Budget 2018-19

A snapshot of the Union Budget 2018-19 expectations of Rita Singh, chairman & managing director of Mesco Steel, on key issues   Finance Minister Arun Jaitley will be presenting Union Budget 2018 in Parliament on February 1. While there are several expectations of key announcements for the economy and its various sectors, it remains to be soon whom the finance minister would oblige this time. Here is a snapshot of the Budget 2018 Expectations of Rita Singh, chairman & managing director of Mesco Steel, on key issues: 1. Reduction of import duty on Coking Coal a. Currently import duty on Coking Coal is 2.5% and many of the steel companies are dependent upon imported coking coal as the domestic quality is not suitable for the steel industry, due to higher ash content. b. The import duty to be levied should be NIL as this would in turn help the steel industry to reduce the raw material cost and would increase production c. During FY18 (April – ...

Markets will be focused on how much India widens its fiscal deficit beyond the 3 per cent of gross domestic product projected for 2018/19 Union budget 2018 : Since his election four years ago, Indian markets have welcomed Prime Minister Narendra Modi’s campaign to mend patchy public finances and develop new areas of growth in Asia’s third largest economy. To keep investors’ confidence, however, Modi’s government will need to be seen containing the fiscal deficit, while also increasing spending in key areas of the slowing economy. Markets will be focused on how much India widens its fiscal deficit beyond the 3 per cent of gross domestic product projected for 2018/19. A Reuters poll showed most economists expect a 3.2 per cent deficit as the government looks to increase investments in key areas such as agriculture to bolster its re-election prospects in elections due by 2019. A modest widening of that nature would calm investors worried that the government ...

The tax exemption limit is expected to be increased from Rs 250,000 per annum to Rs 300,000 or more, and there could be some changes to tax slabs to lighten taxpayers' burden The budget 2018-2019 , is likely to get some relief for everyone as it is the last full-fledged budget of the BJP-led government ahead of the general elections in 2019 and the government is expected to follow a please-all strategy. The government is diligently working on various permutations and combinations to arrive at the right mix which ensures that the tax burden is not unreasonable and at the same time enough resources are mobilized for infrastructure development. We expect that the finance ministry is working on a proposal to increase the tax exemption limit from INR 2.5 lakh per annum to INR 3 lakh or more and introduce some changes in the tax slabs to lighten the taxpayers' burden. The corporate India also has great expectations from the upcoming Union Budget 2018 as this would be th...

Defence allocation accounted for 17% of the central government budget (Rs 21.46 trillion) in 2017-18   India is the fifth largest military spender (2016) in the world and the largest importer of arms, accounting for 13% of the world’s total imports between 2012 and 2016, according to the Stockholm International Peace Research Institute, a think tank. However, over three years to 2017-18, there was a 9% decline in budget allocation for capital investments against requirements, or “projections” in officialese, a factor that could delay procurement and modernisation of the armed forces, according to a report by the Parliamentary Standing Committee On Defence 2017-18, an advisory body to the defence ministry, presented to the Lok Sabha (lower house of Parliament) on December 19, 2017. The air force capital budget was 46% lower than its requirements, the Army's was 41% and the Navy's 32%, the report said. The budget for defence expenditure–including revenue (sa...

Will the Modi govt's last full Union Budget before general decisions 2019 will be a populist one? Everyone's eyes are currently on FM Arun Jaitley's Budget discourse on Thursday As Finance Minister Arun Jaitley inspires set to introduce Budget 2018, the last full Union Budget of the Narendra Modi-drove focal government in its present term, there is a foresight that he will fairly shed his judicious position for a more populist position one. The view radiates from the way that this will be the back priest's last opportunity to satisfy the voters through a Budget 2018 preceding 2019 general races. Populism in the administration's yearly spending plan could expect arrangement choices like lower impose rate for the salaried class, bring down corporate duty rates tuned in to Trump's generosity for the corporate class in the US and enormous bonanzas for India's ranchers. In the event that the Economic Survey, arranged by Chief Economic Advisor ...

