By Arun Kejriwal

India has been trading in Indian Rupee with bilateral pacts for time immemorial with the best example being the Rupee-Rouble trade which has been going on even before I was born (or over 65 years ago). The same was extended for trade between India-Iran when there were sanctions on Iran imposed. Now the same is happening between the UAE, Sri Lanka and Bangladesh among others.

There would be no short-term impact of this de-dollarisation from a stock market perspective. However, in the long term this would impact the markets in a very positive manner. India's biggest imports are crude oil and edible oil and most of the trade of these commodities has traditionally happened in USD.

Post the Russia-Ukraine war, the situation has changed and India has been able to do trade with Russia for crude oil at favourable prices and also in rupee denominated currency.

I am not sure how many would recall the large department store in Singapore known as 'Mustafa' which was very popular with Indians visiting that country. This store always accepted Indian currency and the same was at the official rupee-SGD rate. Even today the rupee is accepted all over the Middle East and Ru-pay has become very popular.

Bangladesh is foreign currency starved and is struggling with its forex reserves. The trade with India in rupee has given a new lifeline to the country and they are now able to manage their business and economy. Small traders and businessmen are once again able to do business and import items from India which had earlier become a bottleneck.

Against the imports of crude oil and edible oil our exports are primarily matched against software exports. This is one item that helps India stay afloat comfortably amongst others. Going forward as the Rupee and the de-dollarisation movement picks up steam, it will have a positive cascading effect on the Rupee.

Besides India, which has its own advantages in floating the rupee as a trade and acceptable currency, even China is pushing de-dollarisation as a viable alternative. Its expansion into multiple geographies with its one road project is now meeting stiff resistance from many countries. Our immediate neighbour (Pakistan) is totally dependent on them, but things seem to be not moving as either of them would have desired.

While the first steps to de-dollarisation have started and the system is doing reasonably well, there is a long way to go before it becomes the norm. The good part is the way the country has moved to digital transactions and the popularity of the UPI system where the same is being used across the length and breadth of the country and across various strata of society. This would also help in making the de-dollarisation that much more successful.

In conclusion, the trade pact that India is signing up with countries and introducing the concept of trading in the local currency is gaining momentum. The moment we are able to tie up say around two-thirds of our crude oil and edible oil in rupee or non-dollar trade, India would have arrived.

This would have a big positive impact on our markets as the Rupee dollar depreciation that FPI's factor when they buy equity being factored as a cost, would stop. This would be the moment for India as our markets would then receive a big boost. This would be the time when our markets start benefiting in a manner that they have never seen till today.

(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal)

Source: IANS

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By Venkatachari Jagannathan

Chennai, March 4 (SocialNews.XYZ) Indias economic growth for 2023-24 is estimated to be in the band 6-6.5 per cent by experts in various agencies with difference only in the decimal point.

The 4.4 per cent growth (down from 6.3 per cent in the previous quarter) logged during the third quarter of FY23 was predicted by the Reserve Bank of India (RBI) couple of months back while the markets had estimated it at a slightly higher level -- again difference only in the decimal point.

In December 2022 announcing the RBI's Monetary Policy Committee's (MPC) decision to hike the repo rate by 35 basis points to 6.25 per cent, Governor Shaktikanta Das said the real GDP growth for FY23 is projected at 6.8 per cent, with Q3 at 4.4 per cent and Q4 at 4.2 per cent.

Last month after the MPC meeting, Das said the economic growth for FY24 was projected at 6.4 per cent with Q1 at 7.8 per cent; Q2 at 6.2 per cent; Q3 at 6.0 per cent; and Q4 at 5.8 per cent.

As to the reasons for the 6.4 per cent growth Das said the expected higher rabi output has improved the prospects of agriculture and rural demand. The sustained rebound in contact-intensive sectors should support urban consumption.

"Broad-based credit growth, improving capacity utilisation, government's thrust on capital spending and infrastructure should bolster investment activity. According to our surveys, manufacturing, services and infrastructure sector firms are optimistic about the business outlook," Das said.

He said the protracted geopolitical tensions, tightening global financial conditions and slowing external demand are the downside risks.

On the other hand, credit rating agency CARE Ratings estimate India's economic growth for FY24 at 6.1 per cent.

"Government focus on capex and improving intent of the private sector to invest should be supportive of investment demand. We expect GDP growth to moderate to 6.1 per cent in FY24," Rajani Sinha, Chief Economist, CARE Ratings, told IANS.

For FY23, CARE Ratings estimates the GDP to grow by 7 per cent.

"As the external demand conditions remain weak, it is critical that domestic demand should accelerate. Improving rural demand and rising rural wages are the positive developments for aggregate demand. However, there is expected to be some fizzling out of the pent-up domestic demand seen in the last few quarters," CARE Ratings said in a report.

The credit rating agency added that the Indian government's focus on capex and improving intent of the private sector to invest should be supportive of investment demand but lower external demand and raising interest rates poses downside risks for investment revival.

Meanwhile, global credit rating agency Moody's Investors Service has projected India's growth rate at 6.5 per cent for 2024 and 5.5 per cent for 2023.

In the case of inflation rate, Moody's has predicted 6.1 per cent for 2023 and 5.5 per cent for 2024 for India.

Moody's said the primary drivers of economic growth in 2023 and 2024 will be the Central banks' decisions regarding how much to raise interest rates, for how long, and when to begin to lower them.

Moody's expects the global growth to continue to slow in 2023, with increasing drag from cumulative monetary policy tightening on economic activity and employment in most major economies.

"We forecast G20 global economic growth will downshift to 2.0 per cent in 2023 from 2.7 per cent in 2022, and then to improve to 2.4 per cent in 2024," Moody's said.

According to Acuite Ratings & Research's Chief Analytical Officer Suman Chowdhury, India's economic growth in FY23 will be close to 7.0 per cent.

"Going ahead into the next fiscal however, the factors that will play an important role are the impact of higher interest rates on urban demand, the stability of the monsoon, and the absence of the base factor; we have kept our GDP growth forecast for FY24 at 6 per cent for now without factoring in any additional risks from monsoon and external factors," Chowdhury said.

India's macroeconomic stability indicators will gradually improve in FY24 owing to a combination of factors like easing in global commodity prices (YoY terms), healthy growth mix (more capex driven), and fiscal and monetary policy on a consolidating path, said Morgan Stanley.

(Venkatachari Jagannathan can be reached at v.jagannathan@ians.in)

Source: IANS

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By Sanjeev Sharma

New Delhi, March 4 (SocialNews.XYZ) Overall, post-Covid economic recovery may be strong in pockets, but remains weak on the aggregate, Nuvama Institutional Equities said in a report.

On a 5 year CAGR trend basis, real GDP is growing at 4 per cent, which is sluggish. The weakness is pronounced in manufacturing (2.7 per cent), whereas services (5 per cent) seems to be doing relatively well. Nominal GDP growth stands at 11 per cent on a trend basis, (similar to pre-Covid trend), aided by higher prices.

On a trend basis (5YCAGR), real GDP is growing at just 4.1 per cent despite upward revisions in FY21 and FY22. Seen differently, real GDP is running 9-10 per cent below the pre-covid trend line, which is notable given pent-up demand is arguably behind, Nuvama Institutional Equities said in a note.

"But what is more concerning is that even before the economy could regain the pre-Covid trend line; a slowdown may be setting in. Manufactured exports are already in contraction while services exports could slow down next amid a broadening global downturn," the report said.

Domestically, consumption momentum is clearly fading, and capex could follow suit amid slowing prices, rising cost of capital and slowing consumption and exports, it added.

Near term uncertainties are rising due to global geopolitical and economic issues, El Nino and negative noise levels ahead of 2024 General elections, Prabhudas Lilladher said in a report.

High frequency indicators like GST collection, peak power demand, recovery in air Travel, PV, CV, housing, capital goods and improving capacity utilisation are positive. Rural demand has failed to pick up due to high inflation but strong rabi crop, declining inflation, and likely increase in rural spending ahead of 2024 elections will likely revive demand although EL Nino remains a key risk, it added.

"El Nino is knocking at the doors as temperatures around the country are soaring high and there are significant variations across the globe. We note that some regions in India are recording temperatures 3-5 degrees higher than normal. Both Skymet and IMD have warned of higher than expected heat in the summer months from April to June," the report said.

Also, winter monsoons were weak this year (deficit of 37 per cent in Nov'22, 14 per cent in Dec'22 and 13 per cent in Jan'23) with major northern states like Punjab, western UP and MP receiving higher rainfall deficit. EL Nino along with weaker monsoons is expected to have multi pronged adverse impact on the Indian agriculture and economy.

"Firstly, it poses a high threat to the standing Rabi crop, especially wheat a higher temperatures can lower output. Secondly, El Nino usually leads to weaker monsoons and hence a threat of poor Kharif crop. Poor Rabi and Kharif crop output can push food inflation further up and delay rural demand recovery. Lastly, higher temperatures will lead to higher power demand which could add to higher coal imports and inflation woes for consumers," the report said.

According to Motilal Oswal Financial Services, an analysis of 12 rural consumption indicators suggests that rural spending rose 5.3 per cent YoY in 9MFY23 v/s 0.6 per cent YoY growth in 9MFY22.

However, consumption grew at a three-quarter low of 4.6 per cent YoY in 3QFY23 v/s 6.5 per cent/5.6 per cent YoY rise in 1Q/2QFY23. The slowdown was primarily led by: four-quarter low growth in real agriculture GVA, continued fall in non-agricultural wages, sharp slowdown (nine-quarter low growth) in two-wheeler sales, continued decline in farmers' terms of trade (negative for eight quarters now), drop in real farm exports (first decline in 10 quarters), and three-quarter low growth in real farm credit in 3QFY23.

Overall, consumption demand has started its southward journey. Both rural and urban consumption grew at a three-quarter low in 3QFY23.

(Sanjeev Sharma can be reached at Sanjeev.s@ians.in)

Source: IANS

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By Nishant Arora

New Delhi, March 4 (SocialNews.XYZ) The economic turbulence of 2022 has entered 2023, even getting worse, and startup founders are finding it all the more difficult to raise funds amid the global macro-economic conditions.

Amid a deepening funding winter, only 53 per cent of startup founders had a positive fundraising experience (71 per cent of those who attempted to raise) in 2022, down from 92 per cent in 2021.

Startup founders expect this year to be challenging, with 58 per cent of founders expecting a tough fundraising environment, according to a recent report by InnoVen Capital, Asia's leading venture debt firm.

"The year 2022 was challenging for the startup ecosystem with an end to cheap money, rising interest rates and a challenging geopolitical environment. The positive aspect of the slowdown has been an increased appreciation for building sustainable business models," said Ashish Sharma, Managing Partner, InnoVen Capital India.

Fintech startups in India raised $5.65 billion in 390 rounds last year, a massive drop of 47 per cent in terms of funding amount and 29 per cent in the number of rounds when compared to 2021.

This drop in funding can be attributed to the decline in late-stage funding from $8.3 billion in 2021 to $3.7 billion in 2022, a drop of 56 per cent, according to data provided by global software-as-a-service (SaaS)-based market intelligence platform, Tracxn.

Fintech startups recorded 13 funding rounds of $100 million+ in value in 2022, which is a massive drop of 50 per cent, from 26 rounds in 2021.

Only four startups in India's fintech sector received unicorn status in 2022, far lower compared to 13 new Unicorns in 2021.

"The country is currently experiencing a funding winter. Growing inflation and macroeconomic tensions have made the investors step back from making big investment decisions," the Tracxn report said.

