Budget highlights in 5 minutes

 

1. Budget focussed on job creation, transfer of benefits of demonetisation, good fiscal management & risks to the economy
2. Structural changes in budget- merger of rail budget, movement of date to February 1, merger of plan & non plan expenditure, certainly different
3. India largely a tax non compliant nation, as can be seen by the number of tax payers. Not very good news.
4. Tax rates cut in tax slab of Rs 2.5 lakhs to 5 lakhs by 5%. Benefits of upto Rs 12500 as a result. Income of 50lakhs+ hit by 10% surcharge. Positive for many, negative for some.
5. Corporate tax rates cut for Micro, Small and Medium Enterprises with turnover up to Rs 50 crores to 25%. Huge benefits to corporatize for smaller businesses. No changes in corporate tax rates.
6. Innovative political funding options – electoral bonds announced. Big step towards poll funding reform.
7. Capital gains on immovable property – long term reduced to 2 years holding instead of 3 years. Base year for indexation also changes to 2001.
8. New web based system for defence pensioners
9. Draft bill to curtail illegal deposit schemes could boost flows to other financial assets
10. High speed fibre connectivity to be available in more gram panchayats – augurs well for the new digital India
11. To simplify labour laws – would this increase India’s ranking in ease of doing business
12. Desire to move from an informal to a formal economy, bodes well for listed companies longer term. GST 1st step.
13. Higher oil & commodity prices, deglobulisation/protectionism & higher US interest rates risk to India
14. Inflation management & lower current account deficit bodes well for the rupee & Indian bonds. Will stable oil prices allow it to continue?
15. Lower interest rates driven by transmission of rate cuts are a short term positive of demonetisation. Time to refinance your home loan.
16. Cash transactions limit now at Rs 3 Lakhs. Penal provisions for transactions above that value equivalent to the value of the transaction.
17. 133 Kilometres per day of road construction and use of technology to better target social spending / MNREGA excellent news
18. 100% electrification for villages by 2018 has huge multiplier benefits for the economy combined with enhanced road construction
19. Affordable housing gets infrastructural status & additional benefits. Step towards boosting employment, possibly India’s biggest challenge?
20. E-learning platform Swayam could change the way Indian youth learns going forward. Testing &certification will need to be combined
21. Focus on creativity and innovation most welcome in skilling and reskilling – new solutions a must to tackle old challenges.
22. Aadhar based medical records for senior citizen – great news.
23. LIC to issue guaranteed 8% pa for 10 years product operationalising PM year end speech
24. Digital Money gets significant attention – Aadhar pay, BHIM, changes in negotiable instrument act, payment regulatory board.
25. Airport redevelopment was one of the most visible successes on infra. Railways follow in its footsteps- station upgrades on way
26. Multimodal transport focus goes back to Keynesian theory in spurring job creation. Execution done right is critical
27. Consolidation and merger benefits of CPSEs to leverage synergies is a great idea. Starting with a large oil company model?
28. CPSEs divestment to continue, IRCTC, IRCON to be listed , will continue to use ETF, propose a new ETF on same lines
29. Another CPSE in offering! Needs to be truly diversified so that commodity related & concentration risks are adequately addressed
30. New laws to confiscate assets of economic offenders could help – details will be closely awaited
31. Fiscal deficit at 3.2% of GDP with 3% next year a relief, with the Fiscal Responsibility and Budget Management committee flexibility to be addressed in the future.
32. Low Tax to GDP ratios- very low profits for companies of different sizes. Individual data no different. Use of data mining could change it.
33. Foreign Investment Promotion Board abolishment sends a strong message of liberalization. Look out for details. Automatic route needs to be truly automatic.
34. Theme = Transform, energise and clean India

 

 

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