View: What's in Modi's Budget for 1.3 billion Indians? Precious little
An all-out push to revive its sputtering economy is not within India's reach. Instead of spending meager local resources to rebuild faltering demand, New Delhi is betting that world growth this year will be down in the dumps — and that will make India appear attractive to foreigners even when it really isn't.
The budget unveiled by Prime Minister Narendra Modi's go nment Saturday left virtually every domestic constituency unhappy. My interpretation? Luring overseas investors to high-yielding Indian assets amid a global coronavirus scare is the preferred strategy.
Under this blueprint, sovereign wealth funds such as Singapore's GIC Pte and Abu Dhabi Investment Authority will pay no taxes on what they earn from Indian infrastructure investment made before 2024, even though domestic investors were miffed the budget didn't scrap their long-term capital gains tax.
Financiers in Mumbai are upset that the budget did little to clear the jammed arteries of credit. But yield-starved overseas investors will get full access to parts of the rupee-denominated Indian go nment bond market, where 10-year yields are a juicy 6.6%. The overseas participation ceiling on corporate bonds, currently limited to 9%, will rise to 15%. A Saudi Aramco-style initial public offering of the Life Insurance Corp., a state-owned former monopoly with $434 billion in assets, would add to Wall Street banks' bragging rights.
The locals will have to sacrifice, though. Funding has been cut for a rural job guarantee program even as widespread agrarian distress weighs on demand for everything from toothpaste to biscuits. The urban middle class got thrown a carrot of lower tax rates, but it's only for those who give up existing exemptions. Most people won't. Dividend earners will, in fact, pay higher taxes as well as a levy — albeit one they can offset against their tax bill — on sending money overseas for education or holidays.
Except for a renewed commitment to affordable housing, Modi's go nment provided little demand stimulus. Existing bottlenecks remain, including a large overhang of unfinished homes. A bold rescue of troubled shadow banks, which are clogging up credit, isn't in the cards. The planned 10.85 trillion rupees ($152 billion) of capital expenditure is expected to grow by just 2.4%.
Break it down, and the Rs 6.73 lakh crore outlay of public-sector companies will shrink by 5%. The remaining Rs 4.12 lakh crore of capital spending funded out of budgetary resources will grow, but 5% of it will go to propping up dying state-run telecom companies. With the private sector refusing to invest, such poor-quality public expenditure won't pull up growth in nominal gross domestic product — which is what matters for tax collections — to the targeted 10% rate, from a four-decade low of 7.5% in the fiscal year that ends March 31.
India's fiscal situation is parlous. I have previously argued that the country should attract patient capital from developed countries, because its domestic balance sheets — financial, corporate, go nment and households — are simultaneously stretched. Meanwhile, global pension and sovereign funds are staring at chronically low interest rates, a problem that could worsen if the coronavirus plays havoc with growth in an over-leveraged world.
译文来源：三泰虎 http://www.santaihu.com/49273.html 译者：Joyceliu
Well written article and comments. This budget is probably made in the dreams where no realities have been considered. The tax paying middle class has been taken for a ride. In a country where there s no social security system , this budget is like a doomsday.
No benefits to Senior Citizens and Super Senior Citizens who do not get pension. Rs. 9000 cr provision for Senior Citizens in the budget may not benefit directly these. Though the Givt says the policy is to put more cash in the hands of public, the cash in the hands of these people is coming down day-by-day as interest rates coming down which solely & wholly source of income.
Very true. Neither Modi nor his ministers understand this problem or care. For 5 years their tax policies are to tax the taxed. On top they have reduced job opportunities and now unemployment is the highest. Congress was sensitive to all this and did not tax dividends etc that are life savers for retired and not having any pension.
Once again, a total disappointing budget. The situation will continue to be grim as usual. Ignoring sectors that create jobs and wealth won't encourage any major Indian investments in the ecosystem.
Why we are unable to even understand that what has Modi done for the nation for past 6 years. No one talks of lack of any investments or jobs but expect a budget with growth incentive.
" You Indians think u are so smart , is it ? We view every Indian as a criminal, someone who needs to be disciplined . As long as we are in power u do as we say, not what u fancy. "
Modi looted the common man with high TAX on Petrol, Diesel. ..
Come April, Banking sector will be the first victim followed by anarchy thereafter......
