Budget 2018: Unfair to judge me on demonetisation and GST only, says Modi

On the criticism related to demonetisation and GST, Modi said his government’s achievements were much beyond these two reforms


Budget 2018

Countering the allegation that his government had reneged on the promise of creating 10 million jobs a year, Prime Minister Narendra Modi quoted a recent study showing seven million jobs had been created in the formal sector alone in the current financial year.

“This data of seven million jobs is not like building castles in the air. It has been calculated by an independent agency on the basis of EPFO (Employees’ Provident Fund Organisation) figures,” Modi said in a television interview, days before leaving for Davos to attend the World Economic Forum meet.

One should also count the opportunities that were being created in the informal sector, he added.

“As many as 100 million people have taken loans from the Prime Minister Mudra Yojana without any bank guarantee. Loans to the tune of Rs 4 trillion have been disbursed. New entrepreneurs are being created. Won’t you count these figures as job creation?” he asked.

“One can counter these figures on the political lines, but these numbers are not based on just wishful thinking,” he said. “We are on the right track so far as job creation is concerned.”

According to a study authored by SBI Group Chief Economic Advisor Soumya Kanti Ghosh and IIM Bangalore professor Pulak Ghosh, 590,000 jobs had been generated every month until November in the current financial year. This means that seven million jobs will be created in the formal sector in 2017-18 if one expands the trend on a pro-rata basis. Click Here


Budget 2018: Reeling under dwindling exports, AEPC seeks several relief

The apparel export body has made around 8-10 demands ahead of the Budget 2018


Reeling from a continued fall in export growth and marginal refunds on the goods and services tax (GST), the Apparel Export Promotion Council (AEPC) has written to the government, seeking 12-15 types of relief. They want the duty drawback and the refund of state levies (ROSL) to be restored to pre-GST levels, and also exemptions from the new indirect tax for exporters.

Growth of apparel exports has clocked a negative 39 per cent, 11 per cent and 8 per cent, respectively, in October, November and December last year, according to H K L Magu, chairman, AEPC.

Now, in the run-up to the Union Budget 2018, the export body has sought incentives from the government, to boost exports. It wants the duty drawback on cotton apparels to be restored to pre-GST rates of 7.5 per cent and the ROSL of 3.5 per cent. They also want to be exempted from 18 per cent GST for air freight.

After the GST roll-out last year, the duty drawback fell to 2 per cent; ROSL to 1.5 per cent on cotton apparels, and 2.5 per cent and 1.5 per cent, respectively, on different man-made apparels.

Till September, when the previous rates were applicable, apparel exports grew in double-digits. However, October onwards, exports began taking a hit.

“We have been asking the government to support apparel exporters to survive. There have been blockages of funds between July and December; hardly anybody got GST refunds. Dollar weakened to be valued at Rs 63. We have become uncompetitive; Bangladesh has begun cashing in on this,” said Magu.

He added, “The government did take notice of the impact. Hence, in the mid-term review, the merchandise export incentive scheme was increased from 2 per cent to 4 per cent. However, more steps are needed to revive the industry.

Budget 2018: Custom duty rejig may make smartphones, gadgets costlier

Through this, the government will address inverted duty structures-finished goods facing lower duty than the inputs that go into them


Make in India is set to get a major boost in Budget 2018 through a customs duty rejig, according to a report. However, these measures are likely to pinch customers’ pocket as they could make imported high-end mobile phones and electronic goods expensive. Basic customs duty may be imposed on components such as printed circuit boards, camera modules and displays that are allowed duty-free entry now.

Custom duty rejig in Budget 2018

Customs Duty may be revised on certain other selected goods. Through this, the government can address inverted duty structures—finished goods facing lower duty than the inputs that go into them.

Post implementation of Goods and Services Tax (GST), customs duty is the only levy which still falls under the central government’s domain.

In December 2017, the government had raised basic customs duty levied on imported mobile phones to 15 per cent, up from the 10 per cent, which it had levied earlier on July 1 last year.

The government has imposed 15% basic customs duty on mobile phones and parts like charger, headsets, battery and USB cable with immediate effect to boost domestic manufacturing.

However, this decision drew flak from tax experts.

“With BCD exemptions available under FTA as well, their impact will also require a separate evaluation on Make in India initiative,” Rahul Shukla, executive director, indirect tax at PwC, told Economics Times.

Make in India programme

As part of the Make in India programme, the government is planning to make India a manufacturing hub rather than a destination where goods are assembled. The engineering sector in India attracts immense interest from foreign players as it enjoys a comparative advantage in terms of manufacturing costs, technology and innovation.


Budget 2018: Easier GST to industry tag, will FM gift these to real estate?

