by admin | May 25, 2021 | News, Politics
Shillong : Meghalaya Chief Minister Mukul Sangma on Thursday thanked Prime Minister Narendra Modi for replicating the Megha Health Insurance Scheme, one of the flagship programme launched by the state’s Congress government, on the national level.
In his Budget 2018-19 speech on Thursday, Finance Minister Arun Jaitley announced a flagship National Health Protection Scheme under which Rs 5 lakh cover will be provided per year to 10 crore poor and vulnerable families in the country.
“The Central government in fact invited the State government to present this exemplary health initiative to other states. I must thank him (Prime Minister) for replicating the scheme,” Sangma told IANS over phone.
Noting that Megha Health Insurance Scheme is one of the transformations in the state’s health sector, he said: “There is no programme as inclusive as ours. Our scheme did not confined only to BPL (Below Poverty Line) families, but we extended it to everybody….”
“Not just this health scheme, we have one of the best Intensive Care Units in government Ganesh Das hospital and Tura hospital. We have made it slow but steady progress in health care sector. And the most important is that we have been able to take care of the expenditure for the medical treatment,” he added.
On Modi’s allegation about the state’s “poor” health sector, Sangma said that “it was unfortunate for the Prime Minister… obviously because he did not do his homework properly”.
The Chief Minister also exuded confidence that his party will retain power in Meghalaya, while saying the results of the Rajasthan bypolls where the party wrested two parliamentary and one assembly seat from the ruling BJP an indication “people’s actual anger and frustration” against the BJP and a sign that Congress will return to power in the 2019 general elections.
—IANS
by admin | May 25, 2021 | Investing, Opinions, Property
By Sudhir Pai,
Much on expected lines, the government in Budget 2018-19 has continued with its thrust for Affordable Housing and Housing for All scheme. The government has been consistent with its efforts in addressing affordable housing in 2017 — be it giving infrastructure status to this segment in the previous budget, to helping increase the quantum of beneficiaries in CLSS under Pradhan Mantri Awas Yojana (PMAY) by expanding the carpet area and re-defining income definitions. Now, Budget 2018-19 has further given impetus to affordable housing by creating a dedicated fund under the National Housing Bank (NHB).
This fund will be provided for from priority sector lending and fully serviced bonds authorised by the Government of India. Now that the government has created significant enablers to increase demand and to create favourable conditions, we should hopefully see a significant spike in new launches/supply in the coming days in the affordable housing segment.
It is also encouraging to see the government address the issues of housing in urban areas. While providing assistance to construct 37 lakh houses in urban areas will take care of the urban housing woes, financial assistance (Rs.2.04 lakh crore) to 99 Smart Cities will ease the pressure on the existing urban centres.
Further, the Finance Minister also proposed that no adjustment shall be made in respect of transactions in immovable property, where the circle rate value does not exceed 5 per cent of the consideration — this would affect only those localities where circle rates are higher than prevailing market rates. The government steered clear of further tax breaks for either industry or for the buyers.
That said, the government has been actively regulating the real estate industry over the last several quarters. From demonetisation aimed at curbing the effect of unaccounted money; to RERA which will help bring in consumer confidence, the real estate sector has seen significant regulatory influence in the past year.
While the budget is now done and dusted, there are some matters which would help drive the industry ahead more vigorously. We hope that going ahead the government will (a) address the issue of GST on new homes which is currently inflationary (b) examine the issue of lowering the cost of transactions, particularly stamp duty and registration fees (c) create enablers for the sector such as digitisation of property registries; guaranteeing or insuring land/property titles; enhancing liquidity in real estate markets through REITs and other means and (d) strengthen RERA to resolve disputes speedily and help drive confidence amongst consumers.
As we’ve been saying for a while now, there are green shoots emerging in the industry once again and we expect a gradual recovery in the course of 2018. With the government having done its bit, there is now need for concerted and purposeful action from developers and other stakeholders in the industry to do their bits and help the process for a better 2018 for real estate.
(Sudhir Pai is CEO of magicbricks. He can be contacted at sudhir.pai@timesgroup.com)
—IANS
by admin | May 25, 2021 | Opinions
By Amit Kapoor and Chirag Yadav,
The Budget is finally out and to put it simply, Mr. Jaitley did not disappoint. In fact, a majority of it was along expected lines. Most importantly, as promised, the government managed to do a commendable job of balancing economic populism with prudent economics. However, as is always the case, the good did come with a tinge of bad.
