Budget 2015

24Feb

Union Budget 2015-16 India Expectations : Pre-Budget expectations for commodity markets

The market, like every time, has huge expectations and this time, hopes are revolving around lowering of subsidy burden, widening the tax net, supportive policies for the industry and rational allocation of funds. Also, some key points present in the agenda of the new government which should form part of the union budget should be to re-invigorate investment cycle and reviving Indian economy on a priority basis.

With lower crude prices, government is now in a better position in terms of its fiscal balances as oil imports occupies a major chunk in our im-port bill. Commodity futures trading also deserves attention this time, keeping in mind government’s agenda of Make in India. A large number of measures are required to bring back liquidity and to make market more efficient.

Union Budget Expectations for Commodity Trading

Amendment of FCRA: Traders and investors from commodity derivatives market are expecting the government to announce steps to restruc-ture the Forward Contracts Regulation Act (FCRA). This would increase depth in the market and will help in efficient price discovery. There is a need to increase market participation by allowing banks, MFs, FIIs which will also help in preventing price manipulation and help hedgers to efficiently hedge their exposure in physical markets.

Abolition of CTT: Market participants are expecting the government to re-duce the Commodities Transaction Tax (CTT) which was levied in year 2013 on metals, bullion and a few processed agri commodities.

Levy of CTT was strongly opposed by commodity exchanges, traders, bro-kers and investors. Commodity trading in India is just 10-year old and get-ting away with CTT may lure more participants, thereby increasing the over-all turnover. In India, more than 80% of the trade volumes take place in bul-lion, metals and energy and CTT has resulted in a significant drop in trading volumes in these segments. Unlike in stocks or agri commodities, daily movement in the above mentioned commodities are generally very low, re-sulting in most of the profits that a trader makes, being lost in the existing charges. FMC needs to take up with the Finance Minister on the need to reduce CTT to bring back liquidity and market depth in the commodity futures trading in the country. The CTT should be reduced to Rs. 1 per crore of trading to encourage the markets and the amount collected should be diverted to improve warehousing and infrastructure facilities.

21Feb

Union Budget 2015-16 India Update : Printing of Budget document begins with ‘Halwa’ ceremony

The significance of the sweet dish is that after it is served, a large number of officials and support staff, who are directly associated with the Budget making and printing process, are required to stay in the ministry and remain cut off from their families till the presentation of the Budget by the minister in the Lok Sabha.

The process of printing documents for the Budget 2015-16 began on Thursday with the ritual ‘halwa ceremony’, which was attended by Finance Minister Arun Jaitley in the North Block office. It has been a tradition which has continued for long. As part of the ritual, ‘halwa’ is prepared in a big ‘kadhai’ (vessel) and served to the entire staff in the ministry.

They are not even allowed to contact their near and dear ones through phone or any other form of communication, like e-mail. Only very senior officials in the Finance Ministry are permitted to go home.

The Budget, which will be the first full-fledged Budget of the present NDA government, is scheduled to be unveiled in Parliament on February 28. Minister of State for Finance Jayant Sinha, Finance Secretary Rajiv Mehrishi, Revenue Secretary Shaktikanta Das, Joint Secretary (Budget) Rajat Bhargava and other officers and staff of the ministry involved with Budget preparation were also present at the halwa ceremony.

20Feb

Union Budget 2015-16 India Pre-Update : Gold imports set to rise as RBI eases curbs ahead of Budget

Gold imports to top consumer India are set to jump in coming months after the Reserve Bank of India (RBI) eased gold import curbs, ahead of an expected cut in import duty in next week’s budget.

The Reserve Bank of India said on Wednesday banks would again be allowed to import gold on a “consignment basis”, under which they act as intermediaries and don’t pay for the stock until a buyer has been found, which is usually quickly.

19Feb

Union Budget 2015-16 India Pre-Update : Speaker calls meeting of leaders For Budget Session

Lok Sabha Speaker Sumitra Mahajan has called a meeting of leaders of political parties on February 22 to ensure smooth run of the Budget Session during which the government will also seek to convert six recent ordinances into legislations.

Parliament sources said Mahajan has convened a meeting of leaders of political parties over dinner on February 22, the eve of the Session, to ensure a smooth session.

The session, which will begin on February 23 and conclude on May 8, will see presentation of the first full-fledged budget of the Narendra Modi government which came to power in May last year.

During the session, government will push for passage of Bills on six ordinances promulgated recently. The ordinances include those on coal, mines and minerals, e-rickshaws, amendment to Citizenship Act, Land Acquisition and the one on FDI in insurance sector.

The government is especially under pressure to legislate the ordinance on insurance sector and the coal sector in view of the fact that the new systems in place for attracting FDI in insurance and for auctioning of coal blocks are not disturbed.

Amongst the bills government proposes to introduce, include Amendments to Whistleblowers Protection Act, The Rights to Services and Grievances Redress Bill, Amendment to Inter-state Water Dispute Act, The Carriage by Air (Amendment) Bill, The Recognition of New Systems of Medicine Bill, Amendment to the National Commission for Women Act, and Andhra Pradesh Reorganisation (Second Amendment) Bill, the sources said.

BJP’s poor showing in the Delhi Assembly polls is likely to have a bearing on the Session with opposition parties expected to make a common cause on issues like Land Acquisition ordinance which they are opposing tooth and nail.
The fourth session of 16th Lok Sabha will commence on Monday, when President Pranab Mukherjee will address both Houses of Parliament assembled together in the Central Hall at 11 AM.

The Cabinet Committee on Parliamentary Affairs, which met on January 21, had recommended to the President the schedule of the Budget Session. Parliament will have a special sitting on Saturday, a holiday, for Finance Minister Arun Jaitley to present the Budget which will be preceded by the Economic Survey on February 27 and the Railway Budget on February 26.

The Motion of Thanks to the President for his address will be debated on February 24 and 25.

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