FINANCIAL DEFICIT
Union Budget 2024 may test Modi govt’s fiscal prudence as it attempts to fulfil Lok Sabha manifesto promises
Budget 2024: Modi is back in power with a stronger reliance on the NDA coalition, and FM Nirmala Sitharaman is expected to maintain fiscal prudence. The Centre has a target of bringing down India's fiscal deficit for FY25 to 5.1% of GDP, which experts see as an encouraging indicator for 'Bharat's' growth story. Sitharaman said that the government would stick to numbers provided in the interim budget numbers if voted to power.
Budget 2024: Economic vision of new govt, political theme key aspects to watch in budget, says Nomura
Nomura, a Japanese brokerage, highlighted key aspects to watch in India's upcoming Union budget, emphasizing the new government's economic vision and its management of political dynamics. The brokerage anticipates "muted returns" in the second half of the year for equities, maintaining a year-end Nifty target of 24,860 points, slightly above current levels. They underscored the importance of fiscal discipline beyond FY26, when the government aims to reduce the fiscal deficit to 4.6%.
France runs risk of economic meltdown after high earners looking at fleeing country over wealth taxes
France is currently facing a risk of economic meltdown in the country as high earners in the country are looking to flee the country over 90 percent taxes, according to reports. The nation may be on the brink of financial crisis if this situation occurs, claim banking experts.
Union Budget 2024 may see Modi government fasttracking reforms to focus on unfinished agenda from previous term
Budget 2024: Market experts predict Prime Minister Narendra Modi’s third term will prioritize unfinished reforms from his previous tenure. The Union Budget 2024-25 is expected to focus on boosting income opportunities, rationalizing taxes, driving the capex cycle, and supporting self-dependency through import substitution. Fiscal consolidation remains a key objective, targeting a deficit reduction to below 4.5% of GDP by 2025-26.
RBI to send strict 'zero tolerance' message to banks' bosses
RBI met CFOs and auditors to enforce zero tolerance for compliance lapses. Deputy governors stressed accurate balance sheets, aggressive lending risks, and ever-greening of loans. Recent CEO talks included credit-deposit growth gaps. Governor Das emphasized risk awareness. Digital banking restrictions on Kotak Bank, IIFL Finance, and others were due to regulatory lapses.
Budget 2024: SBI wants Modi 3.0 to not obsess too much over fiscal stance
Budget expectations: The upcoming full Budget for 2024-25 under Prime Minister Narendra Modi's government aims for fiscal prudence with a focus on a fiscal deficit target of 4.9%. SBI Research recommends not being overly fixated on this goal. The government aims to reduce fiscal deficit below 4.5% of GDP for 2025-26, with robust growth in revenues contributing to this strategy. Finance Minister Nirmala Sitharaman's sixth budget speech, scheduled for July 23, will mark a significant milestone, setting the financial course for Modi's third term.
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Union Budget 2024 will likely focus on women, middle-class and agri sector
BUDGET EXPECTATIONS: Narendra Modi's third-term Budget, slated for July 23, focuses on leveraging revenue growth and RBI dividends for infrastructure and targeted sectors. The session will also introduce non-legislative reforms. The Economic Survey will precede, highlighting achievements and future plans. Sitharaman aims to tackle inflation, unemployment, and regional disparities with tax measures and social benefits, aiming for a fiscal deficit of 4.5% amid robust GDP projections.
Modi’s top coalition ally Chandrababu Naidu seeks more than Rs 1 lakh crore handout
Key allies in Modi's coalition government, N Chandrababu Naidu and Nitish Kumar, are seeking substantial financial support for their states. The demands include funds for building a new capital and infrastructure projects. This puts pressure on the national budget and raises concerns about increasing debt.
US Fed hopeful of achieving 2 per cent inflation target soon
The U.S. Federal Reserve noted a lack of significant progress towards its 2 percent inflation target in its latest meeting. Despite this, there have been modest improvements in recent months. This conclusion was shared in the Fed policy minutes released on Wednesday.
Financials & utilities are the cheapest sectors; IT overpriced: Neelkanth Mishra
Neelkanth Mishra highlights undervalued financial and utility sectors compared to the overpriced IT sector. The Budget is expected to focus on rural support and fiscal prudence, with emphasis on Viksit Bharat 2047 initiatives. However, GDP growth may slow down, impacting FMCG sector earnings. Mishra expects consumption by the lower income households will grow slower than the GDP on average,
West Bengal Governor CV Ananda Bose warns of state's financial breakdown
In the midst of financial turmoil, the West Bengal Governor faces allegations of sexual assault, further complicating the state's already dire fiscal situation.
Increase in exports, improvement in CAD, mnfg to help boost Indian economy: Goyal
India's merchandise exports show growth despite a widened trade deficit, reflecting a positive economic outlook. The Commerce Minister's participation in the gem and jewellery industry program signifies confidence in the country's economic trajectory.
Pakistan's National Assembly passes Rs 18,877 billion budget for fiscal 2024-25
The budget, facing opposition, sets growth targets and tax revenue goals while addressing concerns about IMF loans and tax exemptions to aid economic growth.
