Moneycontrol

Budget 2021

Associate Partners:

  • SMC
  • Samsung
  • Volvo

Moneycontrol

Budget 2021

Associate Partners:

  • SMC Samsung Volvo

State of The Economy

GDP growth dipped even before COVID...

GDP growth dipped even before COVID...

as private consumption too slowed...

as private consumption too slowed...

...and manufacturing remained in dire straits

...and manufacturing remained in dire straits

High inflation crimps space for further rate cuts

High inflation crimps space for further rate cuts

Although RBI has cut repeatedly during the past 2 years...

Although RBI has cut repeatedly during the past 2 years...

...bank credit growth remains tepid

...bank credit growth remains tepid

The tax bases has not broadened as much as desired...

The tax bases has not broadened as much as desired...

.. and the fiscal deficit is putting pressure on interest rates...

.. and the fiscal deficit is putting pressure on interest rates...

The govt's debt burden too is expected to climb

The govt's debt burden too is expected to climb

Top News Budget 2021

Budget 2021: Life insurers seek separate tax carve-out for products to boost penetration

The industry feels this will allow policyholders to diversify their investments into various life insurance products to meet their financial goals while availing of tax benefits. Currently, life insurance premium is eligible for tax exemption under Section 80C, which has a limit of Rs 1.5 lakh annually, but also clubs other investment options such as PPF, EPF, and NSC, among others.

Budget 2021: Life insurers seek separate tax carve-out for products to boost penetration

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Budget 2021 expectations | Structural reforms to continue in aviation; industry awaits cost breather

Budget 2021 expectations | Structural reforms to continue in aviation; industry awaits cost breather The industry expects financial aid and reduction in levies and taxes in the immediate near term to revitalise operations and boost passenger traffic, while in a longer time frame, the government needs to address India’s aviation infrastructure requirements.

Budget 2021 expectations | Renewables & strengthening of power distribution segment is key for power sector: ICRA

Budget 2021 expectations | Renewables & strengthening of power distribution segment is key for power sector: ICRA Policy measures are also required to revive stranded gas-based projects, given that such projects can be used to meet peak power demand and as a balancing power source in the light of the rising share of intermittent renewable generation

Budget 2021 expectations | Focus should be on achieving Sagarmala targets and increasing autonomy at major ports: ICRA

Budget 2021 expectations | Focus should be on achieving Sagarmala targets and increasing autonomy at major ports: ICRA Even if the Government continues with its past policy and does not introduce higher budgetary allocation towards these plans, some incentives or other measures to boost the private investor interest that facilitate more active participation could be expected

Budget 2021 expectations | Tax clarity and support for gas prices key demands of the oil and gas industry: ICRA

Budget 2021 expectations | Tax clarity and support for gas prices key demands of the oil and gas industry: ICRA A downward revision in cess on crude oil production, from the current level, may help upstream companies improve their earnings in a higher crude oil price regime

Budget 2021 expectations | Focus on agriculture to continue, Budget to be pivotal for fertiliser industry: ICRA

Budget 2021 expectations | Focus on agriculture to continue, Budget to be pivotal for fertiliser industry: ICRA ICRA expects budgetary allocations towards the entire agricultural value chain to improve productivity and reduce post-harvest losses, while ensuring adequate realisation for the farmers

Budget 2021 expectations | Government should avoid sharp fiscal tightening

Budget 2021 expectations | Government should avoid sharp fiscal tightening For the GoI, a revenue deficit of 3.5 percent of GDP and a fiscal deficit of around 5 percent of GDP in FY2022 may allow enough space for prioritising health expenditure, vaccine rollout as well as capital spending.

Budget 2021 expectations | Govt support may be required again to recapitalise public banks

Budget 2021 expectations | Govt support may be required again to recapitalise public banks Though the GoI as a backstop for capital requirements does add to the comfort of public banks for their regulatory capital requirements, their weak capital position and the inability to raise capital from the markets have much larger consequences.

