Consolidation in PSUs flagged with oil sector taking lead

Budget 2017 - The government will create a mega oil company as part of its plan to consolidate public sector companies. The proposal of merging 13 government oil companies, which had stemmed out of the Cabinet Secretariat last year but did not find takers in the ministry of petroleum, is now back on the agenda.

“We see opportunities to strengthen our central public sector undertakings through consolidation, mergers and acquisitions... Possibilities of such restructuring are visible in the oil and gas sector. We propose to create an integrated public sector ‘oil major’ which will be able to match the performance of international and domestic private sector oil and gas companies,” said Finance Minister Arun Jaitley in his Budget speech.

He said that the CPSEs could be integrated across the value chain of an industry, which would give them “capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for the stakeholders”. But, for reasons ranging from the managerial to employee management and legal, any attempt to execute the idea could see a long-drawn process involving legislative changes as well. Even an indomitable Mani Shankar Aiyar had to beat a retreat on this proposal, ostensibly on the recommendations of V Krishanamurthy’s Synergy in Energy panel in 2005.(Read More)

Budget 2017: Base year for calculating capital gains changed

Budget 2017 - Capital gains on sale of assets like property or gold may come down following the proposal to shift the base year for calculation indexation from 1981 to 2001, as announced by the Finance Minister in the Budget 2017-18. 

This means that any property that was purchased before 1980 was now calculated according to the Fair Market Value (FMV) of 1980 at the time of selling in order to calculate capital gains. But now it will be calculated at the FMV of 2001. “This is closer to the current market prices and will help the seller get better market value,’’ Amarpal Chadha Tax Partner, People Advisory Services, EY. 

If the property is held for more than three years, the long term capital gains (LTCG) tax applicable is 20 per cent with indexation. In order to calculate the indexation the value of acquisition is taken into account and this was assumed to be the FMV of 1981 for older properties. 

Now since the base year would be 2001, the cost of acquisition will be higher, as property prices went up between the period 1981 to 2001. 

"Capital gains will come down because the cost of acquisition of property will go up and hence the tax burden will be lower while selling property," says Chadha.(Read More)

20 things Jaitley changed in India through this budget

Budget 2017 - There were many things that Finance Minister Arun Jaitley said during his budget speech but there are many more that went unsaid. Here is a list of 20 things that could have a direct or indirect impact on your life:

• With regard to a foreign company, sale of leftover stock of crude oil in case of strategic petroleum reserve after the expiry of the agreement, subject to the fulfilment of certain conditions, shall not be liable to tax in India.

• In case of income arising from sale of carbon credit, a concessional tax rate of ten per cent will be given
  
• Government, foreign missions and state PSUs engaged in the passenger transport business will be exempted from Tax Collection at Source (TCS) provisions relating to purchase of vehicles. 

• Conditions of special taxation regime for offshore funds under section 9A of the Income-tax Act has been modified. Now, maintenance of minimum fund size would not be necessary for the year in which the fund is being wound up. 

• Income from Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund shall be exempted from tax. 

• Certain entities like Investor Protection Funds, Core Settlement Guarantee Fund, Tea/Coffee/Rubber Boards, enjoying exemption from levy of income-tax under section 10 of the Income-tax Act, shall be required to furnish return of their income. 

• In order to ensure timely filing of returns of income, it is proposed to levy a fee in case of delay in filing the return. 

• If an accountant or a merchant banker or a registered valuer furnishes incorrect information in a report or certificate, the applicant shall be liable to a penalty of Rs 10,000 for each default. (Read More here)

Highlights: Jaitley delivers fiscally prudent Budget 2017

Budget 2017 - Here are the highlights of Jaitley's budget for the 2017/18 fiscal year that begins on April 1.

FISCAL DEFICIT

* The 2017/18 budget seeks to pursue prudent fiscal management to preserve financial stability.

