Finance Minister Arun Jaitley is presenting the Union Budget 2017-18 in Parliament today. Catch live updates here.
4.00 pm: Finance Minister Arun Jaitley in a press conference spoke on the limit on cash donations to political parties. The donor and donee can both avail of a deduction and exemption, respectively, he said. The cash donation limit is set at Rs 2000.
3.35 pm: The Sensex was up 485.68 points or 1.76 percent at 28141.64 and the Nifty rallied 155.10 points or 1.81 percent at 8716.40.
3.10 pm: Ashok Lavasa, Secretary, Finance, said the government had set up the FRBM committee because there was an overwhelming view that they should review the implementation of the FRBM act and see whether the provisions of the act -- how they meet the requirement of the situation.
3.00 pm: Nilesh Shah, Managing Director, Kotak Mahindra Asset Management, said that this Budget has created the base for the market. There was a lot of apprehension about fiscal deficit target being maintained.
2.57 pm: Economic Affairs Secretary Shaktikanda Das said that this is a strong Budget for the rural sector. For agriculture, it will result in demand creation. “It will also give a major push to public investment.” He also said the Budget is strong with regards to the overall macroeconomic parameters. It is strong with regard to reforms.
2.38 pm: Sensex gains 380.68 points or 1.38 percent at 28036.64 and the Nifty rose 116.90 points or 1.37 percent to 8678.20.
2.25 pm: Finance Minister Arun Jaitley says his Budget will give a boost to rural areas and infrastructure.
2.15 pm: Our cover story on the Budget is up. For a holistic view on the Budget, check it out here.
2.12 pm: Oil company shares have perked up after the Divestment Secretary told CNBC-TV18 that the government is consider merging upstream and downstream companies.
2.10 pm: The market strategy going forward should be buy-on-dips, says broker Sanjay Dutt of Quantum Securities. "I would even recommend adopting a contrarian buy-IT strategy," he says.
2.00 pm: The market has gone from strength to strength. Sensex is now up 431 points.
1.45 pm: Arun Jaitley's Budget speech was 289 paragraphs long. This is longer than the average length of Budget speeches of almost all previous finance ministers.
1.40 pm: We've got our hands on the Budget document and are combing through it for details. First up, as opposed to what we thought, excise duty has indeed been hiked by up to 6 percent for cigarettes of all sizes.
However, ITC shares are still cheering it, as it is below the expected 10 percent hike.
1.35 pm: PM Modi is now speaking, terms the Budget 'historic' and says it will boost the rural, infrastructure and industrial sectors.
1.25 pm: Market experts believe that the Budget has nothing to upset the ongoing share rally. Veteran India watcher Adrian Mowat tells CNBC-TV18 says investors should be positive but patient.
"Once the noise over GST and demonetisation dies down, things will be good," he says.
1.15 pm: Revenue Secretary Hasmukh Adhia is speaking to CNBC-TV18. He discusses the decision to disallow cash transactions above Rs 3 lakh. He points out that any transactions above the threshold will attract a penalty of the same amount.
1.10 pm: "The abolishment of FIPB is a very positive step," veteran investment banker Ashok Wadhva says. "It will greatly help ease doing business."
1.04 pm: ITC shares are rallying. This must be the first time in years excise duty on cigarettes has not been touched.
The market too is now inching up. Perhaps it is taking heart from 'no news is good news' rule.
1.00 pm: On average, experts' first take: a decent Budget but no gamechanger.
12.58 pm: Summing up
- Fiscal deficit target widened but not by much
- Income tax rate for Rs 2.5 lakh-Rs 5 lakh halved
- Net market borrowing lower than last year
- No moves on long-term capital gains tax for equities
- Service tax rate not increased
- Affordable housing gets a boost
- Corporate tax not reduced
- Bank recap figure not increased
12.56 pm: With a parting couplet, the FM ends the speech. "When my aim is right, and my goal is in sight, the winds favour me and I fly."
