HIGH BUDGET DEFICIT
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,
Why Budget 2024 must have more than Sensex on its radar
Budget 2024: The Union budget is set to dominate headlines in India, with the question of whether realpolitik or coalition compulsions will dictate the budget's economic policy. The interplay between economics and politics is not new to India, as it is part of elected democracies. The BJP's performance fell short of expectations due to inflation and unemployment, both factors within the domain of economic policy.
Budget 2024: Ahead of Sitharaman’s big announcement, a look at govt’s forex war chest to deal with external shocks
India Forex Reserve FY 2023-24 | Finance Minister Nirmala Sitharaman is set to present her seventh Budget in July 2024 amid robust economic indicators, including India's substantial foreign exchange reserves of nearly $654 billion. The Modi 3.0 government's first full budget comes amidst high capital inflows and resilient forex management, underscoring economic resilience and strategic fiscal planning
India's economy: A-Z all you need to know before announcement of Union Budget
Union Budget will be announced by Finance Minister Nirmala Sitharaman in late July. The report covers key economic indicators, including India's GDP growth at 7.8% in Q4FY24, concerns over consumption expenditure, stable retail inflation at 4.7%, fiscal deficit reduction to 5.6% in FY24, and a narrowing trade deficit | Budget 2024
Asian stocks stutter, euro gains after first round vote in France
The euro was 0.32% higher at $1.0747, while European stock futures rose 1% as exit polls showed Marine Le Pen's eurosceptic National Rally emerged ahead in the first round of the French vote but with fewer votes than some analysts had forecast.
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.
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Govt's gross liabilities rise by 3.4 pc to Rs 171.78 lakh crore at March-end: Finance Ministry
Government's total gross liabilities rose to Rs 171.78 lakh crore by March 2024 from Rs 166.14 lakh crore in December. Public debt, at 90.2% of total, saw a 3.4% increase in Q4 2023-24. Indian bond yields softened due to fiscal adjustments, while US treasury yields were volatile. Ownership patterns of securities shifted.
Pakistan passes tax-laden budget ahead of talks on fresh IMF loan
Pakistan's parliament passed a tax-heavy finance bill aimed at avoiding a debt default, amid slowest South Asian growth. The budget targets 13 trillion rupees in revenue, a 40% increase, to secure a $6-8 billion IMF bailout. Criticized by opposition, it raises taxes sharply on textiles, mobiles, real estate, and incomes, foreseeing 3.6% growth and 12% inflation.
Budget in mind, D-St bulls cross 'historic' milestone
Analysts said the sustained run-up in indices of late is part of the pre-budget rally, aided by renewed flows from foreign investors in June. The optimism, however, did not rub off on the broader market where there were more losers than gainers.
Budget Preview: Govt could use part of RBI dividend to reduce fiscal deficit, says Motilal Oswal
A transfer of Rs 2.11 lakh crore by the RBI implies excess receipts of about Rs 1.5 lakh crore in FY25, the MOFSL note said. MOFSL sees the new government largely retaining its tax and non-debt capital receipt (including disinvestment) projections as presented during the interim Budget in February.
Union Budget: India mulls income tax cuts in Budget as part of $6 billion consumer boost
India Budget Tax Expectations: India's government under Prime Minister Narendra Modi is considering measures worth over 500 billion rupees to boost consumption in the upcoming budget. This includes tax cuts for lower income individuals for the first time in seven years. The plan aims to target consumers with high propensity to spend amidst economic challenges.
Union Budget 2024: Here is how revenue, fiscal and primary deficit impacts the Indian economy
Union Budget 2024: A revenue deficit arises when a government's day-to-day expenses surpass its total revenue receipts, necessitating borrowing, divestments, or adjustments in taxes to bridge the shortfall. In contrast, a fiscal deficit occurs when government expenditure exceeds its total receipts, influencing aspects like economic growth, price stability, production costs, and inflation.
ETMarkets Smart Talk: Progressive Budget, normal monsoons & strong inflows will further re-rate markets: Amnish Aggarwal
We expect the NDA government to sustain focus on capex-led growth around PLI, Roads, Ports, Aviation, Defence, Railways, and Green energy, given a 20 bps lower fiscal deficit in FY24 (Than RE), normal monsoons, and Rs 2.1 lakh crore dividend from RBI.
Modi's 'lower political capital' to hit implementation of tough reforms, says UBS
A Swiss brokerage stated that Prime Minister Narendra Modi's 'lower political capital' may hinder the new government's ability to implement tough reforms, potentially limiting the growth rate to around 7.5%. UBS Securities highlighted the importance of reforms related to land, farming, divestments, Uniform Civil Code, and one nation one election to boost growth to over 7.5% in the next five years.
