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Budget 2018 updates: Amit Shah says Narendra Modi govt's Budget in spirit of 'Sabka Saath Sabka Vikas'

Finance Minister Arun Jaitley will present the Union Budget 2018-19 on Thursday which may see new rural schemes and stepping up of funding towards existing programmes.

FP Staff February 01, 2018 17:24:06 IST
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Budget 2018 updates: Amit Shah says Narendra Modi govt's Budget in spirit of 'Sabka Saath Sabka Vikas'

Highlights

10:30 (ist)

Defence gets little attention in Budget

Lost in the debate over populism, election-oriented Budget and fiscal prudence is the fact that at 1.63% of the GDP, India has one of the lowest budgetary allocations in the world for defence. In fact, for all the BJP's nationalistic posturing and 'strong government' image, last year's defence spending was lowest in the past 50-odd years in terms of percentage of GDP. Leave alone China, even Pakistan greater budgetary allocation, points out Livemint in a report. Moreover, as data journalism website IndiaSpend tells us further, over the last three years to 2017-18, IAF's capital budget was 46% lower than its requirements, the army’s was 41% and the navy’s 32%. When Arun Jaitley rises to present his final budget, he would be aware that India cannot afford to ignore budgetary spending on defence given the fact that we are the largest importers of arms and equipment in the world.

08:11 (ist)

Highest funding allocated to MGNREGA in 2017, yet, 56% wages were delayed

The 2017-18 budget saw the highest ever allocation to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) — the world’s largest make-work programme — at Rs 48,000 crore, but 56 percent wages were delayed and 15 percent wage seekers did not find work in 2016-17, an IndiaSpend analysis of government data shows.

 
 
 
 
 
 
 
 

The allocation to be announced by Finance Minister Arun Jaitley on 1 February, 2018, when he presents his government’s last full-year budget ahead of the general elections in 2019 will be closely watched, even as his government has decided to “pump an additional Rs 7,000 crore into the rural job scheme” for the current financial year, as The Telegraph reported on 5 January, 2018.

Eight states have declared a drought in the past year, and 6,867 farmers were reported to have committed suicides due to farm distress. India’s agricultural growth has been declining, and has now dipped to 2.1 percent, government data show.

Read full Indiaspend article here

07:46 (ist)

Budget 2018: From corporate tax cut to easing rules for investors, industry has a long wishlist

As the Narendra Modi government prepares to present its last complete budget before the 2019 general elections, we reflect on the current fiscal year and evaluate the key target areas for the financial and tax reform proposals of ‘Budget 2018’.

This year has witnessed sweeping legislative reform – introduction of the Insolvency and Bankruptcy Code, 2016 (IBC) to facilitate the corporate insolvency resolution process, passing of the Real Estate (Regulation and Development) Act, 2016 to regulate the real estate sector, and introduction of GST as single national tax which streamlines the indirect tax regime in India.

Within the realm of direct taxes, the year witnessed the introduction of the General Anti-Avoidance Rules, thin capitalisation norms, secondary adjustments in India’s extant transfer pricing regime, the issuance of the final guidelines on ‘POEM’ (i.e. place of effective management) as a test of corporate residency, the widening of fair valuation basis taxation and implementation of country by country reporting for transfer pricing.

Against the backdrop of this legislative overhaul, and the commitment of the present Government to establish an investor and business friendly regime, set out below is a quick round - up on the key expectations from ‘Budget 2018’.


• Reduction in corporate tax rate


• Indirect transfer tax provisions


• Replace DDT with a withholding tax


• Clarity on thin capitalisation norms


• Taxation on transfer of shares


• I-T provisions for companies under Insolvency


• Alignment with provisions of Ind-AS


• Taxation of income from cryptocurrencies

06:56 (ist)

CII seeks easier GST compliance procedures, tweaking tax network

Ahead of the Budget, industry chamber CII today sought redressal of issues related to GST compliance including filing of returns, matching of invoices and getting timely input tax credit.

According to the chamber, simplification of Goods and Services Tax (GST) compliances would result in higher number of returns filed, increased collection of revenues, and easier working capital management by trade and industry. The GST Network (GSTN) functioning and return filing formats could be tweaked to ensure acceptance of invoices, it added.

