJP, have been guilty of this.' 'Now, Modi's guarantees, the Congress's 'nyay' path and both ruling and Opposition parties are vying with each other for freebies in my home state Andhra Pradesh.'
The Reserve Bank on Friday retained GDP growth forecast of 7 per cent for 2024-25 financial year, lower than the 7.6 per cent expansion estimated for FY24. In its February monetary policy, the RBI had projected the GDP growth rate of 7 per cent for the financial year beginning April 1. Announcing the current fiscal's first bi-monthly monetary policy, RBI Governor Shaktikanta Das said the rural demand is gathering pace, and sustained growth in manufacturing sector should boost private investment.
'Like every Budget, this time, too, there is chatter around tinkering with the long-term capital gains tax.' 'Investors may not want to jump into the markets until there is clarity on this front.'
'The problem is that the bubble may not only be in valuations, but also in investors' minds.'
The Supreme Court on Monday referred to a five-judge Constitution bench a suit filed by the Kerala government raising the issue of ceiling on net borrowing.
Withdrawing a blanket ban on overseas shipments of non-basmati white rice, the government on Saturday imposed a floor price of $490 per tonne and exempted the commodity from export duty. Exports of non-basmati white rice have been banned since July 20, 2023 to boost domestic supply. "The export policy for non-basmati white rice (semi-milled or wholly milled rice, whether or not polished or gazed) ...is amended from prohibited to free, subject to MEP (minimum export price) of $490 per tonne with immediate effect and until further orders," the directorate general of foreign trade (DGFT) said in a notification.
The Reserve Bank of India on Friday retained its projection for retail inflation at 4.5 per cent for the current fiscal assuming a normal monsoon, while emphasising that uncertainties related to food price outlook warrant a close monitoring. Consumer Price Index (CPI)-based retail inflation has been projected at 4.5 per cent with quarter-wise projections at 4.9 per cent in Q1 (April-June), 3.8 per cent in Q2, 4.6 per cent in Q3, and 4.5 per cent in Q4.
The Reserve Bank of India on Thursday projected a GDP growth of 7 per cent for 2024-25 financial year, which is lower than the 7.3 per cent expansion estimated for the current fiscal. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said rural demand continues to gather pace, urban consumption remains strong and investment cycle is gaining steam on the back of increased capex.
Making a case for an optimal fiscal stance, the Economic Survey on Friday said growth leads to debt sustainability and not necessarily vice-versa. "This is because debt sustainability depends on the 'Interest Rate Growth Rate Differential' (IRGD) i.e. the difference between the interest rate and the growth rate in an economy. "With the Indian context of potential high growth, the interest rate on debt paid by the Indian government has been less than India's growth rate by norm, not by exception," it said.
Moody's assigns a 'Baa3' rating on India, with a stable outlook.
Release of key macroeconomic numbers, monthly derivatives expiry, and global cues are likely to drive stock market movement this week, according to analysts. Markets will also be reacting to remarks made by the US Federal Reserve Chair Jerome Powell, they said. "This week, we expect the market to witness a gradual up-move with stock-specific action.
Nirmala Sitharaman on Wednesday assumed charge as the Finance and Corporate Affairs Minister for the second consecutive term and is slated to soon present the final Budget for FY '25 that is going to set the tone for the Modi 3.0 government's priorities and direction for Viksit Bharat. Upon her reaching the North Block office, Sitharaman was greeted by Finance Secretary T V Somanathan and other top officials. Minister of State for Finance Pankaj Chaudhary was also present. Chaudhary assumed charge on Tuesday evening.
'Invest only in stocks of those companies that deliver on earnings and there is earnings visibility too for the next few quarters.'
The wholesale inflation rose to a 13-month high of 1.26 per cent in April fuelled by rising prices of food articles, especially vegetables, amid expectations of RBI holding interest rates in the policy review next month. The wholesale price index (WPI) based inflation has been rising for two months in a row.
'Compare the new slabs with the previous years to understand if your tax liability will increase or decrease after the Budget.'
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