In 2023, the tightening funding environment has also led to an increased focus on profitability and unit economics.

"While both growth and profitability are important, for the first time in seven years, founders had a higher bias for profitability over growth. Around 55 per cent of founders cited profitability as a bigger focus area in 2023, compared to only 17 per cent in 2021," the InnoVen Capital report said.

Startup founders are also increasingly looking towards a domestic IPO as the likely mode of exit, despite the recent volatility of public market tech companies.

As Indian startups face turbulence in the global funding winter, experts said they need to reserve cash, create a long-term goal and adopt a culture of customer feedback to survive in 2023.

According to Ritesh Malik, Director, Alliance for Digital India Foundation (ADIF), startups must hear back from their customers.

"The more you hear from your customers, the more you will be able to understand their changing needs. And the more your product becomes dynamic, you constantly change that product to the whims and fancies of the customer," he told IANS.

Ravish Naresh, CEO and Co-founder of Khatabook, said that there is a stronger acknowledgment of Indian startups' role in solving core problems of emerging economies to bridge the socio-economic gaps.

"This year, our primary aim is to turn profitable and scale up the digital lending offerings to meet the unmet credit demand of Indian MSME businesses. We are optimistic about the Indian economy and its opportunities for the startup ecosystem," he said.

Source: IANS

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New Delhi, March 4 (SocialNews.XYZ) Private consumption demand, which forms the largest part of GDP, slowed meaningfully to 2.1 pert cent in Q3FY23 due to slowdown in urban discretionary consumption along with already weak rural demand, Ambit Capital said in a report.

Manufacturing sector contracted for a second straight quarter as demand for manufacturing exports decelerated given the global slowdown.

Real GDP growth in FY24 will be in the range of 5.5-6 per cent (vs 7 per cent in FY23), with downside risks, given: (1) urban discretionary demand continues to decelerate along with weak rural demand, (2) private investment remains in the slow lane given rising borrowing costs and sluggish external demand and (3) slowdown in global growth will adversely affect India's manufacturing and services exports, Ambit Capital said.

Systematix Institutional Equities in a report said that on the discretionary front, growth remains sluggish, especially in apparel and QSR, prolonging the deceleration that started post festive season. This could be a temporary slowdown, but if it continues for few more months, it could impede the footprint expansion plans of most industry players.

"Margins could pose a concern, as the recovery is being driven by promotions, discounts and higher sales of entry-level products. While the medium-term narrative on discretionary remains strong, we foresee more earnings cuts in FY24, especially on the margin front, which could drive some more de-rating in the space and amplify the recent underperformance. While we expect near term sluggish growth in QSR and apparel, paints, jewellery and luggage may fare relatively better," the report said.

In consumer discretionary, there was no major change in the demand environment across categories in February, which remained sluggish in QSR, apparel and jewellery segments.

Demand for mass-priced products, especially in the Northern and Eastern regions, remained weak with better trends in South and West India, the report said. However, the growth trajectory of paint companies has been improving since December.

While footfalls are picking up at a slow pace, higher promotions/discounts are likely to weigh on margins near term in most categories.

So far, companies have yet not slowed down on their footprint expansion plans, but if the prevailing environment continues for few more months, some segments may need to reconsider their physical expansion plans in the near term, the report said.

The data for Q3FY23 suggests: (1) manufacturing sector contracted for the second quarter in a row as slowing exports hit labour-intensive manufacturing; (2) private consumption expenditure (largest component of GDP) growth has slowed down meaningfully as urban discretionary demand slowed due to subdued mass consumption, Ambit Capital said.

"Goods exports and domestic consumption are already slowing, and we expect services exports and capex to lose momentum ahead amid a slowing global economy and higher domestic interest rates," Nuvama Institutional Equities said in a report.

Motilal Oswal Financial Services said in a report that consumption demand has started ebbing.

Overall, consumption demand has started its southward journey. Both rural and urban consumption grew at a three-quarter low of 4.6 per cent and 6.6 per cent YoY, respectively, in Q3FY23. Going ahead, though the central government continues to focus on the rural sector, weak income growth combined with higher interest rates could bring down overall consumption demand further. Data released from the CSO also reveals collapse in total consumption to 2.1 per cent YoY in Q3FY23.

After growing strongly by 18 per cent/10.9 per cent YoY in Q1/Q2FY23, urban consumption rose only 6.6 per cent YoY in Q3FY23, leading to slower growth in 9MFY23 (v/s 9MFY22 level). Six out of nine indicators disappointed in 3QFY23; these were real non-farm GVA, domestic PV sales, IIP for consumer durable goods, petrol consumption, real house prices, and real non-farm consumer imports, the report said.

Urban consumption compiled by using nine proxy indicators grew 11.5 per cent YoY in 9MFY23 vs a 12.4 per cent YoY growth in 9MFY22.

Three among the nine indicators, real non-farm consumer imports, real non-farm GVA and IIP for consumer durable goods witnessed a slowdown. Others such as real salaries of BSE500 employees, domestic PV sales, real personal credit and petrol consumption posted higher growth.

While CPI for non-food inflation remained flat at a high level (of 6.7 per cent YoY), real house prices contracted at a slower pace in 9MFY23, the report said.

Source: IANS

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By Venkatachari Jagannathan

Chennai, March 4 (SocialNews.XYZ) The interest rates in India will continue to be at a higher level next fiscal as inflation continues to be sticky at a higher level, said experts and several reports.

"The interest rates will remain at higher levels as it looks unlikely that the Reserve Bank of India (RBI) will cut rates. There is a possibility of another rate hike based on how inflation turns out in the coming month," Madan Sabnavis, Chief Economist, Bank of Baroda told IANS.

Sabnavis also said with the US Federal Reserve going for two hikes, the world will be through a phase of higher rates.

Credit rating agency Acuite Ratings and Research said the RBI will continue with monetary tightening and will hike the policy rate by 25 basis points (bps).

Acuite Ratings expects the RBI to persist with monetary tightening to guard against generalisation of core inflation pressures into a wage-price spiral.

"After a hike of 25 bps in Apr-23, MPC (Monetary Policy Committee) could opt for a pause for impact assessment. The stance may change to 'neutral' only after core inflation witnesses a sustained decline to below 5 per cent," Acuite Ratings said.

According to Acuite Ratings, over the last three months, inflation has begun to descend from peak levels across most economies in the world. The upshot from this development has been a step down in monetary policy aggression by most central banks despite the persistence of monetary tightening.

Morgan Stanley in a report said that the RBI may hike the repo rate in April and peg the terminal rate at 6.75 per cent.

A shallow rate cut cycle (of cumulative 50 bps) from 1Q24 as visibility on durable moderation in inflation improves, the report said.

Global credit rating agency Moody's Investors Service has predicted India's inflation rate at 6.1 per cent for 2023 and 5.5 per cent for 2024.

In February 2023, the RBI's MPC hiked the repo rate (the rate at which RBI lends to the banks) by 25 basis points (bps) to 6.5 per cent. This takes the cumulative hike in repo rate to 250 bps since May 2022.

The RBI had projected the inflation at 6.5 per cent in 2022-23, with Q4 at 5.7 per cent. And assuming a normal monsoon, RBI projected the CPI inflation at 5.3 per cent for 2023-24, with Q1 at 5.0 per cent, Q2 at 5.4 per cent, Q3 at 5.4 per cent and Q4 at 5.6 per cent.

However, in a shocker, consumer price index (CPI) inflation touched 6.5 per cent in January, after being 5.72 per cent in December and 5.88 per cent in November last year, a worrisome factor, economists had said.

Given the situation, experts are of the view that the RBI will continue with hiking rates but at a lower rate.

Moody's said the Central bank, having embarked on the most aggressive monetary policy tightening in decades, are now at a precarious juncture, faced with the question: Is the magnitude of rate hikes undertaken thus far adequate to quell inflation?

While there is a sense that the end to tightening is near, it is unclear how many more rate increases would be appropriate and for how long interest rates will remain restrictive. The Central bank's decisions will evolve according to wage and inflation dynamics, Moody's said.

(Venkatachari Jagannathan can be reached at v.jagannathan@ians.in)

Source: IANS

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New Delhi, March 4 (SocialNews.XYZ) The global economic crisis, which hit the companies' initial public offering (IPO) plans in India in 2022, continues to haunt the founders and CEOs and the first two months of the new year went completely dry as no public offering was launched amid recession fears.

Although some IPOs appear to be in the offing this month, the mood among the companies, investors and the public is yet to be lifted after a dismal December.

Forty Indian corporates raised Rs 59,412 crore through IPOs in calendar year (CY) 2022, half of the Rs 1,18,723 crore (all-time high) mobilised by 63 IPOs in 2021, according to Prime Database, India's premier database on the primary capital market.

When it comes to big new-age internet companies, only fully-integrated logistics service provider Delhivery (Rs 5,235 crore IPO) and data intelligence firm Tracxn Technologies (Rs 309.38 crore) took the public offering route last year.

Droneacharya Aerial Innovations also went public, with an aim to raise approximately Rs 34 crore through a new issuance of shares.

Meanwhile, startups and tech companies that deferred their public offerings last year included Oyo, Snapdeal, Ola, Droom, MobiKwik, PharmEasy, BoAt and Flipkart.

In 2021, 11 startups went public, including Zomato, Paytm, Policybazaar and Nykaa.

Market experts believe there will be many more IPOs from March onwards.

However, 2023 does not appear to be promising as of now as consumer demand is expected to stay low over the coming quarters, as inflation continues to rise, creating a further slowdown phase for the startups in the country.

There is an ongoing risk of further escalation in the war on Ukraine and the current wheat crop being impacted by hot weather conditions, according to market research firm Redseer Strategy Consultants.

Consumer perception of the general economic condition continues to be pessimistic as per the Reserve Bank of India's Consumer Confidence Survey of January 2023, where more than 50 per cent of consumers reported it to have worsened.

The IPO and qualified institutional placement (QIP) activity has been declining consistently since 2022 amid global macro-economic conditions and funding squeeze.

This comes at a difficult time for startups. They currently have limited ability to drive growth through discounts and other levers, which worked well during an easier funding environment.

"Therefore, startups must focus on efficient unit economics and improving profitability by sticking to their core offerings," according to the RedSeer report.

In some good news, as the stock performances of tech IPOs, compared to other consumer companies, witnessed a steeper crash, India is poised to see more than 100 large-scale profitable/path-to-profitability startups in the next five years.

With about 20 of them already being listed, about 80 start-ups have the potential to look at an IPO journey, according to another report by Redseer Strategy Consultants with HSBC.

The learning is that there may be more time, maybe a few quarters, for the markets to recover.

Source: IANS

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By Arun Kejriwal

Meanwhile, sales of most Indian hosiery players are down sharply year-on-year (YoY) in 3QFY23, indicating impact on consumer sentiment in the last quarter. Further, the same has happened to sales of paint companies and even the ever-popular pizzas.

GDP numbers for the third quarter have seen it slowing down to 4.4 per cent. FY23 GDP is now estimated at 7 per cent. Further, FY22 GDP is now revised to 9.1 per cent. There are signs all around us to be cautious, but not alarmed as yet.

The big positive is the fact that tax collection numbers, whether direct or indirect, are buoyant and with better compliance we seem to be on a strong footing.

The concern is the demand slowing down now even in semi-urban and urban areas. This is in addition to the slowing demand already being witnessed in rural India.

