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

Govt to overhaul fiscal roadmap, may aim budget deficit at 4% of GDP by FY26

The fiscal deficit -- difference between Centre's expenditure and revenue - is expected to be in the range of 7-8 percent of GDP in 2020-21. From that, it may gradually come down to 4 percent of GDP by 2025-26. This means that the long-standing medium- term target of 3 percent of GDP, as mandated by the FRBM Act, no longer holds.

Govt to overhaul fiscal roadmap, may aim budget deficit at 4% of GDP by FY26

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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.

Moneycontrol Manifesto

What's Moneycontrol Editors' View About What Needs To Be Done To Revive The Indian Economy?

Captains' View

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

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.

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

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

Isha Chaudhary is Director, CRISIL Research| CRISIL Research

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.

MACROS AND MARKETS Experts weigh in on the stock markets and their expectations from the budget
What is plan and non-plan expenditure?

There are two components of expenditure - plan and non-plan. Of these, plan expenditures are estimated after discussions between each of the ministries concerned and the Planning Commission. Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and fertilisers), wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, other general services such as tax collection, social services, and grants to foreign governments. Non-plan capital expenditure mainly includes defence, loans to public enterprises, loans to States, Union Territories and foreign governments.

Direct tax

Direct tax is levied on individuals and corporations for incomes generated by them. For example, income tax, corporate tax.

What is fiscal policy?

Fiscal policy is a change in government spending or taxing designed to influence economic activity. These changes are designed to control the level of aggregate demand in the economy. Governments usually bring about changes in taxation, volume of spending, and size of the budget deficit or surplus to affect public expenditure.

What is a fiscal deficit?

This is the gap between the government's total spending and the sum of its revenue receipts and non-debt capital receipts. It represents the total amount of borrowed funds required by the government to completely meet its expenditure.

Customs duty

It is a levy imposed on imports into, and exports out of a country, and are paid by the importer and exporter, respectively.

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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