12.54 pm: The FM now moves to indirect taxes, says no major changes in existing tax structure have been proposed because of rollout of GST.
12.50 pm: For those in 20 percent (Rs 5 lakh-Rs 10 lakh) and 30 percent (Rs 10 lakh plus), there is a Rs 12,500 rebate.
"The total cost of the two measures for the government will be Rs 15,500 crore," the FM says.
To compensate for this, those earning Rs 50 lakh a year will pay a 10 percent surcharge.
12.48 pm: INCOME TAX RATE FOR THOSE IN RS 2.5 LAKH-RS 5 LAKH CUT FROM 10 PERCENT TO 5 PERCENT.
12.45 pm: The FM moves to personal income tax. Hold your breath. "After demonetisation, there is expectation of relief on income tax."
12.42 pm: Maximum cash donation to political parties from one source cut to Rs 2,000 from Rs 20,000 earlier. The benches have strong opinions on this.
12.40 pm: FM says no cash transactions will be allowed over Rs 3 lakh.
12.38 pm: "In order to promote Make in India, I propose to tweak custom duties for imported products as outlined in the Budget document," he says. "This will also take care of inverted duties to an extent."
Will know details when the annexure is uploaded.
12.35 pm: Talking about corporate taxes, FM says he will cut corporate tax rate for MSMEs having revenues less than Rs 50 crore to 25 percent. This is big from a startup standpoint.
The FM says about 96 percent of all MSMEs will be benefited from this move.
However, no framework for slashing of broad corporate tax rate outlined.
12.34 pm: "I propose to allow MAT carryforward for a period of 15 years instead of 10 years."
12.30 pm: FM says the government will reduce holding period for long-term capital gains tax on immovable property from three years to two years. This will result in lower taxes for those selling property at a profit.
12.30 pm: No announcements so far on personal or corporate income taxes. Moves to affordable housing. Will likely revisit it later.
12.27 pm: FM says government is targetting tax revenue growth of 17-18 percent in FY18.
12.23 pm: FM now talking about taxes.
Doles out data for number of taxpayers in various brackets -- and states the shocking but obvious assertion: "We are largely a non-tax-compliant economy."
12.18 pm: FM MOVES TO FISCAL DEFICIT, SAYS GOVERNMENT WILL TARGET DEFICIT OF 3.2 PERCENT IN FY18, COMPARED TO ORIGINAL TARGET OF 3 PERCENT. REVENUE DEFICIT HOWEVER HAS BEEN TIGHTENED TO 2.1 PERCENT INSTEAD OF 2.3 PERCENT.
FY19 TARGET IS NOW 3 PERCENT WHILE REVENUE DEFICIT IS PEGGED AT 1.9 PERCENT.
12.13 pm: "Madam this is an important announcement. We have seen economic offenders flee the country. We will strengthen the legislative framework to freeze assets of such persons."
Bad news for Vijay Mallya.
12.08 pm: The FM moves to digital payments.
- We are targetting Rs 2,500 crore digital transactions across platforms like UPI
- Govt will launch 2 new schemes to promote BHIM app
- To take steps to promote digital payments at petrol pumps, hospitals
- AadhaarPay will be launched shortly
On the last one, imagine walking into a store and make a payment using your thumb impression.
WATCH LIVE BUDGET SPEECH BY FINANCE MINISTER ARUN JAITLEY here.
12.05 pm: This will come as a disappointment. Bank recapitalisation for FY18 continues to stay at Rs 10,000 crore as originally outlined. "We will allocate more funds to recapitalise PSU banks if needed."
The market is just bobbing close to the flat line.
12.04 pm: The FM talks about policy for PSU listings, an area where it has not had much success, says Railway companies such as IRCON and IRCTC will be listed. But will they?
12.02 pm: An expert panel will be created to look to integrate spot and derivatives commodities market.
12.01 pm: FM moves to financial sector. Big announcement upfront: the Foreign Investment Promotion Board (FIPB), will be abolished and a new framework will be created.