Coming to the markets and the primary markets at that. There was no issue post the Adani FPO for a month. This was followed by just one issue in the beginning of March and a few issues that are likely in the month of March.

Fundraising is becoming tough with markets not at their best and promoters currently unwilling to lower their expectations about valuations.

Come April, there would be a change in the documents being filed as the same would have to give the valuation number as well. The subjectivity and the premium that promoters and merchant bankers took on market performance would now disappear.

As far as the secondary markets are concerned, they are just about fairly valued post the correction witnessed in recent times. However, the opportunity in China and the US, which has corrected even more than India, makes those markets more attractive.

Further, Q3 results were a mixed bag and by and large there were no surprises which could make one more bullish for the fourth quarter results. Suffice to say that the usual bullishness on expectations of better results would be the only solace.

India's economy is highly dependent on the monsoon. With global warming and unusual weather worldwide, the monsoon would be a challenge and the agricultural output would play a major part in ensuring moderate inflation. If, however, God forbid, something goes wrong, the economy could get badly affected.

The Russia-Ukraine war has completed a year and there seems to be no resolution of date or anything on the horizon. When and at what terms would there be settlement seems a long way off.

Crude oil is a major import for India and fortunately, the Russia-Iran-India route has paid off. It ensures a steady supply at affordable rates and highly beneficial terms. This has also helped India get much better rates from other countries which have lost market share.

In summary, 2023 would be a tough year for markets and one should be prepared and safeguard oneself from possible setbacks.

It would be a good time to conserve cash and wait for the proverbial rainy day when all resources available may be less than the opportunities available looking at bargain rates.

Source: IANS

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New Delhi, March 4 (SocialNews.XYZ) After a dismal year for tech companies and startups in 2022 which saw lakhs of employees being shown the door, 2023 started on a similar note and in January-February, 417 companies laid off more than 1.2 lakh workers globally.

In January alone, close to 1 lakh tech employees lost jobs globally, dominated by companies like Amazon, Microsoft, Google, Salesforce and others.

In India, nearly 23,000 employees have been laid off by 78 startups, including unicorns like BYJU'S, Ola, OYO, Meesho, MPL, Innovaccer, Udaan, Unacademy, Vedantu, Chargebee, Cars24, LEAD and others, according to leading startup news website Inc42.

Edtech companies laid off most employees, with 18 edtech startups firing more than 8,200 workers.

When it comes to big companies, the layoff season in the country this year started with Amazon India sacking around 1,000 employees.

Google India also fired more than 450 employees across various departments.

Elon Musk-run Twitter shut two of three of its Indian offices and also told its staff to work from home. The company had fired more than 90 per cent of its 200-plus workforce in India late last year.

At a time when the job market is hit by rising layoffs, Wipro wrote to fresh recruits who have been offered Rs 6.5 lakh per annum, asking if they would be able to work for Rs 3.5 lakh per annum.

Wipro also laid off more than 400 fresher employees for poor performance in internal assessment tests in January.

After Wipro showed the exit door to hundreds of freshers, it was the turn of Infosys to sack the probationers for failing to prove their credentials in the internal assessments.

Infosys is letting go of hundreds of employees, who are at the fag end of their training and failed the internal assessment tests. The new recruits will have to undergo comprehensive training before they are added into various teams for full-fledged work, according to reports.

"I believe that the crisis will remain in the entire 2023 and even probably the first quarter of 2024. It will eventually subside and we all will come back to normalcy. However, it is going to take some time," according to Sumanth Prabhu, Co-Founder and CEO, Ulipsu.

Hiring this year is expected to slow down, with only 38 per cent of startup founders expecting a higher pace of hiring predominantly in early-stage companies, according to a report by InnoVen Capital.

However, in a silver lining for the Indian job market, hirings saw a 9 per cent sequential growth in February and the IT sector signalled a positive comeback after witnessing a decline in the past few months in line with the global meltdown.

The number of new jobs in the IT sector increased by 10 per cent in February compared to the preceding month, according to data by Naukri JobSpeak.

Sectors such as banking, BPO and Retail, showed similar trends with the number of new jobs increasing by 9 per cent, 7 per cent, and 7 per cent, respectively over previous month, the report showed.

Meanwhile, India's economic growth fell, for the second consecutive quarter, to 4.4 per cent in October-December period of the current financial year, owing to weak demand and high inflation, as per data released by the Statistics and Programme Implementation Ministry.

The GDP growth was 6.3 per cent in the September-quarter of 2022-23.

It shows that the danger is still lurking and global economic meltdown has only become deeper, posing a challenge to the Indian companies across the domain to reserve cash, cut expenditures and stay afloat.

Source: IANS

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Chennai, Feb 4 (SocialNews.XYZ) The Southern Railway has received an outlay of Rs 7,134.56 crore for the financial year 2022-23, in addition a total of Rs 1,064.34 crore is also received as Extra Budgetary Resource (EBR), said officials.

Of the total outlay Rs 1,445.85 crore has been earmarked for doubling projects, Rs 346.80 crore has been earmarked for gauge conversion projects and Rs 59 crore for new lines.

An amount of Rs 327.77 crore has been allotted for passenger amenities for the year 2022-23, Southern Railway said.

A sum of Rs 189.76 crore has been sanctioned towards various signal and telecom works in Southern Railway with thrust on proliferating indigenously manufactured 'Kavach' anti collision devices across the network.

As regards the outlay for projects in Tamil Nadu, Southern Railway said 25 new line/gauge conversion projects costing Rs 28,307 crore over 3,077 kms length falling fully/partly in the state are under different stages of planning/execution.

The Budget grant for Railways in Tamil Nadu is Rs 3,865 crore for the financial year 2022-23 which is 340 per cent higher than the average outlay of 2009-2014.

Some of the important projects in Tamil Nadu featuring in Budget 2022-23 are:

• Rameswaram - Dhanushkodi (17.2 Km) new line project has received an outlay of Rs 59 crore.

• The outlay for Madurai - Bodinayakkanur doubling project is Rs 125 crore.

• The gauge conversion project between Tiruchchirappalli-Nagore-Karaikal with extension of Velankanni-Tiruturaipundi including new material modification of Karaikal-Peralam (23 km) new line is allotted Rs 121.80 crore.

• Funds to the tune of Rs 54.2 crore are allotted for the 4th Line between Chennai Beach to Chennai Egmore.

• For FY 2022-23, funds to the tune of Rs 789 crore have been allotted through the Budget for the ongoing RVNL projects, including Rs 50 crore for construction of new Pamban Bridge.

  An amount of Rs 303.42 crore has been allotted for various railway electrification works in Tamil Nadu.

  In Kerala, eight projects costing Rs.9,489 crore for 439 km length falling fully/partly in Kerala are under different stages of planning/approval/execution.

  The Budget grant for Railways in Kerala is Rs.1,085 crore for the financial year 2022-23 which is 192 per cent higher than the average outlay of 2009-2014.

  Some of the important projects in Kerala featuring in Budget 2022-23 are:

• Thiruvananthapuram-Kanniyakumari Doubling project (86.56 Km) has been allotted Rs 393.50 crore.

• Doubling of Kuruppanthara - Chingavanam (26.54 Km) has been allotted Rs 50.94 crore.

  An amount of Rs 100.66 crore has been allotted for various railway electrification works in Kerala.

Source: IANS

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By Sreejith Balasubramanian

Implied Q4 FY22 (Jan-Mar) estimate point to a 14.5 per cent y/y contraction in gross tax revenue, after it grew 44 per cent during Apr-Dec. Revenue from excise duties (which fall given the cut in November 2021), income tax, CGST etc. appear realistic.

However, corporate tax revenue estimate is quite conservative at ~0.3 per cent of GDP, below our forecast, which could help ease the final FY22 fiscal deficit. Net tax revenue in Q4 FY22 is estimated to fall 37 per cent y/y also because tax devolution to states is estimated to grow 32 per cent y/y.

For FY23, nominal GDP at 11.1 per cent is quite conservative and overall tax buoyancies are estimated to moderate from FY22 as expected. Direct tax buoyancy is estimated to fall slightly blow pre-pandemic levels while indirect tax buoyancy is different also owing to excise duty cuts, changes in the GST system, etc.

Overall, FY23 gross tax revenue growth estimate of 9.6 per cent is towards the lower end of realistic outcomes. The scope for surprise is thus to the upside, mainly from corporate tax revenue, although not to the extent seen in FY22 as pent-up demand diminishes and further buoyancy from higher GST compliance could be lower.

The likely macroeconomic context ahead -- slower global growth and trade, global monetary policy normalisation, slower Chinese economy, impact of higher oil prices, incomplete recovery of the domestic services sector, health of households given the K-shaped recovery, etc. -- could also limit the upside.

Capex growth -- details matter as always

On-budget capex is estimated to rise by 24.5 per cent y/y to Rs 7.5 lakh crore in FY23, from an upward revised Rs 6.03 lakh crore in FY22, which itself is a 41.4 per cent rise. This is encouraging as share of capex in total on-budget expenditure (measure of quality of spending) rises consistently.

However, like last year, off-budget capex eases. In FY22, this is broad-based across 7-8 ministries while in FY23 it is mainly on-budgeting of support (Rs 65,000 cr) to the National Highways Authority of India (NHAI).

This is indeed good for transparency but reduces consolidated capex. There are also some one-offs like the loan to railways in FY21 (Rs 79,398 cr), clearing of Air India liabilities in FY22 (Rs 51,971 cr) and special assistance through 50-year interest-free loan to states for capex (Rs 11,830 cr in FY21 and Rs 15,000 cr in FY22, which rises to Rs 1 lakh crore in FY23).

To be fair, states' capex could rise by the loan amount but timely execution matters for eventual off-take. The actual growth in capex and thus the impetus to growth could be lower than what the headline numbers suggest.

Funding deficit through higher market borrowing -- trade-off for higher capex

The trade-off for higher capex in FY23 is the higher share of market borrowing in fiscal deficit, which, after falling from 76 per cent in FY18 to 49 per cent in FY22, picks up sharply to 67 per cent in FY23. This is primarily owing to lower utilisation of cash balance and lower short-term borrowing vs FY22. Funding from NSSF a) through 'securities against small savings' falls in FY23 after picking up in FY22 but b) through its core inflows (savings deposits, savings certificate and public provident fund) picks up.

However, a) lower FY23 fiscal deficit, b) higher cash utilisation (our estimate of Central government cash balance is Rs 4.84 lakh crore as on January 21, 2022), and c) recent G-sec switches with the RBI which reduced FY23 redemption by Rs 63,648 crore offers scope for a mild relief to the Rs 14.95 lakh crore gross borrowing announced in the Budget.

However, total public sector deficit (defined as Centre's fiscal deficit + states' fiscal deficit + resources of PSEs excluding internal resources) has come off from recent highs (10.3 per cent of GDP as per FY23BE vs 15.8 per cent in FY21) but is still well above 8.1 per cent in FY19. There is risk of this crowding out private investment once it starts to pick up down the line.

States -- bigger role in capex but conditions apply

Compensation provided to states, from cess collected, for shortfall in GST collection ends in July 2022 and loans provided were for FY21 and FY22. States were allowed additional market borrowing, partly conditional on reforms and capex, and carried forward space expired in FY22. For FY23, states have been allowed a fiscal deficit of 4 per cent of GSDP (Gross State Domestic Product), again 0.5 per cent of which is tied to power sector reforms. They will also be provided with 50-year interest-free loans worth Rs 1 lakh crore for capex.

