Indian Economy - News & Discussion Oct 12 2013

RoyG · Post by **RoyG** » 01 Jul 2014 17:16

Thank you Shiva, this planning commission is going to be finished. Bloody jokers have been taking this country for a ride for a long time.

ramana · Post by **ramana** » 01 Jul 2014 19:25

India Today has a cartoon on twitter about Modi's travails with Planning Commission.

It says PC wants a five year plan to disband itself!!

hanumadu · Post by **hanumadu** » 02 Jul 2014 11:35

Looks like the monsoon hit India, at least Mumbai. The deficit is supposed to be less than 10% of a normal monsoon. Won't be too bad for the economy I hope.

Rony · Post by **Rony** » 02 Jul 2014 16:26

Chidu leaves a gutted exchequer: fiscal deficit at 45% of year’s total in just 2 months

When Narendra Modi talked about the “empty coffers” left behind by the UPA, P Chidambaram, who was in charge of the coffers till 26 May 2014, claimed this was nonsense. He claimed he was leaving Rs 26,510 crore in cash for the Modi administration in contrast to the negative cash balance left behind by the previous NDA government in 2004.

Chidambaram said: “The opening cash balance on June 1, 2004, just after NDA government demitted office, was negative Rs 2,730 crore. On the other hand, the opening cash balance on June 1, 2014, just after UPA demitted office, was Rs 26,510 crore. We do not subscribe to the empty coffers theory but for the sake of argument, we would like to ask who left behind an empty treasury.”

Perhaps, the former finance minister was being too clever by half. He, of all people, should know the difference between leaving a positive “cash balance” and huge unpaid liabilities which will have to be paid by the next government.

A “cash balance” makes no sense if you have unpaid bills. Its like keeping money in the bank while accumulating huge debts on your credit card. The cash balance is thus notional and fictitious.

The government today (30 June) released the fiscal deficit figures for April-May 2014 which show the real state of the exchequer. According to a Reuters report, in just the first two months of this year – April and May, when the UPA was holding the fort – the fiscal deficit soared to 45.6 percent of the whole year’s budgeted figure.

In April and May, the fiscal deficit touched Rs 2,40,837 crore as against Chidambaram’s budgeted figure of Rs 5,28,631 crore budgeted in his interim budget for the whole of 2014-15.

This means his successor Arun Jaitley, who has a drought and an Iraq oil situation to contend with, will have to get by with just Rs 2,87,794 of deficit leeway for the remaining 10 months of this year. If this is not empty coffers, one wonders what is.

If we deduct Chidambaram’s positive “cash balance” of Rs 26,510 crore as on 1 June from the April-May fiscal deficit figure, we would still end up with a fiscal deficit net of the cash balance at Rs 2,14,327 crore. This would be a high 40.5 percent of the whole year’s fiscal deficit target. Last year, the fiscal deficit for the same period was 33.3 percent.

If you spend 40 percent of your year’s deficit target in two months, what are you essentially leaving for the next government beyond empty coffers?

And remember, this fiscal deficit may also be fictitious, since Chidambaram is known to have cooked his books.

According to the data released today (30 June), net tax receipts were at Rs 28,651 crore while expenditures were in the region of Rs 2,80,000 crore – that is, net tax receipts were just a tenth of total government expenses. Even assuming in an election year the government had to spend more than usual in April and May, and tax refunds are high, this is a disastrous gap.

That’s not all. The eight core sector industries reported just 2.3 percent growth in May, against 4.2 percent in 2013. Core industries include coal, power, crude oil, fertiliser, natural gas, steel, cement, and petroleum refining, and they account for 38 percent of the Index of Industrial Production. This suggests that industrial production may continue to head downhill in the initial months of the NDA government as well.

Chidambaran not only leaves “empty coffers” but a decelerating revenue base and a gutted economy.

This level of fiscal deficit means Jaitley has very little leeway in raising expenses for pet schemes without upsetting the rating agencies. He will have to drastically up the revenues from asset sales to increase capital spending and revive the economy.