Report from Bloomberg!? And on an Indian domestic matters! Well, it is a branch of Congress Party's HQ that is known to all ;-)
most important point is war with pakistan .War with china wont happen because modi is already sold to them way back in 2014.With entire 6 yrs of tax spent and nothing to show for in military,india is in trouble.Indian military can run efficient smuggling operations in north east-near bangla border-pakistan border but it can not win a sustained war with pakistan or even bangladesh.Our soldiers are brave but top echelon is corrupt
Modi is doing what he has been ordered to do by foreign advisors.He is selling nation to indian and foreign corporations and he might even leave india then.
Let's stop believing in Feku and his 5 Trillions economy by 2025....
Writer and Bloomberg is ANTI-INDIA. It is well known fact. And no body pays attention to their article.As regard to budget, there are many positives. New system of personal income tax will save tons of stationary, time and effort in collection, submission,verification of documents at different levels. Just think it national saving.It is media, who has wasted interest, spreads lies to common man.By developing infrastructure(roads, railways hospitals etc.) common man will benefit. Rich people already have all facilities at their disposal.
Very pessimistic view!!
I think the budget had couple of misses like tax cuts for SMB, some targeted incentives for automobiles and some tax cuts for higher slabs as well. However, it is good to see that they have focused on fundamentals like clean drinking water. The key is implementation of various plans. The govt may provide more incentives closer to elections.
Economy in doldrums and the biggest step taken is clean water project. When are the next elections?
Fekunomics is total failure.
Hari Krishna Johri
The surprising there is nobody in entire opposition to challenge him.It's shocking why no other leader is not coming forward to unseat him ? Is there no other good leader in whole country ??
Feku tries to be a super hero, but has turned out be a super flop. The biggest problem is people are looking a single person to overthrow him. But the truth is good governance is not a individual's domain, it is from collective wisdom of a group. As a group congress is 10 times better than BJP. They have proven time and again that they can govern better and manage economy. Dr MMS and PVN Rao, handled economy in the most difficult times with bare majority. But this idiotic Modi had big majority and most of time oil prices were low and they made a huge collection by keeping the taxes on oil high. Still they have taken India to a mess. Who spends 1.25 lakh crore on ganga cleaning? It is a river, just stop the pollution the river will clean it self. But BJP wants people to pollute so that they can spend 1.25 L crore of tax payer's money on cleaning 1 river.
Puthumbaka Raghu Kumar
Locals have been sacrificed to benefit Corporates and FPIs. With massive majority in Parliament this Government is thinking that they can do anything and get away with it.
modi is best prime minister of world
Modi should go for waiver in GST on industrial buildings and add industrial building along with residential building as an option for saving long term capital gains........
At least corporates share dividend income is taxed heavily who holds proprietary interest in companies they hold is not bad at all. That's why these rich people are not able to digest.
Can we scoop out more than what is available.? The theme is fine. The two important things : easy of doing business without co ption and quick justice delivery if ensured India will do fantastically well. Slowly the ethos is getting changed because of BJP . The harm done for 7 decades are gargantuan and though cannot be undone easily a positive approach is taken by BJP is the need of the hour.
As of now, not even one up vote for the silly comment. The current situation is so bad for the whole economy that people will be happy to have the UPA back.
If only we had an intelligent opposition. Modi is only there because Congress become too corrupt and arrogant. Unfortunately, Congress still remains incompetent and arrogant. For India to move forward, Congress must reform. Well, until then, Modi will keep getting votes. Like it or not!!!!
Absolutely!!! With Nehru-Gandhi Parivaar at the helm of the party will never make it a viable alternative. Had there been some other competent leader at the top, NaMo would have been history by now.
绝对没错! ! !有尼赫鲁-甘地•帕利瓦拉掌舵，该党将永远也无法成为替代的对象。如果高层有其他有能力的领导人，那么现在莫迪早都已经成为历史了。
Andy Mukherjee is hurt that his White Christian Masters like Jeff Bezos were not put on pedestal. Well Andy can prostrate in front of his local White skinned master - Sonia.It is clear from series of Andy's articles, he is a shill for the realtor / NBFC lobby. He would prefer that Modi throws good money after bad, because his Indian masters can't continue looting poor real estate buyers.
The budget gave a miss to address GST, auto & real estate industry, the most job creating by any means. Well the go nment will realise the same maybe after few months when the upstick would be timid. It's unfortunate that FM misses the opportunities to address the downturn steadfastly.