Budget Analysis 3

Budget Analysis

4. Finance:

 

 

1.Further liberalization of FDI policy is under consideration:

{More Inflows of foreign money bringing employment}

 

2. A Computer Emergency Response Team for our Financial Sector :

{ To deal with cyber threats}

 

 

 

3. An integrated public sector ‘oil major’ like British Petroleum

{Improve yield of indigenous oil majors}

 

 

 

4. Indradhanush 10,000 crores for recapitalisation:

{To pump money into the system of PSBs to kickstart lending}

5. Pradhan Mantri Mudra Yojana for startup lending to Backwards and Women aspiring entrepreneurs:

{More Employment Opportunities}

 

 

 

 

6. Focus on BHIM App and Aadhaar enabled pay:

 {A push to digital economy}

5. Fiscal Management:

1. Capital expenditure increased by 25.4%

{Denotes expenditure on Asset management the main priority}

2.  Fiscal deficit for 2017-18 is targeted at 3.2% of GDP 

{ Government has to borrow 3.2 percent of the total expenditure. Still OK figure }

3. Net market borrowing of Government restricted to 3.48 lakh crores.

{Less borrowing means less servicing of debt}

4. Revenue Deficit to be 1.9 % against 2.3% for previous fiscal. 

{ A good step as less money needs to be borrowed for regular upkeep of government, law, police etc}

5. Taxation:

1. Small firms with turnover up to Rs 50 crore to pay 25% tax now, instead of 30%:

{ The firms now can save 5% of their profit and can use it for expansion. This will spur growth and employment}
 

2. No cash transaction above Rs 3 lakhs:

{Less Generation of Black Money}

3. Maximum cash donation any party can receive will be Rs 2000 from one source:

{Political System Cleansing but depends on its implementation}

4. An amendment being proposed in RBI Act to enable the issuance of electoral bonds for political funding:

{Political Funding can be done through capital Markets. An innovative step indeed}

5. Income tax rate from 10% to 5% for tax slab of Rs 250,000 to Rs 500,000:

{ More money into the hand of people. There is an expectation of more tax compliance. Persons with taxable income over Rs 5 lakh up to Rs 50 lakh will pay Rs 12875 less.}

  6. Surcharge of 10% for those whose annual income is Rs 50 lakh to 1 crore:

{Revenue Generation to make up the loss from the reduction in smaller brackets. A progressive taxation indeed}

7. 15% surcharge on incomes above Rs 1 crore to continue:

 {Progressive tax regime}

 

 

 

8. Implemetation of Goods and Services Tax:

{ It will create Uniform Market In India. We will talk about it separately Soon}

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A total of 27+ lakh crores is being used up for allocation. The Numbers above seems tempting and the finance minister has done a commendable job in balancing the expenditure. A long-term vision can be seen in the budget. Following points might have been kept in mind while its preparation:

1. Infrastructure development

2. Housing development

3. Focus on skill development

4. Focus on exports

5. More money in hands of rural India and poverty alleviation.

6. Increasing Human Development Index.

etc.

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Overall it seems a balanced budget given all schemes is implemented pragmatically.

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Although, few areas have been left off:

1. Primary Education Rejuvenation

2. Health Services Coverage for all

3.  Transportation Upliftment

4.  Universal health Insurance Scheme

etc. etc.

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Also, no budget can be perfect. Sadly the majority of citizens in India do not pay taxes. This causes a restriction in spending for various projects.  Despite such a large economy, less than 4% citizens pay taxes. But the sales of luxury cars, flats, abroad visit is at all-time high. This shows a clear case of tax evasion.

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So, I would urge all citizens to spread the word and pay taxes honestly and encourage others also to contribute in the development of the country.

That takes us to the end of this long review. Hope you liked it. There could be something I might have missed. 

Do share your view on it.

Feel free to comment and share.

Regards

Obliged by your reading

Prashant

Budget Analysis 2

BUDGET REVIEW AND ANALYSIS

 

This post is in continuation of the previous post.

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1. Farmers and Rural areas:

Major Funding is going to:

 

1. MGNREGS ( Mahatma Gandhi National Rural Employment Guarantee Scheme}: 

 {Highest allocation ever 48000 cr. It will help in asset creation such as small dams and ponds. It will also create employment opportunities for rural area.}

2. NABARD (National Bank for Agriculture and Rural Development):

{This will enable NABARD to give credit worth 10 lakh crores to farmers and cooperative societies. There are also funds for micro-irrigation and for dairies development.}

3. Fasal Bima Yojana:

{Insurance for crops}

4. Krishi Vigyan Kendra:

{For soil testing scheme etc. for maximum yield}

5. National Agricultural Market (e-NAM):

{For sale of harvest to multiple markets via online portal}

 

6. Pradhan Mantri Gram Sadak Yojana:

{133-km road per day being constructed for rural connectivity}

7. Pradhan Mantri Awaas Yojana–Gramin:

 {1 Crore affordable houses by 2019}

8. Deen Dayal Upadhyaya Gram Jyoti Yojana:

{Rural electrification by 2018}

9. National Rural Drinking Water Programme(NRDWP) :

 {Clean water for 28000 habitats}

10. Clean India Mission:

{Open Defecation free India by 2019}




Total Allocation for Rural, Agriculture and Allied sectors is 1,87,223 crores

2. Human Resource:

 