Austin · Post by **Austin** » 03 Jul 2014 18:51

India central bank seeks to swap gold to improve reserves quality

* Location swap to boost offshore holdings

* Gold from RBI vaults to be sold on local market - sources

* Eases supply squeeze following gold import curbs

vera_k · Post by **vera_k** » 03 Jul 2014 21:53

Rony wrote:Chidu leaves a gutted exchequer: fiscal deficit at 45% of year’s total in just 2 months

If estimates are overshot by 300%, this looks like another instance where the EOW needs to use IPC 409 to investigate the finance ministry. There must be another side to the story.

chanakyaa · Post by **chanakyaa** » 04 Jul 2014 07:29

Austin wrote:India central bank seeks to swap gold to improve reserves quality

* Location swap to boost offshore holdings

* Gold from RBI vaults to be sold on local market - sources

* Eases supply squeeze following gold import curbs

I'm confused.

MUMBAI, July 2 (Reuters) – India’s central bank said on Wednesday it has sought quotes from banks to swap gold in its own vaults for international-standard gold (What does "international-standard gold mean?? Are the gold bars held by central banks different from what RBI holds?), aiming to improve the management of its reserves.

The Reserve Bank of India said the operation would “standardise the gold available with RBI in India with respect to international standards” and the gold acquired would be delivered to its overseas custodian, the Bank of England (Why are these thugs acting as custodian?? Is it Ecuador style liquidity trade with Goldman Sachs??)

By holding gold reserves in London, the RBI would gain flexibility to mobilise them if needed to defend the currency (Does it mean Rajan is anticipating liquidity crunch?? Umhh!!). It shipped some of its gold holdings to Britain in 1991 as part of a series of emergency measures to tackle a financial crisis

RoyG · Post by **RoyG** » 05 Jul 2014 21:19

WOAH WOAH WOAH, this is actually really big news. Kick this Raguram Rajan out if this is true. He wants to give up the gold to England? You don't own what you don't have in your possession. This is a very scary move. At a time when the China, Russia, and other world powers are increasing their gold holdings, we are letting go of ours. He is not thinking strategically.

Prem · Post by **Prem** » 06 Jul 2014 03:18

http://www.business-standard.com/articl ... 211_1.html

India has potential to become top chemical exporter: Official

ndia’s chemical industry has an immense potential to become a reliable exporter of quality products, a top government official said as he stressed on the need for companies in the sector to comply with environmental norms for sustainable growth.The meet was called to take stock of preparations for the largest event of chemicals and petrochemical industry in India. The chemicals industry is expected to grow at 11 per cent per annum and reach a size of $224 billion by 2017 from the current $108.4 billion, the representatives said.Speciality chemicals is the fastest growing segment in the industry. These are high value, low-volume chemicals known for their end-use applications and performance enhancing properties, the senior IAS officer said.There is an immense potential for increasing consumption within the country and make India a reliable exporter of quality chemicals, he added.“India Chem is an important platform for networking, exchange of ideas, creation of awareness of new products and technologies, and exploration of possibilities for enhancement of trade,” Pal said. The event provides an excellent opportunity for the industry to showcase its capabilities and strengths to the world. “The focus for this year’s event will be on growth with emphasis on sustainability and green chemistry,” he said.Pal said the work on setting up a Petroleum, Chemicals and Petrochemical Investment Region (PCPIR) at Dahej in adjoining Bharuch district, about 90km from Vadodara, is in the final stages of implementation.The project, approved in 2009, seeks to attract investments worth Rs 70,000 crore, he added.Addressing the gathering, Deepak Mehta, Chairman of FICCI Committee on Chemicals Industry, spoke about delay in getting approval from environmental authorities
(Jairam Mahish ) for setting up units.

TSJones · Post by **TSJones** » 06 Jul 2014 03:40

udaym wrote:I'm confused.

MUMBAI, July 2 (Reuters) – India’s central bank said on Wednesday it has sought quotes from banks to swap gold in its own vaults for international-standard gold (What does "international-standard gold mean?? Are the gold bars held by central banks different from what RBI holds?), aiming to improve the management of its reserves.