All this is definitely a good way to incentivise states to undertake important but difficult reforms, like in the power sector, and direct limited resources to capex with higher growth-multiplier and lower inflation outcomes.

However, cooperation from all states, their ability to timely manage revenue expenditure (given a higher share of conditional inflows) and the need to account for differences among states in priority and avenues of spending (which a common mandate could miss) must also be taken into consideration.

Thus borrowing by states has to be seen given that states had already announced a larger-than-expected Q4 FY22 borrowing calendar, and GST-related support is about to end and borrowing costs have been rising more recently. FY23 state budgets, due in the next few months, should provide some indication. Overall, states now have a larger and clearer role in capex and reforms, albeit with the centre directing a bigger share of resources.

Fiscal consolidation -- what it takes to be on the glide path

The Centre's fiscal deficit is targeted at below-4.5 per cent of GDP by FY26. If one does a basic exercise on forecasting major receipts and expenditure till FY26, need for a broader pick up in sources of receipts becomes immediately clear. In other words, non-tax revenue (RBI dividends, telecom spectrum related receipts, etc.) and/or non-debt capital receipts (disinvestments) need to step up soon.

This is also because our pre-pandemic growth was already slowing (FY20 real GDP growth was recently revised downward from 4 per cent to 3.7 per cent) and our potential growth has been likely hit by economic scarring and a K-shaped recovery in the absence of a meaningful employment and wage cycle in the last wo years. Growth (and thus capex for it) is thus good to stabilise the fiscal deficit to GDP ratio but we still need non-tax receipts to fire to be on the glide path.

Despite trade-offs, can public investment get the economy's wheels moving?

Capex-led impetus for growth is likely a good option now given balance sheets of corporates and banks are likely better on aggregate, although possibly with skews within. However, capacity utilisation broadly continues to be at levels below thresholds to commence a private capex cycle.

Balance sheets of households on aggregate (impacted in the last decade by the investment slowdown percolating onto the demand side but then staying afloat with leverage from NBFCs until 2018 after which private consumption materially slowed and is currently below the pre-pandemic real level) have also likely been hit again by the pandemic and the following K-shaped recovery.

With these constraints in play, execution, quality of expenditure and getting states fully on board becomes even more critical to generate inclusive medium-term growth. However, the funding route taken for this in the immediate future tests the appetite of the domestic bond market, although there could potentially be some mild positive surprise here as we traverse FY23.

(Sreejith Balasubramanian is Economist - Fund Management, IDFC AMC. The views expressed are personal)

Source: IANS

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New Delhi, Feb 3 (SocialNews.XYZ) India needs to enhance the production and not just focus on increasing the minimum support price (MSP) on pulses every time as it hurts the consumers in the long run, said Bimal Kothari, Vice Chairman of India Pulses and Grains Association (IPGA).

"As of now our productivity is really low in comparison to international levels," Kothari said.

Doubling farmers' income too can be attained by increasing productivity. "Crops like pulses and edible oil seeds require special attention, because India has been importing them. Though the production of pulses has definitely been given a boost, still, we are importing about 2.5 million tons of pulses annually."

India's pulses demand will be around 30 to 33 million tonnes, he predicted.

Besides, the move to use drones in the farm sector, as announced in the Budget, will allow the industry to estimate the production and understand the crop losses accurately besides spraying insecticides in the field, he added.

"Not just the farmers but even the government will benefit from this drone scheme. Many times we are unable to get accurate numbers of production, whereas government policies are totally dependent and designed based on these numbers. Getting the most accurate numbers related to production and losses will immensely benefit government, trading associations and farmers."

While welcoming the Centre's high procurement of agri produce at MSP, he recommended more focus to be provided on purchasing of oilseeds and pulses.

"In the pulses sector there has been significant procurement in the last three to four years, but this needs to be enhanced more and buffer stocks need to be created as it's being done in case of wheat and paddy."

Higher procurement will help in intervening by the Centre in controlling the prices when the production gets affected due to unavoidable events, he added.

"This is more important in the pulses sector because pulses production of other origin is much less than our requirements or shortfalls."

India is evidently the largest population of vegetarians and pulses fulfill the large part of protein requirement for the masses.

Lately, the Centre has shown strong interest in raising the domestic output of pulses and edible oils and also took various initiatives as part of its self-sufficiency goal.

Even though India is a major producer of pulses and edible oils, its domestic consumption outstrips the production, which pushes the country to import such commodities from other nations.

Source: IANS

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New Delhi, Feb 3 (SocialNews.XYZ) The government's drive to boost efficiency in the logistics sector, which is critically linked to the growth of trade and economic activities, is undoubtedly a positive move that will eventually strengthen the sector, as highlighted by industry experts.

Finance Minister Nirmala Sitharaman, in her Budget speech on Tuesday, announced 25,000 km of new highways, PM Gati Shakti Masterplan for expressways and 100 new cargo terminals with multi-modal logistics parks. She also announced an array of initiatives that will connect urban transport to railways, a move that will boost the industry.

"We welcome the positive steps the government has taken for strengthening and further developing the logistics sector under the PM Gati Shakti plan. The expansion of the national highways network, implementation of multi-modal logistics parks and development of 100 new cargo terminals will facilitate swift movement of goods, improve pan-India connectivity and reduce logistics costs," said Kushal Nahata, CEO & Co-founder, FarEye.

In addition to adding new cargo terminals, the Budget has also underlined the government's plan for a sustainable economic revival as it proposed initiatives that favour digitisation of the sector and strengthening of infrastructure. The Budget has also introduced policies that support the survival and growth of MSMEs.

"The Gati Shakti scheme's focus on sustainable growth and digitisation looks extremely promising. The proposed unified logistics interface platform will accelerate the digitisation of the logistics sector in the country. It will help reduce paperwork and aid better logistics and supply chain management. Indian Railways' One Station One Product plan to provide capable logistics services to farmers and MSMEs will ensure that local businesses overcome the existing bottlenecks in the supply chain," Nahata added.

Sudhir Unnikrishnan, Senior Vice President and Managing Director of India, Blume Global, said, "Given that India's supply chain and logistics costs currently account for 14 per cent of the country's GDP (compared to the global average of approximately 8 per cent), this is a great move and will bring India closer to the world standards."

Unnikrishnan also welcomed the mega logistic parks and said, "it will not only generate enormous employment and boost the economy but also make the supply chain leaner by making it a one-stop-shop for multi-modal transport, storage, customs clearance, workshops, yards, parking and much more."

It is worth mentioning that Union Road Transport and Highways Minister Nitin Gadkari had recently announced that around 35 multi-modal logistics parks would come up in the country under the Bharatmala project.

Source: IANS

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By Venkatachari Jagannathan

Chennai, Feb 3 (SocialNews.XYZ) Rolling out 400 Vande Bharat Express trains is about Rs 40,000 crore of business coupled with jobs and other spin-off benefits, said senior officials --present and past -- of Indian Railways

Presenting the Union Budget for 2022-23, Indian Finance Minister Nirmala Sitharaman said 400 new energy efficient Vande Bharat trains will be introduced in three years.

The Vande Bharat Express is a semi-high speed train designed, developed and built by the Integral Coach Factory (ICF) at a frugal outlay of Rs 100 crore.

The Indian Railways officials preferring anonymity told IANS that 400 Vande Bharat trains over the next three years is not just headline catching announcement. It is about Rs 40,000 crore business opportunity that would also create 15,000 jobs and several spin -off benefits.

Presently there are only two Vande Bharat trains that are running -- Delhi to Varanasi and Delhi to Katra.

"The trains without a pair are running six days a week without a breakdown till date since they were pressed into service a couple of years back. Perhaps Vande Bharat Express is the first train that is run without a pair," a senior official at ICF told IANS with pride.

It is one classic example of 'Make in India' and far cheaper than similar trains that are rolled out by foreign companies.

The train has only about 15 per cent import content which will further go down if production volumes increase, officials told IANS earlier.

An ICF official said the third prototype is getting delayed due to production bottlenecks and logistical challenges due to the Covid-19 pandemic.

However, how the government is going to achieve its target of 400 Vande Bharat Express trains over the next three years is the Rs 40,000 crore question.

While it is really an ambitious target, it can be achieved in a staggered manner with the government giving better clarity on its plans, officials said.

Indian Railway Minister Ashwini Vaishnaw said the upgraded Vande Bharat train is expected to be ready for tests in April and commercial production is expected to start in August/September, 2022.

"I would think that a more realistic target of say 100-150 trains in three years would have been better. This target itself would need very concerted and committed action by railway executives, particularly at ICF," Sudhanshu Mani, retired General Manager, ICF and the Creator of Vande Bharat Express told IANS.

He said, commercial production and necessary testing of the upgraded train is expected to start only in September 2022 and hence the target should be realistic.

"Rolling out the trains in large numbers may not be an issue. But where are they going to be deployed? The routes also have to be finalised," Mani added.

Continuing further Mani said ICF should start working on Vande Bharat trainsets, including the sleeper version (code named Train 19) and 300 units of aluminium body trainsets (code named Train 20).

"There can be a foreign partner for rolling out aluminium body trains. In 5/6 year's time 400 trains can be there," he remarked.

When pointed out that the train could be rolled out by other coach manufacturing facilities in the country Mani said: "Initially only ICF should roll out as they understand the technology and other aspects. Spreading out the production to other units will result in quality issues."

Concurring with him, a senior official not wanting to be quoted told IANS: "Only ICF should make it. It needs special skill sets and trained people are not available in other units."

Officials also said spreading out the manufacturing not only would result in quality issues, but the ultimate death of the train that is successfully running without a hitch six days a week for the past couple of years.

While ICF would initially roll out the trainsets, the other units can take care of the maintenance works and acquire the production knowhow.

The other question is the availability of the vendors. Unless the government gives a clear roadmap, vendors may not ramp up their production capacity, officials said.

"The supply chain will take time to gear up. They can supply only at a steady rate. Out of the 400 trains, during the first year only 20 trains can be rolled out and 380 trains in the remaining two years is not possible," the official added.

Further vendors and ICF officials are reluctant to touch the Vande Bharat train project after the witch hunt in the form of vigilance enquiry that was conducted and concluded recently without finding any discrepancy.

According to officials, there needs to be long term contracts -- say 60 trains for the next 10 years -- only then vendors can set up production facilities.

"Tenders and procurement process should be done in such a way that vendors can participate without worry," they added.

(Venkatachari Jagannathan can be contacted at v.jagannathan@ians.in)

Source: IANS

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New Delhi, Feb 3 (SocialNews.XYZ) The Union Budget gains applause for digitalization of education and making it accessible at the grassroots level. Still, many believe more could have been done to elevate the quality of education as well.

The leading names among the country's higher education fraternity welcomed the Union Budget 2022, announced by Finance Minister Nirmala Sitharaman on February 1. The sector appreciated the budget being in line with promoting human capital through digital tools such as the 'one class one TV channel' programme proposed under the PM e-Vidya scheme.

It laid out a progressive vision the Government holds for capitalizing on India's demographic advantages by suggesting a digital university, creating a conducive environment for inter-university collaborations, and introducing a number of skill development programmes. The Union budget 2022-2023 has allocated Rs 63,449.37 crore to the Department of School Education and Literacy, an increase of about 6.6 per cent (Rs 9,000 crore) over the current financial years. It sets a straight road for the Government to achieve its long-term mission of increasing the employability of the country's youth by promoting upskilling, reskilling and several learning measures equipping them with new-age skills.