Budget 2021 expectations | Scrappage policy, PLI scheme to put automotive sector in fast lane

Budget 2021 expectations | Scrappage policy, PLI scheme to put automotive sector in fast lane The automotive industry faced strong headwinds during FY2020 with the slowdown in economic activities during H2 FY2020, exacerbated by the NBFC crisis, which affected demand significantly.

Budget 2021 expectations | Retail industry eyes govt measures to spur spending

Budget 2021 expectations | Retail industry eyes govt measures to spur spending There is a case for the government to relook at the existing FDI policy for multi-brand retail trade and raise the cap of FDI from the current level of 51 percent under the approval route.

Budget 2021 expectations | Farm gate infrastructure development can give agriculture sector fresh fillip

Budget 2021 expectations | Farm gate infrastructure development can give agriculture sector fresh fillip The formation of 10,000 new farmer producer organisations as proposed for fiscal 2021 can cater to only seven percent of the farming population. Also, the existing FPOs lack capacity, leadership and basic infrastructure for effective market participation.

Budget 2021 expectations: Pharma industry seeks steps to reduce dependence on API imports from China

Budget 2021 expectations: Pharma industry seeks steps to reduce dependence on API imports from China It is expected that the government will continue to focus on reduced import dependence, and encourage investments to boost R&D and capital expenditure.

Budget 2021 expectations | More income tax incentives for housing purchase necessary to revive realty sector

Budget 2021 expectations | More income tax incentives for housing purchase necessary to revive realty sector The affordability of housing projects had been one of the major constraints for demand. Various states had provided time-bound relaxation in stamp duty on housing purchase, which was seen to have a positive impact on sales. The budget could consider further steps to improve affordability.

Budget 2021 expectations | Transporters' profitability hinges on reduction in excise duty on diesel

Budget 2021 expectations | Transporters' profitability hinges on reduction in excise duty on diesel Freight demand revival, which will improve transporters’ profitability, depends on recovery in economic growth and the government’s spending, especially on infrastructure.

Budget 2021 expectations | Healthcare sector allocation likely to go up by 40%

Budget 2021 expectations | Healthcare sector allocation likely to go up by 40% To boost investments in the sector, in addition to the viability gap funding already announced, tax incentives for private sector investments in modernising medical facilities and developing greenfield hospitals will be a welcome step.

Budget 2021 expectations | Better financing mechanisms needed to keep National Infrastructure Pipeline on track

Budget 2021 expectations | Better financing mechanisms needed to keep National Infrastructure Pipeline on track Infrastructure project financing in India is predominantly from the banking sector and a few infrastructure NBFCs. It is important to strengthen the existing infrastructure NBFCs for enhancing their ability to finance projects.

Captains' View

A poll conducted by the CII, India's oldest and largest industry body, exclusively for Moneycontrol.
Presented by Toshiba
Presented by Toshiba

CII-Moneycontrol CEO Budget Survey | India Inc wants focus on public spending, manufacturing sector

CII-Moneycontrol CEO Budget Survey | India Inc wants focus on public spending, manufacturing sector

The poll was conducted by the Confederation of Indian Industry (CII), India’s oldest and largest industry body, exclusively for Moneycontrol. It took responses from more than 80 CEOs of the country’s top business houses. In it, the corporate honchos laid down their expectations from the government in and beyond the Union Budget 2021-22, as well as their thoughts on the economy in 2021.

CII-Moneycontrol CEO Budget Survey | India Inc wants focus on public spending, manufacturing sector

The poll was conducted by the Confederation of Indian Industry (CII), India’s oldest and largest industry body, exclusively for Moneycontrol. It took responses from more than 80 CEOs of the country’s top business houses. In it, the corporate honchos laid down their expectations from the government in and beyond the Union Budget 2021-22, as well as their thoughts on the economy in 2021.