The Reserve Bank of India said the operation would “standardise the gold available with RBI in India with respect to international standards” and the gold acquired would be delivered to its overseas custodian, the Bank of England (Why are these thugs acting as custodian?? Is it Ecuador style liquidity trade with Goldman Sachs??)

By holding gold reserves in London, the RBI would gain flexibility to mobilise them if needed to defend the currency (Does it mean Rajan is anticipating liquidity crunch?? Umhh!!). It shipped some of its gold holdings to Britain in 1991 as part of a series of emergency measures to tackle a financial crisis

two points:

1. If the RBI is selling gold locally then they are pulling in currency making it scarce.

2. If the RBI isending gold abroad it is going to be used as collateral for potential currency swaps with the euro, dollar, pound, etc.

Suraj · Post by **Suraj** » 06 Jul 2014 22:57

India's Modi to target record asset sales in first budget

India's new government will seek to raise up to a record $11.7 billion in asset sales in its maiden budget this week, a senior government source said, bolstering state finances and buying time for structural reforms to revive a weak economy.

The privatization target could reach 700 billion rupees, almost equal to all proceeds over the last four years, in a budget Prime Minister Narendra Modi hopes will launch the growth and jobs agenda that in May won him India's biggest election mandate in three decades. The budget is due on Thursday.

"The finance ministry has approached different ministries to increase the divestment target," said the senior official with direct knowledge of the budget process. The previous government had penciled in sell-off proceeds of 569 billion rupees ($9.5 billion).

The 63-year-old premier has made a decisive start by naming a streamlined cabinet, approving a slew of infrastructure projects and embarking on what promises to be a whirlwind first year of trade diplomacy.

member_28640 · Post by **member_28640** » 07 Jul 2014 19:35

Suraj wrote:Labour reforms are coming:
India's Modi eyes first labor overhaul in decades to create jobs
Prime Minister Narendra Modi has set in motion the first major revamp in decades of India's archaic labor laws, part of a plan to revive the flagging economy, boost manufacturing and create millions of jobs.

Successive governments have agreed labor reform is critical to absorb 200 million Indians reaching working age over the next two decades, but fears of an ugly union-led backlash and partisan politics have prevented changes to free up labor markets.

Now, with the benefit of a single party majority in the lower house of parliament for the first time in 30 years, laws that date back to just after the end of British rule are set for an overhaul. Officials at the labor ministry say this is a top priority in the government's first 100 days in office.

India has a forest of labor laws, including anachronisms such as providing spittoons in the work place, and are so complex that most firms choose to stay small. In 2009, 84 percent of India's manufacturers employed fewer than 50 workers, compared to 25 percent in China, according to a study this year by consultancy firm McKinsey & Co.

One of the best news so far, Great fillip to manufacturing industries. These laws date back to Independence with their roots in British laws tabled in the 1800's. Makes it hard for desi manufacturing industries to grow.(Idiotic rules like Govt clearance must be had when Downsizing-The clearance is rarely granted)

subhamoy.das · Post by **subhamoy.das** » 07 Jul 2014 19:56

http://economictimes.indiatimes.com/new ... 947834.cms

Hint of things to come?

kmkraoind · Post by **kmkraoind** » 08 Jul 2014 13:11

Vedanta mulls 5 mt steel unit at Bellary; may invest Rs 30k cr

Let India have "zero iron ore export" policy.

nawabs · Post by **nawabs** » 08 Jul 2014 22:48

UK offers 1 bn pound line of credit for infra projects in India

http://www.financialexpress.com/news/uk ... ia/1267981

Finance minister Arun Jaitley and his UK counterpart George Osborne on Tuesday agreed on a Pound one billion line of credit for infrastructure project developers in India who are keen to avail credit for importing inputs from UK at competitive rates, a joint India-UK statement issued here said.

Jaitley and the UK Chancellor of the Exchequor also agreed to collaborate on developing India's corporate bond market and to exchange tax related information automatically from 2017.