Dilip Puri, Founder & CEO, Indian School of Hospitality, appreciated the move stating, "We welcome the new initiatives introduced by the Government in the Union Budget 2022 to revive and boost our economy. The Government has identified areas that need financial assistance and support, and a clear focus is laid on the education sector. The setting up of digital universities is a progressive move by the Government - by reaching out to every student in the remote corners of our country, they will give them access to education by collaborating with world-class institutes and educators. We hope the execution comes through swiftly and accelerates the growth of edtech. We are also delighted that the Government showed specific interest to promote and facilitating upskilling and reskilling programmes. We hope through continuous skilling avenues we are able to direct our efforts towards skilling aspirants and increase employability in the hospitality sector."

Shishir Jaipuria, Chairman FICCI Arise and Chairman Seth Anandram Jaipuria Group of Educational Institutions, also commended the government's efforts in aligning the budget provisions with the progressive elements of National Education Policy 2020.

Shishir Jaipuria said, "The Union Budget 2022 takes forward the vision of universalizing quality education as enshrined in the National Education Policy 2020. The decision to expand the PM e-VIDYA scheme to 200 TV channels and to also develop high-quality e-content in all spoken languages will benefit the students of grades 1 to 12, who suffered learning loss due to the closure of schools during the Covid-19 pandemic.

"The formation of Digital University, as announced in the budget, will be a laudable initiative. The Digital University will help to make world-class education accessible in different Indian languages to all students, even in far-flung areas. The simultaneous proposal to train teachers to build their competency and empower them to develop quality e-content will ensure better learning outcomes. I welcome the move to set up 750 e-labs in science and mathematics and 75 skilling e-labs that will nurture scientific temperament and critical thinking skills important for 21st-century learners.

"Going beyond the e-learning initiatives, the government has rightly decided to designate five academic institutions as 'centres of excellence to deliver courses in urban planning and design. The move will take forward the vision of India-specific urban development. The budget 2022 is aimed at providing a major push to e-learning, reduce learning gaps and make education inclusive."

Niranjan Hiranandani, Provost - HSNC University appreciated the government's construct of a well-rounded budget, promoting equal accessibility of education and growth mindset among students, irrespective of their backgrounds.

Hiranandani said, "Industry lauds & welcomes the thrust to the digital ecosystem while focussing on building and upgrading the digital infrastructure for quality education. Setting up of digital universities will enhance the availability of education to the rural students following the hub and spoke model. With easy access to education in regional language, every student will get an opportunity to empower and equip themselves.

"Moreover, measures for quality e-content appear promising to educate teachers effectively for better e-teaching outcomes. Besides, there is a surge in the scope of personalized learning, especially in the digital ecosystem. The budget also puts required emphasis on skilling, which makes an individual employable and sustainable. The skilling courses will not just encourage learners to apply critical thinking and creativity but also make them industry-ready, which is evidence of shaping the youth of India for a better future."

Understanding the need for skill-based education, Bikram Agarwal, CFO, Seth Anandram Jaipuria Group of Educational Institutions, praised the budget offerings.

Agarwal said, "The most important takeaway of the Union Budget 2022 is the slew of decisions that have been taken to empower the digital learning ecosystem in the country. The formation of Digital University and the initiative to create quality e-content in all Indian languages will make learning inclusive for all. Besides these moves to nurture academic rigour, the decision to launch the DESH-Stack e-portal will help to skill and upskill learners.

"At the same time, the Government aims to improve learning at Agriculture University by revising and revamping the syllabus to address the practical needs of modern agriculture. I also appreciate the decision to involve academia in defence research and development for better designing and development of military platforms and equipment. The scope of this budget is quite wide. It touches upon several aspects of the education sector and is to be lauded."

While many applauded these moves, some believed that the government could have done more. The budget critics felt that this year saw lesser investments and initiatives relative to the last year's budget for promoting quality education across all strata of society.

Reacting to the budget, Professor Tarun Jain, Associate Professor of Economics, IIM Ahmedabad, said, "The Finance Minister has mentioned supplementary teaching through additional TV channels (PM eVidya) to make up for the education loss of the last two years. This is minuscule given the tremendous learning loss that our children have experienced. Significant investments in improving school quality are critical for ensuring that our demographic dividends are actually realized. This has to run against the reality that barely 8 per cent of rural students and 23 per cent of urban students have access to the Internet.

Even when students have Internet access, the quality of online education remains poor. We have to benchmark the budget commitments against the aspirations of the Indian people. High-quality education is both a critical component of what young people hope for, and also have some of the highest returns on investment in the economy. Thus, the Government should consider boosting investments in public education considerably."

Overall the Union Government received a favourable response for its budgetary recommendations to promote skill-based learning powered by digitalization. From short-term skilling programmes to upskilling, reskilling, apprenticeships and lifelong learning, a wide range of training opportunities have been put across by setting up thousands of skill centres and special training centres. The budget ensured that the Government's focus on skill training would continue to make youth employable, further contributing to the country's growth and economic health.

Source: IANS

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By Sanjeev Sharma

New Delhi, Feb 2 (SocialNews.XYZ) An estimation of decadal tax buoyancy (total tax revenue and other individual tax revenues) using double log model reveals that tax buoyancy of total tax revenue and income tax and corporation tax has declined in the current decade (2010-11 to 2019-20) compared to the last decade (2000-01 to 2009-10), the SBI said in a research report.

The most critical situation is regarding the corporation tax buoyancy and income tax buoyancy which is the lowest in five decades and three decades, respectively.

Thus, the decline in tax revenue in the current decade is more to do with corporate tax shortfall rather than others and this result is indeed an eye-opener, the report said.

Against this background with corporate taxes now picking up significantly, it is likely that tax buoyancy will be overachieved. For FY23, as per the budget estimates the tax buoyancy is expected to be 0.9. The largest buoyancy is projected for income tax (at 1.24) followed by corporation tax and customs.

The tax buoyancy (based on gross tax revenues) for FY23 is reasonably estimated at 0.9 as nominal GDP growth is projected by 11.1 per cent while gross tax revenues are projected to grow by 10.7 per cent. For FY22 (RE) the tax buoyancy is estimated at 1.4.

The Centre's gross tax revenue for FY22 has been revised upwards to Rs 25.6 lakh crore (24.1 per cent increase over FY21), which is Rs 3 lakh crore more over the Budget estimate for FY22. All the heads under gross tax revenue have seen an upward revision from the Budget estimates of FY22 as the economy recovered following the slowdown due to Covid-19.

The report said it also estimated the long-run and short-run buoyancy for a 50-year period (1970-2020) based on ARDL model. It found that the long-run and short-run buoyancy of total tax revenue are 1.01 and 0.98, respectively. The speed of adjustment, which is generally negative, measures the speed of adjustment towards the long-run equilibrium. The speed of adjustment for the total tax revenue is came out at -- 0.33, i.e., adjustment towards its long-term buoyancy is quite moderate.

(Sanjeev Sharma can be reached at sanjeev.s@ians.in)

Source: IANS

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New Delhi, Feb 2 (SocialNews.XYZ) The Finance Bill 2022 has proposed to cap the surcharge on long-term capital gains (LTCG) at 15 per cent.

While such surcharge is already fixed at 15 per cent for capital gains arising from on market sale of equity shares and certain other securities, capital gains arising from any other capital asset is subject to surcharge as high as 37 pert cent, depending on the total income of the taxpayer.

Accordingly, capital gains arising to an HNI's on sale of immovable property, unlisted shares, gains arising from off market sale of listed shares and even alienation of shares of foreign company are all amenable to the higher surcharge ranging up to of 37 per cent.

Kunal Savani, Partner, Cyril Amarchand Mangaldas, said that in order to provide relief to such HNIs/investors earning capital gains income, the Bill proposes to cap the surcharge on long-term capital gains arising from any capital asset to a maximum of 15 per cent.

This would result in effective capital gain rates reducing from 28.5 per cent to 23.92 per cent (or 14.25 per cent to 11.96 per cent).

"Having said the above, it would be pertinent to note that such cap has only been proposed to be placed on long-term gains. Short-term gains on such assets would continue to be subject to surcharge ranging up to 37 per cent," he added.

Source: IANS

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Hyderabad, Feb 2 (SocialNews.XYZ) The Union Budget 2022-23 came as a big shock for Telangana as all its demands for additional funds and new projects were ignored.

The budget speech of Finance Minister Nirmala Sitharaman also had no mention of the commitments made to the state under Andhra Pradesh Reorganisation Act 2014.

The state had high hopes from the budget and it had demanded allocation of Rs 60,000 crore for various projects. It was for this reason the budget evoked angry reaction from Chief Minister K. Chandrasekhar Rao, who termed it as 'golmal' and 'useless' budget.

Telangana's long pending demand for national status to either Kaleshwaram or Palamuru-Rangareddy lift irrigation projects was again ignored by the Centre.

As per the budget estimates, Telangana will get Rs 17,165 crore during 2022-23 as its share in the central taxes. This is Rs 3,175.85 crore higher than the 2021-22 budget estimates and Rs 1,240.14 crore higher than the revised estimates.

However, there was no allocation to the state in addition to the state's share in central taxes, funds for local bodies as per the recommendation of Finance Commission and allocation for centrally sponsored schemes.

With the Centre imposing a huge cut of Rs 25,000 crore on allocation of MGNREGS across the country, the flow of funds to the state under the rural employment guarantee scheme is likely to be badly hit.

Telangana has 1.19 crore workers registered under the scheme and they are provided work for 100 days in a year with minimum daily wages of Rs 237. With the cut in allocation the state may be forced to cut the number of workers or work days under the scheme. For the current financial year, the state has received Rs 3,053 crore under the central scheme.

The Centre also did not take the recommendation of 15th Finance Commission to allocate Rs 2,362 crore for state-specific grants for four years from 2022-23 into consideration. As per this recommendation, the state was expecting Rs 471 crore every year.

The state has also not received arrears towards the special assistance for development of backward areas under AP Reorganisation Act. For the last three years, the state government had been demanding release of Rs 24,205 crore as per the recommendation of NITI Aayog.

Similarly, the demand to allocate funds for Mission Bhagiratha and Mission Kakatiya as per the recommendation of NITI Aayog was once again ignored. Ahead of the budget, state finance minister T. Harish Rao had written to union finance minister Nirmala Sitharaman seeking Rs 5,205 crore for Mission Kakatiya, Rs 19,000 crore for Mission Bhagiratha as recommended by NITI Aayog.

Under Mission Kakatiya, the government has taken up revival of irrigation tanks and while Mission Bhagiratha is aimed at supplying drinking water to every house by laying pipelines.

Though the Telangana government has been urging the Centre for last seven years to fulfill the commitments made in AP Reorganisation Act, 2014, the same were ignored once again.

Under the Act, the Centre had promised railway coach factory at Kazipet, a tribal university and a steel factory at Bayyaram.

Telangana's repeated demand for revival of Information Technology and Investment Region (ITIR) was once again ignored. In 2014, the then Congress-led UPA government had sanctioned ITIR for Hyderabad but after BJP-led NDA came to power, the project was shelved.

The state had also demanded setting up of IIM, Navodaya Vidayalayas, six industrial corridors, funds for Kakatiya mega textile park, Hyderabad Pharma City and various other urban infrastructure projects.

The Telangana Rashtra Samithi (TRS) government has been demanding that a progressive state like Telangana should be encouraged with allocation of funds and projects. The party leaders said once again the state was given a raw deal.

Ahead of the budget, Telangana ministers wrote a series of letters to Sitharaman seeking funds and projects for the state.