It was a no-brainer that the Budget would focus on the agricultural sector after BJP’s electoral performance in rural Gujarat. Mr. Jaitley went a step further and, in a major departure from the past, began his Budget speech with the government’s plan for the farming community. He unveiled a litany of measures in line with the government’s aim of doubling farmer incomes by 2022.
First, the Budget allowed for setting the minimum support price (MSP) at 1.5 times the production cost for kharif crops. Even though this support to farmers will help increase their incomes, there are two questions that need to be asked. Will the effect of this jump in MSP be inflationary? Also, will it take away the incentive to reduce production costs? The answer to both of these questions is probably in the affirmative. Only time will tell if the move has any such negative externalities for the economy, but the government should be prepared with commensurate remedies to tackle the eventuality.
The second significant move on the agricultural front has been a push to boost agri-business activities across the country and improve agricultural markets. Allocation has been doubled for enhancing food processing and specialised agro-processing networks from Rs 700 crores to Rs 1,400 crores. The government has also decided to follow a cluster-based approach for stimulating agricultural production. Further, in a bid to formalise agricultural markets, the 470 Agriculture Produce Market Committee (APMC) promoted markets would be connected to the e-nam market platform and over 22,000 rural agricultural markets would also be developed. These are positive moves to remove the middle man and ensure farmers receive the bulk of the prices paid by the consumer.
However, the e-nam platform is still in its formative stage and its performance has not been adequately tested. A bulk of the sale of agricultural products is still done through commission agents and it is doubtful that the practice will be done away with any time soon. On the other hand, the development of agri-business clusters provides a viable solution to formaliseagricultural markets. The gains from all of these measures, however, can only be expected in the long-run.
Another major highlight of the budget has been its focus on the social sector. Healthcare and education received their fair share of budgetary focus. In fact, Mr. Jaitley took pride in announcing the “world’s largest healthcare programme” that would provide Rs 5 lakhs per family per year for medical reimbursement under National Health Protection Scheme for around 10 crore families across India. This is a positive move by the government towards universal health coverage in the future. As for education, digitalisation of education and training of teachers was given a boost. In monetary terms, the increase in budgetary allocation from last year is about 3.84 percent and that for healthcare is about 2.76 percent. This seems like a significant boost in absolute terms, but it pales in comparison when seen in light of the overall GDP growth of 6.75 percent. Considering the fact that India lags on these social parameters, this historical trend in Indian budgets need to come to an end.
As for taxes, the corporate sector, which was expecting a tax cut on commensurate lines as that of the US economy, was partly obliged. Corporate tax for all companies with a turnover of Rs 250 crores or less was reduced to 25 per cent. This proved to be a major disappointment to large firms whichwill still be taxed at 30 per cent. However, it was understandable on the government’s part as the revenue forgone would have been an astounding Rs 20,000 crores had the tax reduction been done for all firms alike.
On a related note, a significant miss by the Budget has been on the investment front. Over the last six years, the investment across the country has been on a declining trend falling to 29 percent as per last CSO estimates. No major announcement was made to reverse this trend expect indirect measures like higher infrastructure allocation, which might be expected to crowd in private investment. However, considering the fact that investment has seen a structural decline over the last few years a lot could have been done to revive investment sentiments. This is also important because the question of jobs is largely dependent on the economy’s investment appetite.
Finally, the much-awaited question about the fiscal deficit was answered and the government did eventually breach the target of 3.2 percent in 2017-18. The revised estimate of the fiscal deficit in the current financial year stands at 3.5 percent while the projection for next year has been kept at 3.3 percent. The NK Singh Committee had allowed a leeway of 0.5 percent in case of unforeseen events and the government has managed to stay within it. The government also accepted its recommendation to maintain the debt-to-GDP ratio at 40 percent. It is commendable that the government has not given in to the temptation of reaping short-term political gains by disregarding the recommendations of the fiscal committee.The commitment would bode well with credit rating agencies and the economy in general.
Therefore, the Budget paints a promising picture of a government that saw it fit not to resort to populist ploys even after it received an election scare not long ago. Even though a lot was left wanting, especially on the investment front, the Budget managed to address quite a few economic challenges that India faces. By targeting the rural economy and the poor, it can be said that it was a Budget for the masses.