Centre is merely collecting taxes in a divisible pool on behalf of the states, and sharing it with them   Union budget 2018 : Quoting Rabindranath Tagore on how a self-sustaining village can make a mark in democracy, the Economic Survey, tabled in Parliament on Monday, has expressed concern over increased dependence on revenue devolution instead of self-generation. While previous government policy statements have focussed on a cooperative federalism, the underlying theme of goods and service tax (GST), the Survey this time talks about fiscal federalism. It acknowledges there is an important legal argument that resources received by the states as part of successive Finance Commission verdicts are not “devolved” resources, but shared. In this view, the Centre is merely collecting taxes in a divisible pool on behalf of the states, and sharing it with them. But, this position, the Survey says, must be assessed against certain realities. It is difficult to dispel the ...

The median forecast from over 40 economists polled Jan 24-29 was for India's government to borrow 3.2 percent of gross domestic product (GDP) in fiscal 2018-19.   Union budget 2018 : India is expected to unveil only modest stimulus at this week's budget, a Reuters poll of analysts showed, despite it being the last before the next election, with government spending likely limited by longer-term efforts to trim the fiscal deficit. Fiscal consolidation was first proposed by Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) government in its maiden budget in fiscal 2014/15, aiming to break a long line of Indian governments that preferred to borrow and spend. But in following budgets, the timeframe for reaching a reduction to a 3.0 percent fiscal deficit target was pushed back. The latest Reuters poll shows the government is expected to delay the timeframe for hitting that target by another year, for the third year in a row, due to setbacks in the...

Conditions were different when report came out; Budget won't be outright populist, govt must show fiscal discipline, says CEA The recommendations of the fiscal responsibility and budget management (FRBM) panel, which had recommended a fiscal deficit target of 3 per cent of gross domestic product, for 2018-19, have been rendered obsolete by circumstances, Chief Economic Advisor Arvind Subramanian told Business Standard in an exclusive interview, a day after presenting his latest Economic Survey. Subramanian indicated that while the upcoming budget 2018-19 will not be an outright populist document, fiscal targets have to be realistic. “The FRBM Panel’s roadmap has been rendered obsolete. The conditions were quite different when the report came out,” he said. The panel, headed by 15th Finance Commission chairman N K Singh, and which included Subramanian as a member, had submitted its report in April 2017. It had recommended a fiscal deficit target of 2.5 per cent ...

Modi pledged in 2015 to bring down corporate taxes over four years, but businesses are still waiting for a roadmap on how that will happen   Businesses waiting for Indian Prime Minister Narendra Modi to follow through on a pledge to cut corporate taxes may need to wait a bit longer. In his last full union budget 2018 before 2019 elections, Modi is facing a revenue squeeze that may make it difficult to deliver on a promise to lower the basic corporate tax rate over time to 25 percent from 30 percent. It’s a catch-22 situation for the premier, who is also trying to lure foreign investors at a time when the US, UK and other countries are lowering business taxes. Here’s a look at Modi’s challenge ahead of the government’s budget 2018 on Thursday. Why Cut? Modi pledged in 2015 to bring down corporate taxes over four years, but businesses are still waiting for a roadmap on how that will happen. It’s part of his mission to improve India’s investment climate: he ...

There are concerns that the huge build-up of positions in equity derivatives could pose a systemic risk   Union budget 2018 : Ahead of Budget 2018, market regulator Securities and Exchange Board of India (Sebi) and stock exchanges are taking precautions, anticipating a significant run-up in the equity market. Sebi has asked brokers to collect higher margins from those with sizeable positions in futures and options. These include foreign institutions, wealthy investors and proprietary desks. There are concerns that the huge build-up of positions in equity derivatives could pose a systemic risk. Stock exchanges have asked brokers to mop up extra deposits from clients with significant exposure to derivatives. “In the joint meeting of exchanges and Sebi, it has been decided that markets should be alerted at different levels of MWPL utilisation so that investors can make an informed decision on whether to hold or square off their existing positions well before regula...

