The Indian rupee had lost much of its radiance in last two days as the domestic currency had dived about 61 paise against the US dollar after Finance Minister Arun Jaitley had tabled India Budget 2018.
The Indian rupee had lost much of its radiance in last two days as the domestic currency had dived about 61 paise against the US dollar after Finance Minister Arun Jaitley had tabled India Budget 2018. In the Union Budget 2018, FM Arun Jaitley proposed to introduce LTCG (Long-Term Capital Gain) tax at 10% on gains over Rs 1 lakh which seemed to have jolted the sentiments of investors. During the speech of FM Arun Jaitley, in a quick session, when Jaitley spoke about putting LTCG under the tax net, immediately after it, the S&P BSE Sensex tanked 463.28 points to hit an 8-day low of 35,501.74. The rupee had fallen about 61 paise at 64.2 apiece the US dollar in two days. The Reserve Bank of India fixed the reference rate of the rupee at 63.6113 against the US dollar on Thursday.
During the day, the rupee moved in a range of 63.8900 and 64.1975. The rupee slipped by 9 paise to open at 64.12 vs the US dollar on Friday. Earlier yesterday, the rupee shed around 44 paise against the US dollar after Arun Jaitley tabled Union Budget 2018 which was the last full-year Budget by Modi-led NDA government before the 2019 General Elections. The domestic currency slumped 44 paise at 64.03 apiece US dollar at the interbank foreign exchange market on Thursday.
Concerns weighing on Indian rupee
- In a major development in Budget 2018, Finance Minister Arun Jaitley introduced a tax on LTCG (Long-Term Capital Gain) on equity investments of over Rs 1 lakh at 10%. Following which a knee-jerk reaction was observed in the Indian equities and amid the heavy sell-off pressure, the S&P BSE Sensex plunged 463.28 points to hit an 8-day low of 35,501.74.
- Finance Minister Arun Jaitley on Thursday fixed the fiscal deficit target for the fiscal year 2018-2019 at 3.3%, higher than previous year’s 3.2% target on account of shortfall in non-tax revenue due to deferment of spectrum auction. He also revised the fiscal deficit for the fiscal year for 2017-2018 upwards to 3.5% as against targeted 3.2%, which in absolute terms was about Rs 5.95 lakh crore. He said that the government will receive the GST revenue for 11 months, which will have the fiscal impact. He said that the revised estimate for FY18 is Rs 21.57 lakh crore as against estimated Rs 21.47 lakh crore.
Meanwhile today, India’s stock markets crashed in the morning trades after opening lower on Friday following the impact of Budget 2018 as Arun Jaitley introduced LTCG at 10% and raised the fiscal deficit target for the financial 2018-2019 at 3.3%. BSE Sensex lost as much as 591.69 points to hit a day’s low of 35,314.97 whereas NSE Nifty tumbled 190.4 points to hit a day’s low of 10,826.5. Finance Minister Arun Jaitley presented the last full-year Budget of NDA government before 2019 General Elections. Shares of blue-chip companies such as HDFC, HDFC Bank, ICICI Bank, Reliance Industries, L&T, Kotak Mahindra Bank, Maruti Suzuki, IndusInd Bank, Axis Bank, SBI and ONGC contributed heavily to the Sensex declines.