The proposed line of credit is from UK Export Finance (UKEF) to support Indian infrastructure projects such as the Bengaluru-Mumbai Economic Corridor (BMEC), said the statement.

“Also, 10 global banks are in discussions with UKEF to deliver government funded loans through a £3bn direct lending scheme, with more banks expected to join them in the coming weeks. This will provide competitive finance to purchasers of UK exports in India,” said the statement.

Also, design of a London based infrastructure debt fund that would invest in India's infrastructure projects is also on the cards.

Both the finance ministers also agreed on co-operating on issues of tax evasion. The two countries would begin exchanging tax information on an automatic basis from 2017. The decisions were taken at the seventh round of India-UK economic and financial dialogue held in the capital. The next round of discussions would be held in 2015 in London.

nawabs · Post by **nawabs** » 08 Jul 2014 22:52

http://www.financialexpress.com/news/ar ... th/1267927

Finance Minister Arun Jaitley said on Tuesday that efforts would be intensified to recover uncollected taxes of past years and that government's fiscal deficit needs to be kept at an acceptable level through expansion of economy and tax buoyancy rather than by contracting expenditure.

The minister said while replying to supplementaries during Question Hour in the Rajya Sabha that fiscal prudence was required to prevent extra borrowing to finance current expenditure. Jaitley's statement comes closer to his maiden budget scheduled for Thursday, which is unlikely to contain many populist measures.

"And, the current acceptable level, which by the FRBM Act, is that you have to move towards a fiscal deficit of 3%," said the minister. The interim budget for 2014-15 had projected a fiscal deficit of 4.1% for the current year, down from the revised estimate of 4.6% for 2013-14. The level of fiscal deficit during the current year up to May is Rs 2,40,837 crore, which is 45.6% of Budget Estimate of 2014-15, the minister said.

The minister said he would personally have been happier if the containment of fiscal deficit takes place by expansion of the economy, by greater tax buoyancy and by greater tax collection, rather than by contracting expenditure. [/b]

April-May revenue deficit at 54% of Budget target

http://www.business-standard.com/budget ... 116_1.html

The Centre's revenue deficit - the excess of non-capital expenditure over non-capital revenues - constituted about 54 per cent of the interim Budget target for FY15 in just two months of the financial year, presenting a reality check for Finance Minister Arun Jaitley ahead of the Budget. As a percentage of Budget estimate (BE), the revenue deficit stood at a six-year high in the first two months of the current financial year.

The revenue deficit stood at Rs 2.05 lakh crore in April-May against Rs 3.82 lakh crore projected for the entire financial year by Chidambaram. It constituted 85 per cent of the fiscal deficit in the first two months. For the entire financial year, the revenue deficit was projected to account for 72 per cent of the fiscal deficit.

RoyG · Post by **RoyG** » 10 Jul 2014 03:04

Russia, China, India Ready to Launch Rival to World Bank

By Damien Sharkov

The long-awaited BRICS development bank is expected to finally be launched next week, Russian finance minister Anton Siluanov confirmed today.

The joint project will see the emerging economic powers of Brazil, Russia, India, China and South Africa establish an alternative to the World Bank, in an attempt to ensure economic stability should the U.S. dollar continue to fluctuate.

The ‘New Development Bank’ project will see each of the founding countries contribute $2 billion to the bank’s funds over the next 7 years, with the bank’s maximum capital set at $100 billion.

Non-BRICS countries will be invited to join as members once the New Development Bank opens for lending in 2016, said Siluanov.

The bank’s stated aim is to keep emerging economies stable, serving as a counterweight in the case of disruptive capital outflow. The project presents a new step away from economic dependence on the U.S. by the BRICS countries.

The launch of the New Development Bank comes after growing mistrust by BRICS leaders of the World Bank, which they have accused of being too concerned with the Euro-Atlantic economic agenda.

The bank will be launched at a BRICS summit in Fortaleza, Brazil next week, said Siluanov, with all but the decision on the main headquarters’ already agreed.