*Fiscal deficit at 3.4% 

*Revenue deficit stands reduced to 2.1% in Fy18

GROWTH

* Jaitley says India seen as an engine of global growth

DEMONETISATION

* Demonetisation "a bold and decisive measure", will make GDP bigger and lead to higher tax revenues - finance minister

* Hit to economy from government decision to outlaw high-denomination notes will be "transient", effects of demonetisation not expected to spill over to next year

* Pace of remonetisation has picked up and will soon reach comfortable levels

* Surplus money in the banking system will lower borrowing costs, increase credit flow
Read More

Your tax liability would now be lower when you sell a house in the third year after purchase. You can now claim long term capital gains (LTCG), if you sell a house after holding it for two years from the date of completion. Earlier, one could claim LTCG only after a holding period of three years. The rate for LTCG tax usually works out to be lower compared to short term capital gains (STCG) tax.

LTCG is paid either at flat 10% or 20% after adjusting the property price for inflation. STCG is added to the income of the seller and taxed as per his income tax slab, which comes to 30% if the gains are Rs 10 lakh or more.

While announcing the move, Finance Minister Arun Jaitley said: “This move will significantly reduce the capital gain tax liability while encouraging the mobility of assets."

“The government seems to have made the changes to revive the property market that has suffered due to demonetisation,” says Rahul Garg, partner and leader direct tax, PwC.(Read More)

Budget 2017 Updates

Budget 2017-18: Railway companies to be listed on stock market

Budget 2017 - While presenting the Union Budget 2017-18 in Lok Sabha on Wednesday, the Union Finance Minister Arun Jaitley has said that the shares of Railway Public Sector Enterprises (PSEs) like IRCTC, IRFC and IRCON will be listed in stock exchanges.

The government will encourage strengthening the CPSEs through consolidation, mergers and acquisitions and soon create an integrated public sector ‘oil major’, he added.

Stating that the Pradhan Mantri Mudra Yojana (PMMY) has proved an overwhelming success in extending funds for the deprived sections, Jaitley doubled the budget target under the scheme to Rs 2.44 lakh crores.

Easing the stressed legacy accounts of banks, Jaitley earmarked Rs 10,000 crore for recapitalisation of banks during 2017-18 and assured need-based additional allocation.

Stating that the disinvestment policy announced in the last budget will continue, Jaitley further said that the government will put in place a revised mechanism and procedure to ensure time bound listing of identified CPSEs on stock exchanges. This will foster greater public accountability and unlock the true value of these companies, he added.(Read More)

Highways allocation stepped up to Rs 64,000 crore: Arun Jaitley

Budget 2017 - Finance Minister Arun Jaitley on Wednesday announced enhancing the outlay for National Highways by 11 per cent to Rs 64,000 crore for 2017-18.

Presenting the Budget in Parliament on Wednesday, Jaitley said, "In the road sector, I have stepped up the budget allocation for the National Highways from Rs 57,676 crore in the budget estimate of 2016-17 to Rs 64,000 crore in 2017-18."

"For transport sector, including railways, road and shipping, government provides Rs 2.41 lakh crore," he added.

Jaitley said 2,000 km of coastal connectivity roads have been identified for construction and development. This will facilitate better connectivity of ports and remote villages, he said.

"The total length of roads including those under the PMGSY built from 2014-15 to current year is about 1,40,000 km, which is significantly higher than the previous three years," Jaitley said.(Read More)

Budget 2017 Updates

Budget 2017 pushes Nifty above 8,700 for 1st time since October 25

The market embraced a slew of market-friendly measures that finance Minister Arun Jaitley announced in his Budget speech with Nifty50 reclaiming its crucial 8,700 mark for the first time since October 25, 2016, while S&P BSE Sensex ended comfortably above its key 28,000 level.

To the relief of investors, Jaitley made no reference to long-term capital gains tax on equities, and also set a comfortable fiscal deficit target of 3.2% for the fiscal year 2017-18.

The Sensex closed the day at 28,141, up 486 points, while Nifty50 settled at 8,716, up 155 points.

In the broader market, the BSE Midcap and BSE Smallcap indices mirrored the gains in the frontline indices to settle 1.7% higher each.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,920 shares rose and 901 shares fell. A total of 111 shares were unchanged.

