India Insight

A look at India’s last five annual budgets

The countdown has begun for the biggest business and economic event of the year, the release of India’s annual budget at the end of February, and Finance Minister P. Chidambaram has a tough job on his hands. With general elections a year away, he must please voters, boost growth and control deficits.

In the last five years, the finance minister has always relaxed income tax slabs — by either increasing the basic exemption limit or widening the tax slabs. As far as markets go, the 2009 budget day was the worst for stocks as the index fell around 950 points during trade. However, the focus has always been on the government’s fiscal deficit targets, which have hovered around the 5 percent mark in recent years.

As India’s economy battles slowing growth, investors will take cues from Chidambaram’s plans to rein in spending and boost growth. Here’s a look at budgets between 2008 and 2012 — the hits, the misses and how they affected the common man.

                                                                        2012

FINANCE MINISTER: Pranab Mukherjee

KEY HIGHLIGHTS

    India projects a decline in the fiscal deficit to 5.1 percent of GDP in 2012/13. GDP expected to grow at 7.6 percent. Controversial proposal to retrospectively tax cross-border transactions in which the underlying assets are located in India. The move amounts to a push to get foreign companies that have invested millions in India to pay more taxes. Or in India’s words, it’s supposed to fight “counter aggressive tax avoidance schemes”. Service tax rate raised to 12 percent from 10 percent, double basic customs duty on gold. No change in corporate tax rates. Personal Taxation: minimum threshold of income not chargeable to tax increased to 200,000 rupees. The 30 percent tax slab applicable on income above 10,00,000 rupees.

RATING AGENCY REACTIONS

Abhijit Mukherjee’s foot-in-mukh moment steals spotlight from rape cases

(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

India is angry. India is protesting. Rallies continue in New Delhi after the gang rape of a 23-year-old girl on Dec. 16. The rapes continue too. On Wednesday night, three men reportedly raped a 42-year-old woman and dumped her in South Delhi. There are more cases being reported every day.

The biggest story in India, however, is Abhijit Mukherjee’s comment about the Delhi protests — “These pretty women, dented and painted, who come for protests are not students. I have seen them speak on television, usually women of this age are not students”. He added that students, who go to discotheques, think it is a fashion statement to hold candles and protest.

Congress strikes two birds with one stone

Why so much euphoria over the presidential polls? Shouldn’t the government concentrate on the economy; it’s a ceremonial post after all, we thought.

However, the way the election process panned out might be the boost the Congress party needed ahead of the 2014 general elections, not only politically, but even for the economy.

With Finance Minister Pranab Mukherjee all set to be India’s 13th president, the party has every reason to cheer, at least for now. The Congress will have the benefit of having one of its most loyal ministers at the Rashtrapati Bhawan, and he can come in handy in 2014.

Mr Pranab Mukherjee, did we hear ‘austerity’?

India is going through a rough patch. The common man knows it, foreign investors know it and so does our government.

Finance Minister Pranab Mukherjee, who is also one of the contenders for the post of president, has been trying his best to clear the air and restore the confidence to get the economy back on track.

In his recent Parliament speech, after he delayed the controversial GAAR norms, Mukherjee said new ‘austerity measures’ will be announced to aid the fiscal consolidation process.

As the economy and markets struggle, India needs tough actions

Slowing growth, a falling rupee, sliding stock markets, a rising current account deficit, drying foreign inflows and policy paralysis at the centre. Things certainly don’t look rosy for India.

With the rupee down 22 percent in the last 10 months and a 6 percent drop in stock markets so far in May (as of Friday’s close), is it time for the government to seriously rethink its strategy ahead of the 2014 general elections?

From Mark Mobius, who said the Indian government has been making many big policy mistakes, to Lakshmi Mittal, who told The Times of India on Friday that decision-making is too slow and India needs to move the way the rest of the world does — there is no dearth of criticism.

Budget 2010: Reactions from the common man

Rohan Dua spoke to people on the streets of New Delhi as Pranab Mukherjee tabled the 2010/11 Budget in parliament –

How to rate the budget?

INDIA-BUDGET/When the finance minister presents the budget, the stock market moves one way or the other.

And like every year this will dominate the news.

Over there and everywhere.

Is that fair? Or convincing?

Some of the analysis will follow a pattern.

If the stock market goes up, the budget may be described as successful because it didn’t “rock the boat”.

If  it moves sideways, it may be said the market had already absorbed the good news — the growth figures for instance.

Budget 2010: Time for annual guessing game

It’s a laudable effort that often gets more brickbats than bouquets. This year, when Finance Minister Pranab Mukherjee presents the Union budget in parliament on February 26, he will walking a tightrope between managing ballooning fiscal deficit and supporting economic recovery in Asia’s third-biggest economy.

Budget 2010: Time for the annual guessing gameExpectations from the finance minister, as always, are high — people and corporates want more in their pockets. There has been no let-up in the rise of food prices and most middle-class families still have to wait for annual sales to get branded products home.

In other words, the nation would like to see changes in tax rates, consumables getting cheaper and credit continuing to be available easily.

Jury still out on Indo-U.S. “unclear” deal

US President Bush raises his glass for a toast with Indian Prime Minister Singh at an official dinner …US President Bush raises his glass for a toast with Indian Prime Minister Singh at an official dinner …You could be forgiven for thinking that the civilian nuclear deal with the United States is all about whether India holds early elections or not.

Every newspaper is speculating if Prime Minister Manmohan Singh, who has staked his personal reputation on the deal, will resign to disassociate himself from an administration that failed to save a pact keenly watched by the world.

But are these the arguments India should be debating in the short-term or should we be discussing the real benefits and drawbacks of the deal?

Is India bending over backwards to please China?

India’s opposition Bharatiya Janata Party has accused the government of a “craven” and “slavish” attitude to China.

Chinese Foreign Minister Li Zhaoxing (L) shakes hands with his Indian counterpart Pranab Mukherjee before their meeting in New Delhi February 13, 2007. REUTERS/B Mathur (INDIA) The BJP and others argue that the coalition government has failed to prevent repeated Chinese incursions along the disputed border, from Ladakh in the northwest to Arunachal Pradesh in the northeast.

And by trying to muzzle the Dalai Lama and close down Delhi during the Olympic torch relay, it has shown weakness, which will only encourage China to throw its weight around more.

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