Budget 2018 must address these key issues to boost investment in infra

As India’s Finance Minister is days away from presenting Budget 2018, there are two key issues that he must address to boost investment and growth in the country. They are: Non-tax revenues from land bank monetisation of public institutions, and full tax-exempt status for income from debt instruments issued by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in India.

The budget must pay attention to non-tax sources of revenues especially with a view to partially monetising the land banks of large public institutions such as the Indian Railways and the Airport Authority of India (AAI).

Land bank monetisation solves two core problems for India — lack of available land for infrastructure and lack of financing for infrastructure. It also leads to productive use of an asset of great value that is lying idle. Land utilised for infrastructure will be land that will be used for productive purposes and therefore will create jobs, a much-needed requirement for a young and growing population.

While talk of land bank monetisation has been around for over a decade, little has been done by way of a fully structured policy and its consequent implementation. What the budget needs to outline is a strategy around land bank monetisation much beyond simply stating numbers.

Budget 2018: Agri-credit likely to increase to Rs 11 trn for better flow

The farm credit target is likely to be raised by a whopping Rs 1 trillion (Rs 1 lakh crore) to a record Rs 11 trillion (Rs 11 lakh crore) in the Budget 2018-19 to improve credit flow in the agriculture sector, according to sources.

In the current financial year, the government has kept a credit target of Rs 10 trillion (Rs 10 lakh crore). Of which, Rs 6.25 trillion (Rs 6.25 lakh crore) has already been disbursed in the first six months till September 2017, the government data showed.

“The government’s priority is agriculture. There is a possibility that the credit disbursal target for the agriculture sector will further be increased to Rs 11 trillion (Rs 11 lakh crore) for the next financial year,” sources read more

Budget 2018: Rs 30 bn for 1.2 mn CCTVs in all 11,000 trains, 8,500 stations

In its endeavour to provide a safe and secure travel experience to passengers, India Railways is pitching for the procurement of about 1.2 million CCTV cameras to ensure state-of-the-art surveillance systems in all trains and stations across the country.

The Railways will make a provision of around Rs 30 billion (Rs 3,000 crore) in its budget 2018-19 to install CCTV systems in all 11,000 trains — including premier and suburban services — and all the 8,500 stations in the Indian rail network, to provide safety and security at rail premises.

As per the plan, while each coach will have eight CCTV cameras covering the entry gates, aisle and vestibules, all crucial points at stations will have the read more

Budget 2018: Animal rights body wants funds for cow shelters, grazing land

With the Union Budget 2018 just days away, an animal rights body has asked the government to allocate funds for a host of animal issues, including for maintenance of gaushalas and development of grazing land.

Spelling out their expectations from the Budget, the Federation of Indian Animal Protection Organisations (FIAPO) has also demanded increased funds for street animal care through the Animal Welfare Board of India, among others.

Varda Mehrotra, Director of FIAPOa, urged the government to allocate special funds for running animal birth control programmes for dogs, funds for regulating slaughterhouses and for setting up and proper functioning of State Animal Welfare Boards.

Mehrotra said there are nearly 4,000 gaushalas that are functional across the country but only read more

Domestic, global taxation: Will Budget 2018 clear the haze around BEPS?

Budget 2018– Base Erosion and Profit Shifting (BEPS), a collective effort of the Organization for Economic Cooperation and Development (OECD) and G20 nations, including India, aims to provide a road map to reform the global international tax framework and to protect legitimate tax base erosion in the context of aggressive international tax planning.

BEPS seeks to minimise gaps and mismatches in both domestic tax and international taxation, especially through planning around tax treaties, which allowed multinational companies (MNCs) to shift profits to low tax jurisdictions. The …read more

Budget 2018: From digitisation to NPAs, a lot expected for banking sector

While there has been a lot of push lately on digital transactions from the Narendra Modi-led central government, it is expected that the coming Union Budget 2018-19 will see Finance Minister Arun Jaitley renewing the thrust by announcing some incentives for small businesses to increasingly go digital in so far as banking transactions are concerned.

