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Economic Times | 23 Jan, 2023 | 10:52AM IST
Budget 2023 News Live Updates: Centre to tap brakes on capex growth, key subsidies on February 1, according to new poll
The Indian government is set to tap the brakes on a torrid pace of capital investment growth in the coming fiscal year as a slowing economy limits spending power by weakening tax revenue, according to a Reuters poll of economists.
Food and fertiliser subsidies that help two-thirds of India's 1.4 billion people will also be scaled back, according to the survey.
Prime Minister Narendra Modi's government has more than doubled capital spending since fiscal 2019/20 in a bid to make India a more attractive destination for global manufacturing. But private investment has lagged New Delhi's lead for about a decade.
Now, that robust pace of government investment is set to slow to barely half its previous rate in the fiscal year to March 2024, according to the Jan. 13-20 Reuters poll of 39 economists.
Capex is set to increase in fiscal 2023/24 by about 17% to 8.85 trillion Indian rupees ($109 billion), from an estimated 7.50 trillion rupees in the current fiscal year, itself up roughly 35% on a year before.
"The government has shown an express motivation to ramp up capex, and the expected absence of a robust recovery in private capex will make public capex particularly important in FY24," noted Sonal Varma, chief economist for India and Asia ex-Japan at Nomura.
Food and fertiliser subsidies that help two-thirds of India's 1.4 billion people will also be scaled back, according to the survey.
Prime Minister Narendra Modi's government has more than doubled capital spending since fiscal 2019/20 in a bid to make India a more attractive destination for global manufacturing. But private investment has lagged New Delhi's lead for about a decade.
Now, that robust pace of government investment is set to slow to barely half its previous rate in the fiscal year to March 2024, according to the Jan. 13-20 Reuters poll of 39 economists.
Capex is set to increase in fiscal 2023/24 by about 17% to 8.85 trillion Indian rupees ($109 billion), from an estimated 7.50 trillion rupees in the current fiscal year, itself up roughly 35% on a year before.
"The government has shown an express motivation to ramp up capex, and the expected absence of a robust recovery in private capex will make public capex particularly important in FY24," noted Sonal Varma, chief economist for India and Asia ex-Japan at Nomura.
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President's address to be held in existing Parliament building
Lok Sabha Speaker Om Birla on Friday refuted media reports on President Droupadi Murmu's address in the new Parliament building, and said that the address of the President will be held in the existing building of the Parliament as the new building is still under construction.
"The New Parliament Building is still under construction. During Budget Session, the Hon'ble President will address Members of two Houses in the existing Parliament House Building," the Lok Sabha Speaker said in a tweet.
The Budget Session of Parliament is likely to begin on January 31 and is expected to conclude on April 6 with a recess in between.
The session will start with an address by the President to the joint sitting of the Lok Sabha and Rajya Sabha in the Central Hall of Parliament.
This will be the first address to the two Houses of Parliament by President Murmu since her elevation to the top post in July last year.
"The New Parliament Building is still under construction. During Budget Session, the Hon'ble President will address Members of two Houses in the existing Parliament House Building," the Lok Sabha Speaker said in a tweet.
The Budget Session of Parliament is likely to begin on January 31 and is expected to conclude on April 6 with a recess in between.
The session will start with an address by the President to the joint sitting of the Lok Sabha and Rajya Sabha in the Central Hall of Parliament.
This will be the first address to the two Houses of Parliament by President Murmu since her elevation to the top post in July last year.
Travel and tourism industry seeks government assistance in Budget
The Travel and Tourism industry has sought assistance from the government in the upcoming budget in enhancing the structural transformation that is needed to build a stronger, more sustainable and resilient tourism industry.
Rajesh Magow, Co-Founder and Group CEO of MakeMyTrip said that the Indian travel and tourism industry has shown great resilience, domestic leisure travel has recovered well past pre-pandemic levels, though the long-haul international travel still lags.
At this crucial juncture, the industry needs support from the government to ensure that it continues to be the one of the foremost employers in the country.
"With India's focus on becoming a digital economy, the disparity between offline and online bookings should be done away with to motivate all travellers to embrace digital India at the grass-root level. Currently, the customer pays a 5 per cent GST charge when booking a non-AC bus through an online platform. This charge is zero for an offline booking. The disparity is similar in the case of an online booking of unregistered hotels and homestay," he said.
Rajesh Magow, Co-Founder and Group CEO of MakeMyTrip said that the Indian travel and tourism industry has shown great resilience, domestic leisure travel has recovered well past pre-pandemic levels, though the long-haul international travel still lags.
At this crucial juncture, the industry needs support from the government to ensure that it continues to be the one of the foremost employers in the country.
"With India's focus on becoming a digital economy, the disparity between offline and online bookings should be done away with to motivate all travellers to embrace digital India at the grass-root level. Currently, the customer pays a 5 per cent GST charge when booking a non-AC bus through an online platform. This charge is zero for an offline booking. The disparity is similar in the case of an online booking of unregistered hotels and homestay," he said.
HR industry expects roll out of labour codes, focus on formal job creation in Budget 2023
The Human Resource industry anticipates various measures from the upcoming Budget 2023, that will be beneficial for employees, the employment process, for job development and will address the skill-gap challenge in the country.
The Indian economy is on the road to recovery after the Covid-19 pandemic significantly affected the country's economic growth. Industry players are hoping that the ensuing budget will provide a much-needed boost to the HR sector that will help the industry to get back on track.
According to leading HR services provider Randstad India, the broad industry asks for the HR sector is the roll out of labour codes, focus on formal job creation, industry Status for Staffing Industry and enhancing skilling initiatives for the youth.
