Budget 2020 LIVE updates: FM Nirmala Sitharaman at Finance Ministry

Budget session 2020 LIVE updates: The Economic Survey is a detailed report card on the economic performance in the year

9:11 AM

Union Budget glossary: What is Economic Survey?

The Economic Survey brings out the economic trends in the country and facilitates a better appreciation of the mobilisation of resources and their allocation in the Union Budget. The Survey analyses the trends in agricultural and industrial production, infrastructure, employment, money supply, prices, imports, exports, foreign exchange reserves and other relevant economic factors that have a bearing on the Budget. It is presented in Parliament ahead of the Budget for the ensuing year.

9:07 AM

TARP-like government fund likely in Budget for NBFC relief

The government is likely to unveil, in the Union Budget 2020, a Troubled Assets Relief Programme (TARP) similar to what the US initiated during the financial crisis in 2008.

 

Under the proposed scheme, the troubled or stressed assets of the non-banking finance companies (NBFCs) will be bought by a government fund to revive the sector.

 

A high-level review meeting on this was held on Monday, chaired by Prime Minister Narendra Modi, for a final decision on the matter.

 

The US government had initiated the TARP at the height of the Wall Street financial crisis of 2008.

9:01 AM

Tax slabs tweak, higher basic exemption on Budget agenda

As clamour grows for more money into the pockets of consumers and households to boost consumption in the economy, the government is discussing multiple options on cuts in personal income tax (PIT) in the forthcoming Union Budget.

 

A final decision was to be taken by Prime Minister Narendra Modi .

 

The options being considered by the Finance Ministry include acting on suggestions of task force on direct tax simplification.

 

A tweaking of tax slabs is on also on the agenda and as part of the restructuring, the government may raise the minimum exemption limit from the current Rs 250,000.

7:01 AM

Apr-Dec fiscal deficit hits 132.4% of budgetary target, at Rs 9.31 trillion

India's budgetary fiscal deficit for the April-December period was Rs 9.31 trillion, or 132.4 per cent of the budget estimates (BE). The government has targeted fiscal deficit to be at Rs 7.03 trillion for 2019-20. Read More

6:45 AM

FM Nirmala Sitharaman to present Budget 2020 in Parliament today

Finance Minister Nirmala Sitharaman will on Saturday present the budget of the second term of the Narendra Modi government. This will also be the second budget for Sitharaman, who became the second woman finance minister after Indira Gandhi to do so in the history of independent India. 

 

Sitharaman will present the full-year budget for the year ending March 2021.

11:05 PM

Experts see economic growth revival in FY21

Economist at Deloitte India Rumki Majumdar said the Survey projects growth revival in FY 2021 but suggests that the government may have to incur expansionary policy to support growth.

11:04 PM

Push on infra spending likely to be a part of Budget 2020

A cut in personal income tax, sops for rural and agriculture sectors as well as an aggressive push on infrastructure spending are likely to be part of Finance Minister Nirmala Sitharaman's "feel-good" second Budget.

 

Facing the worst economic slowdown in more than a decade, Sitharaman is expected to pull out all stops to spur consumer demand and investment, government sources and economists said.

10:24 PM

Better to focus on growth than on fiscal deficit in current situation: CEA

Chief Economic Adviser K V Subramanian on Friday suggested the government should focus on growth rather than being rigid on fiscal deficit in times of slowing economy. "So, we've delineated the overall stance that needs to be taken in times like this. India has been in such situations earlier as well. There's always a delicate balance between spurring growth and keeping the fiscal (situation) in order," Subramanian told PTI in an interaction.

8:59 PM

Economy during PM Modi's first tenure was actually worse than what we believed: Chidambaram

Congress leader P Chidambaram on Friday said the state of the economy during Prime Minister Narendra Modi's first tenure was worse than what was believed as growth rates for 2017-18 and 2018-19 have been revised downwards.

 

He asked if the ministers will explain it.

 

"GDP growth rates for 2017-18 and 2018-19 have been revised DOWNWARDS. The state of the economy under MODI-1 was actually worse than what we believed so far.

 

"Will the articulate and voluble Ministers please speak on the state of the economy and explain the downward revision in the last two years and the drastic slide in the current fiscal year," Chidambaram tweeted. 