The two options currently being considered are Shanghai or New Delhi, reported ITAR TASS. Russia has stated no preference but will aim to retain involvement by dominating at the managerial level.

Siluanov also confirmed that plans for a separate BRICS project, planned as an alternative to the International Monetary Fund. A joint contingency currency pool between the five BRICS countries is on the agenda at Fortaleza, which would see a further $100 billion become available to any member in proportional installments.

"In current conditions of capital volatility, it is important for our countries to have this buffer in addition to the International Monetary Fund," Siluanov said.

The pool will become available in 2015 and will see each BRICS country putting in as much of a proportion of the total capital as it would be allowed to withdraw, except for China and South Africa, the largest and smallest contributor, respectively.

China will only be able to access half of its $41 billion, while South Africa will be able to withdraw twice the amount of its $5 billion investment. Russia, India and Brazil will each chip in $18 billion from their foreign exchange reserves and be able to withdraw all of it back.

"It is to be a mechanism that could react swiftly to capital outflow by offering swap operations... in dollars," said Siluanov.

The BRICS development bank was first discussed as a possibility in 2012 but progress has been slow, marred by disagreements over the organisation’s funding and leadership.

However India and China have both recently suffered slumps due to volatility in their foreign exchange markets, as cheap dollars flooded the market last year, prioritising the need for a more self sufficient BRICS union.

Similarly Russia’s increasingly austere trade relations with the US over the crisis in Crimea has seen it increase its efforts to establish economic ties elsewhere.

http://www.newsweek.com/russia-china-in ... ank-258058

BRICS Bank about to take off. We should try to get the headquarters established in New Delhi.

RoyG · Post by **RoyG** » 10 Jul 2014 10:37

49% FDI defence cap.

member_28173 · Post by **member_28173** » 10 Jul 2014 11:09

[quote="udaym"][quote="Austin"]India central bank seeks to swap gold to improve reserves quality

[quote]* Location swap to boost offshore holdings

* Gold from RBI vaults to be sold on local market - sources

>>>> Reason Why I want Madhu Dandavate to be remember............

nawabs · Post by **nawabs** » 10 Jul 2014 13:06

Tax exemption limit under 80C raised to Rs 1.5 lakh

http://timesofindia.indiatimes.com/budg ... 128395.cms

Seeking to boost household savings, the government on Thursday hiked the exemption limit for investments by individuals in financial instruments to Rs 1.5 lakh.

Presently the investments and expenditures up to a combined limit of Rs 1 lakh get exemptions under Sections 80C, 80CC and 80CCC of the Income-Tax Act.The savings rate has come down from over 38 per cent of GDP in 2008 to 30 per cent in 2012-13.

The financial instruments which enjoy exemption include life insurance premium, public provident fund, employees provident fund, National Savings Certificates, repayment of capital on home loan, equity linked saving schemes sold by mutual funds and bank FDs of five year maturity.

Plus No change in tax rate; exemption limit raised by Rs 50,000

prahaar · Post by **prahaar** » 10 Jul 2014 13:26

chandturakhia wrote:
Austin wrote:India central bank seeks to swap gold to improve reserves quality

>>>> Reason Why I want Madhu Dandavate to be remember............

Are you mixing up the transfer of gold in 90s with the current step? The current step from the news seems to suggest converting non-International-Standard gold reserve into IS gold reserve, at the same time reduce gold smuggling. IIRC, the 90s gold transfer was to get loan/cash since we were at record low forex reserves.

Also can you elaborate on Madhu Dandavate's legacy of emptying the government's coffers by loan-waivers (I was a pre-teen kid, so my memory might be hazy/inaccurate).

Please let me know if my understanding is false.

Austin · Post by **Austin** » 10 Jul 2014 14:33

RoyG wrote:BRICS Bank about to take off. We should try to get the headquarters established in New Delhi.

BRICS bank to be headquartered in Shanghai

Gus · Post by **Gus** » 10 Jul 2014 18:47

Budget discussion?

hanumadu · Post by **hanumadu** » 10 Jul 2014 18:54

Gus wrote:Budget discussion?