(Amit Kapoor is chair, Institute for Competitiveness, India. The views expressed are personal. He can be contacted at amit.kapoor@competitiveness.in and tweets @kautiliya. Chirag Yadav is senior researcher, Institute for Competitiveness)
—IANS
by admin | May 25, 2021 | Economy, Markets, News
Mumbai : Caution ahead of the Union Budget 2018-19 presentation led the key Indian equity indices to close in the negative territory for the second consecutive session on Wednesday.
Market observers said negative global cues and heavy selling pressure in healthcare, consumer durables and capital goods stocks pulled the equity indices lower.
However, some late-hour buying helped the key indices to recover from their day’s lows and the Nifty50 reclaimed the psychologically important 11,000-level.
The wider Nifty50 of the National Stock Exchange (NSE) fell by 21.95 points or 0.20 per cent to close at 11,027.70 points.
However, the barometer 30-scrip Sensitive Index (Sensex) of the BSE closed below the 36,000-mark at 35,965.02 points — down 68.71 points or 0.19 per cent from its previous close.
The BSE market breadth was bearish as 1,776 stocks declined against 1,036 advances.
“Markets corrected on Wednesday ahead of the Union Budget 2018-19 on Thursday, February 1. Investors and traders were turning cautious ahead of the event,” Deepak Jasani, Head, Retail Research, HDFC Securities, told IANS.
“Some late hour recovery was seen in the indices post 2.30 p.m. Broad market indices like the BSE mid-cap and small-cap indices lost more, thereby underperforming the main indices,” said Jasani.
In the broader markets, the S&P BSE mid-cap index closed lower by 1.29 per cent and the small-cap index by 0.83 per cent.
Provisional data with the exchanges showed that both foreign institutional investors turned net sellers and sold scrips worth Rs 136.63 crore.
However, domestic institutional investors invested in stocks worth Rs 1,294.66 crore.
The Indian rupee strengthened by two paise to close at 63.58 against the US dollar from its previous close at 63.60.
Vinod Nair, Head of Research, Geojit Financial Services, said: “Selling extended in the market as investors were awaiting the big budget day while the expectation for this budget is muted compared to what was anticipated over the last 2-years. The main requirement is to have a good balance between fiscal discipline and growth reforms.”
“Rural economy will be the key in the budget but infrastructure development and reforms are also likely to be highlighted. Some tinkering can be expected on corporate and individual taxation. If these basic points are addressed in the budget, we feel that market will maintain it’s luminous in the short to long-term,” Nair added.
Sectorwise, the S&P BSE healthcare index declined by 240.39 points, followed by capital index by 231.32 points and consumer durables index by 221.90 points.
On the other hand, the S&P BSE banking index edged higher by 124.79 points, oil and gas index by 77.60 points and energy index by 25.97 points.
Major Sensex gainers on Wednesday were: Kotak Bank, up 1.85 per cent at Rs 1,109.75; Reliance Industries, up 1.25 per cent at Rs 961.15; HDFC, up 1.16 per cent at Rs 1,955.70; IndusInd Bank, up 1 per cent at Rs 1,754.15; and Tata Motors, up 0.77 per cent at Rs 399.25.
Major Sensex losers were: Dr Reddy’s Lab, down 3.75 per cent at Rs 2,225.25; Tata Steel, down 3.49 per cent at Rs 705.05; Coal India, down 2.32 per cent at Rs 298.60; Hindustan Unilever, down 2.13 per cent at Rs 1,369.65; and Sun Pharma, down 2.02 per cent at Rs 579.35.
—IANS
by admin | May 25, 2021 | Opinions
By Amit Kapoor,
In its own #MeToo moment, the Economic Survey this year was released with a symbolic pink cover and a dedicated chapter on India’s notorious gender issues.
The Survey, over the last few years under Arvind Subramanian, has provided a refreshing take on resolving the challenges facing the Indian economy. In the past, he has given quite a few out-of-the-box policy recommendations like the establishment of a bad bank for resolution of the problem of bad loans and implementation of a universal basic income to do away with the inefficiency of subsidies. The document this year is no less insightful.