1. SWAYAM platform:

 {350 online courses. This would enable students to virtually attend courses taught by the best faculty online free of cost}

2. National Testing Agency:

 {To be set up for conducting all entrance examinations for higher education institutions}

 

3. Pradhan Mantri Kaushal Kendra: 

{For training youth for employment. 100 India International Skills Centers will be established across the country}

4. Skill Acquisition and Knowledge Awareness for Livelihood Promotion Programme (SANKALP):

{SANKALP will provide market relevant training to 3.5 crore youth }

5. Mahila Shakti Kendra:

{ This will provide services for empowering rural women with opportunities for skill development, employment, digital literacy, health, and nutrition}

 

 6. AIIMS (All India Institutes of Medical Sciences):

  {To be set up in Jharkhand and Gujarat}

3. Infrastructure:

 

 

1. Development of Roads, Coastal roads, Highways, Pradhan Mantri Grameen Sadak, Railways,  Air connectivity through various schemes and acts:

 {These are drivers of growth and main source of employment }

 

 

2. Rashtriya Rail Sanrakshan Kosh:

{For train passenger safety}

3. Strategic crude oil reserves:

{2 more locations: Chandikhole in Odisha and Bikaner in Rajasthan. This helps in taking care of oil demand during wars, emergencies etc. }

3. Solar Park development:

{Will reduce dependence on conventional fuels and clean ecosystem}

For transportation sector as a whole, including rail, roads, shipping, provision of 2,41,387crores.

That's it for now.

Keep watching the space for further analysis.

Till then

Chao🙋

Prashant 

Budget Analysis 1

BUDGET REVIEW AND ANALYSIS

 


So, The Budget has been announced. And the reactions have started coming in. Let me clarify that I am not a seasoned economist. The blog consists my views arrived from the little knowledge that I have about Economy. The budget review is neutral.

Well firstly we must consider that Budget how much grand it may be in its perspective should be judged upon its implementation. We have seen the major announcement in the past by several governments but I am afraid that not much has come to the ground. But we must be optimistic. That is even my made up name.😀
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 Let's give this government the mandated 5 years and then discuss what fundamental changes have been observed and what out of the box thinking have been implemented. 
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Its quite logical to say that India is a complex economy( and by complex I mean India has numerous religions, castes, sub-castes, economic classes, highest population, illiteracy etc.) any significant change cannot happen in a year or so. Change requires time.

So to start with, we will keep the discussion simple enough for general understanding and will focus on takeaways rather than mighty numbers in crores and lakh crores.

You may also find the documented copy of financial budget 2016-2017 and economic survey on the official link:

http://indiabudget.nic.in/

Key takeaways about the condition of the economy:

 1. First time in the history of India, Budget has been announced so early i.e. at the start of the budget session.

{This will result in early allocation of funds and fast implementation of schemes}

 

2. Railway budget has been incorporated in the General Budget.

{This has put the railways at center stage of fiscal policy. No dividends need to be paid by the railways to the government saving more than 10,000 crores.}


3. CPI i.e. Commodity Pricing Index* based inflation declined from 6% in July 2016 to 3.4% in December 2016.

{This means there is a significant deceleration in prices of the commodities prescribed in government basket. In simple terms. Inflation is in control. A significant factor may be Demonetization.}

4. India’s Current Account Deficit* declined from about 1% of GDP last year to 0.3% of GDP in the first half of 2016. 

 

{This means imports are reducing and exports are increasing which is indeed a good sign.}

5. F.D.I. i.e. Foreign Direct Investments grew 36% in H1 2016-17 over H1 2015-16, despite 5% reduction in global FDI inflows.

{This means that Foreign money in terms of investments has increased significantly. This will result in establishment of more industries giving a push to technological deficit and also generate employment for lakhs of workforce.}


 6.The Indian economy has been robust to mild shocks and IMF forecasts, India to be one of the fastest growing major economies in 2017. 

{Global growth is merely 3.4% and India stands apart with 7+% Growth rate}

7. GDP forecast rate is between 7.1 to 7.5 % which is less than 7.6 % of last fiscal. The reason may be demonetization.

{Few quarters may be bleak but no permanent impact may be observed}

9. FSE Reserves i.e. Foreign Stock Exchange Reserves is at all time high i.e. $ 361 Billion.

{This may cover up import bills of 12 months. In simple words India can sustain imports of  12 months in case of economic crisis.}


 

  10. The Tagline for the upcoming fiscal is "“Transform, Energize and Clean India” 

 11. The 10 pillars of the budget allocation are:


 

a. Farmers : committed to double the income in 5 years;

b. Rural Population : providing employment & basic infrastructure;

c.Youth: energizing them through education, skills and jobs;

d. The Poor and the Underprivileged: strengthening the systems of social security, health care and affordable housing;

e. Infrastructure: for efficiency, productivity and quality of life;

f. Financial Sector : growth & stability by stronger institutions;

g. Digital Economy: for speed, accountability and transparency;

h. Public Service: effective governance and efficient service delivery through people’s participation;

i. Prudent Fiscal Management : to ensure optimal deployment of
resources and preserve fiscal stability

j. Tax Administration : honoring the honest.









 

 **
CAD: A current account deficit means the value of imports of goods / services / investment incomes is greater than the value of exports. It is sometimes referred to as a trade deficit.

CPI: The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care.

That is all for now. Stay tuned for next part..

Chao🙋
Prashant