The chief Business Officer of India Real Estate Property Site lists the various demands of the real estate sector from Finance Minister Arun Jaitley’s Union Budget 2018-19 and explains how they could help the sector


The year 2017 was a landmark one in terms of policy directives. The real estate market witnessed a temporary setback on account of reforms like Real Estate (Development & Regulation) Act (RERA) and Goods and Services Tax (GST). However, after withstanding the aberrations, the market now seems to be settling down to the changes, which are envisioned to bring long-term benefits. The New Year has started with hopes of a market revival, especially on the back of positive policy roll-outs in the upcoming Union Budget 2018-19.

Every year, the Union Budget 2018 presents an opportunity to the government to work towards the revival of Indian real estate and address the looming concerns that afflict various stakeholders. Budget 2017 doled out several benefits such as infrastructure status to the affordable housing segment and lower interest rates for loans up to Rs 12 lakh, but 2018 awaits resilient steps to kick start the recovery phase.

The Indian realty industry stands at the cusp of restoration and announcements of reformatory measures to address high land costs, unsold inventory and tedious approval processes are instrumental for the turnaround of the sector.

In 2018, stringent action is required for renewal. Certain initiatives towards reviving the sector are critical in the short term. Here are some of them:

* Industry status: This is a long-pending demand of the real estate sector which is considered vital for its expansion. Accordance of an industry status will extend subsidies and tax exemptions that are required to uplift the sector. Availability of easier and cheaper funds to the real estate developers will be a major booster for the market.

* Increase in tax shields for home buyers: The Budget session must look into the various sections of the Income Tax Act to extend support to homebuyers and boost real estate investments. Under Section 80C of the Income Tax Act, 1961, the government allows tax benefit on savings up to Rs 1.5 lakh. Principal repayment of completed homes qualifies for tax deduction under section 80C. Extending this limit to Rs 2 lakh or Rs 2.5 lakh could make real estate investment more lucrative. ReadMore

At pre-Budget 2018 meet, states flag drop in revenue on GST roll out

Punjab Finance Minister Manpreet Singh Badal asked the Centre to announce a farm debt waiver for the entire country


At the pre-Budget consultations of Finance Minister Arun Jaitley with state finance ministers on Thursday, ministers representing state governments run by Congress, Left parties and regional parties flagged the revenue drop faced by states after the goods and services tax (GST) roll out and flagged agrarian distress.

Bihar Deputy Chief Minister Sushil Modi, who represented the Janata Dal (United)-Bharaitya Janata Party (BJP) coalition government in his state, demanded more central assistance for key schemes and revise wages for unskilled workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). He suggested the Centre advance the fiscal year to start from January 1, and increase income tax exemption limit from Rs 250,000 to Rs 300,000.

Punjab Finance Minister Manpreet Singh Badal asked the Centre to announce a farm debt waiver for the entire country on the lines of the one announced by the Congress government in Punjab.

Kerala finance minister Thomas Isaac flagged the revenue drop and resource crunch that state governments have faced after the GST rollout, which has impacted the socio-economic spending capacities of states.

Isaac said the Centre has increased central excise by Rs 8 per litre on diesel between 2015 to 2017, and reduced it recently only by Rs 2 per litre. He said none of the states have substantially increased the rate of tax on diesel. Isaac said that in this context it was “unfair” on the part of the Centre to ask the states to reduce the rate of tax when most of the states were faced with financial crisis because of uncertainties related to revenue that accrued to them on the implementation of the GST. He asked the Centre to strictly implement the anti-profiteering measures in the GST. He said any effort to bring stamp duty, one of the few taxes that states can raise, under the ambit of the GST would be “unconstitutional”.

Himachal Pradesh Chief Minister Jai Ram Thakur, representing the recently formed BJP government in his state, demanded that the Centre provide 100 per cent tax exemption for the first five years to industries set up in the state and 50 per cent for subsequent five years.

Thakur, who also handles the finance portfolio, also sought a 7 per cent interest subvention for a period of seven years to promote industrial development in the hill state. He suggested reduction in corporate tax rate to 20 per cent and increase in import duty on apple.

Union Finance Minister Arun Jaitley greets Himachal Pradesh Chief Minister Jai Ram Thakur during a pre-Budget meeting in New Delhi. Tamil Nadu Deputy Chief Minister O Panneerselvam and MoS for Finance Shiv Pratap Shukla are also seen shaking hands (Photo: PTI)


Punjab finance minister Badal, who has highlighted that Punjab has suffered a 40 per cent drop in revenue after GST, said the Centre should release the share of central taxes to states on a monthly instead of quarterly basis in 2018-19. He also sought restoration of central assistance to states in the Rashtriya Krishi Vikas Yojana to 90:10 ration from 60:40 to help reduce agrarian distress and help achieve Modi government’s vision of doubling farm income by 2022.

