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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, Feb 27: Congress leader Priyanka Gandhi Vadra on Thursday attacked the government over the transfer of Delhi High Court Judge S Muralidhar, saying the Centre's attempts to "muzzle" justice and "break people's faith in an upright judiciary are deplorable".

Delhi HC Judge S Muralidhar was transferred to the Punjab and Haryana High Court, days after the Supreme Court collegium made the recommendation.

"The midnight transfer of Justice Muralidhar isn't shocking given the current dispensation, but it is certainly sad & shameful," Priyanka Gandhi tweeted. "Millions of Indians have faith in a resilient & upright judiciary, the government’s attempts to muzzle justice & break their faith are deplorable," she said.

The judge was hearing the Delhi violence case and the late evening notification came on the day when a bench headed by him expressed "anguish" over the Delhi Police's failure to register FIRs against alleged hate speeches by three BJP leaders.

Mumbai, Mar 28: Industrialist Ratan Tata on Saturday announced that Tata Trusts has committed Rs 500 crore for the medical supplies and equipments which will help combat the coronavirus outbreak.

"The COVID-19 crisis is one of the toughest challenges we will face as a race. The Tata Trusts and the Tata group companies have in the past risen to the needs of the nation. At this moment, the need of the hour is greater than any other time," said Ratan Tata, in an official release.

"Tata is committing Rs 500 crore for: personal protective equipment for the medical personnel on the frontlines; respiratory systems for treating increasing cases; testing kits to increase per capita testing; setting up modular treatment facilities for infected patients and knowledge management and training of health workers and the general public," Tata added.
Tata Chairman also expressed his deep gratitude for the members of all the organizations who are fighting coronavirus at the frontline, puting their life at risk.

"The Tata Trusts, Tata Sons and the Tata group companies are joined by committed local and global partners as well as the government to fight this crisis on a united public health collaboration platform which will strive to reach out to sections that are underprivileged and deprived," he added.

According to the Ministry of Health and Family Welfare (MoHFW), there are 873 confirmed cases of coronavirus cases in the country and 19 fatalities have been reported.