The Survey places the GDP growth estimate for the current fiscal at 6.75 per cent. This figure is a tad higher than the Central Statistics Office’s projection at 6.5 percent, as in its own estimates, it has not incorporated the pick-up in growth in the latter half of the year. Moreover, the Survey estimates that, as a result of the reforms undertaken this year, real GDP growth will rise by 7 to 7.5 percent in the next fiscal. This would reinstate India’s position as the fastest-growing major economy in the world.
On India’s economic growth in the recent past, the Survey highlights an interesting aspect. Over the last 4-6 quarters, India’s growth has temporarily decoupled with that of the world economy. Until early 2016, economic growth in India was accelerating while that of other countries was decelerating. Since then the opposite has been true.
This was due to a combination of five factors. First, until mid-2016, real interest rates were following the downward global trend after which India’s rates deviated and started shifting upwards. This affected investment activity negatively and resulted in an appreciation of the rupee, which subdued export activity.
The second and third factors were the twin effects of demonetisation and the Goods and Services Tax (GST). The fourth was the twin balance sheet (TBS) challenge of banks and corporates while the final factor was the uptick in oil prices over the first three quarters of 2017-18.
However, of late, India is displaying a robust revival in growth along with the world economy, signalling an end of the temporary decoupling it witnessed. The story of revival in the Survey is also punctuated with warnings of risk factors within the economy. The biggest challenge in the upcoming fiscal arises from the rise in oil prices. The Indian economy always finds its growth story challenged by twin deficits within its fiscal and current accounts owing to variability in the global oil prices. The economy needs to find a sustainable solution to this historical macro-economic vulnerability by rapidly ramping up its strength on the export front, preferably in manufactured goods.
The second risk factor highlighted by the Survey, which could impact India’s growth in the near future, is a possible correction in the stock markets. As this column has previously highlighted, Indian stock markets have displayed a puzzling trend over the last few years. Since December 2015, the Sensex has risen 46 percent in rupee terms while economic growth and corporate profits have decelerated. This trend has largely been driven by expectations of a revival in growth and a sudden change in the savings pattern of households after demonetisation. However, as the Survey points out, a sharp correction cannot be ruled out in case future growth of the economy and corporate earnings do not remain in line with current expectations.
Such a correction in stock markets could trigger the classic emerging market “stall” in capital flows and force further hikes in interest rates, which will be quite inimical to economic growth. Hence the duality of growth and risk is the current saga of the India story.
So, what do the findings of the Economic Survey tell us about the focus of the upcoming Budget?
First, as expected, the agriculture sector will be in deserving focus on February 1. The Survey stresses on giving adequate support to the sector. However, in a major setback to Modi’s aim of doubling agricultural income, the Survey provides a key finding that, due to climate change, annual agricultural incomes could reduce by 15-18 percent on an average. In unirrigated areas, this figure could climb up as high as 20-25 percent.
This provides some crucial Budget recommendations. Higher investment needs to be made towards expanding irrigation with the implementation of efficient drip and sprinkler technologies. Moreover, a plan to provide direct income support to farmers can be put in motion to replace inefficient agricultural subsidies.
Second, the Budget needs to address the perpetual problem of employment. Although India’s unemployment rate is around 3.5 percent, the unemployment rate in the 15-24 age group stands at 10.5 percent, as per recent International Labour Organisation estimates. Therefore, India has an abysmally low capacity to provide jobs to first-time workers. The only solution for India is to strengthen its manufacturing sector.
Providing incentives to labour-intensive export sectors in the Budget can kill two birds with one stone. Apart from providing jobs, growth in the export sector will imply higher current account surplus for the Indian economy which can provide a cushion against swings in the global oil prices. Therefore, it would go a long way in reducing India’s historical macro-economic vulnerability that the Survey highlights.
There are various other aspects of the economy that will hopefully be addressed when Finance Minister Arun Jaitley stands up in Parliament on the fateful day. Reviving investment activity, stabilising the GST and, most importantly, the question of sticking to the fiscal deficit targets; quite a lot hangs in balance on the upcoming Budget. It will be interesting to see the course that the government decides to take.
(Amit Kapoor is chair, Institute for Competitiveness, India. The views expressed are personal. He can be contacted at amit.kapoor@competitiveness.in and tweets @kautiliya. Chirag Yadav, researcher at Institute for Competitiveness, has contributed to the article)
—IANS