“This is an efficient and sensible budget and continues to follow the theme of maintaining fiscal discipline seen in the last two budgets. The focus continues to remain on improving the macros as government has not succumbed to the populist expectations. The fiscal deficit target of 3.2% for FY18 should further reinforce the lower interest rate bias and a positive outlook on the economy(Read More)

Budget 2017 Updates

Jaitley makes big bang affordable housing announcements

Giving a massive push to affordable housing sector finance minister Arun Jaitley in the budget finally gave the segment much needed relief and granted infrastructure status to affordable housing. The industry had been for long asking for these changes.

According to industry experts as well as officials in the Urban Development ministry the new measures would not only push more developers to enter the affordable housing segment, the cost of development would massively reduced for developers.

Also with tax benefits the government is offering, post demonetisation real estate prices reaching reasonable levels, would all help in attracting new home buyers and end users.

“Granting infrastructure status to affordable housing will provide a boost in volume of construction activity across the country. A good boost to the construction industry that was struggling with reduced number of product launches in real estate in the last couple of years,” said Joe Verghese, Managing Director, Colliers International India.(Read More)

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Budget relief to middle class, 5% income tax for Rs 2.5-5 lakh earners

Budget 2017 - The Budget gave relief to on personal income tax front, mainly the salaried group in the middle class, by halving the tax to five per cent up to the income of Rs 5 lakh to ease the pains of demonetisation. However, those earning above Rs 50 lakh and up to Rs one crore will have to shell out additional 10 per cent surcharge.

The cut in the tax rate for the lowest slab will also save up to Rs 12,500 for incomes in other slabs, increasing disposable income of the middle class that can provide spur to the slowing down economic growth. The present super rich tax in the form of 15 per cent surcharge will remain for those earning income over Rs one crore.

The finance minister also put more money in the hands of small and medium enterprises by reducing the corporate tax rate to 25 per cent from the current 30 per cent for annual turnover up to Rs 50 crore. Ninety six per cent of companies which file returns come under this category. (Read More)

Budget 2017: Key takeaways for education sector

Budget 2017 - Finance Minister Arun Jaitley presented the Union Budget as per schedule on February 1.

Business Standard presents some key takeaways for the education sector from the Union Budget 2017:

• Two new AIIMS institute in Jharkhand and Gujarat

• Take steps to increase post-graduate seats for medical sciences 

• Proposal to launch a system of measuring learning in schools. Emphasis on science education and flexible curriculum. 

• Focus will be the 3,479 educationally backward blocks where the government proposes to introduce the practise of measuring annual learning outcome in schools. 

• Certain colleges and institutions to be identified and granted an autonomous status based on accreditation.

• Use of DTH channels to link online courses available on the Swayam platform, that will offer 310 online courses, to enable student access high-quality education resource.

• A national agency to be instituted that will be in-charge of conducting all entrance exams for higher education. This would free the CBSS and ISCE from their current administrative responsibilities and focus on improving academic milieu.

• Pradhan Mantri Kaushal Kendras to be extended to more than 600 districts across the country. 110  centres to be opened to help youth get access to employment opportunities abroad.

• Rs 2,200 cr to be set aside for investment in vocational training.

• Innovation Fund for secondary education to be created.

Read More

Govt to abolish Foreign Investment Promotion Board: Finance Minister

Budget2017 - The Foreign Investment Promotion Board (FIPB) has been decided to be abolished, Finance Minister Arun Jaitley declared in his budget presentation on Tuesday.

While, the FIPB had the final say in approving Foreign Direct Investment (FDI) proposals in the country for long, its power has been systematically reduced under the current government. Most notably, back in June, 2016 the government had announced relaxed FDI norms in single brand retail, civil aviation, airports, pharmaceuticals, animal husbandry and food products.

It had allowed up to 100% FDI in defence through the approval route, 100 per cent FDI in food product e-commerce, 100 per cent FDI in greenfield pharma via the automatic route, 100% in browfield pharma — of which 74% will be through automatic route — 100 per cent FDI in scheduled airlines, and up to 49 per cent FDI in airlines through automatic route.(Read More)

Budget 2017: Centre raises CLSS loan tenure to 20 years

Budget 2017 - The Centre on Wednesday approved extension of tenure of loans under Credit Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojana (PMAY) to 20 years from 15 years and introduction of a new CLSS for middle income group with a provision of Rs 1,000 crore in 2017-18.