Fiscal deficit hits 3% of full FY25 target in April-May at Rs 50,615 crore
India's fiscal deficit for April-May reached approximately 3% of FY25's target, totaling Rs 50,615 crore. PM Narendra Modi's third term priorities include tackling agricultural distress, job creation, sustaining capital expenditure, and enhancing revenue growth for fiscal consolidation. S&P upgraded India's sovereign rating outlook to positive, contingent on fiscal discipline
Narrowing trade deficit, rise in remittances aid current account surplus: CRISIL
Financial flows also increased leading to accretion in foreign exchange reserves during the fourth quarter amounting to USD 30.8 billion, it said. The country's foreign reserves, as of June 14, 2024, stood at USD 652.9 billion. The report said even though the FDI inflows continued, there has also been a rise in outward FDI, leading to a reduction in net flows, the report said.
Rain deficit may spike food inflation further, warn experts
A note from Madhavi Arora, lead economist at Emkay Global Financial Services Ltd, said cumulative rainfall till June 21 was 17% below the long-term average (LTA), while the weekly rainfall (till June 19) was 33% below the LTA. Overall, basin-wise reservoir levels were in deficit and below last year's level as well. On June 20, the overall level was about 9% below the LTA and 19% below last year's level.
CAD in surplus in March quarter after four years
India's current account turned into a surplus in the quarter ended March 2024, marking the first surplus in four years. This change was driven by a moderation in the trade deficit, higher services income, and increased remittances from overseas Indians.
Electricity in Punjab to cost more as PSERC hikes power tariff by 10-15 paise per unit
The Punjab State Electricity Regulatory Commission (PSERC) on Friday announced a new tariff order which will be effective from June 16 till March 31, 2025.
Should Joe Biden downplay his own success?
"People telling Biden to downplay the fact that his big spending has worked out well for the economy are to some degree revealing their own ideological biases rather than giving solid political advice."
New govt may cut FY25 fiscal deficit target amid robust growth and windfall RBI dividend
In the interim budget in February, the government had set the FY25 fiscal deficit goal at 5.1% of GDP and revised the FY24 target to 5.8%. However, the actual fiscal gap for FY24 was contained at 5.6%. With exit polls projecting Prime Minister Narendra Modi to retain power with a strong majority, policy continuity is expected, and the government may aim to further improve the fiscal deficit target for the upcoming fiscal year starting April 1, 2025.
Govt may lower fiscal deficit target below 5.1 pc for FY25
For previous financial year ended March 2024, the fiscal deficit was better at 5.6 per cent of the GDP as against estimates of 5.8 per cent accounted in the interim Budget presented on February 1.
S&P Global to observe India's fiscal glidepath for ratings upgrade
S&P Global Ratings will monitor India's fiscal consolidation efforts over the next two years for a potential sovereign ratings upgrade. Despite raising the outlook to "positive," the rating remains "BBB-." Focus is on India's fiscal deficit reduction targets, fiscal discipline with RBI's surplus transfer, and its ability to manage inflation.
Raging bulls of India: D-Street dances to RBI record
The key index closed at a record 22,967.65, up 369.85 points or 1.64%, after hitting a peak of 22,993.60 during trade. The BSE Sensex rose 1,196.98 points, or 1.61%, to end at 75,418.04.
Nifty hits record high, Sensex jumps 1,200 points. Is RBI behind the sugar rush?
Nifty hits a record high while Sensex surges 1,200 points, fuelled by RBI's Rs 2.1 lakh crore dividend for the government. Analysts anticipate positive macroeconomic effects, including potential fiscal deficit reduction and infrastructure spending boost.
Swaminathan Aiyar wonders how RBI managed to give Rs 2.1 lakh cr dividend to govt, says it will make a huge difference to July Budget
Finance Minister aims to reduce fiscal deficit from 5.8% to 4.5% in two years, relying on non-revenue RBI transfer. This strategy facilitates reaching 5.1% deficit this year. Challenges remain in sustaining revenue deficit reductions alongside fiscal targets. Aiyar says it is not very clear at this point what has resulted in this rise in the RBI dividend. Once we have greater clarity on that, we will be able to find out what are the consequences for different parts of the economy.
Japan's top rugby competition bucks trends, continues to grow as the game faces headwinds elsewhere
The Japan Rugby League One is experiencing historic growth, adding three new clubs next season, bringing the total to 26 teams across three divisions. Large corporations in Japan are sponsoring teams, and top foreign players are drawn to the league at a younger age, staying longer. This growth is in contrast to financial struggles faced by professional rugby in England, New Zealand, Australia, and elsewhere.
India's FY24 fiscal deficit seen slightly better than projected: Source
India's fiscal deficit for the year ending March 2024 is anticipated to surpass the government's estimate of 17.35 trillion rupees, with increased tax revenues contributing to the improvement. The income tax receipts surged by 17.7% year-on-year to nearly $235 billion, exceeding projections. The government aims for a fiscal deficit of 5.8% of GDP for the year, with further details expected upon the release of fiscal data on May 31.
Services exports may rise to $800 bn by 2030: Goldman Sachs report
Goldman Sachs predicts that India's services exports will rise to $800 billion by 2030, up from $340 billion in 2023. This growth is expected to make India's external sector more resilient to supply-side shocks and reduce rupee volatility. The country's foreign trade policy aims to achieve $1 trillion in service exports by 2030. The report also suggests that India's high-value services will drive top-end discretionary consumption and demand in commercial and residential real estate.
April-February fiscal deficit at 86.5% of revised annual target
Experts said the Centre would comfortably meet the downwardly revised fiscal deficit target for the fiscal. The fiscal deficit in absolute terms was revised down to ₹ 17.35 lakh crore or 5.8% of gross domestic product (GDP) from the earlier budget estimate of ₹17.87 lakh crore.
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