1. FM Arun Jaitley may not present a game-changer budget on Feb 29: Nomura

FM Arun Jaitley may not present a game-changer budget on Feb 29: Nomura

Budget 2016: Nomura says the government would stick to a fiscal deficit target of 3.5% of GDP in FY17 with credible assumptions.

By: | Updated: February 19, 2016 3:29 PM
FM Arun Jaitley

Budget 2016: Nomura says the government would stick to a fiscal deficit target of 3.5% of GDP in FY17 with credible assumptions. (Photo: PTI)

Budget 2016: Finance minister Arun Jaitley is not likely to present a game-changer budget on February 29, but is expected to present a “run-of-the-mill” budget, a Nomura report said. However, the government would stick to a fiscal deficit target of 3.5% of GDP in FY17 with credible assumptions.

In the Budget for 2015-16, Jaitley had stretched the fiscal deficit target to 3.9 per cent from the earlier 3.6 per cent to address growth concerns. As per the roadmap, deficit is to be brought down to 3.5 per cent of GDP in 2016-17, from 3.9 per cent in 2015-16.

According to the Japanese financial services major, the budget will be a tightrope walk for the government.

Below are the 5 budget expectations from Nomura:

1. Government may meet its fiscal deficit target of 3.9% of GDP in FY16, but expect slippage to 3.7% of GDP in FY17 owing to the Seventh Pay Commission (including arrears) and the One Rank One Pension scheme.

2. Quality of fiscal consolidation to deteriorate as wages and pensions rise, while budgeted capex moderates. Instead, we expect a step-up in off-balance-sheet financing of infrastructure (via public sector enterprises and the NIIF).

3. Net market borrowing to rise to Rs 4.8 trillion in FY17 (FY16: INR4.4trn) and gross borrowing to increase to Rs 6.5 trillion in FY17 from Rs 5.85 trillion in FY16.

4. FM Arun Jaitley may increase the services tax rate to 16% from 14.5% and a reduction in the corporate tax rate to 29%, from 30%, alongside lower exemptions this budget.

5. Other key areas in the budget are likely to include: (1) boosting rural infrastructure; (2) public sector bank reforms; (3) skilling and employment incentives; and (4) start-up India.

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  1. A
    Ashish
    Feb 19, 2016 at 11:13 am
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    Reply
    1. P
      Parth Garg
      Feb 22, 2016 at 8:29 am
      One thing is sure after every Union Minister and Chief Ministers of BJP ruled States declaring schemes and project worth several Lakh Crore day in and day out the common people would be loaded with unbearable direct and indirect tax burden.
      Reply
      1. P
        pkpk
        Feb 20, 2016 at 2:37 pm
        What do you mean by game changer?1. Income tax for individuals and corporations should be brought down to 20%. There should be only 3 slabs - 10%, 15% and 20%. There should be no exemption - everybody at the minimum should pay 10% even if your income is 10 rupees from whatever - ry, industry, farming, construction or services. 2. Hiring and firing by employers should be free. Employers whether govt, corporations or small firms or individuals like big farmers should be free to hire anybody for any length of duration and free to fire whenever required. That's all is needed to make India a ROCKET ECONOMY.
        Reply

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