CII also stressed upon the need for designing a fool-proof and effective return filing system where seamless and speedier input tax credit (ITC) can be availed by the recipient, as against the current requirement of filing three GST returns.

PTI

06:36 (ist)

Budget should unveil a long-term strategy for non-tax revenue generation, says Edelweiss' Shah

 
Edelweiss Group chairman Rashesh Shah, who also heads the industry lobby Ficci as its president, has called for laying down a strategic road-map in the Budget to ensure higher non-tax revenue.
 
In an extensive interview ahead of the Budget, Shah urged the finance minister to unveil a road-map for "continuous and steady growth in non-tax revenues in a
strategic manner." Shah, who has spent over quarter of a century in the corporate and financial markets and is one of the leading industry spokespersons, started Edelweiss in 1996 which has since grown into one of the leading diversified financial services conglomerates with presence in broking and investment
banking, MF, ARC that's the largest today, NBFC etc.
 
"All these years, successive governments had an ad-hoc approach to non-tax revenue generation. There was no strategy in place. We must widen the non-tax revenue stream in a strategic manner, which none of the governments have tried in the past," Shah told PTI.
 
He said ideally, every government should be raising more money from asset sales/monetization or through non-tax streams and not from higher taxes as has been our model. He said this can be achieved through a proper asset monetisation plan, as our government is among the largest owners of the property and immovable assets in the world. 
 
"I expect the Budget to lay down a five or even a 10-year road-map for asset monetisation, which can go a long way in meeting budgeted revenue targets.Why should governments own so much land banks and other assets?" he asked. Stating that governments should not be owning large assets, be it in power plants or manufacturing complexes or others, Shah said, "to me the role of a government should be limited to building the assets and taking the developmental
risks and not in running and owning them."

PTI

LIVE NEWS and UPDATES

Feb 01, 2018 - 17:37 (IST)

How the market moved on Budget Day

Feb 01, 2018 - 17:36 (IST)

Thankfully, only one year to go: Rahul Gandhi

Feb 01, 2018 - 17:34 (IST)

The Student's Budget

Feb 01, 2018 - 17:18 (IST)

Arvind Kejriwal says middle-class 'completely ignored' in Budget

Feb 01, 2018 - 17:17 (IST)

Opposition meeting to decide strategy on Budget begins

Feb 01, 2018 - 17:05 (IST)

Modi's Davos speech forgotten, says Chidambaram

Speaking at a press conference, former finance minister P Chidambaram said, "I did not hear any measure to boost exports, as the government has run out of ideas. Jaitley has imposed additional custom duties to restrict imports. Prime Minister Narendra Modi's speech at and the spirit of Davos has been forgotten within a few days."

Feb 01, 2018 - 17:03 (IST)

'No impact on final price of petrol, diesel'

Feb 01, 2018 - 16:54 (IST)

Amit Shah highlights on schemes in the Budget

"For food processing, Rs 1400 crore has been planned to be provided. Through Saubhagya Yojana, Centre plans to electrify each house by 2022," BJP chief Amit Shah said while addressing the media.


"Modi government has arranged to provide insurance to poor families. 24 new medical colleges will also be opened. 6 crore more toilets are planned to be constructed across India," he added.

Feb 01, 2018 - 16:51 (IST)

Amit Shah talks on Narendra Modi govt's vision to double farmers income by 2022

Feb 01, 2018 - 16:44 (IST)

Centre on Rashtra Swasth Bima Yojana

A finance ministry official says, "​Rashtra Swasth Bima Yojana cover has been increased to Rs 5 Lakh. It was limited to specific people but now 10 crore family groups will be considered. We are working on it and soon it will be implement."

Latest update, 2.50 pm: After the conclusion of his Union Budget address to the Parliament, Finance Minister Arun Jaitley said that he does not link Budget to elections.

Prime Minister Narendra Modi has praised his government's Union Budget, calling it a "common man friendly budget", and saying it will help farmers and increase their income.

The Lok Sabha has been adjourned till 5 February, 2018. However, the Sensex and Nifty have been left disappointed by the Budget.