"The Union Cabinet chaired by Prime Minister Narendra Modi has given ex-post facto approval to the proposals for extension of tenure of loans under the CLSS vertical of Pradhan Mantri Awas Yojana (Urban) Mission from 15 to 20 years," said an official statement.

According to the statement, the scheme will be renamed as CLSS for EWS/LIG — for economically weaker sections (EWS) of society/Lower Income Group (LIG). Besides, the Cabinet approved the introduction of a new Credit-Linked Subsidy Scheme for the Middle Income Group (MIG).

The government has proposed to construct 1 crore houses for the homeless by 2019. The PMAY allocation has been raised to Rs 23,000 crore, from Rs 15,000 crore.(Read More)

Budget highlights: Fiscal deficit target for 2017-18 at 3.2%

Budget 2017 - Here are the highlights of Jaitley's budget for the 2017/18 fiscal year that begins on April 1.

FISCAL DEFICIT

* The 2017/18 budget seeks to pursue prudent fiscal management to preserve financial stability.

*Fiscal deficit at 3.4%

*Revenue deficit stands reduced to 2.1% in Fy18

GROWTH

* Jaitley says India seen as an engine of global growth

DEMONETISATION

* Demonetisation "a bold and decisive measure", will make GDP bigger and lead to higher tax revenues - finance minister

* Hit to economy from government decision to outlaw high-denomination notes will be "transient", effects of demonetisation not expected to spill over to next year

* Pace of remonetisation has picked up and will soon reach comfortable levels

* Surplus money in the banking system will lower borrowing costs, increase credit flow

INFLATION

*Consumer price index inflation is expected to remain within the central bank's mandated range of 2 to 6%

SPENDING

* India to spend more in rural areas, infrastructure and poverty alleviation

* The government will continue process of economic reforms for the benefit of poor

* Allocation under MNREGA increased to Rs 48,000 cr from Rs 38,500 cr; highest ever allocation

Read More

Budget 2017: Bonanza for farmers & agriculture, Rs 10 lakh crore allocated

Budget 2017 - Budget 2017: Finance Minister Arun Jaitley announced during Budget presentation on Wednesday, that total allocation for Agriculture and Farmers’ welfare will be enhanced to Rs 10 lakh crore.
With better monsoon, agriculture is expected to grow at 4.1%. Target for agricultural credit for 2017-18 is set at ten lakh crore, announced Arun Jaitley

Last year, the Narendra Modi government had stepped up allocation for Agriculture and Farmers’ to Rs 35,984 crore. Last year, too, the government had reoriented its interventions in the farm and non-farm sectors to double the income of the farmers by 2022.

MGNREGA should create productive asets to improve farm productivity, incomes. MNREGA allocation increased. Highest ever allocation for MNREGA at Rs 48,000 crore. Participation of women in MGNREGA up to 55%.

On health, the government proposes to eliminate tuberculosis by 2025. Two new AIIMS Hospitals to be set up in Jharkhand and Gujarat. Budget allocation for welfare of women and children under various ministries increased to Rs 1,84,632 crore.(Read More)

Jaitley presents Union Budget despite Oppn protest

Budget 2017 - Finance Minister Arun Jaitley has begun presenting the Union Budget in Parliament on Wednesday amid expectations of an increase in income tax exemption limits, to incentives for the Micro Small and Medium Enterprises (MSME) sector post the November 8 demonetisation drive.

Lok Sabha Speaker Sumitra Mahajan paid tribute to former union minister and Indian Union Muslim League (IUML) leader E Ahamed, who passed away this morning.

"I would have adjourned the House. But today's sitting has been fixed by the President for presentation of the Budget. Instead the House will be adjourned tomorrow as a mark of respect for E. Ahamed ji," the Lok Sabha Speaker said.

"Madam Speaker, on this auspicious day of vasant panchami I rise to present the union budget 2017-18. I am presenting this Budget when the world economy faces ," Jaitley said, as he stood to present the Budget.

However, Leader of Opposition in Lok Sabha, Mallikarjun Kharge, urged the Speaker for postponement of the budget.

