Tag: budget 2021

India’s plan to sell two state-controlled banks may get deferred to the next financial year as the government is yet to seek parliament’s nod for changes in laws required to start the transaction, according to reliable sources. The Finance Ministry hasn’t finalised modalities to seek approval from lawmakers for the sale, which leaves little time for the process to be completed this year, it is said. The government will seek buyers for two state-run banks by March 2022, Finance Minister Nirmala Sitharaman had said in February, in the nation’s budget for the current financial year that began on 1st April.

As the Budget gave the necessary booster shot to a dilapidated Indian economy Market's wealth has been soaring at the bourses. The budget with infrastructure programs, privatisation proposals, a nod to public sector banks’ recapitalisation, and no changes in the direct tax regime, proved to be one of the “best in decades” for the economy. At the bourses, frontline indices are hitting record highs every day. With today’s gains, the S&P BSE Sensex and the Nifty50 are up over 11 percent since January 29 and have more-than-doubled since their March 2020 lows. The BSE barometer of 30 constituents hit a new lifetime peak of 51,753 today while the broader 50-share Nifty hit 15,238. From a medium-term perspective, Morgan Stanley sees the Sensex hitting the 55,000-mark by the end of 2021. Read more

The bond market got a negative surprise on Budget day (1st Feb 2021) when the government projected its gross borrowing numbers for the next financial year at Rs 12.05 trillion, much higher than the expected Rs 10.5 trillion. To make the matter worse, the government said it would borrow an additional Rs 80,000 crore in the current financial year, too. “The Rs 80,000 crore extra borrowing for this year is especially a bolt from the blue for the bond market,” said an expert. “This is because the government has been consistently running very high cash balances lately, revenues have picked up dramatically, and even though spending has gone up, it hasn’t been tracking anywhere close to what is required to yield the revised Budget numbers.” Read more

The excitement in the Indian markets continued with the benchmark indices soaring another 3 percent today(2nd February 2021) after recording their biggest Budget-day rally (point-wise) in the previous session. Besides, a firm set of global cues also spurred the bulls. Among the headline indices, the S&P BSE Sensex shot up over 1,400 points and reclaimed the 50,000 levels. The broader Nifty50 index topped the 14,700-mark. Larsen & Toubro, up 8 percent, was the top Sensex gainer, followed by HDFC Bank and HDFC, up 6 percent and 5 percent, respectively. The Nifty sectoral indices were painted green, with the Nifty Financial Services index, up 4.4 percent, leading the gainers. Meanwhile, the Nifty Bank index surged over 1,500 points in intra-day deals to 34,618, a fresh high. Read more

Finance Minister Nirmala Sitharaman presented her third Union Budget in Parliament, which rests on six major heads – health and well-being, physical, financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, and minimum government and maximum governance. The finance minister has announced a total spend of around Rs 2 trillion on healthcare and mega national highway projects in election-bound states of Tamil Nadu, West Bengal, Assam,union and Kerala. Addressing the nation after the Budget presentation, Prime Minister Narendra Modi said this year's Budget was prepared under unprecedented circumstances. He said it speaks of 'all-round development'. Read more

Finance Minister Nirmala Sitharaman will present her third Union Budget in Parliament at 11 am today. The Budget speech will be keenly watched not only by the domestic and foreign investors but also by various interest groups like farmers, anxious middle class, and corporate entities. As the Covid-19 pandemic hit India last year, the government witnessed a rising expenditure and tumbling revenue, even as at one stage economic activity came to a standstill due to the pandemic-induced lockdown. However, the economy is now in a recovery mode. On Friday,29th January 2021 the government tabled the Economic Survey 2020, which pegged India's real GDP growth at 11 percent in FY22. Meanwhile, the finance minister has promised a 'Budget like never before'. Read more

Due to an increased demand for a higher health care allocation, the government may set up a new fund to meet the public health spending target of 2.5 percent of GDP by 2025. Both, the Centre and states would provide for the fund to achieve the goal, the Union Budget may propose. At present, the country’s total health expenditure is 1.4 percent of GDP — much lower than many emerging economies in the world. The fund, if created, would be under the ‘Pradhan Mantri’ umbrella and will focus on both short- and long-term priorities of the sector, according to the government officials. The primary objective of the new fund will be to spend 25 percent on primary health care and the rest on infrastructure as well as research and development. It would also provide additional money to the government’s existing health care schemes such as Ayushman Bharat. Read more

Markets are now eyeing the upcoming proposals in the Union Budget – scheduled to be presented on February 01 – After a stupendous rally that has seen the S&P BSE Sensex more than double from March 2020 low and hit the 50,000 marks. The budget proposals may help revive Covid-19 impacted economy and lift the fortunes of corporate India as well. While most experts suggest the government loosen its purse strings and not worry about the fiscal deficit in a pandemic impacted year, it will be a tightrope walk for the government to increase spending without going overboard. Growth and not fiscal prudence, experts say, should be the priority for the government now. Read more

GOI is planning to create a special window for strategically important investors such as sovereign wealth funds and pension funds that wish to invest over Rs 3,000 crore through a single transaction, according to sources. An announcement in this regard may happen in the Union Budget, scheduled to be presented on February 1. Some strategically important foreign investors include Canada pension fund CDPQ, GIC (Singapore), the Qatar Investment Authority, Temasek (Singapore), and the Abu Dhabi Investment Authority. Most of them met Prime Minister Narendra Modi through virtual meetings in early November. It is learned that foreign investors showed faith in the government’s recent initiatives and reforms. Through this window, foreign funds would receive a response from the government within three days, so that such a proposal can be fast-tracked. Also, the window will act as a point of contact between investors and the various ministries and departments concerned.