There is nothing innovative, no big bang items, lost opportunity. /sarc off

Uttam · Post by **Uttam** » 10 Jul 2014 19:21

hanumadu wrote: There is nothing innovative, no big bang items, lost opportunity. /sarc off

Au contraire! I am loving this budget. The focus is on infrastructure (more roads, acquire land before awarding contract, etc.), quality education (IITs and IIMs), improving cities (mid-size ones), increasing investment (more FDI), increasing domestic savings (80c, etc.), fiscal prudence (reduced deficit and no lavish tax reduction) See comparison here

I think the focus is on delivering rather than promising. Remember that a budget is just a proposal (promises) made with a lot of fanfare. Delivering it is a totally different issue. Just look at the disinvestment targets made in last 10 years and how many were achieved. I believe Modi's philosophy is to promise small but deliver, make incremental progress but deliver, keep some of the social programs of previous government but deliver on them more efficiently. To me the real judgement about this budget will come at the end of this fiscal year.

hanumadu · Post by **hanumadu** » 10 Jul 2014 19:32

Uttam wrote:
hanumadu wrote: There is nothing innovative, no big bang items, lost opportunity. /sarc off
Au contraire! I am loving this budget. The focus is on infrastructure (more roads, acquire land before awarding contract, etc.), quality education (IITs and IIMs), improving cities (mid-size ones), increasing investment (more FDI), increasing domestic savings (80c, etc.), fiscal prudence (reduced deficit and no lavish tax reduction) See comparison here

I think the focus is on delivering rather than promising. Remember that a budget is just a proposal (promises) made with a lot of fanfare. Delivering it is a totally different issue. Just look at the disinvestment targets made in last 10 years and how many were achieved. I believe Modi's philosophy is to promise small but deliver, make incremental progress but deliver, keep some of the social programs of previous government but deliver on them more efficiently. To me the real judgement about this budget will come at the end of this fiscal year.

Sirjee, that was a post made in sarcasm.

Uttam · Post by **Uttam** » 10 Jul 2014 19:33

hanumadu wrote:

Sirjee, that was a post made in sarcasm.[/quote]

wooops! Now I noticed your "sarc off".

Picklu · Post by **Picklu** » 10 Jul 2014 21:35

The sharp focus on infrastructure improvement makes this one of the best budgets in the last few years.
Of course the base was low, anything not having a "right to blah blah blah" would have made it a good one.

But the infra improvement makes it bonus. Particular interest is the low visibility no jazz REAL game changing Allahabad to Haldia water way, an alternate to eastern DFC. Jet Li gets full marks just for this.
Also reduction of Airforce cap budget means no way the imported BMWs sorry I mean Rafale, Apache and group are coming in.

49% FDI in defence combined with removal of license requirement of 100s of defences items a few days back is going to go a long way to revolutionize desi MIC.
Only disappointment is no mention of increase in DRDO budget

RoyG · Post by **RoyG** » 10 Jul 2014 21:52

Rafale deal is not looking good.

ramana · Post by **ramana** » 10 Jul 2014 22:10

Picklu for you especially.

Karan M wrote:DRDO budget up by 77%!! Finally some good thinking by GOI!! Good change from the previous Govt.

Rs 9298 Crores @ $1.5 Bn from approximately $800 Mn levels earlier
http://indiabudget.nic.in/ub2014-15/eb/sbe27.pdf

I already asked Rahul Mehta to get of his pessimism. I urge you to do the same.

Do you want to give company to all the media turds who see doom and gloom on the choice that millions of Indians made on May 16, 2014?

Don't imagine dungeons in the castles in the air we dream of.

Picklu · Post by **Picklu** » 10 Jul 2014 22:25

Ramanaji, I wrote all the good words about this budget and all you saw is pessimism

And btw, since I am one of those millions who made that choice, I do not think any caution is necessary. So, with all due respect, you might want to redirect the X-hair somewhere else, for example, people demanding immediate action against Sheila D, US, Oirope and other assorted pet peeves.