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Budget 2017: Big mistake if budget not postponed, says Congress after MP Ahamed's death

Budget 2017 - Contending that passing the Union budget was "not inevitable", Congress leader Mallikarjun Kharge on Wednesday said not adjourning Parliament following the death of former Union Minister E Ahamed, will be a big mistake.

Speaking to the media the Leader of Opposition in Lok Sabha, also slammed the Narendra Modi government for not promptly announcing Ahamed's death who passed away at 2:15 am on Wednesday.

"We have discussed with several parties and all believe that the budget presentation should be postponed by a day in honour of Ahamed," Kharge said.

"It will be big mistake if we don't respect his death and break this precedent of not adjourning the house in case of a death of a sitting member," he added.

"At this moment, presenting the budget is not inevitable. Had today (Wednesday) been March 31, then the case would have been different."

"Postponing the budget by a day will not incur losses. The government has already advanced the budget and now they are not willing to accept a precedent. This is very wrong," he said.(Read More)

Arun Jaitley will present Budget 2017-18 at 11 am today

Budget 2017 - Finance Minister Arun Jaitley will present the Union Budget 2017-18 at 11 am on Wednesday in Lok Sabha.

"Watch me live presenting the Union Budget 2017 at 11 am, February 1, 2017," Jaitley tweeted.

Jaitley met President Pranab Mukherjee in the morning and the latter gave his assent to the presentation of the Budget today.

There was uncertainity over the presentation of the Budget over the demise of MP and IUML leader E Ahamed.

78-year-old Ahamed passed away in the wee hours on Wednesday at Ram Manohar Lohia Hospital in the capital.

The MP from Kerala's Mallapuram suffered a cardiac arrest during the President's address to the joint sitting of Parliament on Tuesday.

In moving away from the tradition, there will be no separate Rail budget from this year, as it has been merged with the General Budget.

The government has advanced the date of Budget presentation so as to complete the entire process before the end of the financial year.

The first part of the Budget Session has been kept brief in view of ongoing Assembly polls in five states.

Later in the day, the Finance Minister will reply to questions by Twitterati on the budget proposals.(Read More)

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Markets trade flat as investors await Budget 2017

Budget 2017 - Benchmark indices were trading flat during the early morning trade as investors awauted Union Budget, to be tabled later in the day. Arun Jaitley is likely to boost spending and ease back on cutting the deficit in his fourth budget, as he seeks to lift growth hit by the demonetisation drive.

The sentiment was also aided as US Federal Reserve is expected to keep interest rates unchanged in its first policy decision since President Donald Trump took office, as the central bank awaits greater clarity on his economic policies, Reuters reported.

At 9:47 am, the S&P BSE Sensex was trading at 27,670, up 15 points, while the broader Nifty50 was ruling at 8,565, up 4 points.

In the broader market, BSE Midcap and BSE Smallcap indices gained 0.3% and 0.2% respectively.

"Yesterday’s slippage saw buying interest from the 8,580 region on anticipated lines, but without enough signs of resumption of uptrend. To this end, early rise into the 8,600-8,640 region should attract long liquidation attempts yet again, though a sharp fall is less expected," said Geogit BNP Paribas in a note.(Read More)

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Budget 2017 will focus on needs of poor, make India self-sufficient: BJP

Budget 2017 - Confident that the Union and the Railway Budget 2017 will make the nation self-sufficient, the Bharatiya Janata Party (BJP) has asserted that government's decision to present both the Union and the Railway Budget 2017 together is astute.

Speaking to ANI here, BJP Kolkata State chief Rahul Sinha further pointed out some of the features to look out for in the upcoming Budget.

"The budget, which will focus on the needs of the common people, will help in the economic progression of the country", he said.

He added, "The Budget will also take forward Prime Minister Narendra Modi's fight against corruption and black money".

Further commenting on the TMC's boycott of Budget to attend 'Saraswati pooja', Sinha said the TMC has been most adversely-affected party from the demonetisation move and is mind-boggled right now.

Appealing to the TMC party to let go of this boycott, he said, "the 'Saraswati Pooja' reason is a mere excuse and the members should attend the Budget".(Read More)

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