Monthly Archives: February 2015

28Feb

Modi Budget 2015-16 India Live: Jaitley sets FY16 divestment target at Rs 69,500 cr

Union Budget 2015-16 announced a divestment target of Rs 69500 crore, higher than the previous fiscal’s target of Rs 58,425 crore.

The government has so far managed to raise only a small fraction of its ambitious divestment target. The break-up envisaged was thus: To raise Rs 36,925 crore from PSU disinvestments, Rs 15,000 crore from residual stake sale in Hindustan Zinc and Balco, and Rs 6500 crore from the stake it held in Axis Bank, Larsen & Toubro and ITC through SUUTI.

Coal India and Steel Authority of India ( SAIL ) divestments added Rs 22558 crore and Rs 1700 crore respectively. The other big stake sale of ONGC has been deferred beyond April due to low oil prices and absence of new subsidy sharing mechanism between the Centre and oil exploration companies.

Expectation

The 2015-16 Union Budget was expected to set disinvestment target in the range of Rs 65,000-70,000 crore, the highest ever. There were strong buzz in the weeks leading to Budget that:

  • Rs 45,000 crore would be mopped up from 5-10 percent stake sale in state-owned firmslike Oil and Natural Gas Corporation, Indian Oil, Bharat Heavy Electricals, National Aluminium, Dredging Corp, Container Corporation, Power Finance Corporation, Rural Electrification Corporation and NMDC.
  • Rs 15,000-20,000 crore would come from residual stake sale in Hindustan Zinc and Bharat Aluminium (Balco)
  • A further Rs 5,000 crore from partial stake sale of government holdings in private firms through SUUTI.
  • Since there was wide spread expectation that Arun Jaitley would want to raise funding and incentives for Prime Minister Narendra Modi’s new centrally sponsored schemes, including Smart Cities, Swachh Bharat and Pradhan Mantri Jan Dhan Yojana, direct and indirect tax levies would be bumped up.
  • The Centre may resort to year-round stake sales to meet divestment target.
28Feb

Union Budget 2015-16 India Live: FM says to introduce India-made gold coins, gold bonds

Gold

In a bid to further cut down on imported gold, Finance Minister Arun Jaitley said the government will introduce India-made gold coins. These will be branded with Ashok Chakras, Finance Minister Arun Jaitley said today.

In a bid to monetize gold through securitization, the FM also said that the government was proposing to develop a gold bond. This would likely be similar to gold funds or e-gold schemes where returns would track the price of the yellow metal.

The FM, however, stayed away from cutting import duties on gold, currently at a high 10 percent. The duty was upped in order to curb imports when the government was going through a current-account crisis a few years ago but of late there were reports the curb may relaxed after gold imports eased in the past few quarters.

The RBI, however, did recently do away with the 80:20 scheme that required gold

28Feb

Union Budget 2015-16 India Live: Jaitley lowers corp tax rate, defers GAAR, taxes super rich

12.40: The main focus was on the ease of doing business and Jaitley managed to deliver, says Ashok Wadhwa of Ambit

12.36: Madhu Kela says the Budget is laudable. The clarity for next five years is commendable.

12.28: Transport allowance doubled from Rs 800 to Rs 1600 per month 12.26: Deduction limit for health insurance premium raised to Rs 25000 from Rs 15,000. The same for senior citizens has been raised to Rs 30,000. He also announced an exemption of Rs 50,000 for contribution to pension scheme.

12.25: Although he annouced 100 percent tax deduction for Swachh Bharat and clean Ganga, the FM also said a clean energy cess will be introduced to finance clean energy drive. There will be an enabling provision to levy a Swachch Bharat cess should the need arises.

12.20: The super rich tax, a legacy of the previous government, is back. The FM abolished wealth tax but levied additional 2 percent surcharge on super rich.

12.18: No change in personal income tax slabs.

12.16: GAAR deferred by two years

12.15: Income tax levy on royalty fees for technicals reduced to 10 percent

12.12: Central excise duty to be raised to 12.5 percent.

12.07: As a major boost to industry, Jaitley reduced corporate tax rate to 25 percent from 30 percent earlier for the next 4 years. The FM said he will rationalise & remove exemptions for corporates in the next 4 years.

12.03: The government estimates FY16 total expenditure at Rs 17.77 lakh crore. Of this planned expendiure stands at Rs 4.65 lakh crore and non planned expenditure ar Rs 13.12 lakh crore.

12.00: FY16 defence allocation at Rs 2.46 lakh crore.

11.59: The Budget announced allocation of Rs 33,150 crore towards healthcare.

11.58: In a bid to boost north eastern states, The Union Budget proposed setting up of film institute in Arunachal Pradesh.

11.55: To allocate Rs 75 crore for electric vehicles

11.54: The governemt will do away with distinction between FPIs and FDIs

11.48:To incentivise credit, debit card transactions. Indians will be encouraged to go the RuPay way. The government will introduce made in India gold coins to reduce demand for foreign coins.

11.42: to set up 5 ultra mega power projects of 4,000 mw

11.35: As a major incentive, jaitley proposed tax-free infra bonds for road, railways & infra projects. In the same direction, he announced setting up of national infrastructure fund. The government will introduce regulatory reform law for infrastructure

11.34: To lift infrastructure, expenditure in the sector will go up to Rs 70000 crore. He said road outlays will increase by Rs 14,031 cr in FY16.

11.31: The finance minister said non-banking finance corporations (NBFC) will be treated at par with banks if they have a size of over Rs 500 crore

28Feb

Union Budget 2015-16 India Live: FY16 defence allocation at Rs 2.46 lakh crore

12.03: The government estimates FY16 total expenditure at Rs 17.77 lakh crore. Of this planned expendiure stands at Rs 4.65 lakh crore and non planned expenditure ar Rs 13.12 lakh crore.

12.00: FY16 defence allocation at Rs 2.46 lakh crore.

11.59: The Budget announced allocation of Rs 33,150 crore towards healthcare.

11.58: In a bid to boost north eastern states, The Union Budget proposed setting up of film institute in Arunachal Pradesh.

11.55: To allocate Rs 75 crore for electric vehicles

11.54: The governemt will do away with distinction between FPIs and FDIs

11.48:To incentivise credit, debit card transactions. Indians will be encouraged to go the RuPay way. The government will introduce made in India gold coins to reduce demand for foreign coins.

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