Minister for industries, information technology, municipal administration and urban development, K.T. Rama Rao, finance minister T. Harish Rao and tribal welfare minister Satyavathi Rathod wrote to Sitharaman and other union ministers seeking nearly Rs 60,000 crore to Telangana in the budget.

Rama Rao had sought Rs 7,800 crore for urban development, Rs 954 crore for textiles and handlooms, R. 14,000 crore for Hyderabad Pharma City.

State Planning Commission vice-chairman B. Vinod Kumar wrote to the Railway Minister seeking completion of pending railway projects and announcement of new railway lines for Telangana in the budget.

Source: IANS

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By Sanjeev Sharma

New Delhi, Feb 2 (SocialNews.XYZ) The budget has tried to plug the incentives for bonus and dividend stripping. This can change the behaviour of a certain class of investors.

Union Budget 2022-23 figures pose ambiguities and asymmetric financial market reactions, Anand Rathi Share and Stock Brokers said in a report.

The report said measures such as re-casting of off- and on-budget items and changes in the mechanism for resource transfer to states created ambiguities by making strict comparison of budget data for FY23 difficult with past years.

These tend to overstate government spending and, coupled with conservative receipt figures on tax, non-tax and non-debt capital ballooned fiscal deficit and market borrowings. This led to a marked spike in bond yields though lack of 'populist' measures and focus on growth positively impacted equities on the budget day.

There seems to be distinct conservatism in the budget in terms of receipts, the report said. At the same time, for capital outlay, while the budget outlay has been increased impressively, there has been a significant reduction in extra budgetary allocations. Consequently, the overall allocation for capital spending is far less impressive, the report said.

"Yet, bringing in off-budget items into budget has optically increased the fiscal deficit", it added.

The hardening of bond yields can have a significant negative impact on the Indian equity market. Yet, the equity market closed positive on budget day despite the hardening of bond yields. The pro-growth, pro-investment, pro-infrastructure stance of the budget seems to have lifted equity market sentiment. This, however, can reverse if bond yields continue to harden.

The policies of the government since late 2019 have favoured investment over consumption. The current budget announcements continue with the same stance. The impact of the budget is likely to be positive on sectors such as infrastructure, construction, cement, logistics, and green energy. The ambitious plan to boost private investment is also positive for banks. In contrast, the budget provides little positive news for consumption-oriented sectors, it added.

(Sanjeev Sharma can be reached at sanjeev.s@ians.in)

Source: IANS

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By Sanjeev Sharma

New Delhi, Feb 2 (SocialNews.XYZ) Measures to boost private consumption are limited in the Union Budget. Personal income tax related measures such as tax cuts, hike in standard deduction, and higher MGNREGA spending would have made an immediate positive impact on consumption, Morningstar Investment Adviser India said in a report.

The government continues to focus on boosting capex to support economic growth. This should also help to crowd-in private capex which is lagging.

Equity markets reacted positively to the budget as sectors such as capital goods, steel, cement and healthcare are expected to gain from the measures announced. Thrust on capital expenditure led by government, improving export attractiveness, low cost of credit, expectations of increased consumer spending, and housing market recovery with improving affordability levels are expected to support high corporate earnings growth (20-24 per cent) expectations for FY2022-24. Much of this would be dependent on the revival of private consumption which continues to remain sluggish.

After hitting lows in March 2020 at the onset of the pandemic, markets witnessed a strong recovery largely driven by cyclical sectors, making valuations look stretched, particularly for mid and small-cap equities, the report said.

However, markets have witnessed some correction recently on concerns over faster tightening by the US Fed to combat a surge in inflation amid persistent supply-chain disruptions.

Our valuation implied return estimates for markets and asset classes, when compared to its long term or fair return, helps us decide whether the market/asset class is attractively priced. At the current juncture, we continue to favor domestic large cap equities over mid and small cap equities, where we are slightly underweight as compared to our neutral/benchmark allocation, it said.

The revised Fiscal Deficit in the current year is estimated at 6.85 per cent of GDP as against BE of 6.8 per cent. The Fiscal Deficit in FY23 is estimated at 6.44 per cent of the GDP. Higher than expected government's net market borrowing programme for FY23 at Rs 11.69 lakh crore vs Rs 8.76 lakh crore for FY22 has negatively impacted G-sec yields. The RBI may need to re-introduce measures such as OMO purchases, etc, to manage yields. In the near term, the 10-year benchmark G-sec yield may continue to trade at elevated levels in absence of any intervention by the RBI.

(Sanjeev Sharma can be reached at Sanjeev.s@ians.in)

Source: IANS

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By Sanjeev Sharma

New Delhi, Feb 2 (SocialNews.XYZ) Only India and Bangladesh have income tax limits that are much higher than the average income.

This implies that there is indeed food for thought for lowering direct taxes but ensuring such a system is equitable and not regressive, SBI said in a Post-Budget research.

There is always a lot of hullaballoo regarding the income tax structure in India. It is true that in some countries, including India, the top marginal personal income tax rate exceeds the corporate income tax by a significant margin, providing strong incentives for taxpayers to choose the corporate form of doing business for purely tax reasons.

Good tax policy should ensure that the top marginal personal income tax rate does not differ materially from the corporate income tax rate, SBI said.

However, on the other hand, India's per capita GDP in FY21 stands at Rs 1.46 lakh, while the taxable income threshold is Rs 2.5 lakh. Which then means the average Indian is not required to pay an income tax. In many countries around the world, that income tax limit is below the average income of its people.

Only India and Bangladesh have income tax limits that are much higher than the average income.

SBI said if growth comes back riding on the spending prowess, the nominal GDP projection may be an underestimate. This may thus provide even some more additional spending room for the Government. Consider this.

The story of increase in household debt during pandemic turned on its head right now with the release of NSO data on January 31, 2022. While the total gross financial savings jumped by a massive Rs 7.1 lakh crore in FY21 (highest ever in any FY), the total financial liabilities increased by only Rs 18,669 crore. In the previous two fiscals (i.e., FY20 & FY21), the cumulative gross financial savings increased by Rs 8.5 lakh crore while during the same period, financial liabilities increased by only Rs 34,000 crore.

The estimated HH debt has now declined from 37.3 per cent in FY21 to 34 per cent in Q1FY22 with the rise in GDP. It thus seems that the household decline may be attributable to risk aversion.

The savings in the form of gold and silver ornaments exhibited decline in FY21 as people choose to save in the form of financial assets. This indicates the changing behaviour of savers.

The Covid-19 pandemic is far more than a health crisis: it has unpredictably changed our whole way of life. As suggested by the analysis of PFCE data, this dramatic scenario has also heavily impacted individuals; consumption patterns. While the consumption on food and non-alcoholic drinks had increased by Rs 3.5 lakh crore in FY21, the spending on categories like 'Transport', 'Clothing and footwear' and 'Restaurants and Hotels' declined by a whopping Rs 6.1 lakh crore. Overall the PFCE declined by Rs 2.83 lakh crore during FY21.

(Sanjeev Sharma can be reached at Sanjeev.s@ians.in)

Source: IANS

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Chennai, Feb 2 (SocialNews.XYZ) It was a moment of great pride for the team that created Vande Bharat trains (also known as Train 18) when Finance Minister Nirmala Sitharaman announced production of 400 trains over the next three years, said the train creator.

Presenting the Union Budget for 2022-23, Sitharaman said 400 new energy efficient Vande Bharat trains will be introduced in three years.

He also hoped that the Integral Coach Factory (ICF) would soon be working on the project of sleeper version of Train 18 christened as Train 19 when they started work on it but was later discontinued by the Indian Railways and the aluminium-bodied energy-efficient Train 20, the project lying in limbo for three years.

"As the creator of the Vande Bharat trains/Train 18, it is a moment of great pride for me and the team which built the first rakes 2018-19," Sudhanshu Mani, retired General Manager, Integral Coach Factory (ICF) told IANS.

Now an independent consultant, Mani added: "It is also a vindication for me and the team as the project had been dragged into an unnecessary controversy since early 2019 and things improved after the new rail minister took over."

Former ICF officials were of the view that importers' lobby were behind the vigilance probe that was initiated in connection with sourcing of items for Vande Bharat Express/Train 18.

According to officials, the realisation of Train 18 by ICF is an achievement similar to Brahmos missile.

Mani said 400 Vande Bharat trains in three years is an extremely ambitious target, and if it happens, he would be the happiest.

"At the same time, I would think that a more realistic target of say 150 trains in three years would have been better. This target itself would need very concerted and committed action by railway executives, particularly at ICF," Mani said.

Concurring with Mani was a senior official of Indian Railway who said 400 Vande Bharat trains in three years seems to be a tall target as the third prototype is yet to be rolled out.

However, a senior official of the Integral Coach Factory (ICF) told IANS that "the third prototype of the train has to be rolled out first and cleared by the Research Design and Standards Organisation (RDSO). Once that is done, production can be streamlined".

Currently, only two trains are in service - Delhi to Varanasi and Delhi to Katra.

The official said the third prototype is getting delayed due to production bottlenecks and logistical challenges due to the Covid-19 pandemic.

The Vande Bharat Express or Train 18 is a semi-high speed train designed, developed and built by the ICF at an outlay of Rs 100 crore.

It is one classic example of Make in India and far cheaper than similar trains that are rolled out by foreign companies.

The train has only about 15 per cent import content which will further go down if production volumes increase, officials had told IANS earlier.

According to Alain Spohr, Managing Director, Alstom India & South Asia, the highlight of the budget was the announcement to introduce 400 new Vande Bharat trains, introduction of the state-of-the-art KAVACH TCAS signalling systems over 2,000 kms of railway network, larger investments to provide for sustainable and integrated urban transport systems.

The total budget estimates of Rs 23,875 crore for MRTS & Metro Projects will incentivise faster implementation of projects and the standardisation of metro design systems will provide the much-needed stability for manufacturers, Spohr said.

The development of 100 Cargo terminals over the next 3 years will also improve India's competitiveness in faster and cleaner logistics and freight movement by rail.

Introducing productivity linked incentive (PLI) scheme for railway manufacturers and exporters promoting Make-in-India would have been ideal for fast-tracking the implementation of projects and supporting the manufacturing ecosystem, Spohr added.

Source: IANS

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New Delhi, Feb 1 (SocialNews.XYZ) Indian companies receiving dividend payments from their foreign-based subsidiaries will be taxed more than the current concessional tax rate of 15 per cent, the Budget document showed on Tuesday.

At present, a concessional tax regime on foreign sourced dividends exists in India. This regime will be withdrawn.

"Clause 27 seeks to amend Section 115BBD of the Income-Tax Act relating to tax on certain dividends received from foreign companies," the Finance Bill 2022-23 read.

The said section, inter-alia, provides that in case of an Indian company whose total income includes any income by way of dividends declared, distributed or paid by a foreign company, in which the said Indian company holds 26 per cent or more in nominal value of the equity share capital, such dividend income shall be taxed at the rate of 15 per cent.

As per the Budget document, a new sub-section will be inserted to remove this provision to the assessment year beginning April 1, 2023.

"This amendment will take effect from April 1, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and the subsequent assessment years," it said.

According to Rajat Mohan, senior partner at AMRG & Associates: "Inward repatriation in the form of dividends from foreign subsidiaries of Indian multinationals will become dearer.

"New-age startups with headquarters in India may plan to move out holding companies to international jurisdictions from where repatriation and investments are more tax efficient."