8:17 PM

Eco Survey completely disconnected with problems faced by common man: Congress

The Congress on Friday hit out at the government on the Economic Survey, saying it is "completely disconnected" with the reality as the country is facing difficult times on the economic front and it is not bothered about the problems faced by the common man.

 

Congress spokesperson Rajeev Gowda also attacked the government on its "thalinomics" concept given by Finance Ministry's Chief Economic Adviser Krishnamurthy V Subramanian.

 

He also accused the government of "fudging data" and committing a "fraud" as the numbers presented by it are not believable by the world.

 

"Thanks to monumental mismanagement by the Modi government, the Indian economy is going through very difficult times. Yet the Economic Survey (ESI) 2019-20 released today is completely disconnected from this grim reality. But this is not surprising as all of the Modi government's chief economic advisers have ignored the ground realities in all these years," Gowda said.

7:45 PM

Eco Survey's GDP growth forecast for FY20 wide off projection

The GDP growth projection made in Economic Survey 2018-19 was wide off the mark, as the expansion is estimated at only 5 per cent during the current fiscal as against 7 per cent projected earlier.

 

It is for the second consecutive time that NSO's GDP estimate is significantly lower than the projection made in the survey prepared by the finance ministry.

 

As per the National Statistical Office (NSO), economic growth is estimated to touch an 11-year low of 5 per cent during 2019-20, mainly due to slowdown in the agriculture and manufacturing sectors.

 

The Economic Survey 2018-19, which was tabled in Parliament in July 2019, had projected growth at 7 per cent for the current fiscal ending March 2020.

 

The Economic Survey 2017-18 had estimated growth for 2018-19 at 7-7.5 per cent. The GDP growth, as per the latest NSO data, has been revised downwards to 6.1 per cent from the earlier estimate of 6.8 per cent.

7:28 PM

Economic Survey makes case for correction in inverted duty structure

The Economic Survey on Friday made a case for correction in inverted duty structure as it will help in reducing cost of intermediate inputs imported for making goods for exports purpose.

 

Inverted duty structure impacts the domestic industry adversely as manufacturers have to pay a higher price for raw material in terms of duty, while the finished product lands at lower duty and cost.

 

It said that in recent times, India's tariff regime has come under pressure from trade partners who seek a cut in the country's basic customs duties.

 

India has defended its tariff regime stating that it is necessary for protecting the vulnerable businesses in India.

7:26 PM

Insolvency law reduces resolution time for stressed assets to 340 days: Eco Survey

The average time taken for resolution of stressed assets has come down to 340 days since the insolvency law came into force three years ago compared to around 4.3 years taken earlier, according to the Economic Survey.

 

The Insolvency and Bankruptcy Code (IBC), which came into force in 2016, provides for market-linked and time-bound resolution of stressed assets.

 

The survey, tabled in the Parliament on Friday, also said resolution under the Code has been much higher as compared to other processes.

 

Citing data provided in the report on Trend and Progress of Banking in India 2018-19, the survey said the amount recovered as a percentage of amount involved in 2017-18 and 2018-19 has been much higher as compared to Lok Adalat and Debt Recovery Tribunals (DRTs), among others.

7:25 PM

Eco Survey indicates positive outlook for steel, oil and gas sectors: Pradhan

The Economic Survey 2019-20 points to increasing steel production and consumption and easing of crude prices, indicating positive outlook for steel and oil and gas sectors, Union minister Dharmendra Pradhan said on Friday.

 

The Economic Survey, tabled in Parliament by Finance Minister Nirmala Sitharaman, said India produced 64.3 million tonnes (MT) of crude steel and 59.73 MT of finished steel during April-October 2019-20.

 

The sector achieved a growth of 5.2 per cent during April-November period of the ongoing financial year as compared to 3.6 per cent in the year-ago period, it added.

 

In a tweet, Petroleum & Natural Gas and Steel Minister Dharmendra Pradhan said, "#EconomicSurvey also points to increasing steel production and consumption, easing of crude prices all indicating positive outlook for steel and oil and gas sectors." The National Infrastructure Pipeline of Rs 102 lakh crore will facilitate growth, create infra for future and ease lives of common citizens, he said in another tweet.

7:23 PM

Corporate tax cut to mostly benefit less than 1% of companies: Survey

The steep cut in corporate tax rate will benefit large companies the most as smaller ones were already paying lower rates, the Economic Survey 2019-20 said on Friday.