CII-Moneycontrol CEO Budget Survey | India Inc wants focus on public spending, manufacturing sector

The poll was conducted by the Confederation of Indian Industry (CII), India’s oldest and largest industry body, exclusively for Moneycontrol. It took responses from more than 80 CEOs of the country’s top business houses. In it, the corporate honchos laid down their expectations from the government in and beyond the Union Budget 2021-22, as well as their thoughts on the economy in 2021.

CII-Moneycontrol CEO Budget Survey | India Inc wants focus on public spending, manufacturing sector

The poll was conducted by the Confederation of Indian Industry (CII), India’s oldest and largest industry body, exclusively for Moneycontrol. It took responses from more than 80 CEOs of the country’s top business houses. In it, the corporate honchos laid down their expectations from the government in and beyond the Union Budget 2021-22, as well as their thoughts on the economy in 2021.

CII-Moneycontrol CEO Budget Survey | India Inc wants focus on public spending, manufacturing sector

The poll was conducted by the Confederation of Indian Industry (CII), India’s oldest and largest industry body, exclusively for Moneycontrol. It took responses from more than 80 CEOs of the country’s top business houses. In it, the corporate honchos laid down their expectations from the government in and beyond the Union Budget 2021-22, as well as their thoughts on the economy in 2021.

CII-Moneycontrol CEO Budget Survey | India Inc wants focus on public spending, manufacturing sector

The poll was conducted by the Confederation of Indian Industry (CII), India’s oldest and largest industry body, exclusively for Moneycontrol. It took responses from more than 80 CEOs of the country’s top business houses. In it, the corporate honchos laid down their expectations from the government in and beyond the Union Budget 2021-22, as well as their thoughts on the economy in 2021.

CII-Moneycontrol CEO Budget Survey | India Inc wants focus on public spending, manufacturing sector

The poll was conducted by the Confederation of Indian Industry (CII), India’s oldest and largest industry body, exclusively for Moneycontrol. It took responses from more than 80 CEOs of the country’s top business houses. In it, the corporate honchos laid down their expectations from the government in and beyond the Union Budget 2021-22, as well as their thoughts on the economy in 2021.

My One reform

Industry captains talk about the one reform they wish from the budget.

Hotel projects of over Rs 50 crore should get infra status

JB Singh is President and CEO, InterGlobe Hotels| InterGlobe Hotels

Budget must focus on streamlining hospitality sector regulations to spur demand

Rohit Kapoor is Chief Executive Officer, OYO India & South Asia. Views are personal.| OYO India & South Asia

Uniform tax rate of 18% on all vehicles will bring some respite

Gurpratap Boparai is MD, Skoda Auto Volkswagen India| Skoda Auto Volkswagen India

We are almost bordering a V-shaped recovery now

Manish Bhatnagar is Managing Director, SKF India| SKF India

India must attract global manufacturers of key components to become a superpower

Rajeev Karwal is Founder Chairman, Milagrow Humantech| Milagrow Humantech

Economic stimuli from govt critical for aviation sector revival

Rajeev Jain is CEO, Mumbai International Airport| Mumbai International Airport

Pension funds, insurance companies must get to participate in road assets

Isha Chaudhary is Director, CRISIL Research| CRISIL Research

We need flexibility in pricing across states for iron ore

Sunil Duggal is Chief Executive Officer, Vedanta| Vedanta

Separate tax deduction for home insurance would be ideal

Tapan Singhel is MD & CEO, Bajaj Allianz General Insurance| Bajaj Allianz General Insurance

Special exemption for insurance products will help

Anuj Mathur is MD and CEO, Canara HSBC OBC Life Insurance| Canara HSBC OBC Life Insurance

Hope Development Financial Institution is set up to turbocharge sector

Vinayak Chatterjee is Chairman, Feedback Infrastructure| Feedback Infrastructure

Long-term solution to liquidity needs of NBFCs

Raman Aggarwal is Co-Chairman, Finance Industry Development Council| Finance Industry Development Council

I do hope that the FM puts this ghost of retrospectivity behind us

Dinesh Kanabar is CEO, Dhruva Advisors| Dhruva Advisors

India needs right now is the better flow of low cost credit, for the businesses

Rashmi Saluja is Executive Chairperson, Religare| Religare

I hope hospital industry is conferred a preferred status

Abhay Soi is Chairman, Max Healthcare| Max Healthcare

The fiscal deficit target should be realistic

Aditi Nayar is Principal Economist at ICRA.| moneycontrol

Team India Budget

The team responsible for the budget preparation.