12.00 pm: FM says infrastructure total allocation is at a record high of Rs 3.96 lakh crore.
11.59 am: The transport sector allocation is at Rs 2.41 lakh crore.
11.59 am: FM turns his attention to infrastructure. The market is holding up all right. No surprises so far. Real estate stocks are inching higher.
11.56 am: The Railway part ends. Two-hour-long Railway Budget compressed into a 6-minute part. Much needed.
11.54 am: Metro rail is emerging as important mode of urban transportation. A new metro rail policy will be announced to enable easier financing and implementation of metro projects.
11.52 am: At least 25 stations re-development contracts will be awarded in 2017-18. 500 stations will be made disabled-friendly.
11.50 am: FM says total spend on Railways will Rs 1.31 lakh crore in FY18. We will focus on passenger safety, cleanliness and overhauling accounting practices.
"A safety fund will be created."
11.46 am: 1.5 lakh health sub-centres will be transformed to health wellness centres. "I propose to amend drug rules to ensure Drugs available at reasonable prices. The government is committed to take structural reform in medical education, practice."
11.43 am: FM turns his attention to health.
11.39 am: We will set up an innovation fund for secondary education. "We propose to establish a national testing agency to create world-class testing standards. This will free boards such as CBSE to focus on education skills."
11.38 am: The FM now starts about talking education.
11.37 am: "Affordable housing will be given infra status." This means the real estate sector will get cheaper funding for affordable housing.
To complete 1,00,00,000 houses by 2019 for houseless and those living in kaccha houses:FM Jaitley
— ANI (@ANI_news) February 1, 2017
11.37 am: In all, allocation for rural, agriculture and allied industry is at Rs 1.87 lakh crore, up 24 percent year-on-year.
11.36 am: We are on track to achieve rural electrification for all homes under the Deen Dayal Scheme.
11.33 am: The FM now turns his attention to MGNREGS, the flagship scheme of the UPA.
"We had allotted Rs 38,500 crore last year but spent Rs 47,000 crore. Next year, we are targetting spends of Rs 48,000 crore. This is the highest ever."
— Ministry of Finance (@FinMinIndia) February 1, 2017
The opposition isn't bemused.
11.31 am: National agriculture markets to be expanded to 585 markets. Dairy processing infra fund will be created with corpus Of Rs 8,000 crore in three years
11.28 am: "Fasal Bima Yojana coverage will be increased to 40 percent," he says. "Issuance of soil health cards has gathered momentum. We will up crop insurance coverage to 50 percent in FY19."
— PIB India (@PIB_India) February 1, 2017
"A long term irrigation fund at NABARD will be created with a Rs 40,000 crore corpus."
11.26 am: The government is targetting agriculture credit offtake of Rs 10 lakh crore in the Budget.
"Farmers will benefit from 60-day interest waiver announced by PM," says the FM.
11.25 am: In this Budget, we have done away with the distinction between plan and non-plan expenditure. There goes the Soviet-era relic. Better late than never.
The Railway and the Union Budget too have been merged in a historic step.
3 challenges in current global scenario:Monetary stance of US FED Reserve, Commodity prices specially crude oil & retreat from globalisation
— Ministry of Finance (@FinMinIndia) February 1, 2017
11.23 am: The focus of the Budget is to spend on rural areas, alleviate poverty and boost infrastructure.
11.20 am: The impact of demonetisation is not expected to spill over to the next year.
11.19 am: Demonetisation, GST and Jan Dhan-Aadhaar-Mobile (JAM) will be epoch-making events in India's economic history.
11.17 am:Demonetisation was a continuation of series of measures taken by the government [to fight black money]. "The GDP will be bigger, cleaner and real," the Finance Minister says.
11.16 am: India has become the sixth largest manufacturing country in the world, up from the ninth position earlier.
11.14 am: "Our CPI inflation has fallen, current account deficit has reduced, FDI flows have increased while forex reserves have increased. The government is continuing on path of fiscal consolidation."
