Protests over church attack ahead of polls in the capital

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.

Lucknow, Jan 6: Undeterred by the large scale protests that claimed as many as 20 lives in the state, Uttar Pradesh government has started the process of implementing the controversial Citizenship (Amendment) Act.

According to sources in the government, the district magistrates have been directed to identify the migrants from Pakistan, Bangladesh and Afghanistan, who have been living in their districts.

Sources said that the state home department has given oral instructions to the district magistrates. ''No written orders have been issued,'' said a senior official here preferring anonymity.

The official said that the district magistrates would be preparing a list containing names of those minorities, who had migrated from these countries following their persecution and had been living without obtaining the citizenship of India.

According to sources, the government expected that the migrants, who could be eligible for the Indian citizenship in accordance with the CAA, could be more in number in the districts, including Rampur, Ghaziabad, Shahjahanpur, Lucknow and some others.

''The list will be sent to the union home ministry,'' the official added.

Sources said that the state government will also inform the centre about the ''illegal Muslim migrants'' for their ultimate deportation to their countries of origin.

Different parts of UP had witnessed large scale violence last month during the protests against the CAA. At least 20 people, mostly youngsters, were killed allegedly in police firing and many others were injured. The state government had denied the charge. 

Alleged police excesses during and after the protests triggered a nationwide outrage with several rights organisations and activists slamming the BJP government and demanding a high-level probe into the allegations.

Seventy-seven per cent children below five years of age in Jammu and Kashmir were not able to access basic healthcare services like immunisation during the lockdown imposed to curb the spread of COVID-19, CRY said on Monday citing a study.

The 'Rapid Online Perception Study about the Effects of COVID-19 on Children' was conducted during the first and second phases of the lockdown based on responses of parents and primary caregivers from all across the country, including Jammu and Kashmir, the NGO said in a statement.

It said a total of 387 respondents from Jammu and Kashmir participated in the study.

"Seventy-seven per cent children of age 0-5 years were not able to access basic healthcare services such as immunisation during lockdown - necessarily imposed to curb the spread of COVID-19 pandemic in Jammu and Kashmir," Child Rights and You (CRY) said.

It said as immunisation programmes witnessed a major setback during the lockdown across the country, the results of the survey across 23 states and Union Territories found nearly 50 per cent of parents with children below five years of age unable to access immunisation services.

"Worryingly, the figure was considerably high in Jammu and Kashmir with 77.14 per cent children below five years unable to get immunisation services," it added.

According to the study, in Jammu and Kashmir, nearly 35 per cent of the respondents said their children did not receive medical help during the lockdown, resulting in difficulties to cope with their children's illnesses and health hazards.

The study also talks about more systemic arrangements and logistical preparedness to ensure that children with no or compromised digital reach are not deprived from their Right to Education.

With online classes introduced as a substitute of schools during the lockdown, access to education for children remained a major issue of concern, as many of them, especially the ones from marginalised and financially poorer backgrounds found it difficult without smartphones and internet access.

The survey's findings revealed that nationally only 41 per cent households with children of school-going age could access online classes on a regular basis.

"Almost 90 per cent parents and primary caregivers reported that the lockdown has increased the screen time of their child to great or some extent. About half of the households recorded an increase of children's exposure to online activities during lockdown," it said.

The NGO said around 76 per cent parents agreed that they could keep a watch of their children's online activity to some extent.