Budget credit positive for India Inc, fiscal challenges remain: Moody's

 The path toward the government’s medium-term deficit target of 4.5% of GDP by FY25 remains undefined.

Rating agency Moody’s said the government’s Budget for FY 2022-23, with emphasis on capital expenditure to support growth, is credit positive for non-financial companies, financial institutions, but poses long-term fiscal challenges for the sovereign. There is continued emphasis on rising capital expenditure to sustain growth momentum near term, as the economy continues to rebound from its coronavirus (Covid-19) pandemic trough, the rating agency said in a report. India’s sovereign rating is “Baa3 stable”.

The conservative Budget 2022 assumptions leave room for the government to respond to prevailing macroeconomic and pandemic risks over the next year. However, the path toward the government’s medium-term deficit target of 4.5 per cent of Gross Domestic Product (GDP) by FY25 remains undefined. India’s Budget, presented on February 1, 2022, projects a narrowing in the central government deficit to 6.4 per cent of GDP in FY22 from an estimated 6.9 per cent in FY21….

Beyond the third wave: Rural economy, banking recovery, and more

 Budget at a glance: Here’re the key numbers from Union Budget 2022

Finance Minister Nirmala Sitharaman on Tuesday unveiled a bigger Rs 39.45 lakh crore Budget, with higher spending on highways to affordable housing with a view to fire up the key engines of the economy to sustain a world-beating recovery from the pandemic. Prime Minister Narendra Modi on Tuesday said the Union Budget presented by Finance Minister Nirmala Sitharaman was “people-friendly, progressive” and full of possibilities for infrastructure, investment, growth and jobs. In a televised statement, Modi said an important aspect of the Union Budget was the welfare of the poor.

Union Budget 2022: Umbrellas to be costlier, diamonds cheaper

 Keeping with the government’s Atmanirbhar Bharat plank, FM Sitharaman increased Customs duties on a host of items, such as umbrellas, parts of wearable devices, and electronic smart meters

Keeping with the government’s Atmanirbhar Bharat plan, Finance Minister Nirmala Sitharaman on Tuesday increased Customs duties on a host of items, such as umbrellas, parts of wearable devices, and electronic smart meters. She also proposed to phase out more than 350 exemptions, including on capital goods, in a gradual manner to encourage domestic manufacturing.

“This comprehensive review will simplify the Customs rate and tariff structure, particularly for sectors like chemicals, textiles, and metals, and minimise disputes. Removal of exemption on items that are or can be manufactured in India and providing concessional duties on raw material that go into manufacturing of intermediate products will go many a step forward in achieving our objective of Make in India and Atmanirbhar Bharat,” Sitharaman said….Read More

What are the key takeaways from Budget 2022?

 While tabling her fourth Budget, Nirmala Sitharaman said that it will lay the foundation for the next 25 year’s economic growth. Let us examine what this Budget has in store for the country

Budget 2022 saw a sharp increase in capital expenditure and the government committing enhanced support for the hospitality sector and related services. There was also an announcement that a digital rupee, using Blockchain, would be issued by the RBI soon. Among other things, the government also rejigged the customs duty structure.

The share of the Budget allocated to capital expenditure is the highest in 19 years. Budget 2022 has allocated 7.5 trillion rupees to capital expenditure. This is 35.4 per cent higher than the previous year’s allocation of 5.5 trillion rupees. It amounts to 19.02 per cent of the Budget’s total expenditure of 39.45 trillion rupees. The last time that the capital expenditure share touched a similar figure was when it came in at 19.32 per cent for the financial year 2004-05.

U R Bhat, co-founder and director at Alphaniti Fintech, has said that the thrust of Union Budget 2022 has been on infrastructure modernisation, adding that this will have a multiplier effect as far as job creation and economic growth are concerned. He emphasised that the government has refrained from doling out any kind of loan ahead of the Assembly elections in some states. The budget, he said, focuses on the next few years and not the elections.

Winter session troubles may hit House again; FM to present Eco Survey today

 The Personal Data Protection Bill is eagerly awaited and may come up in the Budget session

If the winter session of Parliament was a washout, the prognosis for the upcoming Budget session that begins on January 31, with the Preside­nt’s address to both Houses of Parliament, is no better. As Opposition parties reached out to each other to fine-tune parliamentary strat­egy, the Narendra Modi government is expected to be in the Oppo­sition’s cross hairs on issues such as the new revelations on snooping by intelligence interception company Pegasus, farm distress, management of the third wave of Covid-19, the sale of national carrier Air India, and Chinese “incursions” into eastern Ladakh.

Finance Minister Nirmala Sitharaman will present the Economic Survey 2021-22 on Monday and the Union Budget on Tuesday. This is expected to go off with only sporadic interruption. But the Budget session is taking place amid a heated election campaign in five states – Uttar Pradesh, Uttarakhand, Punjab, Goa, and Manipur – that go to polls in seven phases from February 10 to March 7.

As parties go head to head in the field, reverberations will hit Parliament as well. This is not all. Some Bills awaiting discussion and passage are also hotly contested. The Electricity (Amendment) Bill, 2021, for instance, has been opposed vigorously by several Opposition-ruled states, inclu­ding Tamil Nadu, West Bengal, Maharashtra, and Kerala…Union Budget 2022

Didn't underestimate spending provisions in Budget: FM Sitharaman

 Lok Sabha gives assent to additional net spending of Rs 2.99 trn

Union Finance Minister Nirmala Sitharaman on Monday said the additional expenditure consent sought by the Centre from Parliament through Supplementary Demand for Grants this year was around 9.6 per cent of the Budget 2021-22 size of Rs 34.8 trillion. This compares to 8.6 per cent during the time of the Manmohan Singh government in 2011-12, she said, adding that the Centre did not under-provision in the Budget.

Replying to the debate on the second Supplementary Demand for Grants and the Appropriation Bill in the Lok Sabha, Sitharaman said the Centre was seeking legislative nod to spend Rs 2.99 trillion extra because of issues such as the Air India sale and the rise in global fertiliser prices, which led to a sharp increase in fertiliser subsidy burden this year.

“Many members have asked if the demand this time is so high because we underestimated in Budget 2022 Estimates (BE)? The big-ticket expenditure items include Air India. Also, at a time when we are very sensitive to farmers and their concerns, we have to ensure that they don’t suffer because of the rise in global commodity prices. And therefore, an increase in the subsidy for fertiliser has been provided, which itself is accounting for Rs 58,430 crore,” Sitharaman said…