11.12 am:The world economy faces a challenging time, protectionism is building up and growth is slowing down. Amid this, India stands out as a shining spot, says the FM.
11.10 am: The FM starts by giving an outlook for the economy. Says India's macros have stabilised, governance has improved, corruption has been eliminated while the poor are being given due focus.
"We have transformed governance over the past 2.5 years," he says.
11.08 am: Amid the din, Finance Minister rises to present the Budget.
11.04 am: The Speaker is explaining why the Budget is being held today despite protocol dictating that the House be adjourned on the passing away of a sitting MP.
The Opposition bench looks set to disturb proceedings. Leader of Opposition Mallikarjun Kharge is now speaking.
11.00 am: Budget visuals now coming in. LS Speaker Sumitra Mahajan starts by paying condolences to former External Affairs Minister E Ahamed who passed away overnight.
He suffered a cardiac arrest yesterday in Parliament when President Pranab Mukherjee was delivering his speech ahead of the tabling of the Economic Survey.
"No Sitting Of Parliament Tomorrow As A Mark Of Respect To E Ahamed," says the Speaker.
10.59 am: A few minutes to go. The Cabinet meeting has ended.
10.50 am: Hedge fund Samir Arora is speaking to CNBC-TV18, and says that even if the government imposes long-term capital gains on sale of equities (currently zero) or extends the qualifying holding period to two or three years (currently one year), it would be a negative.
"But grandfathering will be important," he says. "Depending on the cut-off date, it could also boost the market in short term."
10.40 am: Market experts are hoping the government goes full throttle on bank recapitalisation and cuts corporate tax rates. Last year, the FM had allocated Rs 25,000 crore to bank recapitalisation but expectation is rife that number was upped this year.
10.32 am: The government's press bureau tweets that Finance Minister Arun Jaitley has presented the Budget to President Pranab Mukherjee. The big black suitcase is on display.
10.30 am: Half an hour before the Budget speech to get under way. The market has given up all of its gains. Which is a signal it is going in with muted expectations (greater chances of a positive surprise!).
10:20 am: Despite effects of cash-squeeze receding quickly, overall activity levels in many sector, such as small, medium and micro enterprises, trading, real estate, 2/3-wheeler etc, are still not back to normal levels. write Jefferies analysts Nilanjan Karfa,Avinash Singh and Bhaskar Basu in their report.
"Management commentaries suggests that return to normalcy will take a couple of months which will continue to be a headwind to loan growth and asset quality in coming quarters," says the report.
10:15 am: Contrasting views from the experts on the CNBC-TV18 panel. Ambit's Ashok Wadhwa says this could be a 'special' Budget. Helios' Samir Arora feels it is unlikely to be a 'big deal'. Arora says market will be relieved if there is no move to change the long term capital gains structure
10:10 am: CNBC-TV18 Consulting Editor says he expects a 'rocket' Budget today, adding that the government should not tinker with the capital gains tax structure as it could spoil market sentiment. He says there is a possibility that the Budget will have elements that has not been seen in the past
10:00 am: Although UBI may make sense politically, it has an outright inflationary
bias attached to it, says a Motilal Oswal Oswal report.
"Not only UBI will increase demand for most essential items from the general public – boosting food inflation, but it will also provide one-time push (by removal of subsidies) to prices of many other essential items. In short, it may put macroeconomic stability at risk.
Furthermore, we continue believing that states do not have the capacity to take the burden of the 7th Pay Commission, payouts related to UDAY scheme and share extra costs related to such universal scheme amid an uncertain economic environment."
9:50 am: Being short on IT is the trade to be done on Budget, says technical analyst Ashwani Gujral. Traders can also go short on Infosys, TCS and Tech Mahindra as sentiment for the sector as a whole is negative, he says. With or without the Budget, the stocks are set to go lower, he says
9:45 am: The Budget will try to boost consumption by giving tax breaks to individuals, says BNP's Manishi Raychaudhuri
9:40 am: Nominal rural agricultural wages growth rose to 7.3 percent y-o-y in November 2016 (the month demonetisation was announced) from 6.9 percent in October, remaining well above the previous 12-month average of 4.8 percent, writes Nomura's Sonal Varma in her report. "Rural wages may have defied this demonetisation effect because of the hike in minimum wages announced by the government in September 2016. Rural wage growth has only recently started to trend higher, after almost two years of stabilisation," says Varma.