The Indian economy is on the road to recovery after the Covid-19 pandemic significantly affected the country's economic growth. Industry players are hoping that the ensuing budget will provide a much-needed boost to the HR sector that will help the industry to get back on track.
According to leading HR services provider Randstad India, the broad industry asks for the HR sector is the roll out of labour codes, focus on formal job creation, industry Status for Staffing Industry and enhancing skilling initiatives for the youth.
All government vehicles older than 15 years to be scrapped, deregistered, says road transport ministry
From April 1, all vehicles owned by central and state governments, including buses owned by transport corporations and public sector undertakings, that are older than 15 years will be de-registered and scrapped, according to a notification by the Road Transport and Highways Ministry.
The rule shall not apply to the special purpose vehicles (armoured and other specialised vehicles) used for operational purposes for the defence of the country and for the maintenance of law and order and internal security, the notification said.
"Disposal of such vehicles shall, after the expiry of the fifteen years from the date of initial registration of the vehicle, (should) be ensured through the Registered Vehicle Scrapping Facility set up in accordance with the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021," it said.
The rule shall not apply to the special purpose vehicles (armoured and other specialised vehicles) used for operational purposes for the defence of the country and for the maintenance of law and order and internal security, the notification said.
"Disposal of such vehicles shall, after the expiry of the fifteen years from the date of initial registration of the vehicle, (should) be ensured through the Registered Vehicle Scrapping Facility set up in accordance with the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021," it said.
"Union budget should create roadmap for sustainable growth in logistics sector"
The upcoming Union Budget should not only create a roadmap for sustainable growth in the logistics sector but also incentivise the industry to adopt sustainable practices, operators said on Thursday.
Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget 2023-24 in the Lok Sabha on February 1.
FedEx Express Senior Vice-President Middle East Indian Subcontinent and Africa (MEISA) Operations Kami Viswanathan in a statement said, "We recommend the implementation of zero rating of Goods and Services Tax for all international transportation services.
"Most of the international GST/VAT legislations 'zero-rate' international freight transportation services. This would facilitate trade and align India with international tax practices as well as reduce logistics costs."
Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget 2023-24 in the Lok Sabha on February 1.
FedEx Express Senior Vice-President Middle East Indian Subcontinent and Africa (MEISA) Operations Kami Viswanathan in a statement said, "We recommend the implementation of zero rating of Goods and Services Tax for all international transportation services.
"Most of the international GST/VAT legislations 'zero-rate' international freight transportation services. This would facilitate trade and align India with international tax practices as well as reduce logistics costs."
Ficci seeks increase in import duty of aluminium, aluminium products
Industry body Ficci has sought an increase in the import duty on aluminium and aluminium products to at least 12.5 per cent in the upcoming budget 2023-24, stating that the move will help curb dumping of aluminium products and encourage growth of the domestic manufacturing and recycling.
The present import duty on aluminium and aluminium products is 10 per cent. Aluminium, a resilient metal that retains its fundamental properties even when recycled, is widely utilised.
However, in recent years, there has been a visible surge in subpar aluminium imports, especially from China which constitutes over 85 per cent of downstream aluminium imports at present, Ficci said in a statement.
Moreover, India is also seeing aluminium imports from the US, the UK, Malaysia and the Middle East. Several of these nations support their domestic industries with concessions and benefits, including low interest loans and cheaper power tariffs.
The present import duty on aluminium and aluminium products is 10 per cent. Aluminium, a resilient metal that retains its fundamental properties even when recycled, is widely utilised.
However, in recent years, there has been a visible surge in subpar aluminium imports, especially from China which constitutes over 85 per cent of downstream aluminium imports at present, Ficci said in a statement.
Moreover, India is also seeing aluminium imports from the US, the UK, Malaysia and the Middle East. Several of these nations support their domestic industries with concessions and benefits, including low interest loans and cheaper power tariffs.
International Road Federation seeks removal of GST on helmets
International Road Federation (IRF), a global body advocating for safer roads, on Thursday said that it has made a plea to the government to do away with the GST imposed on helmets.
At present a GST of 18 per cent is levied on helmets.
"IRF...in a letter written to the Union finance minister Nirmala Sitharaman has demanded reduction of GST on life saving device helmets for safety of the two-wheeler riders from present 18 per cent to 0 per cent in the forthcoming Union Budget 2023-24," the global road safety body said.
India accounts for about 11 per cent of the road accident deaths worldwide and the two-wheeler riders, being most vulnerable, constitute almost 31.4 per cent of road accidental deaths primarily due to head injuries.
At present a GST of 18 per cent is levied on helmets.
"IRF...in a letter written to the Union finance minister Nirmala Sitharaman has demanded reduction of GST on life saving device helmets for safety of the two-wheeler riders from present 18 per cent to 0 per cent in the forthcoming Union Budget 2023-24," the global road safety body said.
India accounts for about 11 per cent of the road accident deaths worldwide and the two-wheeler riders, being most vulnerable, constitute almost 31.4 per cent of road accidental deaths primarily due to head injuries.
Steel industry seeks anti-predatory measures against imports
While domestic steel prices have remained subdued, raw material costs have surged approximately by Rs 6,000 per metric tonnes.
Amid this scenario, Indian steel makers have sought suo moto safeguard in terms of import duty of up to 25 per cent on ad-valorem basis, in the forthcoming union budget.
In a representation to the finance ministry, the domestic steel makers have also sought reinstatement of anti-dumping measures on HR coil, sheets and plates as well as colour coated and wire rods.
Amid this scenario, Indian steel makers have sought suo moto safeguard in terms of import duty of up to 25 per cent on ad-valorem basis, in the forthcoming union budget.
In a representation to the finance ministry, the domestic steel makers have also sought reinstatement of anti-dumping measures on HR coil, sheets and plates as well as colour coated and wire rods.