 

Finance Minister Nirmala Sitharaman had in September last year announced the lowering of the base corporate tax rate to 22 per cent from 30 per cent for companies that do not seek exemptions and reduced the rate for some new manufacturing companies to 15 per cent from 25 per cent. Including surcharges and cesses (levies to raise funds for specific purposes), the effective corporate tax rate will drop by nearly 10 percentage points to 25.17 per cent.

 

The pre-Budget Survey, tabled in Parliament, said most of the companies (99.1 per cent) have a gross turnover of below Rs 400 crore (say small and medium companies) and are already taxed at the base corporate tax rate of 25 per cent. With surcharge and cess, their tax rate varies from 26 per cent to 29.12 per cent.

7:22 PM

Fiscal deficit target may be relaxed to arrest declining growth: Eco Survey

The Economic Survey on Friday made a case for relaxing the fiscal deficit target of 3.3 per cent of GDP in view of the need to arrest declining growth, estimated to touch an 11-year low of 5 per cent in the current fiscal.

 

The Medium Term Fiscal Policy (MTFP) statement presented with the Budget 2019-20, pegged the fiscal deficit target for 2019-20 at 3.3 per cent of gross domestic product (GDP), which was further expected to follow a gradual path of reduction and attain the targeted level of 3 per cent of GDP in 2020-21, and continue at the same level in 2021-22.

 

The year 2019-20 has been challenging for the Indian economy owing to the decelerating growth rate experienced in the first half of the year, said the survey prepared by a team led by Chief Economic Adviser K V Subramanian.

6:29 PM

Survey suggests scrapping of 'anachronistic' Essential Commodity Act 1955

The Economic Survey on Friday pitched for scrapping of the Essential Commodities Act (ECA), saying the law is "anachronistic" that leads to harassment and is of no help in checking price volatility.

 

The Survey also favoured "dynamic" foodgrain policy that allows switching from procurement and distribution of grains to cash transfers, but disfavoured loan waiver to farmers that disrupts the credit culture.

 

"The consumer affairs ministry and its related arms must examine whether the anachronistic ECA, which was passed in 1955 in an India worried about famines and shortages, is relevant in today's India," it observed.

 

Stating that around 76,000 raids under the ECA were conducted last year, the Survey said that considerable administrative effort goes into enforcement of this law assuming a minimum of 5 persons involved in a raid.

 

"As the conviction rate, however, is abysmally low and raids have no impact on prices, the ECA only seems to enable rent-seeking and harassment. The Survey provides clear evidence that the case for jettisoning this anachronistic legislation is strong," the document said.

6:28 PM

Majority of trade pacts implemented by India have no effect on exports: Survey

Majority of trade agreements being implemented by India have had "no effect" on the country's overall merchandise exports, according to the Economic Survey.

 

It also said that products manufactured in India have clearly benefitted from eight out of the fourteen trade agreements considered in the survey.

 

"A majority of the trade agreements exerted no effect on overall merchandise exports," it said.

 

The survey considered 14 agreements signed by India -- Chile, Korea, Sri Lanka, Singapore, Bhutan, Afghanistan, Nepal, Malaysia, Japan, Thailand, BIMSTEC, Asean, Mercosur, and SAFTA.

 

Exports of manufactured goods from India has benefitted from trade agreements with Mercosur (a six-country trade bloc including Brazil, Argentina, Paraguay and Uruguay), ASEAN, Nepal, Singapore, Chile, Bhutan, Afghanistan and Japan.

 

It said that four of the agreements (SAFTA, BIMSTEC, Thailand and Sri Lanka) had no effect on exports of manufactured products, while the bilateral agreements with Korea and Japan exerted a negative effect.

6:02 PM

Fiscal deficit target may be relaxed to arrest declining growth: Survey

The Economic Survey on Friday made a case for relaxing the fiscal deficit target of 3.3 per cent of GDP in view of the need to arrest declining growth, estimated to touch a 11-year low of 5 per cent in the current fiscal.

 

The Medium Term Fiscal Policy (MTFP) statement presented with the Budget 2019-20, pegged the fiscal deficit target for 2019-20 at 3.3 per cent of gross domestic product (GDP), which was further expected to follow a gradual path of reduction and attain the targeted level of 3 per cent of GDP in 2020-21, and continue at the same level in 2021-22.

