24Feb

Union Budget 2015-16 India Expectations : Pre-Budget expectations for Agri Commodities

Union Budget Expectations for Agri Commodities

Exemption of CTT for processed agricultural commodities to ensure a pickup in volumes in the futures market

Passing on benefits of a fall in petrol/diesel prices to ensure reduction in freight charges

Investment funds in warehousing sector to prevent wastage of food

Bank accounts for farmers for each and every household for direct transfer of subsidies and loans

Subsidized loans to farmers and safeguarding them from crop losses through crop insurance

Availability of quality agri inputs like fertilizers, seeds and advanced technology inputs

Providing irrigation facilities and electricity at cheap rates to farmers

Upgrading weather forecasting system – IMD, for accurate monsoon forecasts which could enable farmer to take informed decisions.

Investments in transportation and infrastructure like roads and railways to reduce transportation costs for farmers for their produce

24Feb

Union Budget 2015-16 India Expectations : Pre-Budget expectations for Base Metals And Energy Industry

Union Budget Expectations for Base Metals Industry

A reduction in excise duty on copper is widely expected this time, in order to improve the cost competitiveness of Indian capital goods companies.

The government’s plan to turn India into a manufacturing hub will need a big budget boost. For this, a lot of metal will have to be imported into the country and hence import duty on ores and metals require a slash in import duty. This will likely boost metals’ market in India.

Union Budget Expectations for Energy Industry

Finance Minister Arun Jaitley may look at re-imposing five per cent customs duty on crude oil imports to shore up revenues by $3 billion and create a level-playing field for domestic producers.

Presently, the government does not levy any import or customs duty on crude oil imports. On the other hand, domestically produced crude oil attracts two per cent central sales tax, something which imported oil is exempted from.

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.

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