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.
Comments
Who is RAMA ?
Answer : he the king of ayodhya.
is he human being
Answer : yes.
how come an human being can become GOD.
my dear hindu brother, please understant the concept of GOD,
rama cannot save sita from kidnapping then how he will save you??
rama need army to capture ravana then how he will become GOD.
Rama born and died, so you think GOD also born & die.
if there is so many gods then there is no justic...same as indian political party one want to pull the leg of other to get power..
Who is GOD ?
The Most Concise Definition of God:
The most concise definition of God in Islam is given in the four verses of Surah Ikhlas which is Chapter 112 of the Qur’an:
"Say: He is Allah,
The One and Only.
"Allah, the Eternal, Absolute.
"He begets not, nor is He begotten.
And there is none like unto Him."
What does Islam say about ‘god-men’?
India is often called the land of ‘god-men’. This is due to the abundance of so-called spiritual masters in India. Many of these ‘babas’ and ‘saints’ have a large following in many countries. Islam abhors deification of any human being. To understand the Islamic stand towards such pretenders to divinity, let us analyze one such ‘god-man’, Osho Rajneesh or RAMA.
Let us put this candidate, ‘Bhagwan’ Rajneesh, to the test of Surah Ikhlas, the touchstone of theology:
i) The first criterion is "Say, He is Allah, one and only". Is Rajneesh one and only? No! Rajneesh was one among the multitude of ‘spiritual teachers’ produced by India. Some disciples of Rajneesh might still hold that Rajneesh is one and only.
ii) The second criterion is, ‘Allah is absolute and eternal’. We know from Rajneesh’s biography that he was suffering from diabetes, asthma, and chronic backache. He alleged that the U.S. Government gave him slow poison in prison. Imagine Almighty God being poisoned! Rajneesh was thus, neither absolute nor eternal.
iii) The third criterion is ‘He begets not, nor is He begotten’. We know that Rajneesh was born in Jabalpur in India and had a mother as well as a father who later became his disciples.
God does not become a human being:
God does not take human form:
Some may argue that God does not become a human being but only takes a human form. If God only takes a human form but does not become a human being, He should not possess any human qualities. We know that all the ‘God-men’, have human qualities and failings. They have all the human needs such as the need to eat, sleep, etc.
The worship of God in human form is therefore a logical fallacy and should be abhorred in all its forms and manifestations.
That is the reason why the Qur’an speaks against all forms of anthropomorphism. The Glorious Qur’an says in the following verse:
"There is nothing whatever like unto Him."
GOD is beautiful, GOD is Merciful, GOD is Loving his creation based on his good deeds.
GOD want human being to live in this earth happly and cooperate each other in bad time.
one important thing GOD want that he want him to worship alone. he is supreme
dont add idol, photo, animal, stone, humans, sun, star etc.
all belong to HIM.
hope you will find the truth before you die!!!
Dear Advocate Sir,
Saying is not enough sir, All courts need concrete evedence to prove and to discharge the verdict.
Please provide the concrete evidence to get the verdict in favor.
We ask advocate Vaidyanathan to respect his post and constitution by not giving incorrect statement. We ask him the base he say that babri masjid was constructed by razing temple. Where is the proof. He is throwing ball in darkness. He is betraying his oath taken while receiving lawyer certificate that he will say truth only. Dear Vaidyanathan, please dont misguide the court and show the evidence. How about the home you are staying. What will be your response if I say that it was constructed demolishing church or gurudwara or masjid.
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