Before coming to Parliament for presenting her second budget, Finance Minister Nirmala Sitharaman and her team met President Ram Nath Kovind. Like last year, Sitharaman opted for a traditional red-coloured 'bahi-khata' to carry budget documents.
One can track it on Parliament’s website and its YouTube channel.
Finance Minister Nirmala Sitharaman, who will present her second full-year annual budget to parliament, could defer the earlier target of cutting the deficit to 3% of gross domestic product in 2020/21 by at least two years. The government may set a deficit target of 3.6% of GDP for 2020/21, up from 3.3% targeted for the current year.
The survey draws from the Prime Minister’s Independence Day speech that only when wealth is created will wealth be distributed and referenced to ancient texts to emphasise benefits accruing from market economy.
This amnesty scheme could mirror the Sabka Vishwas scheme which was targeted at customs and excise dispute resolution amnesty scheme in which the government has mopped up at least Rs 38,000 crore.
As clamour grows for more money into the pockets of consumers and households to boost consumption in the economy, the government is discussing multiple options on cuts in personal income tax (PIT) in the forthcoming Union Budget.
Among the proposals being considered for the Union Budget is that the long term capital gains (LTCG) tax will be fixed at 24 months or two years uniformly for all asset classes.
Session may presage a Budget woven around the theme of the start of a new decade and building of a New India.
The Economic Survey 2019-20 has suggested integrating 'Assemble in India for the World' into Make in India as it would help raise India its export market share to about 3.5% by 2025 and 6% by 2030.
The government is considering a proposal to do away with capital gains on selling property. Currently, one has to pay 30 per cent capital gains on the sale of a property, if the amount is not re-invested in property within 3 years.
Besides giving relief to the domestic industry and boosting employment, the move will help to keep imports down and raise revenue. Many of these are industries which are essentially concentrated in the SME sector and employment intensive. The industry ministry in its budget recommendations has proposed rationalisation of basic customs on over 300 items.
The Budget comes at a time when the economy is facing one of the worst slowdown in decades with growth slowing down to 4.5% and the unemployment rising to 45-years high.
Over the next week, markets will likely obsess about the minutiae of fiscal and monetary policy. Reams will be written about the implications for growth and financial conditions from the fiscal deficit expanding or declining this year and next.
The Survey starts off with its heart in the right place with an overarching theme of wealth creation and the attendant policy choices. It rightly argues that for wealth to be distributed, it first has to be created and called for looking at wealth creators with respect.
There are already immense deficits in quality and quantity of basic urban facilities, causing traffic congestions, inadequate solid waste management facilities, drinking water scarcity, pollution, etc.
The lavender refers to, as per chief economic adviser K Subramanian, “the new Rs 100 note with the old note, symbolising this synthesis of the old with the new”. The “synthesis”, though, is not immediately apparent.
The Economic Survey 2019-20 suggested corporatisation of divestment by forming a new entity where the government's stake in listed central public sector enterprises (CPSEs) can be transferred and sold overtime, making a strong pitch for privatisation.
“Government has emerged as the single largest procurer and hoarder of foodgrains,” the survey noted. Direct cash transfers would be far more effective than the current inefficient procurement system, it said. The waiver of farm debt by states is a bad idea, it said.
The Survey noted that increasing digitalization and seamlessly integrating multiple agencies onto a single digital platform can further reduce procedural inefficiencies in cross-border trade significantly and improve user experience substantially. Streamlining of logistics on Indian seaports needs close inter-ministerial coordination, it said.
The survey has a distinct prescriptive flavour with many bold reforms to transition the economy to a more market-based economy. Thus, the survey has rightly highlighted that the vestiges of old Soviet model of economic growth need to be dismantled (notably in agriculture sector) to encourage rapid wealth creation on the back of entrepreneurship and growth.
The survey is not much of a policy guide beyond first-principles free-marketism.
The survey’s Chapter 2 is a lengthy exposition on the importance of wealth creation, and it starts by noting that “for more than three-fourths of known economic history, India has been the dominant economic power globally”. This is consistent with respected economic history research.
Bet on rebound, but key would be recovery in global growth many suggested reforms may not be politically acceptable
In a bid to improve connectivity, the government will also focus on creation of new highways, waterways, airways and I-ways (IT infrastructure), the President said addressing the joint sitting of both houses of Parliament, on the first day of the Budget session
The survey cites the example of China to underline how India can become a trade super power by way of exports. During the period between 2001-2006, labour-intensive exports helped China generate 70 million jobs for workers with primary education.
Under the NFSA, the government supplies 5 kg of subsidised foodgrains to each person per month through more than 5 lakh ration shops, known as public distribution system (PDS).