There may be a meta-preference manifesting itself in fertility-stopping rules, contingent on the sex of the last child, which notionally creates 'unwanted' girls, estimated at 21 mn, the Survey says   The Economic Survey 2018 reveals that Indian parents, still keen to have more and more male children, continue producing “until they have the desired number of sons”. The survey calls this phenomenon the son meta-preference, which involves parents adopting "fertility-stopping rules”, or having children until the desired number of sons are born. The country’s sex ratio, skewed in favour of males, has led to the identification of “missing” women. But there may be a meta-preference manifesting itself in fertility-stopping rules, contingent on the sex of the last child, which notionally creates “unwanted” girls, estimated at about 21 million, the Survey adds. “Consigning these odious categories to history soon should be society's objective,” notes the Survey. ...

Domestic equities have risen sharply on expectations of strong corporate earnings   The Economic Survey 2018 sounded a note of caution on the high equity valuations and hasn’t ruled out a possibility of a correction. After a sharp 23 per cent rally this financial year, the benchmark Sensex is trading at 27 times its trailing 12-month earnings. The broader-market BSE Midcap and Smallcap indices, which have outperformed the benchmark in FY18, are trading at even higher valuations of 47 and 105 times, respectively. “Sustaining these valuations will require future growth in the economy and earnings in line with current expectations, and require the portfolio re-allocation to be semi-permanent. Otherwise, the possibility of a correction in them cannot be ruled out,” the Survey said. Domestic equities have risen sharply on expectations of strong corporate earnings. However, the earnings growth has been elusive so far, only to belie analysts’ expectations. “Expectat...

According to the Survey, the Gross Non-Performing Advances (GNPA) ratio of Scheduled Commercial Banks (SCBs) increased from 9.6 per cent to 10.2 per cent between March 2017 and September 2017 The performance of the banking sector in general and those in the public sector, in particular, continued to be subdued in the current fiscal, the Economic Survey 2017-18 said on Monday. According to the Survey, tabled in Parliament by Finance Minister Arun Jaitley, significant progress has been made for the Corporate Insolvency Resolution Process (CIRP) to enable banks to realise their dues. The Survey states that 525 companies have been admitted under CIRP and the total underlying default is Rs 128,810 crore. According to the Survey, the Gross Non-Performing Advances (GNPA) ratio of Scheduled Commercial Banks (SCBs) increased from 9.6 per cent to 10.2 per cent between March 2017 and September 2017, whereas, their Restructured Standard Advances (RSA) ratio declined from 2.5...

Sales during the first half declined by over 38 per cent when compared with the same period a year earlier, while unit launches fell by over 56 per cent during the same period  Union budget 2018: India’s real estate sector hit rock bottom, falling to a five-year low in 2017-17, and a change in market sentiment to attract more foreign direct investment (FDI) would be required for a revival of the beleaguered sector, the Economic Survey 2017-18 notes. While residential real estate market saw sales of only 58,000 units in the first half of 2017, new home sales fell to a five-year low of about 101,850 units during this period. Sales during the first half declined by over 38 per cent when compared with the same period a year earlier, while unit launches fell by over 56 per cent during the same period, the Survey said. According to the Survey, the share of real estate sector, including ownership of dwellings, accounted for 7.7 per cent in India’s overall gross value added in 20...

This is the last full budget of the present government and the last opportunity for it to demonstrate its commitment to India's health and nutrition Union budget : Slow improvements in basic indicators of maternal and child mortality, double burden of communicable as well as non-communicable diseases, high out-of-pocket expenditure, a failing public sector and heavily commercialised private sector characterise the healthcare crisis in India. The year 2017 saw a number of incidents in the health sector across the country which highlight each of these issues. While the deaths of children in a public hospital in Gorakhpur due to alleged disruption of oxygen supply highlighted the systemic failures in public health provision, the cases of excessive billing and negligence in big corporate hospitals (e.g. the case of dengue death in Fortis Hospital, Gurugram) showed that the unregulated private sector is no solution to India’s healthcare problems. The protests agains...