Source: IANS

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New Delhi, Feb 1 (SocialNews.XYZ) The Central government plans to launch the next phase of 'Ease of Doing Business' as well as 'Ease of Living', Finance Minister Nirmala Sitharaman said on Tuesday.

In her Budget speech to Parliament, the Finance Minister stated: "For the 'Amrit Kaal', the next phase of Ease of Doing Business, EODB 2.0 and Ease of Living, will be launched."

"In our endeavour to improve productive efficiency of capital and human resources, we will follow the idea of 'trust-based governance'."

According to Sitharaman, the new phases will be guided by an active involvement of the states, digitisation of manual processes and interventions, integration of the central and state-level systems through I-T bridges, a single point access for all citizen-centric services, and a standardisation and removal of overlapping compliances.

"Crowdsourcing of suggestions and ground level assessment of the impact with active involvement of citizens and businesses will be encouraged."

Besides, the Finance Minister stated that as a result of our government's strong commitment for 'minimum government and maximum governance' over 25,000 compliances were reduced and 1,486 Union laws were repealed in recent years.

This, she stated, is the outcome of the government's trust in the public along with measures such as 'Ease of Doing Business' (EODB).

Besides, she proposed to expand the scope of the single window portal -- Parivesh -- for all green clearances.

"The scope of this portal will now be expanded, to provide information to the applicants. Based on location of units, information about specific approvals will be provided," she said.

"It will enable application for all four approvals through a single form, and tracking of the process through 'Centralized Processing Centre-Green' (CPC-Green)."

The portal was launched in 2018 to reduce the time required for green approvals. Furthermore, Finance Minister proposed that states will be encouraged to adopt 'Unique Land Parcel Identification Number' to facilitate IT-based management of land records as efficient use of land resources is a strong imperative.

The facility for transliteration of land records across any of the 'Schedule VIII' languages will also be rolled out. In addition, she proposed a completely paperless, end-to-end online 'e-Bill System' to be launched for use by all Central ministries for their procurements.

The system is expected to enable the suppliers and contractors to submit online their digitally signed bills and claims and track their status from anywhere.

Source: IANS

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New Delhi, Feb 1 (SocialNews.XYZ) The Budget 2022-23 on Tuesday has provisions for faster green clearances and expanding scope for single window clearances for projects that are to be cleared by the Environment Ministry and also talks of bringing in legislative changes to promote agro-forestry.

The proposals have evoked mixed reactions from experts.

"A single window portal, PARIVESH, for all green clearances was launched in 2018. It has been instrumental in reducing the time required for approvals significantly. The scope of this portal will now be expanded, to provide information to the applicants. Based on the location of units, information about specific approvals will be provided. It will enable application for all four approvals through a single form, and tracking of the process through Centralised Processing Centre-Green (CPC-Green)," said Finance Minister Nirmala Sitharaman in her Budget 2022-23 speech.

"The policies and required legislative changes to promote agro forestry and private forestry will be brought in. In addition, financial support will be provided to farmers belonging to Scheduled Castes and Scheduled Tribes, who want to take up agro-forestry," she said.

The Ministry of Environment, Forests & Climate Change has already brought in a slew of amendments and also proposes to make massive changes to multiple foundational laws related to the environment - all to the detriment of the cause, experts have said.

Environmentalists are already up in arms over the changes proposed to the Forest (Conservation) Act, the Wildlife (Protection) Act and the amendments to the Biodiversity Act.

Data from the India State of Forest Report 2021 released last month has already been subjected to scrutiny as the forest cover has counted all commercial plantations and agro-forestry projects.

Kanchi Kohli, a researcher with Centre for Policy Research (CPR), said: "The idea of single window clearances creates the illusion that industrial and infrastructure projects will get all environmental approvals together. In effect, this assurance only allows for the ease in submitting and tracking the paperwork before the Environment Ministry. All projects will need to go secure separate approvals for forest diversion, environmental impacts or impacts on wildlife, which require necessarily detailed assessments and appraisals."

Agro-forestry, she said, may be an important measure to improve farm incomes and add to the tree cover through plantations. "However, a large scale and policy driven exercise to increasing monoculture plantations or creating carbon sinks can be directly at odds with biodiversity, livelihood rights and food security. This is especially when carbon forestry leads to creation of conservation enclosures that has to necessarily curtail access and use of areas designated as sinks," Kohli observed.

Stating that there is no need to combine the forest cover definition and agro-forestry, International Forum for Environment, Sustainability, and Technology (iFOREST) CEO Chandra Bhushan, in fact, welcomed that there would be a legal backing for agro-forestry.

"India imports $40 billion worth of wood and wood products every year. Farmers need income and we need to save forex. So, agro forestry is actually an extremely good policy both for farmers and the economy," he said.

"A tree planted outside a forest is a tree saved inside a forest. But if the government is mixing it, then there should be public pressure on the Forest Survey of India to improve the reporting," he said.

Some experts saw the infra growth as a positive push. Pointing out that the Budget's push towards infrastructure is a huge opportunity for making climate resilient development, TERI Senior Fellow, Earth Science and Climate Change, Saurabh Bhardwaj said: "With the Budget pegging India's economic growth at plus 9 per cent this fiscal and giving a concerted push towards infrastructure, making such development climate resilient is a huge opportunity to further safeguard the economic losses due to impending climate change impacts. This growth budget needs to be resilient as well."

While Prime Minister Narendra Modi had, at the annual climate conference last November, presented 'Panchamrit' or five 'nectar' elements that were India's promised action plan for combating climate change, Dr Anjal Prakash, Research Director and adjunct Associate Professor at the Bharti Institute of Public Policy, Indian School of Business, however, said: "There is a miss in creating institutions for net zero delivery in India.

"Presently, no single ministry can deliver Modi's Panchamrit, the five nectar elements. Climate scientists have been demanding that there should be a separate Ministry of Climate Change, which will give the impetus needed to the PM's pledge of net zero by 2070."

Source: IANS

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New Delhi, Feb 1 (SocialNews.XYZ) Slamming the Union Budget 2022-23, Delhi Deputy Chief Minister Manish Sisodia on Tuesday said that the Centre has not even allocated a single penny to the Municipal Corporation of Delhi (MCD).

"The Centre never allocates money to the Delhi government, but it should at least give something to MCD ruled by its own (BJP) party. Total Rs 69,421 crore have been assigned to the rest of the civic bodies in the country, except that of Delhi's," he said in a virtual press conference this evening.

Noting that it is the Bharatiya Janta-led MCD which is always crying over not having enough money, he said: "The Central government should have given something to MCD to improve its condition."

"Meanwhile, the Delhi government has been getting only Rs 325 crore from the Centre for last 21 years, whereas the rest of the states/Union Territories get Rs 8,16,000 crores. I mentioned this to the Union Finance Minister in a meeting but nothing has been done about it lately," Sisodia, who is also the state Finance Minister, said.

He also termed the Budget "anti-farmer", "anti-education", "anti-health", and "anti-employment".

Terming Budget 2022-23 "disappointing", Delhi Chief Minister Arvind Kejriwal said that it has nothing to ease the burden of common masses hit by the rising inflation amid Covid-19.

Source: IANS

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New Delhi, Feb 1 (SocialNews.XYZ) Regulations around tax incentives and Customs rationalisation will help capture the shift in the manufacturing supply chain from China to India, Primus Partners said in a note.

The Union Budget announced on Tuesday that the period of commencement of manufacturing for newly-incorporated manufacturing entities has been extended up to March 31, 2024 for availing concessional tax regime of 15 per cent.

Similarly, the period of incorporation for startups has been extended to March 31, 2023 for availing tax incentive in three consecutive years out of 10 years from incorporation.

The proposal to gradually phase out 350 Customs exemptions and inclusion of rates in the Customs tariff schedule was also announced in the Union Budget.

Incentives around taxation and Customs rationalisation are critical tools to achieve Make in India and Aatmanirbhar India outcomes, the note said.

Extension of the 15 per cent concessional tax regime for new manufacturing entities and tax incentives for startups is a right step in making India an attractive destination vis-a-vis global counterparts, said Shavan Shetty, Managing Director, Primus Partners.

The Union Budget 2022-23 focuses on preparing India@100 with an eye on big investments -- both by the government and the private sector.

The top headlines are around economic growth, job creation, agricultural support, greater investments in creating a digital society, improvement in ease of doing business and further expansion of the Aatmanirbhar Bharat programme.

Allocation to MNREGA in this year's Budget at Rs 73,000 crore is down 26 per cent, while allocation to Pradhan Mantri Awas Yojana at Rs 48,000 crore is flat, ASK Investment Managers said in a note.

At the same time, there has been normalisation of food and fertiliser subsidy, which is down 27 per cent.

Source: IANS

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New Delhi, Feb 1 (SocialNews.XYZ) The Centre proposes to impose one per cent Tax Deduction at Source (TDS) on payments for transfer of virtual digital assets above a "monetary threshold", Finance Minister Nirmala Sitharaman said in her Budget speech.

However, the threshold was not mentioned during the Budget speech.

The TDS was announced in order to capture the transaction details, Sitharaman added.

Besides TDS, gifting of virtual digital assets was also proposed to be taxed in the hands of the recipient.

In an apparent bid to disincentive virtual digital assets, the government on Tuesday announced a 30 per cent tax on any income from the transfer of virtual digital assets, and specified that no deductions and exemptions would be allowed.

Stressing that since there has been a phenomenal increase in transactions in virtual digital assets, Sitharaman, presenting the Budget 2022-23, said that the magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.

"No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition. Further, loss from transfer of virtual digital assets cannot be set off against any other income," she said in her speech.

There are an estimated 15 to 20 million crypto investors but there is no clarity on the size of the Indian crypto market.

Source: IANS

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Amaravati, Feb 1 (SocialNews.XYZ) Andhra Pradesh's ruling YSR Congress Party (YSRCP) has termed the Union Budget 2022-23 "disappointing".

The party said they had expected a booster dose but it appeared like all style but no substance.

YSRCP Parliamentary Party leader V. Vijayasai Reddy said the allocation of Rs 1 lakh crore for capital expenditure seems huge but when it comes to the state's share as per the set formula, Andhra Pradesh gets just 4.047 per cent which works out to only Rs 4,000 crore.

In case of the FRBM as well, while the set norm is not more than 3 per cent of the GSDP for states, there is no parity with respect to Centre on the borrowings. The state is still bearing the brunt of wrong decisions of the previous government, he said.

Citing the statistics, he said while the fiscal deficit of Union Budget was 9.3 per cent for 2020-21, 6.9 per cent for 2021-22, and is estimated at 6.4 per cent this year, Andhra Pradesh registered a deficit of 5.48 per cent and 3.94 percent during the past two years and yet there are restrictions on FRBM.

Reddy said that the proposed budget for 2022-23 is nearly Rs 40 lakh crore, with an increase of Rs 4.5 lakh crore than that of the last fiscal and the Country's growth rate for 2021-22 is at 9.2 percent. He said this is much better than any other country, especially while fighting Covid. Further, he appreciated the increase in capital expenditure by 35 per cent than the previous allocations, where Rs 7.5 lakh crores has been allocated in the current budget which is 20 per cent of the budgetary allocations.

On interlinking of rivers Krishna-Godavari, Krishna-Penna, and Penna-Cauveri, he said that the state government had already interlinked Godavari-Krishna Rivers with its own funds and thus, appealed to compensate the state.

The state government has been pushing for three development projects which include a dedicated freight corridor from Kharagpur to Vijayawada, freight corridor connectivity to ports in Andhra Pradesh andthe Bhogapuram National Highway, but no announcements were made in this regard, he said.

