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Indian Budget 2009-10 due on 16th Feb

Indian Budget 2009-10 due on 16th Feb

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Published by Indicus Analytics
Budget 2009-10 to be announced February 16th 2009 With polls scheduled for April, there is confusion over whether this is a vote-on-account/interim budget/budget Important: All budgets go through a vote on account procedure till final approval gets the Budget passed a couple of months from announcement. (See Budget in India by Deepa Nayak) Since the poll dates have not been announced yet, this is a regular budget and not an interim budget.
BUT The current government has a moral responsibility, since there is a possibility of not staying in power, it should refrain from letting it be ‘ business as usual’. This budget should therefore not put in high spending budgetary provisions, And should leave major changes to the next government.
Expectations from government are high Because of the financial shock and the recession in the West, growth in India has slowed down from 9% last year to estimated 7.1% this year. Since boost to economy comes from monetary and fiscal policy, budget is being watched. Demands are many, some that are the same year to year, despite economic performance e.g cut in excise duties, etc.
FICCI for example has asked for: Extension of interest rate subsidy of 2% to exporters till March 2010. Reduction in income and corporate tax rates, removal of surcharge Extend tax holiday to housing sector and exempt it from service tax.
However, the budget should stick to across the board stimulus – e.g reduction in VAT for all items, no sector–specific strategies. Right now every sector has been hit, except education, health and to some extent FMCG. Allowing the markets to get the right signals is important, rather than fudge them with selective measures.
Sector performance Most affected Garments, Gems & Jewellery Textiles IT and ITES Capital Goods Engineering Basic manufacturing Organized real estate Higher end Auto, Electronics, Durables
BUT Worrying Fiscal Situation Various estimates but all point to sharp rise in deficit numbers. This year already the fiscal deficit has gone up from a budget estimate of 2.5% of GDP to 6%, thanks to falling tax collections, farm loan waiver, pay hikes to govt servants. Gross fiscal deficit, including oil and fertilizer subsidy bonds will be 9.5% of GDP compared to 6.1% last year, says Fitch. Govt borrowings high Govt has changed its borrowing programme Four times this fiscal, now an additional Rs. 46,000 crores to be borrowed by March end
Budget 2009-10 to be announced February 16th 2009 With polls scheduled for April, there is confusion over whether this is a vote-on-account/interim budget/budget Important: All budgets go through a vote on account procedure till final approval gets the Budget passed a couple of months from announcement. (See Budget in India by Deepa Nayak) Since the poll dates have not been announced yet, this is a regular budget and not an interim budget.
BUT The current government has a moral responsibility, since there is a possibility of not staying in power, it should refrain from letting it be ‘ business as usual’. This budget should therefore not put in high spending budgetary provisions, And should leave major changes to the next government.
Expectations from government are high Because of the financial shock and the recession in the West, growth in India has slowed down from 9% last year to estimated 7.1% this year. Since boost to economy comes from monetary and fiscal policy, budget is being watched. Demands are many, some that are the same year to year, despite economic performance e.g cut in excise duties, etc.
FICCI for example has asked for: Extension of interest rate subsidy of 2% to exporters till March 2010. Reduction in income and corporate tax rates, removal of surcharge Extend tax holiday to housing sector and exempt it from service tax.
However, the budget should stick to across the board stimulus – e.g reduction in VAT for all items, no sector–specific strategies. Right now every sector has been hit, except education, health and to some extent FMCG. Allowing the markets to get the right signals is important, rather than fudge them with selective measures.
Sector performance Most affected Garments, Gems & Jewellery Textiles IT and ITES Capital Goods Engineering Basic manufacturing Organized real estate Higher end Auto, Electronics, Durables
BUT Worrying Fiscal Situation Various estimates but all point to sharp rise in deficit numbers. This year already the fiscal deficit has gone up from a budget estimate of 2.5% of GDP to 6%, thanks to falling tax collections, farm loan waiver, pay hikes to govt servants. Gross fiscal deficit, including oil and fertilizer subsidy bonds will be 9.5% of GDP compared to 6.1% last year, says Fitch. Govt borrowings high Govt has changed its borrowing programme Four times this fiscal, now an additional Rs. 46,000 crores to be borrowed by March end

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Published by: Indicus Analytics on Feb 13, 2009
Copyright:Attribution Non-commercial

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07/16/2009

original

 
 
 INDIA BUDGET 2009-10
WHAT LIES AHEAD?Indicus Analytics12
th
February 2009
 
 
Budget 2009-10 to be announced February 16
th
2009
 With polls scheduled for April, there is confusion over whether this is a vote-on-account/interim budget/budget 
Important:
 All budgets go through a vote on account procedure till finalapproval gets the Budget passed a couple of months fromannouncement. (SeeBudget in India by Deepa Nayak) Since the poll dates have not been announced yet, this is a regular  budget and not an interim budget.
 
 
BUT
 
The current government has a moral responsibility, sincethere is a possibility of not staying in power, it should refrainfrom letting it be ‘ business as usual’.This budget should therefore not put in high spending budgetary provisions,And should leave major changes to the next government.

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