India's COVID-19 tally stands at 21,700

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, May 31: India registered its highest single-day spike of COVID-19 cases on Sunday with 8,380 new infections reported in the last 24 hours, taking the country's tally to 1,82,143, while the death toll rose to 5,164, according to the Union Health Ministry.

The number of active COVID-19 cases stood to 89,995, while 86,983 people have recovered and one patient has migrated, it said.

"Thus, around 47.75 per cent patients have recovered so far," a senior health ministry official said.

The total confirmed cases include foreigners.

The death toll has gone up by 193 since Saturday morning, of which 99 were from Maharashtra, 27 from Gujarat, 18 from Delhi, nine each from Madhya Pradesh and Rajasthan, seven from West Bengal, six each from Tamil Nadu and Telangana, five in Bihar, three from Uttar Pradesh, two from Punjab, and one each from Haryana and Kerala.

New Delhi, Jun 9: Petrol price on Tuesday was hiked by 54 paise per litre and diesel by 58 paise a litre - the third straight daily increase in rates after oil PSUs ended an 82-day hiatus in rate revision.

Petrol price in Delhi was hiked to Rs 73.00 per litre from 72.46, while diesel rates were increased to Rs 71.17 a litre from Rs 70.59, according to a price notification of state oil marketing companies.

This is the third daily increase in rates in a row. Oil companies had on Sunday restarted revising prices in line with costs, after ending an 82-day hiatus.

Prices were raised by 60 paise per litre each on both petrol and diesel on Sunday as well as on Monday. In all, petrol price has gone up by Rs 1.74 per litre and diesel by Rs 1.78 a litre in three days.

Oil PSUs - Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) - had put daily price revisions on hold soon after the government on March 14, hiked excise duty on petrol and diesel by Rs 3 per litre each.

Oil companies did not pass on that excise duty hike, as well as the May 6 increase in tax on petrol by Rs 10 per litre and Rs 13 a litre hike on diesel by setting them off against the decline in retail prices that should have effected to reflect international oil rates falling to two-decade low.

International rates have since rebounded and oil companies having exhausted all the margin are now passing on the increase to customers, an industry official said.