Business Standard looks at past surveys to analyse what their priorities and challenges were After the 2009-10 economic survey, which projected economic growth on the dot for 2010-11, most surveys in succeeding years have been off track in predicting growth. Surprisingly, the only other exception was the survey of 2015-16 that pegged economic growth in a range of 7-7.75 per cent for 2016-17 and actual growth was indeed 7.1 per cent. The growth fell in the range predicted by the survey despite the year witnessing demonetisation. The major setback in terms of prediction could be the survey of 2010-11, which had forecast growth to be nine per cent for 2011-12 (plus or minus 0.25 per cent) but growth fell down to just 6.5 per cent. Nine per cent growth has remained wishful thinking in recent times even after the change in the GDP computation methodology, which many say overestimates the growth. Let us now see the focus of the four surveys presented under the Modi government...

The government met leaders of political parties at a meeting in Parliament House on Sunday and also sought their cooperation The government on Sunday said it would "leave no stone unturned" to ensure the passage of the triple talaq Bill in the Budget session of Parliament starting Monday, and asserted that it would talk to various parties for a consensus on the issue. The government met leaders of political parties at a meeting in Parliament House on Sunday and also sought their cooperation in ensuring the success of the crucial session during which the Union Budget 2018 would be presented. The all-party meeting was attended by Prime Minister Narendra Modi, Union ministers Rajnath Singh, Arun Jaitley and Ananth Kumar, besides leaders of the Opposition and other parties. Speaker Sumitra Mahajan also held a dinner meeting with party leaders for the session's smooth functioning and said the leaders had assured her of their cooperation. Addressing...

Economic Survey 2018 is a flagship annual document of the Finance Ministry that reviews the overall state of the economy The Economic Survey will be released today. It marks that start of the Budget session of Parliament. The Economic Survey 2018 will be read out by Finance Minister Arun Jaitley, as a precursor to the Budget 2018 .  to be announced on Thursday. In view of this, Finance Ministry's Chief Economic Adviser, Arvind Subramanian started a web page wherein he has shared some details on the Survey. What is Economic Survey? It is a flagship annual document of the Finance Ministry. It reviews the overall state of the economy in the last 12 months. In August last year, however, the government for the first time presented a mid-term economic survey.

Budget 2018 is crucial because there are eight state elections in 2018 and the General Election in 2019   The Budget session of the Parliament begins today. As many as 28 bills will be tabled in the Lok Sabha, while 39 bills are listed for the Rajya Sabha for the upcoming session. On February 1, Finance Minister Arun Jaitley will present the last full Budget of the present government. This session is extremely crucial for the rulling government, which is set to face eight state elections in 2018 and the General Election in 2019. As much as it crucial because there are eight state elections in 2018 and the General Election in 2019, it is also the first post-GST Budget — with its own increased challenges and decreased kick of "what got cheaper; what got dearer". Top 10 developments 1. Budget session schedule The Budget Session 2018 has been scheduled to be held from Monday (January 29) may conclude on April 6 due to exigencies of government business. D...

USIBC said it believes India must ensure that transfer pricing principles are applied in a fair, consistent manner for all taxpayers Ahead of the Union Budget , corporate America has urged Finance Minister Arun Jaitley for further reduction in tax uncertainty for multinational companies and institutional investors, a step which it said would help attract more foreign direct investments to India. "A significant positive step toward improving the investment climate would be to further reduce tax uncertainty for multinational companies and institutional investors in India," Nisha Desai Biswal, the president of the US India Business Council (USIBC), said in a memorandum submitted to Jaitley. Noting that in today's economic environment, scarce capital is allocated to markets offering optimal returns, Biswal said global businesses allocate investments where post-tax returns for a given risk profile are highest. When tax costs are uncertain, particularly...

This is the first Union Budget after the country's biggest tax reform GST and eighty-eighth Budget after the independence. Union Budget 2018 : 88th Budget After Independence Our Finance Minister will present our Union Budget before the Parliament in eight days. This is the first Union Budget after the country’s biggest tax reform GST and eighty-eighth Budget after the independence. Last year the budget was presented in a traditional way of presenting the budget in Part A which dealt with financial policies and their significance and part B which deals with various taxations, customs duty, central excise, service tax and VAT with other direct tax subheads like income tax and corporate tax. Union Budget 2018: Post GST Budget In this year’s budget, Part B has become shorter as GST engulfing many indirect taxes, guessing that Mr. Jaitley’s speech will be shorter. There are about 20 sundry cesses which are absorbed by GST. Ac cording to CAG (Comptroller and Auditor...