75 Years of budget

Dil Chahta Hai Dil Chahta Hai by Farhan Akhtar was a point of inflection in Indian filmmaking. Will 2021-22 be a breakout year for the Indian economy?
Dhande Ki Baat: Alok Jain sees prices reaching climactic top in 2021

Dhande Ki Baat: Alok Jain sees prices reaching climactic top in 2021

After a shutdown in March, the Indian government started the unlock process from late May-June. After that, the markets saw recovery and record-highs in 2020. Find out what experts predict for the year 2021.

What is a capital budget?

The capital budget is different from the revenue budget as its components are of a long-term nature. The capital budget consists of capital receipts and payments. Capital receipts are government loans raised from the public, government borrowings from the Reserve Bank and treasury bills, loans received from foreign bodies and governments, divestment of equity holding in public sector enterprises, securities against small savings, state provident funds, and special deposits. Capital payments are capital expenditure on acquisition of assets like land, buildings, machinery, and equipment. Investments in shares, loans and advances granted by the central government to state and union territory governments, government companies, corporations and other parties.

Disinvestment

The sale of government's shares in public sector undertaking is called disinvestment.

What is a revenue budget?

The revenue budget consists of revenue receipts of the government (revenues from tax and other sources), and its expenditure. Revenue receipts are divided into tax and non-tax revenue. Tax revenues are made up of taxes such as income tax, corporate tax, excise, customs and other duties that the government levies. In non-tax revenue, the government's sources are interest on loans and dividend on investments like PSUs, fees, and other receipts for services that it renders. Revenue expenditure is the payment incurred for the normal day-to-day running of government departments and various services that it offers to its citizens. The government also has other expenditure like servicing interest on its borrowings, subsidies, etc. Usually, expenditure that does not result in the creation of assets, and grants given to state governments and other parties are revenue expenditures. The difference between revenue receipts and revenue expenditure is usually negative. This means that the government spends more than it earns. This difference is called the revenue deficit.

What are indirect taxes?

Indirect taxes are those paid by consumers when they buy goods and services. These include excise and customs duties. Customs duty is the charge levied when goods are imported into the country, and is paid by the importer or exporter. Excise duty is a levy paid by the manufacturer on items manufactured within the country. Usually, these charges are passed on to the consumer.

Union Budget

A comprehensive report of the government's financial statements, containing all expenditures and revenues -- actual numbers for the year going by (revised estimates) and forecast numbers for the year ahead (budgeted estimates).

What impact does the Budget have on the market and economy?

The Budget impacts the economy, the interest rate and the stock markets. How the finance minister spends and invests money affects the fiscal deficit. The extent of the deficit and the means of financing it influence the money supply and the interest rate in the economy. High interest rates mean higher cost of capital for the industry, lower profits and hence lower stock prices. The fiscal measures undertaken by the government affect public expenditure. For instance, an increase in direct taxes would decrease disposable income, thus reducing demand for goods. This decrease in demand will translate into a decrease in production, therefore affecting economic growth. Similarly, an increase in indirect taxes would also decrease demand. This is because indirect taxes are often partially or completely passed on to consumers in the form of higher prices. Higher prices imply a reduction in demand and this in turn would reduce profit margins of companies, thus slowing down production and growth. Non-plan expenditure like subsidies and defence also affect the economy as limited government resources are used for non-productive purposes.

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