 

The year 2019-20 has been challenging for the Indian economy owing to the decelerating growth rate experienced in the first half of the year, said the survey prepared by a team led by Chief Economic Adviser K V Subramanian.

5:56 PM

Cut in housing prices can help clear unsold inventories, clean up banks' balance sheets: Survey

The residential property market is reeling under huge unsold housing stocks because of issues like stalled projects and delayed possession, but inventories can be cleared if real estate developers take a haircut and reduce apartment prices, according to the Economic Survey.

 

The balance sheets of banks and non-banking financial companies (NBFCs) would also be positively impacted if builders decide so, it added.

 

Pitching for correction in property prices, the survey said that housing prices are ruling at a high level, even as the growth in rates has been muted since 2015-16.

 

"Government's thrust on affordable housing is evident, in order to boost the real estate sector and consequently the construction activity in the country. Higher investment in housing by households may increase the fixed investment in the economy," the survey said.

 

"Existing unsold housing inventory can be cleared and the balance sheets of both bank/non-bank lenders cleaned if the real estate developers are willing to take a 'hair-cut' by allowing the house-prices to drop," it added.

5:51 PM

Govt must unleash bold reforms to achieve 6-6.5 pc growth in FY21, say experts, industry

Attaining a GDP growth rate of 6 to 6.5 per cent in 2020-21 as projected by the Economic Survey will be "challenging" and the government needs to prioritise growth while unleashing bolder policy measures to achieve it, experts and industry bodies said on Friday.

 

India's economic growth is expected to "strongly rebound" to 6-6.5 per cent in 2020-21 from 5 per cent estimated in the current fiscal, said the Economic Survey 2019-20 tabled in Parliament on Friday by Finance Minister Nirmala Sitharaman, adding that the government with a strong mandate has the capacity to expedite reforms.

 

"The 6-6.5 per cent growth pegged by the Economic Survey for 2020-21, is a target that is achievable with the right dose of reforms and public investments," CII Director General Chandrajit Banerjee said.

5:32 PM

Thalinomics in times of rising prices: Veg, non-veg thalis more affordable, says Eco Survey

Rising inflation may have burnt a hole in common man's pocket but Finance Ministry's chief economic advisor believes otherwise as he brought a novel 'thali' concept to otherwise heavy-duty data crunching to drive home the point that affordability of a plate of meal has improved.

 

Calling it 'Thalinomics', Krishnamurthy V Subramanian compared price of standard veg and non-veg meal plates across the country to say that affordability as a factor of daily wage has improved overtime, indicating improved welfare of the common person.

 

The affordability of vegetarian 'thalis' improved by 29 per cent while that of non-vegetarian by 18 per cent between 2006-07 and 2019-20, the Economic Survey said in its chapter 'Thalinomics -- The Economics of a Plate of Food in India".

5:30 PM

Privatised CPSEs reported better profit, sales after transition: Survey

Most privatised CPSE witnessed improvement in net worth, profit, gross revenue and sales growth after the transition, the Economic Survey has said.

 

The survey, tabled in Parliament on Friday, examined the change in performance for each individual central public sector enterprises (CPSE). It studied the movement in major financial indicators for each of the firm ten years before and after the year of strategic disinvestment or privatisation.

 

Taken individually, each privatised CPSE witnessed improvement in net worth, net profit, gross revenue, net profit margin, sales growth in the post-privatisation period compared to pre-privatisation period except for Hindustan Teleprinters, MFIL and Tata Communications in the case of few indicators. it said.

5:30 PM

Consequential train accidents decreased in 2018-19: Survey

Stating that steps are being taken on a regular basis to prevent rail accidents, the Economic Survey on Friday said consequential train accidents registered a decline in 2018-19.

 

It said number of consequential train accidents decreased to 59 in 2018-19, compared with 73 in the previous year. In 2019-20 (April-October 2019), 41 consequential train accidents took place.

 

"Safety is accorded the highest priority by Indian Railways and steps are being undertaken on a continuous basis to prevent accidents and to enhance safety of the passengers," according to the Economic Survey 2019-20 tabled in Parliament.

5:25 PM

150,000 Ayushman Bharat Health & Wellness Centres to be set up by 2022: Survey

To promote preventive healthcare, 150,000 Ayushman Bharat Health & Wellness Centres are proposed to be set up by 2022, according to the Economic Survey 2019-20.