While presenting the Budget, Jaitley had said there were over 85 lakh new taxpayers in the country in 2016-17, up from 66.26 lakh in the preceding years. Jaitley had also announced that the government is launching a flagship National Health Protection Scheme to cover 10 crore poor and vulnerable families (with a total beneficiary net of over Rs 50 crore).

He had earlier said his government will focus on agriculture, education and improved quality healthcare. He said they will focus on training the teachers in schools and colleges, and will make use of technology, calling it the "biggest driver" in improving quality of education. He also said they will focus on training the teachers in order to improve the standards of students.

This was after he said the focus of his government's Budget will be on agriculture and rural economy in the coming year.

This came after the Cabinet approved the Union Budget for 2017-18. Jaitley had earlier called on President Ram Nath Kovind at the Rashtrapati Bhavan.

The budget, in view of upcoming assembly polls in eight states — including three major states ruled by the BJP — and general elections next year, may see new rural schemes and stepping up of funding towards existing programs like MNREGA, rural housing, irrigation projects and crop insurance.

Budget 2018 updates Amit Shah says Narendra Modi govts Budget in spirit of Sabka Saath Sabka Vikas

File image of Arun Jaitley. PTI

With the recent elections in Gujarat indicating erosion of BJP's rural vote base, Jaitley may also unveil incentives for the farm sector.

Small businesses, which have traditionally formed the core support base of the BJP, too may get some sops to ease pain caused to them due to a chaotic rollout of the Goods and Services Tax (GST) and demonetisation.

There is also an expectation that common man may get some relief in income tax by way of a raise in the exemption limit.

Also on Jaitley's menu may be upping spending on infrastructure projects like highways and modernisation of railways to boost economic growth that is at a four-year low.

But he has to do all this while sticking to the roadmap of narrowing one of Asia's largest budget deficits, as failing which, India may fall on the wrong side of global investors and credit rating agencies which had late last year handed out a rare sovereign upgrade.

The target Jaitley had previously set out was to lower the fiscal deficit to 3.2 percent of the GDP in the current fiscal and to 3 percent in 2018-19, the budget for which he would present in the Lok Sabha on Wednesday.

Prime Minister Narendra Modi seemed to have already lowered expectations of mass voter swaying announcements when he indicated that the budget may not be resort to populism and that it was a myth that common man wants sop.

This will be India's first post-GST and is being keenly watched to see what Jaitley does to boost growth in Asia's third-largest economy.

There are talks that tax break on capital gains from stock investments may go and it remains to be seen if Jaitley will finally show some movement on his 2015 promise to lower corporate tax rate to 25 percent from 30 percent over four years.

Some kind of incentives to boost exports of certain sectors may be announced while there may be announcements for start-ups as well as for promoting entrepreneurship.

In the first eight months of 2017-18, fiscal deficit reached 112 percent of the target, stoking fears of a fiscal slippage. The shortfall was largely due to reduced dividends from government companies, which the government looks to bridge through stake sale in state-owned firms like HPCL.

Scrapping the colonial-era tradition of presenting the budget at the end of February, Jaitley had for the first time presented the annual accounts on 1 February last year.

The budget presentation was advanced by a month to ensure that proposals take effect from 1 April, the beginning of the new financial year.

Also, the nearly century-old tradition of having a separate budget for the railways was scrapped and merged with the general budget.

The Union Budget 2018-19 would be the last full budget of the BJP-led NDA government before the 2019 general elections. As per the practice, a vote-on-account or approval for essential government spending for a limited period is taken in the election year and a full-fledged budget presented by the new government.

Even though independent India's biggest tax reform of GST was implemented from 1 July, the Budget for 2017-18 (April- March), had followed the practice of tax revenue projections under the heads of customs duty, central excise and service tax alongside direct tax numbers.

With excise duty and service tax being subsumed in the GST, the classifications in the forthcoming budget may undergo change.

While a new classification for revenues to be accrued from GST will be included in the budget for the next fiscal, for the current year two sets of accounting may be presented — one for actual accruals during April-June for excise, customs and service tax, and the other for July-March period for GST and customs duty.

Updated Date:

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