Govt to issue ‘outcome budget’ this week; to monitor new and existing plans

The government will issue its ‘outcome budget’ later this week. This is to contain tangible targets, including output and outcome, that it aims to meet for all schemes and programmes it funds.

Outcome-based budgeting began from the 2017-18 Union Budget. The idea is to monitor centrally sponsored schemes, partly funded schemes, loans, programmes and any other endeavour into which funds are pumped. Schemes were earlier monitored on three parameters — input, activity and output. They are now monitored on outcome and impact as well.

For example, the Pradhan Mantri Fasal Bima Yojana saw Rs 90 billion allocated to it in 2017-18. With that sum, the Centre aimed to deliver insurance coverage to 40 per cent of the gross cropped area. The outcome it hoped for was risk minimisation by 60 per cent of about 60 million farmer households.

Similarly, the urban component of the Pradhan Mantri Awas Yojana was allocated Rs 45 billion. For that money, the Centre aimed to sanction assistance to 2.4 million houses approved by states, ensuring 75 per cent occupancy. And, work on improving the living condition of urban poor, including slum rehabilitation by providing all-weather self-owned housing units, with adequate basic services and read more

Budget 2018: Airlines want lower tax burden on pilots to stop ‘brain drain’

Higher salaries and tax-free income from West Asian and southeastern airlines have for long snatched pilots away from Indian carriers. Now, a surcharge levied by the Indian government on high-income individuals is proving to be a burden. Airlines now hope that the upcoming budget 2018 will give them relief.

Finance minister Arun Jaitley, in the last budget, had proposed to increase the surcharge on income tax for individuals with a total income of over Rs 10 million from 12 per cent to 15 per cent. Commanders of Indian airlines normally fall under the Rs 10 million salary bracket and have to pay the surcharge. But in order to make their salary package attractive, airlines bear the expense of surcharge.

A senior government official said that in their budgetary demands, airlines have asked for abolishing the surcharge part or give exception to companies where this tax is borne by the employer.

“Indian carriers are grappling with the pilot shortage and to stop them from migrating abroad, they have opportunities across the world primarily from West Asian carriers where income is tax free, airlines have no choice but to bear the extra burden of surcharge in addition to the tax,” said an executive of a private airline.

Budget 2018: Unfair to judge me on demonetisation and GST only, says Modi

BUDGET 2018– Countering the allegation that his government had reneged on the promise of creating 10 million jobs a year, Prime Minister Narendra Modi quoted a recent study showing seven million jobs had been created in the formal sector alone in the current financial year.

“This data of seven million jobs is not like building castles in the air. It has been calculated by an independent agency on the basis of EPFO (Employees’ Provident Fund Organisation) figures,” Modi said in a television interview, days before leaving for Davos to attend the World Economic Forum meet.

One should also count the opportunities that were being created in the informal sector, he added.

“As many as 100 million people have taken loans from the Prime Minister Mudra Yojana without any bank guarantee. Loans to the tune of Rs 4 trillion have been disbursed. New entrepreneurs are being created. Won’t you count these figures as read more

Budget 2018: Reeling under dwindling exports, AEPC seeks several relief

Reeling from a continued fall in export growth and marginal refunds on the goods and services tax (GST), the Apparel Export Promotion Council (AEPC) has written to the government, seeking 12-15 types of relief. They want the duty drawback and the refund of state levies (ROSL) to be restored to pre-GST levels, and also exemptions from the new indirect tax for exporters.

Growth of apparel exports has clocked a negative 39 per cent, 11 per cent and 8 per cent, respectively, in October, November and December last year, according to H K L Magu, chairman, AEPC.

Now, in the run-up to the Union Budget, the export body has sought incentives from the government, to boost exports. It wants the duty drawback on cotton apparels to be restored to pre-GST rates of 7.5 per cent and the ROSL of 3.5 per cent. They also want to be exempted from 18 per cent GST for air freight.

After the GST roll-out last year, the duty drawback fell to 2 per cent; ROSL to 1.5 per cent on cotton apparels, and 2.5 per cent and 1.5 per cent, respectively, on different man-made apparels.Till September, when the previous rates were applicable, apparel exports grew in read more

Budget 2018: Custom duty rejig may make smartphones, gadgets costlier

Make in India is set to get a major boost in Budget 2018 through a customs duty rejig, according to a report. However, these measures are likely to pinch customers’ pocket as they could make imported high-end mobile phones and electronic goods expensive. Basic customs duty may be imposed on components such as printed circuit boards, camera modules and displays that are allowed duty-free entry now.