 

The Survey was tabled in Parliament on Friday by Finance Minister Nirmala Sitharaman. A total of 28,005 such centres have already been set up as on January 14, 2020, it added.

5:05 PM

Intense competition, low tariffs led to financial stress in telecom sector: Survey

Substantial competition and low tariff rates by telecom operators since 2016 have led to a financial stress in the sector, the Economic Survey said on Friday.

 

The data price in the country came down by over 99 per cent during 2016-2019, making it among the lowest tariff in the world, according to the survey.

 

"Since 2016, the sector has witnessed substantial competition and price cutting by the telecom service providers (TSPs), creating financial stress in the sector. As a result, the sector is experiencing consolidation. While some operators have filed for bankruptcy, others have merged, in their quest to improve viability," the survey report said.

 

In April-June 2019, the price of data was Rs 7.7 per gigabyte (GB) as compared to Rs 200 per GB in June 2016, it added.

 

"The Average Revenue Per User (ARPU) for GSM based mobile services has also gone down substantially from Rs 126 in June 2016 to Rs 74.30 in June 2019," the survey said.

5:05 PM

Survey expresses worry over aging shipping fleet, low share in global tonnage

The Economic Survey has expressed concerns over aging Indian shipping fleet and a meagre 0.9 per cent share of the country in total global dead weight tonnage.

 

About 42 per cent of India's 1,419 fleet is 21 years and above, the Economic Survey for 2019-20, tabled in Parliament by Union Finance and Corporate Affairs Minister Nirmala Sitharaman on Friday, said.

 

"Despite one of the largest merchant shipping fleet among developing countries, India's share in total world dead weight tonnage (DWT) is only 0.9 per cent as on January 1, 2019 ... The existing Indian fleet is also aging, with the average age increasing from 15 years in 1999 to 19.71 years as on October 1, 2019 (42.06 per cent of the fleet is 21 years and above and 12.49 per cent is in the 16 to 20 year age group)," the Economic Survey said.

5:03 PM

Eco Survey focuses on wealth creation, says PM Modi

The Economic Survey focuses on wealth creation for Indians and outlines a multi-faceted strategy to achieve a USD 5 trillion economy through enterprise, exports and the ease of doing business, Prime Minister Narendra Modi said on Friday.

 

Economic Survey 2019-20 projected the revival of economic growth to 6-6.5 per cent in the next fiscal beginning April 1 but suggested the government should relax the budget deficit target to boost growth from a decade low.

 

The Survey, released a day before the Union Budget for 2020-21 is presented, called for cutting food subsidy while at the same time looking at businessmen with respect as they create wealth and jobs.

 

"The #EconomicSurvey 2019-20 focuses on wealth-creation for 130 crore Indians. It outlines a multi-faceted strategy to achieve a $5 trillion economy through enterprise, exports, ease of doing business and more," Modi said on Twitter.

4:51 PM

Contraction in domestic revenue growth softened IT-BPM sector growth in FY19: Survey

Contraction in domestic revenue growth "softened" the overall pace of revenue growth of the IT-BPM sector to 6.8 per cent in 2018-19 from 8.2 per cent in the previous year, the Economic Survey said on Friday.

 

Nearly 83 per cent of the IT-Business Process Management (BPM) industry continues to be export-driven, with export revenues crossing USD 135 billion in 2018-19, it said.

 

"During 2018-19, the revenue growth (y-o-y) for IT-BPM sector (excluding hardware) softened to 6.8 per cent from 8.2 per cent in 2017-18. This was driven by a contraction of 0.3 per cent in domestic revenue growth even as export revenue growth accelerated to 8.3 per cent," it added.

4:49 PM

Congenial environment for aviation sector; airlines to have 1,200 planes by FY'24: Survey

Indian aviation sector "re-established" its resilience this fiscal despite a large airline suspending operations and the government has been providing a congenial environment so that airlines can have more than 1,200 planes by 2023-24, according to the Economic Survey.

 

India is the world's third largest domestic market for civil aviation and has 136 Airports Authority of India (AAI)-managed airports as well as six aerodromes under public private partnerships, it said.

 

In recent times, domestic traffic growth had faced headwinds.

 

The Survey for 2019-20, tabled in Parliament on Friday, also said airlines operators in the country have scaled up their aircraft seat capacity from an estimated 0.07 annual seats per capita in 2013 to 0.12 in 2018.