I am not pessimistic, but I do remember reading the praise of LoC in this jirga. LoC being crap does not make J P Dutta bad or Border crap. And while rail budget was a massive KLPD, this budget is anything but.

Thanks for pointing out the DRDO budget increse though. Jingo bahut bahut khush hua.

RoyG · Post by **RoyG** » 10 Jul 2014 22:31

Eh, the big change in defense is going to come from Indian industry slowly moving in. DRDO budget raise is ok, especially for strategic missile development, disruptive tech, etc. but on the whole nothing is going to beat a competitive university system and the private sector working together. Indian industry also needs to replace the OFB and other PSU's which are just not producing quality items for the individual soldier. Next gen ballistic helmets and patkas, rifles, grenades, ammo vests, bullet proof vests, boots, etc. Manufacturing side needs to move away from government control and into private hands wherever possible and the procurement process needs to be streamlined.

Picklu · Post by **Picklu** » 10 Jul 2014 23:01

RoyG wrote:Eh, the big change in defense is going to come from Indian industry slowly moving in. DRDO budget raise is ok, especially for strategic missile development, disruptive tech, etc. but on the whole nothing is going to beat a competitive university system and the private sector working together. Indian industry also needs to replace the OFB and other PSU's which are just not producing quality items for the individual soldier. Next gen ballistic helmets and patkas, rifles, grenades, ammo vests, bullet proof vests, boots, etc. Manufacturing side needs to move away from government control and into private hands wherever possible and the procurement process needs to be streamlined.

Agreed RoyG, that is why I wrote

49% FDI in defence combined with removal of license requirement of 100s of defences items a few days back is going to go a long way to revolutionize desi MIC.

However there are areas where DRDO (read Govt) has to put money and that is why this 77% is very good news.

Theo_Fidel · Post by **Theo_Fidel** » 11 Jul 2014 08:47

Some highlights...

Tax revenue increase of 16.9%. Last year the projection was 20% and actual was 12%. Unlikely to happen.
Tax exemption up to Rs 250,000.
---------------------------------
Education cess to remain at 3%. Kinda disappointing.
5 More IIT's with Rs 100 crore each.
15,000 Crore for higher education. Up 13%.
55,000 Crore for school education. Up 10%.

BTW the IIM's got Rs 7,000 crore. 1/2 the higher education budget. Humph! Yup! what we need. More managers.
Meanwhile midday meal gets 13,000 crore. Or about Rs 400 per student. Annual.

No/mini funding of critical programs. Toilets in schools. Rs 30 crore for testing of school quality.
------------------------------------------------
Plan Expenditure of Rs 5,75,000 crore. About a 4% increase from last year. The key will be actually spend it.
Military spending up 12%
Retrospective tax on Vodafone stays. I actually support this.
Disinvestment target of Rs 58,000 crore. How about shutting down Air India.
3 year tax holiday for infrastructure, power, coal mines, etc.
Gold duties stay the same. good.
Tax on Cigarettes and paan raised from 11% to 72%. Excellent.

~ Rs 40,000 crore for road development. A little light but.... The CRR thing is not good idea though.
Allocation for subsidies, ~ 2,50,000 Crore. About 100,000 crore must be from last year & PC, so about Rs 150,000 Crore for subsidies. Though I'm not sure. very conphusing.
----------------------------

AIIMS type institute in every state. With an allocation off... wait for it.. Rs 100 crore each. For reference the annual budget of AIIMS delhi alone is Rs 1,500 crore.
100 Smart cities with allocation of Rs 7,000 crore. Seems more IT initiative than a build city initiative.
Urban Dev is now ~Rs 18,000 crore. Quite a boost from Rs 7,000 crore last year. But JNNURM is now kaput.
Ultra Mega Solar plants for Rajasthan & TN. with Rs 1000 crore. Excellent. So 4000 MW solar coming to TN. Vina Saars BP is going up...

