Union Budget 2021 Live Updates

The BSE Sensex lost almost 7% this week ahead of the Union Budget.

“Bangladesh seems poised to emerge as a dominant exporter as its exports posted an impressive compound annual growth rate (CAGR) of 8.6 percent during 2011-2019, higher than 0.9 percent for India, and 0.4 percent for the world. As a result, Bangladesh witnessed its share in world exports increase from 0.1 percent in 2011 to 0.3 percent in 2019,” said the Economic survey on Friday.

Comparison of Thali costs showed that in 2020-21 (Jun-Dec 2020), the most expensive Veg thali in the rural areas was in Andaman & Nicobar Islands (Rs 38.7) while the cheapest in rural areas was in Uttar Pradesh (Rs 23.1). In terms of Non-Veg thali during the same period, the most expensive was in Arunachal Pradesh (Rs 48.5) while cheapest was in Chandigarh (Rs 29.9) in rural areas.

India is expected to witness the current account surplus during the current financial year after a gap of 17 years.

Economic Survey 2021 said that agriculture is set to cushion the shock of the pandemic on the economy in 2020-21 with a growth of 3.4%- resulting in an increase in its share in GDP to 19.9% in 2020-21 from 17.8% in 2019-20. This indicates that agricultural activities for rabi harvesting and kharif sowing were largely unaffected by the COVID-induced lockdown.

Gross Value Added (GVA) growth is pegged at -7.2% in 2020-21 as against 3.9% in 2019-20.

The new farm laws are designed and intended primarily to benefit small and marginal farmers who constitute 85% of total farmers, the Economic Survey 2021 said, adding that the laws will empower farmers in their engagement with processors, wholesalers, aggregators, large retailers and provide a level-playing field.

Although India has performed above expectation on innovation w.r.t. its level of development, India lags behind most other large economies (top ten in terms of GDP current US$) on most indicators of innovation, says survey.

"This path would entail a growth in real GDP by 2.4 percent over the absolute level of 2019-20 – implying that the economy would take two years to reach and go past the pre-pandemic level. Key role of the government is to actively shape the structure of the healthcare market," the Survey reads.

Policy focus does not imply that re-distributive objectives are unimportant but that redistribution is only feasible in a developing economy if the size of the economic pie grows, says Economic survey 2021.

“Never in the history of sovereign credit ratings has the 5th largest economy been rated as the lowest rung of investment grade (BBB -). India’s fiscal policy must not remain beholden to a noisy, biased measure of India’s fundamentals. India’s forex reserves can cover an additional 2.8 standard deviation negative event. It is imperative that sovereign credit rating methodology be made more transparent, less subjective,” Economic Survey 2021 says.

The Economic Survey 2020-21 tabled by the Finance Minister Nirmala Sitharaman said that India's GDP (gross domestic product) is seen growing at 11% in the financial year 2021-22.

Benchmark indices have lost more than 5% ahead of the Union Budget announcements. There is a possibility that there could be some cess that is levied on corporate tax, which could hit earnings.

We expect the governments subsidy bill for 2021-22 to increase by around 4 to 5% to Rs.2.7 lakh crores, driven by an increase in food subsidy.

Any cess levied on corporate tax maybe a dampener for the stock markets. Remember, India drastically reduced corporate tax rates, which led to a huge spike in the stock markets.

Stock markets are trading flat ahead of the Economic Survey. The Nifty is up almost 28 points, while the Sensex is up 74 points. The Nifty has shed near 5 per cent in the last few trading sessions.

The Economic Survey is likely to give an indication of where we are headed in terms of growth.