The Union Budget will be tabled on February 1. The session will go into a break on February 9 Two all-party meetings will be held on Sunday, ahead of the Budget Session of Parliament which is due to start on Monday, government sources said on Saturday. Parliamentary Affairs Minister Ananth Kumar has called for an all-party meeting at 4.00 p.m., and Speaker Sumitra Mahajan will hold a meeting at 7.30 p.m, which will be followed by dinner, sources said. The Budget Session will start on Monday with President Ram Nath Kovind's address to a joint sitting of the two Houses. This will be Kovind's first address to a joint sitting of Parliament since he took over as the President. The Union Budget will be tabled on February 1. The session will go into a break on February 9. The second phase of the Budget Session will start on March 5 and conclude on April 6. The session is likely to see important bills, including one for the commission for backward classes an...

The farmers collectively purchase goods from growers and sell them at rates lower than prevailing market prices The Budget 2018-19 may announce haats and organic hubs in 1,000 village clusters across the country. Modelled on Harihar Haath in Jagdalpur district of Chhattisgarh, these markets will enable villagers to sell their produce directly to consumers, bypassing middlemen, thereby helping them realise a good price for their produce. Started as a pilot project in 2017, Harihar Haath is a unique bottoms-up approach to farm marketing. It is a consortium of four farmer-producer companies, five cooperatives, and 13 women self-help groups. It has been taking great strides to create a risk-free space for farmers. The farmers collectively purchase goods from growers and sell them at rates lower than prevailing market prices. Most of the farmers are women, drawn from self-help groups under the Mahila Kisan Sashaktikaran Pariyojana of the rural development ministry. ...

USIBC said it believes India must ensure that transfer pricing principles are applied in a fair, consistent manner for all taxpayers Ahead of the Union Budget , corporate America has urged Finance Minister Arun Jaitley for further reduction in tax uncertainty for multinational companies and institutional investors, a step which it said would help attract more foreign direct investments to India. "A significant positive step toward improving the investment climate would be to further reduce tax uncertainty for multinational companies and institutional investors in India," Nisha Desai Biswal, the president of the US India Business Council (USIBC), said in a memorandum submitted to Jaitley. Noting that in today's economic environment, scarce capital is allocated to markets offering optimal returns, Biswal said global businesses allocate investments where post-tax returns for a given risk profile are highest. When tax costs are uncertain, particularly ...

The scheme implies 92% annual rise in capex Budget 2018 : The Indian Railways is working on a Rs 35.3-trillion investment plan by 2032, pushing up the capital expenditure for the ministry by around 92 per cent annually. Going by the ambitious vision, the average annual investment, including capacity addition and modernization, would touch around Rs 2.5 trillion, up from the Rs 1.31 trillion in 2017-18. This long-term investment will also comprise the modernisation plan of ‘Vision 2030’ and also Rs 8.56-trillion investment target that former minister Suresh Prabhu had kicked off starting 2014-15. “The Indian Railways will require approximately Rs 35.3 trillion by 2032 to create the requisite capacity and modernize the system,” the ministry said in a report to the Parliamentary Standing Committee. The Railways, under Piyush Goyal, has already started the work, aiming to achieve at least 4000 km electrification per year in the coming years. The capex for Railways during 2...

In the Union Budget 2018-19, Finance Minister Arun Jaitley could reinforce his Modi govt's thrust on skill enhancement to aid job creation to help India effectively leverage its demographic dividend Union budget 2018 : The upcoming Budget 2018, which Finance Minister Arun Jaitley will present on February 1, is expected to be more significant than other recent ones, especially as it is coming after a year full of radical reforms by the Narendra Modi government such as demonetization of high-value currency notes, implementation of the goods and services tax (GST) and a new bankruptcy regime. The year 2017 ended on a high with gross domestic product (GDP) growth in the July-September quarter standing at 6.3%, indicating the significant impact of the two structural reforms — GST and demonetisation — is now behind us and, hopefully we could expect an upward growth in 2018. I am hopeful that this year, too, there will be a thrust on skill enhancement to aid job creation...

