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Arun Jaitley’s Budget 2016: Rating Agencies rain on FM’s parade; top 5 points to note

Wed March 02 2016, 12:48 pm
  • budget 2016, budget news 2016, income tax slab 2016, budget highlights, budget 2016 india, budget 2016 income tax, 2016 income tax rates, tax rates 2016, tax rates 2016-17, budget news

    FM Arun Jaitley speech painted a pretty picture about the Indian economy and NDA government's intentions to spur economic growth in a tough global environment, but a day after domestic rating agencies have taken the sheen off the FM's optimism. Check out the top 5 reasons why: (Image Source: Reuters)

  • budget 2016, budget news 2016, income tax slab 2016, budget highlights, budget 2016 india, budget 2016 income tax, 2016 income tax rates, tax rates 2016, tax rates 2016-17, budget news

    1. Arun Jaitley's Budget 2016: Rating agencies have said while some of the revenue growth expectations expressed by Finance Minister Arun Jaitley's in the Union Budget are optimistic, but the government will have to deliver on the fiscal targets before the Governore Raghuram Rajan led Reserve Bank of India (RBI) can cut rates. (Image Source: Reuters)

  • budget 2016, budget news 2016, income tax slab 2016, budget highlights, budget 2016 india, budget 2016 income tax, 2016 income tax rates, tax rates 2016, tax rates 2016-17, budget news

    2. Arun Jaitley's Budget 2016: "A closer look at the Budget 2016 math indicates that the revenue expectation is highly optimistic and for the government to stay on the fiscal consolidation path, it will have to cut capital expenditure," India Ratings said. (Image Source: Reuters)

  • budget 2016, budget news 2016, income tax slab 2016, budget highlights, budget 2016 india, budget 2016 income tax, 2016 income tax rates, tax rates 2016, tax rates 2016-17, budget news

    3. Arun Jaitley's Budget 2016: Another agency Icra said a "final rate cut" of 0.25 per cent can come in 2016, provided the monsoons are normal. It, however, raised question marks over the 14.2 per cent revenue growth target, which has been arrived at after calculating an 18.1 per cent growth in income tax, 12.2 per cent growth in Excise duty and a whopping 76.67 per cent growth in non-tax revenue from communication services expecting a windfall from the forthcoming spectrum sales. "The assumed buoyancy of income tax is optimistic; Excise resilience seems believable on the back of the increase in the clean environment cess and infrastructure cess," it said, and even the non-tax revenue from other communication services also appears optimistic. (Image Source: PTI)

  • budget 2016, budget news 2016, income tax slab 2016, budget highlights, budget 2016 india, budget 2016 income tax, 2016 income tax rates, tax rates 2016, tax rates 2016-17, budget news

    4. Arun Jaitley's Budget 2016: Icra said spectrum sale (Rs 98,000crore), divestment (Rs 36,000 crore) and strategic divestment (Rs 20,000 crore) are optimistic, but tax growth targets are realistic. Crisil, however, offered a different view saying the government has got its maths correct, and that most of the tax collection targets are achievable, except income tax and corporate tax. It said while the overall subsidy burden is likely to come down on lower oil subsidies, there is only a mild hike in productive spending (which includes capital spending and revenues grants for creation of capital assets) has been increased only marginally to 2.75 per cent from 2.73 per cent. (Image Source: Reuters)

  • budget 2016, budget news 2016, income tax slab 2016, budget highlights, budget 2016 india, budget 2016 income tax, 2016 income tax rates, tax rates 2016, tax rates 2016-17, budget news

    5. Arun Jaitley's Budget 2016: Icra said a "substantial portion" increase in the Central Plan outlay will be funded through extra budgetary sources, including institutional finance and market borrowings to be raised by NHAI and the Railways. Even though the government's borrowing is lower in FY17, this will push up bond yields and crowd out the private sector, it warned. (Image Source: Reuters)

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