Similarly, he mentioned that no announcements were made towards the development in healthcare sectors and no attention was paid towards research and completely ignored health insurance for the middle class people.

In regard to agriculture, he said that the Centre had completely ignored increasing the allocations of PM Kisan and failed to include tenant farmers under the scheme and also ignored paddy procurement policy and MSP for crops. The YSRCP leader stated that the shortfall in GST compensation of states was not addressed in the budget and appeals to extend the compensation period were ignored.

He welcomed an increase of the tax deduction limit of state employees to 14 percent, and duties' reduction on shrimp production and aquaculture.

The YSRCP, however, opposed the privatisation of profit-making public sector units like the LIC, HPCL, VSP and the like. He said there was no encouraging mention of MGNREGS. The budget also has no mention of health insurance to the middle income group which forms over 56 per cent.

Source: IANS

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By Sanjeev Sharma

New Delhi, Feb 1 (SocialNews.XYZ) The Union Budget has introduced a provision to provide that in case of transfer of an immovable property (other than agricultural land), TDS is to be deducted at the rate of one per cent of such sum paid or credited to the resident or the stamp duty value of such property, whichever is higher.

Section 194-IA of the Act provides for deduction of tax on payment on transfer of certain immovable property other than agricultural land. Sub-section (1) of the said section provides for deduction of tax by any person responsible for paying to a resident any sum by way of consideration for transfer of any immovable property (other than agricultural land) at the time of credit or payment of such sum to the resident at the rate of one per cent. of such sum as income-tax thereon.

Sub-section (2) provides that no deduction of tax shall be made where the consideration for the transfer of an immovable property is less than Rs 50 lakh.

As per the provisions of the said section, TDS is to be deducted on the amount of consideration paid by the transferee to the transferor.

This section does not take into account the stamp duty value of the immovable property, whereas, as per the provisions of section 43CA and 50C of the Act, for the computation of income under the head "Profits and gains from business or profession" and "capital gains" respectively, the stamp duty value is also to be considered. Thus, there is inconsistency in the provisions of section 194-IA and sections 43CA and 50C of the Act.

In order to remove inconsistency, it is proposed to amend section 194-IA of the Act to provide that in case of transfer of an immovable property (other than agricultural land), TDS is to be deducted at the rate of one per cent of such sum paid or credited to the resident or the stamp duty value of such property, whichever is higher.

In case the consideration paid for the transfer of immovable property and the stamp duty value of such property are both less than Rs 50 lakh, then no tax is to be deducted under section 194-IA.

This amendment will take effect from April 1, 2022.

(Sanjeev Sharma can be reached at sanjeev.s@ians.in)

Source: IANS

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New Delhi/Chennai, Feb 1 (SocialNews.XYZ) The Department of Atomic Energy (DAE) has asked for an allocation of about Rs 32,342 crore for 2022-23.

In the demand for grants placed in the Parliament as part of the budget papers, the DAE has demanded a fund allocation of about Rs 32,342 crore up from the revised estimates of about Rs 31,301 crore.

The three public sector undertakings under the DAE gets a total of Rs.7,573.12 crore - the Nuclear Power Corporation of India Ltd Rs 7,288.77 crore, the Uranium Corporation of India Ltd Rs 12.35 crore and the Bharatiya Nabhikiya Vidyut Nigam Ltd (BHAVINI) - Rs 272 crore.

The allocation for the Bhabha Atomic Research Centre (BARC) is estimated at Rs 2,918 crore and for Indira Gandhi Centre for Atomic Research (IGCAR) at about Rs 510 crore.

Source: IANS

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New Delhi, Feb 1 (SocialNews.XYZ) India is expected to become a $5 trillion economy by FY26 or FY27 if the 8 per cent GDP growth rate is retained, Chief Economic Advisor, V. Anantha Nageswaran, said on Tuesday.

In the post-Budget press conference held here, Nageswaran said while replying to a question: "If we continue to retain the path of 8 per cent of real GDP growth and if we extrapolate it, we should be a $5 trillion economy in terms of nominal GDP in the Financial Year 2025-26 or 2026-27."

Before the conference, in her Budget speech in the Parliament on Tuesday, Finance Minister Nirmala Sitharaman said that overall, sharp rebound and recovery of the economy is reflective of "our country's strong resilience".

"India's economic growth in the current year is estimated to be 9.2 per cent, the highest among all large economies," she said.

On Monday, the Economic Survey 2021-22 said that India's economy is expected to grow at 8-8.5 per cent in the next fiscal.

According to the Survey, the building back of the economic momentum along with enhanced vaccination drive as well as the likely long-term benefits of supply-side reforms in the pipeline, the Indian economy is in a good position to witness GDP growth of 8.0-8.5 per cent in 2022-23.

"Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending.

"The year ahead is also well poised for a pick-up in private sector investment with the financial system in a good position to provide support to the revival of the economy," the Survey noted.

However, the Survey also pointed out that the global environment still remains uncertain.

Source: IANS

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New Delhi, Feb 1 (SocialNews.XYZ) The Ministry of Education has received a record budgetary allocation for the upcoming financial year. The Ministry has been allocated Rs 1,04,277.72 crore for the financial year (FY) 2022-23. This budgetary allocation witnessed a jump of 11.86 per cent which is Rs 11,053.41 crore higher than the FY 2021-22.

There has been an overall increase of Rs 8,575.71 crore (15.63 per cent) in the budget allocation for Department of School Education & Literacy in the FY 2022-23 from FY 2021-22.

The overall budget allocation in FY 2022-23 is Rs 63,449.37 crore out of which Scheme allocation is Rs 51,052.37 crore and Non- Scheme allocation is Rs 12,397 crore.

The budget allocation for FY 2022-23 in the Flagship Scheme of Samagra Shiksha has increased by Rs 6,333.20 crore from Rs 31,050.16 crore in 2021-22 to Rs 37,383.36 crore in 2022-23.

Budget Allocation for FY 2022-23 for the World Bank aided Scheme of STARS has increased by Rs 65 crore from Rs 485 crore in 2021-22 to Rs 550 crore in 2022-23.

Allocation in KVS has increased by Rs 850 crore (from Rs 6,800 crore in BE 2021-22 to Rs 7,650 crore in BE 2022-23) and in NVS by Rs 315 crore (from Rs 3,800 crore in BE 2021-22 to Rs 4,115 crore in BE 2022-23).

There has been an overall increase of Rs 2,477.7 crore (6.46 per cent) in the Budget Allocation of Department of Higher Education in the FY 2022-23 from FY 2021-22.

The overall Budget Allocation in FY 2022-23 is Rs 40,828.35 crore out of which Scheme allocation is Rs 7,454.97 crore and Non- Scheme allocation is Rs 33,373.38 crore.

Union Minister for Education and Skill Development & Entrepreneurship Dharmendra Pradhan has lauded the Union Budget 2022 as being inclusive, forward looking and aspirational, laying foundation for the Amrit Kaal of the next 25 years.

The Education Minister has hailed the record budgetary allocation to Ministry of Education of Rs 1,04,277.72 crore in the FY 2022-23. The budgetary allocation witnessed the jump of 11.86 per cent.

Expressing his gratitude to Finance Minister Nirmala Sitharaman, he said that the Budget has made several direct interventions like announcing the setting up of a Digital University, allowing foreign universities to run courses in GIFT City, launch of DESH-Stack e-portal and aligning Skill Qualification Framework with industry requirements.

These interventions will improve and strengthen the education and skilling ecosystems in the country.

Pradhan highlighted the efforts of the Ministry to universalize quality education which will gain strength with the setting up of a Digital University and expansion of One Class-One TV Channel programme of PM e-VIDYA from 12 to 200 TV channels.

He said that the digital university will be built on a networked hub-spoke model, with the collaboration of best public universities and institutions in the country and it will provide access to students across the country, to world-class quality universal education at their doorsteps in different Indian languages. Expansion of one class-one TV channel programme will enable all states to provide quality supplementary education in regional languages for Classes 1-12, he added.

The Budget 2022 has announced that 750 virtual labs in science and mathematics, and 75 e-labs for skilling with simulated learning environment, are to be set-up in 2022-23.

According to the minister, the extensive use of technology will be vital in providing access to quality education for all children. Integration of technology in teaching learning process will be the game-changer in future as it will empower teachers, provide them autonomy, and promote innovative pedagogies that will ultimately lead to improvement in learning outcomes of children.

Source: IANS

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New Delhi, Feb 1 (SocialNews.XYZ) The Union Budget 2022-23 has allocated more funds to the Ministry of Home Affairs-administered Union Territories.

According to the Budget proposals for the current fiscal, with a hike of 6.98 per cent, the total allocation for the Union Territory of Andaman and Nicobar Islands has been pegged at Rs 5,763.65 crore, an increase of Rs 376.24 crore over last year's Rs 5,387.41 crore.

For Chandigarh, the total allocation is Rs 5,382.79 crore, an increase of Rs 196.67 crore from Rs 5,186.12 crore in 2021-22. This is an increase of 3.79 per cent from last year's allocation.

Dadra and Nagar Haveli and Daman and Diu has been allocated Rs 3,781.10 crore, an increase of Rs 217.51 crore, or 6.10 per cent).

The Capital Allocation has been increased from Rs 764.83 crore in Budget Estimate (BE) 21-22 to Rs 875.10 crore in BE 22-23 which is an increase of Rs 110.27 crore or 14.42 per cent.

For Ladakh, the total allocation in BE 2022-23 is Rs 5,958.00 crore, at the same level as in BE 21-22 while Lakshadweep was allocated Rs 1,421.50 crore.

The total allocation in BE 22-23 for Delhi is Rs 1,168 crore, an increase of Rs 210.49 crore or 21.98 per cent, from Rs 957.51 crore in BE 21-22. An additional amount of Rs 200 crore has also been allocated as Central assistance for the Chandrawal Water Plant and Rs 10 crore as contribution to the Delhi Disaster Response Fund.

Jammu and Kashmir has been given a total allocation of Rs 35,581.44 crore, an increase of Rs 4,824.44 crore or 15.69 per cent from BE 21-22's Rs 30, 575.00 crore.

J&K has also been given an additional funds, provided as Grant for Prime Minister Development Projects (PMDP Projects) of Rs 273 crore, a Rs 476.44 crore grant for Ratle hydro electric plant, a Rs 130 crore grant for 624 MW Kiur hydro electric plant, and additional grant of Rs 500 crore for capital expenditure.

In Puducherry, the total allocation in BE 2022-23 is Rs 1,729.79 crore like the last financial year.

Source: IANS

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New Delhi, Feb 1 (SocialNews.XYZ) The Centre plans to implement an accelerated corporate exit process in fiscal 2022-23.

A Centre for Processing Accelerated Corporate Exit (C-PACE) has been proposed to be established, Finance Minister Nirmala Sitharaman said in her Budget 2022-23 speech.

The C-PACE with process re-engineering will speed up the voluntary winding-up of these companies from the currently required two years to less than 6 months.

In her Budget speech to Parliament on Tuesday, Sitharaman said: "Several IT-based systems have been established for accelerated registration of new companies.

"Now the Centre for Processing Accelerated Corporate Exit (C-PACE) with process re-engineering, will be established to facilitate and speed up the voluntary winding-up of these companies from the currently required 2 years to less than 6 months."

Besides, she said that necessary amendments in the IBC Code will be carried out to enhance the efficacy of the resolution process and facilitate cross-border insolvency resolution.

Source: IANS

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