Custom duty rejig in Budget 2018 

Customs Duty may be revised on certain other selected goods. Through this, the government can address inverted duty structures—finished goods facing lower duty than the inputs that go into them.Post implementation of Goods and Services Tax (GST), customs duty is the only levy which still falls under the central government’s domain.

In December 2017, the government had raised basic customs duty levied on imported mobile phones to 15 per cent, up from the 10 per cent, which it had levied earlier on read more

Budget 2018: Easier GST to industry tag, will FM gift these to real estate?

The year 2017 was a landmark one in terms of policy directives. The real estate market witnessed a temporary setback on account of reforms like Real Estate (Development & Regulation) Act (RERA) and Goods and Services Tax (GST).

However, after withstanding the aberrations, the market now seems to be settling down to the changes, which are envisioned to bring long-term benefits. The New Year has started with hopes of a market revival, especially on the back of positive policy roll-outs in the upcoming Union Budget 2018-19.
Every year, the Union Budget presents an opportunity to the government to work towards the revival of Indian real estate and address the looming concerns that afflict various stakeholders. Budget 2017 doled out several benefits such as infrastructure status to the affordable housing segment and lower interest rates for loans up to Rs 12 lakh, but 2018 awaits resilient steps to kick start the recovery phase.
The Indian realty industry stands at the cusp of restoration and announcements of read more

Budget 2018: Auto industry seeks reforms to improve better infra, logistics

Union Budget 2018 would play a crucial role in determining the growth trajectory of the industry and the economy at the same time. To put a cap on inflation and ensure a balanced economy, my Budget expectation is that the finance minister would look at reining in fiscal deficit below 3.2 per cent. I hope that the Budget will have a greater focus on growth-oriented measures than populist schemes.

To facilitate industrial growth and promote ‘Make in India’, there need to be reforms that would improve the quality of infrastructure and logistics, such as wider roads, modernisation of ports, railways and airports.

To make the business scenario more conducive, it is important that the rationalisation of corporation tax continues in line with the pre-defined road map.

There should be reforms to prioritise increasing farmers’ incomes in the country for productive agricultural growth. To build a globally competitive manufacturing sector in the country, investment in ‘Skill India’ is also imperative. Higher education and training quality need read more

Budget 2018: Real estate wants infra status widened beyond affordable homes

In the year 2017, we saw the rollout of the goods and services tax (GST) and the implementation of the Real Estate (Regulation and Development) Act (RERA). The twin policy moves, in addition to the lingering effects of the demonetisation exercise of late 2016, had an adverse impact in the short run on real estate sale and the overall economy.

However, these moves also brought about consolidation and transparency in the sector. Now, in the Budget 2018, the last full Budget of the present government before the general elections of 2019, we hope Finance Minister Arun Jaitley will – after granting infrastructure status to affordable housing – also spread this benefit to the entire real estate sector.

Also, considering the cost of homes in cities, the rebate on home loans must be increased and tax exemptions be given. On the supply side, the government should incentivise builders to undertake more projects in the read more

Budget 2018: As jobs remain big headache, govt looks at tax tweaks for fix

Job creation is one of Modi government’s biggest challenges, with the Opposition using what it calls the government’s poor performance in this regard as a stick to beat the prime minister’s economic policies with. With Budget 2018 less than a month away, and with employment generation reportedly being a key theme this year, one way the government could give job creation a boost is by tweaking taxation laws to provide companies an incentive for hiring.

India already provides tax benefits to incentivise job creation by companies. However, according to a Times of India report, certain lacunae in the rules have kept many companies, particularly from the services sector, from reaping the benefits of such incentives. In view of this, according to the national daily, the government could tweak Section 80JJAA — which sets out conditions under which a company can avail of deductions in respect of employment of new employees — of the Income Tax (I-T) Act or introduce some read more

Govt cuts extra loans to Rs 200 bn, FY18 fiscal deficit could reach 3.4%

The government has announced that it is reducing additional borrowing to Rs 200.00 billion from Rs 500.00 billion earlier, in the current financial year (FY18), signalling to markets and experts about the Centre’s commitment to fiscal consolidation.But even then, the fiscal deficit may reach up to 3.4 per cent of gross domestic product (GDP), higher than the 3.2 per cent pegged in the Budget for 2017-18.

This reduction in borrowing largely came because the government expects the Reserve Bank of India (RBI) to transfer to it a higher-than-anticipated surplus in FY18, a few senior government sources have confirmed independently to Business Standard.

Besides, direct taxes have come to the help to the government, rising by 18.7 per cent till January 15, against the Budget target of 15.7 per cent for FY18, according to figures released by the government on Wednesday.In its books, the RBI had made a provision for Rs 131.40 billion for transfer to a contingency fund. This amount could be transferred to the read more