~ Rs 2,000 crore for Ganga development plan. No break down available. + Rs 4,000 crore for waterway development. excellent. good follow thru.
------------------------------------
I'm going to ignore this entire FDI thing. Seems like waste of time. The only FDI that works is in manufacturing/retail/exports/etc. FDI in property development? Yup! more big companies buying land in India. Just what we need right. I don't understand this business of foreigner friendly budget. Come on folks, ain't no furriner gonna build our infrastructure. We are going to have to do it. All of it. Furriner only come to exploit our infrastructure.
--------------------------------
Along with that some low lights.

The way I read it, correct me if wrong...
Short term capital assets on ADR's now 36 month. What the hell. Out of step with rest of the world. Right there it means I will think long and hard on buying ADR's. After plugging them on this forum.
Capital gains tax on mutual funds now 20%. Again WTH....

Rs 6,500 crore for Air India. WTF. More mantriji privilege.... ...One must point out the Rs 100 Crore token amount for HSR... This is more than last year BTW.

Rs 200 Crore for worlds largest statue. Total cost Rs 2000 crore. One suspects Patel would cringe. This will prove a needless distraction one could have avoided.

http://img.washingtonpost.com/blogs/wor ... Statue.jpg

BTW it also seems like Rs 100 crore has become a talisman for this budget.
100 crore for metro in Lucknow & Ahmedabad?
100 crore for training rural youth. Assume this is the ITI thing. Kinda pointless amount really.
100 crore for DMIC smart cities. What the...
100 crore modernize madrassa's. Really...
100 crore for virtual classrooms. What...

The end of the JNNURM with Rs 50,000 crore is extremely disappointing. This will have a major negative on city development.
Rs 2,500 crore for prasar Bharati. Meaning DD. Sigh!
Rs 34,000 crore for MREGA. Sigh! Sigh!Sigh!Sigh! Sigh!Sigh!Sigh! Sigh!Sigh!
No mention of GST. Now Vina Saars thallai is going to explode...

Singha · Post by **Singha** » 11 Jul 2014 10:07

JNURM was instrumental in helping blr get its showpiece and calling card over other metros - the network of Volvo buses. blr has a lot more volvos than marcopolo or tata/AL buses. perhaps the only city in india with so many comfortable high end public buses.

Austin · Post by **Austin** » 11 Jul 2014 10:58

Most Analyst doubt the 4.1 % Fisical Target is achievable and the number is as doubtful as the UPA Budget.

chetak · Post by **chetak** » 11 Jul 2014 11:10

Singha wrote:JNURM was instrumental in helping blr get its showpiece and calling card over other metros - the network of Volvo buses. blr has a lot more volvos than marcopolo or tata/AL buses. perhaps the only city in india with so many comfortable high end public buses.

Aren't Volvos produced in a factory not far from Bangalore??.

May be saving entry and other taxes.

Supratik · Post by **Supratik** » 11 Jul 2014 13:48

Disappointed with JNNURM being discontinued. One of the few good projects of UPA. Otherwise decent budget. Also there is some confusion whether fiscal deficit is 4.1% (set by PC) or 4.5% of GDP.

merlin · Post by **merlin** » 11 Jul 2014 13:49

chetak wrote:
Singha wrote:JNURM was instrumental in helping blr get its showpiece and calling card over other metros - the network of Volvo buses. blr has a lot more volvos than marcopolo or tata/AL buses. perhaps the only city in india with so many comfortable high end public buses.
Aren't Volvos produced in a factory not far from Bangalore??.

May be saving entry and other taxes.

Yes, its on Old Madras Road IIRC.

Rahul Mehta · Post by **Rahul Mehta** » 11 Jul 2014 14:49

Theo_Fidel wrote: BTW it also seems like Rs 100 crore has become a talisman for this budget.
100 crore for metro in Lucknow & Ahmedabad?
100 crore for training rural youth. Assume this is the ITI thing. Kinda pointless amount really.
100 crore for DMIC smart cities. What the...
100 crore modernize madrassa's. Really...
100 crore for virtual classrooms. What...

It should have been Rs 108 crores .