According to the Survey, as a proportion of gross domestic product (GDP), the expenditure on social services has registered an increase of 1.5 percentage points during the period 2014-15 to 2019-20 from 6.2% to 7.7%, it said.
For instance, the Survey calls for abolition of archaic laws like the Essential Commodities Act as it imposes stock limits which acts as disincentive for the private sector for creation of storage capacity. The survey said that the act should be let go of for more economic freedom to the market and to spur wealth creation.
The government has provided over Rs 43,000 crore to more than 8 crore farmers under the PM-KISAN scheme and will spend Rs 25 lakh crore in coming years to boost the rural economy, President Ram Nath Kovind said on Friday.
This year's survey comes at a time when the government is trying to revive the economy that is facing its worst slowdown in the recent years with economic growth slipping to 4.5% and unemployment rate at a 45-year high.
The first advance estimates put out by the government peg the GDP growth at 5 per cent for FY20, an 11-year low and nominal growth at 7.5 per cent, a 42-year low. The slowdown in India's economic growth can be traced to a dramatic fall in investment and consumption, two main drivers of growth, along with fall in exports and manufacturing.
AISTA expects a reduction of 1 million tonnes in sugar production due to diversion of cane to production of B heavy mollases. The estimate of 27.5 million tonnes is excluding the diversion for ethanol production.
As education and health outcomes improve, women's barriers to entry in joining the workforce would reduce. This would reverse the worrying trend of dipping female labour force participation and contribute to India’s economic growth. It would also make women more financially independent and reduce the crimes against women that begin in the household.
The UK will officially become a non-member of the European Union (EU) from Friday night, a certainty welcomed by Indian businesses operating in the UK as well as British businesses keen to expand into the Indian market.
The survey is a detailed report of the the country's economic performance during the past one year. It is basically an assessment of the progress of the economy over the 12-month period. As a usual practice, the Union Budget and the Economic Survey of India are presented a day apart.
Instead of waiting for the Budget, the government chose to unveil steps including one of the sharpest ever corporation tax reductions months after Nirmala Sitharaman presented her first Budget in July 2019.
India's current CEA, Krishnamurthy Subramanian, is a staunch believer of China's growth model.
Taxpayers have complained of GSTN portal slowdown, login error or auto logout, non-delivery of OTP or delayed OTP, network error or gateway timeout, OTP issues on email or on a few domains, open file error, and GSTR-9C document not uploading, among other issues while filing returns.
India faces its worst economic slowdown in a decade. Growth slipped to 4.5% in the July-September quarter, imperilling job prospects for millions of young people entering the workforce each year.
Finance Minister Nirmala Sitharaman is set to outline fiscal steps that may include higher spending in rural areas and possible tax cuts when she delivers her second budget speech in New Delhi. The government is expected to widen its budget deficit target for the year through March to 3.8% of gross domestic product from a planned 3.3%.
This year, India is in the middle of a slowdown in growth that has divided economists and worried politicians. Thus, even more is hoped for from the budget than normal.
Officials have earlier said that divestment of public sector enterprises, including Air India, which the government wants to execute at a fast pace, will not be done in the current financial year. Dipam has managed to mop up only Rs 18,094 crore from divestment of CPSEs, well short of the Rs 1.05 lakh crore target set by the government in the previous budget.
The FIEO said that if the problem persists for long, it may impact domestic mobile manufacturers as they import certain components from China. "Mobile exporters may face issues if the problem will continue for long as they import lot of components from the neighbouring country," FIEO Director General Ajaya Sahai said.
The duty benefit under the Merchandise Export from India Scheme (MEIS) is effective from January 1 and will be applicable till March 31, 2020.
Almost every economist has predicted that the government will breach the 3.3 per cent target set for FY20. The reason is simple: Subdued tax collections that will miss the target and the disinvestment programme missing the Budgeted goal of Rs 1.05 lakh crore by a wide margin.
The central government is currently offering imported onions to state governments at an average landed cost of Rs 58/kg for further distribution in the retail market. It is also bearing the transportation cost.
The big question is how the FM will manage to mobilise resources at a time when the tax collections have taken a serious hit and divestment proceeds are nowhere near meeting the full year target of Rs 1.05 lakh crore.
Is there a win-win approach that can satisfy government finances, minority shareholder interest and management reform while still maintaining more than 51% stake in these companies?
The recent corporate tax cuts in September 2019, surely one of the most defining tax policy announcements for India in decades, has led to many views and counterviews with regard to the necessary transmission effect for investments and economic growth at the cost of tax revenues.
Jitesh Patel, a potato farmer from Dolpur Kampa village of Arvalli district, turned his and his family’s fortunes around after using his education in agriculture science to begin cultivating the Lady Rosetta (LR) variety of potato.
