Budget inputs among secret files stolen from ministries

Feb 2: Prime Minister Narendra Modi’s second budget in seven months disappointed investors who were hoping for big-bang stimulus to revive growth in Asia’s third-largest economy.

The fiscal plan -- delivered by Finance Minister Nirmala Sitharaman on Saturday -- proposed tax cuts for individuals and wider deficit targets but failed to provide specific steps to fix a struggling financial sector, improve infrastructure and create jobs. Stocks slumped as a proposal to scrap the dividend distribution tax for companies failed to impress investors.

"Far from being a game changer, the budget provides little in terms of short-term growth stimulus,” said Priyanka Kishore, head of India and South East Asia economics at Oxford Economics Ltd. in Singapore. “While income tax cuts will provide some relief on the consumption front, the multiplier effect is low and the overall stance of the budget is not expansionary."

India has gone from being the world’s fastest-growing major economy three years ago, expanding at 8%, to posting its weakest performance in more than a decade this fiscal year, estimated at 5%.

While the government has taken a number of steps in recent months to spur growth, they’ve fallen short of spurring demand in the consumption-driven economy. Saturday’s budget just added to the glum sentiment.

Okay Budget

“It’s an okay budget but not firing on all cylinders that the market was hoping for,” said Andrew Holland, chief executive officer at Avendus Capital Alternate Strategies in Mumbai.

The government had limited scope for a large stimulus given a huge shortfall in revenues in the current year. The slippage induced Sitharaman to invoke a never-used provision in fiscal laws, allowing the government to exceed the budget gap by 0.5 percentage points. The result: the deficit for the year ending March was widened to 3.8% of gross domestic product from a planned 3.3%.

On Friday, India’s chief economic adviser Krishnamurthy Subramanian said reviving economic growth was an “urgent priority” and deficit goals could be relaxed to achieve that. The adviser’s Economic Survey estimated growth will rebound to 6%-6.5% in the year starting April.

The fiscal gap will narrow to 3.5% next year, as the government budgeted for gross market borrowing to rise marginally to 7.8 trillion rupees from 7.1 trillion rupees in the current year. A plan to earn 2.1 trillion rupees by selling state-owned assets in the year starting April will also help plug the deficit.

Total spending in the coming fiscal year will increase to 30.4 trillion rupees, representing a 13% increase from the current year’s budget, according to latest data.

Key highlights from the budget:

* Tax on annual income up to 1.25 million rupees pared, with riders

* Dividend distribution tax to be levied on investors, instead of companies

* Farm sector budget raised 28%, transport infrastructure gets 7% more

* Spending on education raised 5%

* Fertilizer subsidy cut 10%

Analysts said the muted spending plan to keep the deficit in check will lead to more downside risks to growth in the coming months.

“It is very doubtful that the increase in expenditure will push demand much,” Chakravarthy Rangarajan, former governor at the Reserve Bank of India told BloombergQuint, adding that achieving next year’s budget deficit goal of 3.5% of GDP was doubtful.

With the government sticking to a conservative fiscal path, the focus will now turn to central bank, which is set to review monetary policy on Feb. 6. Given inflation has surged to a five-year high of 7.35%, the RBI is unlikely to lower interest rates.

What Bloomberg’s Economists Say:

The burden of recovery now falls solely on the Reserve Bank of India. With inflation breaching RBI’s target at present, any rate cuts by the central bank are likely to be delayed and contingent upon inflation falling below the upper end of its 2%-6% target range.

-- Abhishek Gupta, India economist

Governor Shaktikanta Das may instead focus on unconventional policy tools such as the Federal Reserve-style Operation Twist -- buying long-end debt while selling short-tenor bonds -- to keep borrowing costs down.

New Delhi, Jul 7: The University Grants Commission (UGC) has issued revised guidelines regarding the conduct of terminal semesters and final year exams by Universities and educational institutions. It has been suggested that exams may be completed by September in online or offline modes.

Releasing a statement, the UGC said it accepted the recommendations suggested by the expert committee. "In continuation to earlier Guidelines issued on 29.04.2020 and based on the Report of the Expert Committee, the UGC Revised Guidelines on Examination and Academic Calendar for the Universities in view of COVID-19 Pandemic were also approved by the Commission in its emergent meeting held on 6th July 2020," the statement read.

The Commission further said that while it was important to safeguard principles of health, safety and equal opportunities, it was also very important to ensure academic credibility, career opportunities and future progress of students.

"The Commission approved the recommendations of the Expert Committee regarding the conduct of terminal semester(s)/ final year(s) examinations by the universities/ institutions to be completed by the end of September 2020 in offline (pen & paper online/ blended (online + offline) mode," it added.

The UGC also said that if required it would also issue relevant details related to admissions and academic calendar in the universities and colleges. It asked the students to adopt the latest guidelines and complete the terminal semester or final year exams accordingly. 

New Delhi, Mar 29 : Notwithstanding the 21-day coronavirus lockdown, the Reserve Bank of India (RBI) has decided to go ahead with the merger plan of ten state-run banks into four larger bank from April 1. The apex bank has issued four separate releases announcing that the branches of merging banks will operate as of the banks in which these have been amalgamated from next month.

RBI's statement comes after Finance Minister Nirmala Sitharaman's clarification on Thursday that the mega bank consolidation plan was very much on track and would take effect from April 1.

The government on March 4 had notified the amalgamation schemes for 10 state owned banks into four as part of its consolidation plan to create bigger size stronger banks in the public sector.

Bank officers' unions, however, earlier this week wrote to the prime minister seeking to defer the merger schemes of lenders due to the lockdown triggered by coronavirus outbreak.

As per the scheme, Oriental Bank of Commerce and United Bank of India will be merged into Punjab National Bank; Syndicate Bank into Canara Bank; Allahabad Bank into Indian Bank; and Andhra and Corporation banks into Union Bank of India.

Under this, the branches of Oriental Bank of Commerce and United Bank of India will operate as branches of Punjab National Bank from April 1, 2020, and branches of Syndicate Bank as that of Canara Bank, the RBI said in a separate releases.

Allahabad Bank branches will operate as those of Indian Bank while the branches of Andhra Bank and Corporation Bank will function as the branches of Union Bank of India from the beginning of next fiscal year 2020-21, the RBI said.

"The Amalgamation of Oriental Bank of Commerce and United Bank of India into Punjab National Bank Scheme, 2020 dated March 4, 2020, issued by the Government of India... The scheme comes into force on the 1st day of April 2020," RBI said.

Customers, including depositors of merging banks will be treated as customers of the banks in which these banks have been merged with effect from April 1, 2020, the RBI noted.

Banking services across the country are impacted due to the effect of COVID-19 as a near shut down is being observed across the country.

In a letter written to the Prime Minister on March 25, the All India Bank Officers'' Confederation (AIBOC) said, "The finance minister yesterday announced a slew of measures in view of the deleterious effect of the contagion. We are also expecting an extension of closing related activities and the revision of the closing date itself from March 31 to June 30, which is the need of the hour."