A weaker Modi government will slow India's fiscal tightening, Moody's says
Indian PM Modi's narrower election victory limits aggressive fiscal reforms, per Moody's analyst Christian de Guzman. BJP secured 240 seats, with NDA totaling 293. Despite this, fiscal consolidation will persist, but populist spending risks increase. India's fiscal deficit target is 4.5% by 2025/26. Bond yields surged post-election, and Moody's sees stable economic prospects.
Should market worry about whether policy continuity is here to stay or not? Swaminathan Aiyar explains
And I would say managing the coalition again becomes much easier if you stick to continuity. If you want to have sudden changes of policy, various people can have objections because any sudden change of policy creates losers and politicians hate to have the losers, even if there are going to be winners later on.
Electoral shock dashes hopes of rate cut
Food inflation challenges RBI, impacting rate cuts. Elections, populist spending, and fiscal landscape influence rate cut decisions.
View: Whichever way you cut it, the economy’s booming and is a welcome gift for the incoming government
The Indian economy is booming with a GDP growth of 8.2% for 2023-24, surpassing estimates. The National Statistics Office data highlights this growth despite challenges in sectors like manufacturing and agriculture.
S&P downgrades French credit rating in blow to Macron
Ratings agency Standard & Poor's downgraded France's credit score on Friday citing a deterioration in the country's budgetary position, a blow to Emmanuel Macron's government days before EU parliamentary elections. France's general government debt will increase to about 112 percent of GDP by 2027, up from around 109 percent in 2023, "contrary to our previous expectations", the agency added.
Ten yrs on, S&P outlook for India turns 'positive'
S&P Global Ratings has upgraded India's sovereign outlook to 'positive' after 10 years, citing improved public spending quality and expectations of continuity in reforms and fiscal policies. India's rating remains BBB- but could be upgraded if cautious fiscal and monetary policies reduce government debt and interest burden while boosting economic resilience. Finance Minister Nirmala Sitharaman welcomed the upgrade, attributing it to macroeconomic reforms since 2014. Economic Affairs Secretary Ajay Seth expressed confidence in India's economy, highlighting robust growth and improved credit metrics.
RBI's ₹2 lakh-crore boost may help India's new govt have an easy-peasy run to achieve a goal
The RBI on May 22 announced a record-high dividend transfer to the government equivalent to 0.6 per cent of GDP ( Rs 2.1 lakh) from its operations in FY24. The figure has surpassed the 0.3 per cent of GDP expected in the FY25 budget from February. Hence, the rating agency said that it will aid the authorities in meeting near-term deficit reduction goals.
RBI's record dividend presents a delicious dilemma for new Indian government
As India prepares for a new government by June 4, a significant Rs 2.11 lakh crore windfall awaits allocation. Options range from faster deficit reduction to increased spending. Analysts anticipate positive investor sentiment, though preferences vary between deficit reduction and expenditure. The BJP-led government's cautious approach contrasts with opposition promises
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.
IMF's Gopinath says high U.S. demand fueling growth, higher interest rates
Gita Gopinath urges the U.S. to boost revenues to tackle deficits, fueling global growth but risking debt escalation, higher interest rates, and a stronger dollar, impacting the world economy's stability.
French deficit worsens to 'very rare' level
France's budget deficit exceeded expectations in 2023, reaching 5.5% of GDP, prompting concerns about President Macron's fiscal goals. The deficit surge was attributed to global economic challenges and the conflict in Ukraine. France plans spending cuts to meet the 4.4% deficit target for the year.
Biden unveils $7.3 trillion budget as campaign pitch for spending, tax goals
President Joe Biden has unveiled a $7.3 trillion spending plan for the 2025 fiscal year, which includes raising corporate income tax rates, increasing tax rates for those earning over $400,000, forcing those with wealth of $100 million to pay at least 25% of their income in taxes, and allowing the government to negotiate to bring more drug costs down.
India's April-January fiscal deficit at Rs 11.03 lakh crore, narrows on-year to 63.6% of revised FY24 aim
India's fiscal deficit for April to January, or the first 10 months of this fiscal year, was at 11.03 lakh crore rupees, equivalent to 63.6% of annual estimates, narrowing from the previous year's 67.8%. The government aims to narrow the fiscal gap to 5.8% of GDP in this financial year from 6.4% a year earlier.
Budget 2024: From a record high, Modi govt’s infra juggernaut is now likely to slow down
Budget 2024: A year after announcing a record capital expenditure push, the Central government's allotment towards capex is likely to plunge in FY25 amid a continuous focus on fiscal consolidation, economists said. The budgeted capex target has been elevated to 3.3% of GDP, the highest in nearly 18 years. However, economists expect capex growth to decline to around 10% year-on-year in FY25, given the government's medium-term fiscal consolidation path.
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