— ANI (@ANI_news) February 1, 2017
9:30 am: IT stocks continue to be under pressure. Nilesh Shah of Envision feels that downside in these stocks is limited because they are now available to 20-25 year low in terms of price earning multiples. It may not be a bad idea for the big IT companies to buyback their shares as they have loads of liquidity and also getting the shares cheap
9.15 am:The market has crawled higher at open. The Sensex is up 48 points while the Nifty is up 20. Equities have had a sterling run recently and Budgets sometimes tend to be inflection points for the market. (Last year, the Nifty bottomed out at 6,800 ON the Budget day.)
Will it be a similar day today -- and could the market turn lower? Not to mention, global markets too seem to be tiring out as the Donald Trump honeymoon ends a bit pre-maturely.
9.10 am: The most important things to watch out for in the Budget are: fiscal deficit target, stimulus policies (especially those aimed at rural India) to counter the slowdown impact of demonetisation, decisions on income and corporate tax rates and any announcements on promoting digital payments or universal basic income.
9.05 am: Economist Jahangir Aziz of JPMorgan thinks the government will stick to the path of fiscal consolidation. That is against the contrarian view being taken by some that the government will go off its fiscal consolidation glidepath.
Watch the interview here.
9.00 am: The rupee has opened at 67.65 per dollar; rising 22 paise.
8.50 am: The pre-market setup is pointing to a firm start for the markets. Historically, the markets tend to start flat to higher on Budget days, and after witnessing some volatility, ends usually lower.
8.47 am: Meanwhile, you can ask Finance Minister Arun Jaitley any question on Twitter using the hashtag #MyQuestiontoFM. There's no saying, of course, how many questions he will respond to today.
— Ministry of Finance (@FinMinIndia) January 31, 2017
8.45 am: Here's bad news for gold lovers (we mean mostly all Indians).
Gold prices may continue to remain on the higher side as the import duty on gold is unlikely to come down this Budget.
8.43 am: The Finance Ministry Twitter handle is keeping is putting out informative tweets. Here's one one Budget glossaries.
— Ministry of Finance (@FinMinIndia) January 31, 2017
8.40 am: Meanwhile, we're still analysing the Economic Survey that came out yesterday.
"Notwithstanding the populist undertone of the President’s speech that preceded the release of the Survey, we do not expect the fiscal math to go awry."
8.35 am: Traders take note: CNBC-TV18's Anuj Singhal tells you what to do in the market. (VIDEO)
8.30 am: We've put up our curtain raised on what to expect from the Budget speech today. Read here: Arun Jaitley's fourth Budget could signal a breakout year.
8.20 am: CNBC-TV18 is reporting that Lok Sabha speaker will take a call on whether the Budget presentation will take place as per schedule.
8.15 am: Speculation is rife that the MP's passing away may defer the presentation of the Union Budget. Protocol dictates that Parliament be adjourned for a day on the passing away of a sitting MP.
8.10 am: Okay, here's the first bit of news: Kerala MP and former External Affairs Minister E Ahamed passed away overnight. He suffered a cardiac arrest yesterday while President Pranab Mukherjee was making a speech ahead of the tabling of the Economic Survey.
— President of India (@RashtrapatiBhvn) February 1, 2017
8.05 am: The biggest day on India's policy calendar is here and it brings with an emotional roller-coaster ride driven by announcements, speculation, interpretation and analyses.
8.00 am: Welcome to the live coverage of the Union Budget 2017-18. We're going to get you breaking news, provide on-the-fly commentary and point you to interesting news pieces across our website and elsewhere. Stay tuned.