UAE protests over Qatari players' eligibility at Asian Cup

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.

Aboard Air Force One, Jan 6: US President Donald Trump threatened sanctions against Baghdad on Sunday after Iraq's parliament called on US troops to leave the country, and the president said if troops did leave, Baghdad would have to pay Washington for the cost of the air base there.

"We have a very extraordinarily expensive air base that's there. It cost billions of dollars to build, long before my time. We're not leaving unless they pay us back for it," Trump told reporters on Air Force One.

Trump said that if Iraq asked US forces to leave and it was not done on a friendly basis, "we will charge them sanctions like they've never seen before ever. It'll make Iranian sanctions look somewhat tame."

Mumbai, Mar 3: India on Tuesday retained their number one spot and captain Virat Kohli remained static at second in the ICC rankings despite a dismal Test series against New Zealand.

India have 116 rating points, six more than New Zealand with third-placed Australia accumulating 108 points. The 0-2 result against New Zealand was India's first series loss in the World Test Championship.

Kohli remains in second position in the batting rankings despite a forgettable Test series in which he made 38 runs in four innings, the ICC said in a statement.

New Zealand opener Tom Blundell and his Indian counterpart Prithvi Shaw and debutant paceman Kyle Jamieson were among the biggest movers in the rankings, released on Tuesday.

Blundell had a successful series against India, scoring 117 runs in four innings, with one half-century, which put him among the top two run-scorers in the series.

The performance meant he was rewarded with a jump of 27 places to No. 46. Shaw, who returned for his first series since his Test debut against West Indies in 2018, and made a punchy 54 in the first innings of the Christchurch Test, rose 17 places to No.76.

Australia's Steve Smith retained his top spot, holding a 25-point advantage over Kohli. Smith's apprentice Marnus Labuschagne jumped one spot to round off the top three, taking the place of New Zealand captain Kane Williamson.

England all-rounder Ben Stokes and India opener Mayank Agarwal moved a spot each and swapped places to break into and fall out of the top 10 respectively.

Among bowlers, Tim Southee's Player of the Series winning performance against India took him into the top five, with a jump of two places to No.4, while Jasprit Bumrah and Trent Boult returned to the top 10, gaining four places each to occupy the seventh and ninth positions respectively.

But the biggest gainer was Jamieson, who rose from No. 80 to 43.

There was only one change in the top ten among all-rounders, with Southee dropping a spot to No.10 and team-mate Neil Wagner falling out of the top 10 with a drop of four spots.

As with the bowling rankings, Jamieson, who frustrated India with handy lower order runs, gained big on the all-rounders' table, rising 26 places to No. 22.