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Winners and Losers: Who Got What in India’s Federal Budget
I think this budget takes a lot of small and important steps in the the right direction. Great thing is, there are no negatives as far as this is concerned. I think this budget is a very big positive for that part of the industry. Hopefully this starts the virtuous loop.VS Parasarathy, CFO, Mahindra Group
However,on the negative side, the budget gave no relief to the NBFC sector, he pointed out. “That's obviously a big deal as the ecosystem is challenged at the moment,” reasoning the equity market’s negative reaction.
The request to the Reserve Bank of India to extend the MSME restructuring window was a little worrisome, he added. “This is basically saying the government does not have the money to recapitalise the state-owned banks and therefore asking RBI to kick the can down the road.”
The market recovered partially, after reaching the day’s low post Finance Minister Nirmala’s budget speech today.
Speaking about the Rs 5 lakh deposit insurance, Arundhati Bhattacharya said along with that, depositors must also be aware that this will mean paying a much larger premiums by the banks. "The cost of servicing accounts will rise accordingly,” she told BloombergQuint.
“On infrastructure fund, I was keen to see one unified authority,” Bhattacharya said. However, the creation of an authority for all investment proposals is a step towards this, she said.
The former SBI Chairman expressed her approval over the government’s decision to take LIC public, saying “For anyone in the finance sector, it’s going to stare them in the eye. It’s in the right direction. I congratulate the government for taking such a step”.
When asked about the budget’s ability to retract India from its current state of slowdown, Bhattacharya said, "If you're looking for the big, bold things that's going to quickly release animal spirits, I don't see that".
The government plans to increase the investment limit of foreign portfolio investors in corporate bonds from 9 percent to 15 percent, Sitharaman said.
The finance minister said certain government securities will be open for foreign investors.
She also proposed debt-exchange traded funds comprising mainly government securities, while stating that Rs 22,000 crore has already provided as support to infrastructure project pipeline.
To address liquidity constraints of NBFCs and housing finance corporations, a partial credit guarantee scheme will be launched by the government, she added.
Budget 2020: Government Asks RBI To Extend MSME Restructuring Scheme Till March 2021
Budget 2020: Government Abolishes Dividend Distribution Tax
Budget 2020: Government Cuts Income Tax Rates For Those Willing To Give Up Exemptions
Budget 2020: Government Pegs FY21 Fiscal Deficit At 3.5%; Invokes Escape Clause In FY20
Budget 2020: India To Take LIC Public
A clean, reliable and robust financial sector is critical to the economy.
In our effort to achieve the $5 trillion economy, the financial architecture should move from strength to strength, she said. In the last few years, the government has infused Rs 3.5 lakh crore into public sector banks. Reforms will be carried out in these banks to make them more competitive and a few will be encouraged to approach the capital market to raise additional capital, she added.
"Robust mechanism is in place to monitor the health of all commercial banks and depositors money is safe."
The deposit insurance and credit guarantee corporation have been allowed to increase deposit insurance coverage to Rs 5 lakh per depositor compared to the current Rs 1 lakh, she said.
Amendments are being proposed to the Banking Regulation Act to strengthen cooperative banks, she said.
India widened its budget deficit target for a third straight year. The budget shortfall will be widened to 3.8 percent from a planned 3.3 percent in the year ending March, Bloomberg reported quoting people familiar, who asked not to be identified as the data isn’t public yet. The deficit will be 3.5 percent for the year starting April, the people said.
The government will provide Rs 4,400 crore towards its climate change plans in FY21.
The Finance Minister proposed reforms and amendments to improve confidence of entrepreneurs, in an effort to increase ease of doing business and to show the government's faith in them.
"We are trusting that every citizen, the aspirational youth, the hard-working women, the risk-taking entrepreneur, the ever hopeful and untiring farmer, and the wise and old elder citizens, are all taxpayers."
Moreover, around Rs 3,150 crore will be provided to the Ministry of Culture in FY21.
FM Sitharaman has proposed setting aside Rs 85,000 for SC/OBC relief for FY21. For STs, Rs 53,700 crore will be provided. Allocation of Rs 9,500 crore for senior citizens for FY21.
A total allocation of Rs 27,300 crore for development of industry and commerce in FY21.
Finance Minister proposed a scheme for the manufacturing of cell phones, semiconductors, and other electronic devices. It can also be used for the manufacture of medical devices as well.
A detailed scheme with details will be released soon.
To catch how markets are reacting to the budget click here
Humara vatan, khilte hue shalimaar bagh jaise
Humara vatan, khilte hue shalimaar bagh jaise
Humara vatan, dal lake mein khilte hue kamal jaisa
Navjawanon ke garam khoon jaisa
Mera vatan, tera vatan, humara vatan, duniya ka sabse pyaara vatan
This is the budget to boost their income and enhance their purchasing power. Only through higher growth can we achieve that and have our youth gainfully and meaningfully employed. Let our businesses be innovative, healthy and solvent with use of technology.Finance Minister Nirmala Sitharaman
The Cabinet has approved Budget 2020, according to ANI. Finance Minister Nirmala Sitharaman to present the budget in Lok Sabha shortly.
N Hiranandani,CMD,Hiranandani Group: I've never seen a liquidity crisis as bad as it is today. No matter how good the budget is if the oil in the mechanism of the economy is not working, the economy can't move.If the oil comes back&we get boost of budget then we will see recovery pic.twitter.com/bZK69uS0gI
— ANI (@ANI) February 1, 2020
#WATCH Delhi: Copies of #Budget2020 have been brought to the Parliament. Finance Minister Nirmala Sitharaman will present the Budget in Lok Sabha at 11 AM today. pic.twitter.com/z3gD0IkLO4
— ANI (@ANI) February 1, 2020
FM Nirmala Sitharaman with 'Bahi-Khata' ahead of presentation of #Budget2020.
— BloombergQuint (@BloombergQuint) February 1, 2020
Catch all the budget updates: https://t.co/ig2EOjOUkv pic.twitter.com/0TpbCpCSQ3
Escorts' total sales for January rise 1.2%, year-on-year.
— BloombergQuint (@BloombergQuint) February 1, 2020
Catch all the market updates in our live blog: https://t.co/gmH0tRVOoN pic.twitter.com/0khmcVLwMy
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Finance Minister Nirmala Sitharaman is set to present the Union Budget for the financial year 2020-21 in the Parliament at 11 a.m. today. This is Sitharaman’s second budget after Prime Minister Narendra Modi’s government returned to power in the 2019 general elections with a bigger mandate.
The state of the economy, however, has deteriorated under the Modi government. Growth took a hit in 2016 after demonetisation, only to be further disrupted by the implementation of the Goods and Services Tax in April 2017. India has since seen its GDP growth fall from over 8 percent—making the fastest-growing major economy—to an estimated 5 percent this fiscal.
Today’s budget is expected to reveal measures to boost economic growth while keeping some cognizance of the fiscal deficit path chalked out by the FRBM Act.
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