Bihar Deputy CM Sushil Modi, who also handles the finance portfolio, also demanded increased central funds. He said there was a “continued reduction in the central share of some important centrally sponsored schemes”, particularly Sarva Shiksha Abhiyan, National Social Assistance Programme, MGNREGA, PM Awas Yojana and Pradhan Mantri Gram Sadak Yojana.

Sushil Modi said there was “a need to revise the wages for the unskilled labourers working under MGNREGA on part of Government of India”. He also said that “sufficient funds” be provided to Bihar in the upcoming Union Budget in view of the “special package of Rs 1.65 trillion” announced by Prime Minister Narendra Modi.

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Budget 2018 must stimulate agri sector to help fertiliser firms, says Icra

The next budget needs to have several policy measures to give a stimulus to the agricultural sector, Icra said


The forthcoming Budget 2018 should provide several policy measures to give a stimulus to the troubled agricultural sector, which in turn would help the cash-straved fertiliser companies, says a report.

The next budget needs to have several policy measures to give a stimulus to the agricultural sector such as on irrigation, crop insurance and agricultural credit to help fertiliser players, Icra said in a pre-budget report today.

The fertiliser sector is highly regulated with controls on several aspects pertaining to their business. The urea sector works on normative cost-plus-return framework, with controls on farm gate prices, distribution and gas allocation.

The difference between retention price and farm gate price net of dealer margins is paid as subsidy to the industry, which is variable in nature depending on the energy price trends.

Also Read : Budget 2018: From digitisation to NPAs, a lot expected for banking sector

As regards the nitrogen, phosphorus and potassium (NPK) segment, it works on a fixed subsidy and variable farm gate pricing principle. Because of the regulated nature, timely payment of subsidy is the key to the eventual returns achieved by the industry, with urea players affected over the NPK segment as more than 65 per cent of their realization comes by way of subsidy as against around 30 per cent for the NPK segment, it noted.

In recent years, subsidy allocation to the industry has fallen short of requirements resulting in recurring backlog of subsidy. As a result, subsidy gets exhausted within the first seven-eight months, forcing the industry to resort to short-term borrowings, noted the report.

With the direct benefit transfer scheme ready to be rolled out on a national basis, under which government has committed to pay subsidy within 7 days of confirmation of sales to farmers, one-time clearance of backlog and adequate allocation of regular subsidies will be the key to the financial health of the industry, it added.

The urea industry also awaits the payment of revised fixed costs, which is long overdue. Many urea players have booked this as an income for the last three years. Any reversal of policy in this regard will lead to write down of their earnings and significant pressure on profitability, the report concluded.

Budget 2018: India eyes doubling of foreign tourists to 20 mn by 2020: Alphons

India is doing very well internationally and is 13th in terms of foreign tourists arrival and 7th in the Asia Pacific, the minister said


India, which saw a record number of Foreign Tourist Arrivals (FTA) of 10 million in 2017, is targeting to double this number in next three years, Minister of State Tourism K J Alphons on Thursday said.

“We crossed 10 million FTAs in 2017 and if we include non-resident Indians visiting the country then the number went up to over 17 million. In dollar terms our earnings have gone up by 20.2 per cent, which is a very good growth compared to the world tourism that grew by less than five per cent,” the minister said on the sidelines of OTM 2018.

These are very encouraging numbers and the government is working towards doubling both the FTAs and foreign exchange earnings in the next three years, he added.

“To make this possible we are working with the state governments and with the industry, as they have a big role to play. So we are all working together and make this possible,” he said.

India is doing very well internationally and is 13th in terms of foreign tourists arrival and 7th in Asia Pacific, the minister said.

“We are getting good spenders who are contributing 6.88 per cent to the GDP and we are also contributing 12.6 per cent to the employment,” he added.

On the upcoming Tourism Policy, Alphons said, it should be out in two or three months, as “we are incorporating new ideas”.

When asked about expectation in Budget 2018, he said “We are hoping to get more than last year…I hope they will be generous in the budget allocation.”

Maharashtra Tourism Minister Jaykumar Rawal, who was also present at the event, said Mumbai has one of the best airports in the world and is also building a world-class cruise port.

“We are building an international cruise port with an investment of Rs 5,000 crore, which funded by the government at Mazagon Dock. It will be operational by 2020,” Rawal added.

In the 3-day OTM 2018, which is organised by Fairfest Media, over 45 countries, over 21 states and Union Territories and over 1,100 exhibitors are participating.