Also, against the backdrop of the government’s plan to recapitalise public-sector banks, which have been suffering because of their ballooning non-performing assets, Budget 2018 will be keenly watched for any announcement towards that end.

PwC and Business Standard look at the present scenario in the banking sector, the issues facing it, and the Budget expectations the industry has from read more

Budget 2018: Expect govt to target fiscal deficit at 3% of GDP, says report

BUDGET 2018– The government is likely to stick to the medium-term fiscal consolidation plan by targeting 2018-19 fiscal deficit at 3 per cent of GDP, a Deutsche Bank report says.According to the global financial services major, the fiscal deficit target for this financial year is likely to be revised upward to 3.4 per cent of GDP.

“We expect the authorities to target FY19 fiscal deficit at 3 per cent of GDP, from a likely upward revised 3.4 per cent of GDP outturn in FY18,” Deutsche Bank said in a research note.

According to the report, the 2017-18 fiscal target will be breached by about 0.2 per cent of GDP, even after various adjustments on the revenue and expenditure front.The FY19 Union Budget, to be announced on February 1, is expected to be a populist and more spending towards social sectors, this would not affect the fiscal situation much.

The authorities will likely re-allocate more spending towards sectors such as infrastructure (roads and railways), affordable housing and read more

Budget 2018: Drop GST rate on biodiesel from 18% to 5%, demands industry

BUDGET 2018- Struggling to survive despite the government ‘s clean energy dream, biodiesel industries have demanded the Goods and Service Tax (GST) rate on them be slashed from the current 18 to 5 per cent.

The demand came days after solar industry made a similar pitch, stating while the unrealistic levy on the solar panels is killing the Indian industry and giving an edge to Chinese exporters.

On Tuesday, the Biodiesel Association of India (BDAI) wrote to Union Finance Minister Arun Jaitley and Finance Ministers of West Bengal and Rajasthan seeking a reduction of high GST rate.

The apex industry body pointed out that while there is a huge potential of producing more cleaner fuel in India, the extraordinary levy has bought the industry at the “brink of extinction”.

With the implementation of GST from July 1 2017, levy on Biodiesel has gone from 6 per cent in excise duty to 18 per cent in GST.”This has made Biodiesel costlier than High-Speed Diesel (HSD) and read more

Budget 2018: Rising oil prices a big challenge for FM Jaitley

Global oil prices have been hovering near a three-year high of $70 per barrel recently, propelled by production cuts by Opec and Russia.

Recovering international crude prices has raised concerns for the Indian economy amid a wideningtrade deficit and growing fiscal deficit projections.

“The surging crude prices will put pressure on inflation, the balance of payments and fiscal policy. We believe the rally is likely to continue until March for certain until the winter demand subsides and clarity is reached on the production plans in the US,” Icra said in a note on January 12.
The trade deficit widened to $14.88 billion last month from $13.83 billion in November, data from the Ministry of Commerce and Industry showed. Imports surged nearly 21.1 per cent year-on-year to $41.90 billion last month while exports grew read more

Budget 2018: Jaitley’s speech, deficit data to decide rupee’s fate in 2018

Don’t let the rupee’s strength fool you, strategists say. The rally that boosted the currency to the strongest in 32 months will probably be short-lived.

The rupee is facing headwinds as elevated energy prices threaten to increase inflation and worsen public finances in a nation that imports most of its oil needs. Traders are also bracing for higher government spending as Prime Minister Narendra Modi is set to take measures in the February budget to revive an economy that’s forecast to grow at the slowest pace in four years.

How Modi fares in reining in the fiscal deficit while seeking to jump-start activity may determine the currency’s direction for the remainder of the year, analysts say.

“The budget could well set the tone for the rupee in 2018,” said Aditya Pugalia, Dubai-based director of financial markets at Emirates NBD PJSC, the second most-accurate forecaster in Bloomberg’s quarterly rankings. “A slip-up on the read more