This is the team that will spearhead what will essentially be the Prime Minister's vision document for 2019  As the Narendra Modi government presents its fifth and final Union Budget before the 2019 polls, this is the team that will spearhead what will essentially be the Prime Minister’s vision document for 2019 and beyond along with Finance Minister Arun Jaitley.   Hasmukh Adhia FINANCE SECRETARY Adhia was designated finance secretary when Ashok Lavasa retired in October. The senior most official in handling GST, he still has a lot on his platter as he looks to ensure revenue buoyancy, while removing the complications arising from the new levy’s less-than-perfect roll-out. He is also one of the masterminds behind demonetisation. Adhia is a strong contender to be the next Cabinet secretary.   Subhash Garg ECONOMIC AFFAIRS SECRETARY A 1983 batch Rajasthan cadre officer, Garg took over as economic affairs secretary in June, after the retirem...

BJP govt faces this situation as it heads into its last full budget before general elections in 2019 Union budget 2018 : With India’s urban population rising by 11 million annually–the equivalent of adding a Bengaluru every year–and urban voters forming a major vote base for the Bharatiya Janata Party (BJP), making money and management available for cities would appear to be a priority. But promises of smart cities and managing growth to provide jobs and housing for the coming urban population jump from 377 million in 2011 to 600 million in 2031–with 20% of this growth expected to come from rural distress and migration–are, currently, displaying little progress. Less than a quarter of central funds for four major national programmes for India’s urban renewal have been used, according to an IndiaSpend analysis of government data. Since urban development is a state subject, state governments implement these national schemes with central assistance playing a key role...

Major expectation from Budget 2018 is the reduction in Income tax charges and limits On February 1, 2018, the entire nation would be glued to their televisions as the Finance Minister Mr. Arun Jaitely presents the Union Budget 2018 . This is the fifth budget being unveiled by the present government and is considered the most critical in their term. With major reforms such as GST Act, demonetisation, RERA, Jan Dhan Accounts, affordable housing, etc. that have swept our economy for past two years, the general public and economic experts are now looking at reaping the benefits of these milestones. The current government goes into elections next year and therefore, there are major expectations from this budget. One major expectation is the reduction in Income tax charges and limits. Tax rates in India are one of the highest in world, particularly corporate and indirect tax rates. Even taxation on individuals is complex and quite high for an emerging market. India stan...

GST should apply only to services rendered in India, and govt should also look at developing MICE clusters in and around key metro cities and tourist destinations, says Cox & Kings CEO Peter Kerkar. Union budget 2018 : The tourism industry is one of the key drivers of employment generation and inclusive growth in India. And, it could be made to be even more important as a sector of the economy with some push from Finance Minister Arun Jaitley in the upcoming Budget 2018. According to the tourism ministry, the tourism sector accounts for 6.88 per cent of the country’s total gross domestic product (GDP), and 12.36 per cent of the total employment in terms of jobs. Therefore, it is imperative that the Narendra Modi-led central government would take important steps to nurture this industry. In order to boost domestic and inbound tourism, the government should reduce the goods and services tax (GST) rate, which is 18 per cent on hotel rooms with tariff in the range ...

The retail industry, particularly e-commerce, wants marketing spend to be classified as operating expenditure rather than capital expenditure As Finance Minister Arun Jaitley prepares to present Union Budget 2018 , the Narendra Modi-led NDA government’s last full Budget before going for the 2019 general elections, the retail sector wants him to consider reworking the income-tax rules to classify marketing spend as operating expenditure rather than capital expenditure. With low customer loyalty as is seen in the retail sector, marketing should certainly be understood to be operating expenditure. Even physical retailers that offer end-of-season sales consider discounts as notional operating expenditure. Among other key Budget expectations from Finance Minister Arun Jaitley is allowing foreign direct investment (FDI) in the country’s multi-brand e-commerce sector through the automatic route. At present, a lot of complicated structures are used by companies to get this ...