Global uncertainty to impact emerging economies: FM
The US Federal Reserves intention to increase policy rates in 2017 may lead to lower capital inflows and higher outflows from the emerging economies, Finance Minister Arun Jaitley said. The world economy faces considerable uncertainty in the aftermath of major economic and political developments during the last year, Jaitley said in his Budget speech. The Minister said uncertainty around commodity prices especially that of crude oil, has implications for the fiscal situation of emerging economies. The Economic Survey, presented in Parliament yesterday had also highlighted that a spike in global oil prices may have dampening impact on the growth. “Nevertheless, the International Monetary Fund (IMF) estimates that world GDP will grow by 3.1 per cent in 2016 and 3.4 per cent in 2017. The advanced economies are expected to increase their growth from 1.6 per cent to 1.9 per cent and the emerging economies from 4.1 per cent to 4.5 per cent,” Jaitley said.
Income tax slab slashed to 5% for Rs 2.5-5 lakh earners
The Budget gave relief to on personal income tax front, mainly the salaried group in the middle class, by halving the tax to five per cent up to the income of Rs 5 lakh to ease the pains of demonetisation. However, those earning above Rs 50 lakh and up to Rs one crore will have to shell out additional 10 per cent surcharge. The cut in the tax rate for the lowest slab will also save up to Rs 12,500 for incomes in other slabs, increasing disposable income of the middle class that can provide spur to the slowing down economic growth. The present super rich tax in the form of 15 per cent surcharge will remain for those earning income over Rs one crore.
Budget 2017: Private equity funds, Esops face securities transaction tax googly on unlisted shares
Private equity funds and holders of stock options were thrown into confusion by a Budget provision aimed at plugging a black money loophole, fearing that it could land them with a hefty tax bill. Those who acquired shares in unlisted companies after October 1, 2004, will have to pay 10% longterm capital gains tax if they hadn’t paid securities transaction tax (STT) at the time of purchase. Currently, income arising from the transfer of long-term capital assets such as stocks is exempted from tax if the sale took place on or after October 1, 2004. STT, which was introduced that year, typically applies to listed stocks.
Budget 2017: Government halves revenue estimate from telecom to Rs 44,300 crore
Following muted response to spectrum auction, government has slashed revenue expectation from the telecom sector by 55 per cent to Rs 44,342.2 crore for 2017-18, indicating no sale of airwaves for mobile services next fiscal. In the receipt estimates, the government has pegged revenue from communications at Rs 44,342.2 crore, which includes “licence fees from Telecom Services Providers” and “one time entry fees from new operators”. In 2016-17, the government had estimated revenue of Rs 98,994.93 crore from telecom sector, which included about Rs 64,000 crore from spectrum auction and the rest from licence fees and other charges.
Govt aims to bring 1 crore households out of poverty by 2019
Giving a major thrust to rural India in the Union Budget, the government today announced bringing one crore households out of poverty and making 50,000 gram panchayats poverty free by 2019, besides allocating highest ever funds to rural job scheme MGNRGEA. Stating that improving the life of people in rural areas is “a non-negotiable agenda for the government”, Finance Minister Arun Jaitley said the government would start a Mission Antyodaya for poverty alleviation in the country. “With a clear focus on improving accountability, outcomes and convergence, we will undertake a Mission Antyodaya to bring one crore households out of poverty and to make 50,000 gram panchayats poverty free by 2019, the 150th birth anniversary of (Mahatma) Gandhiji,” Jaitley said in his speech.
India factory PMI returns to modest growth in January
Indian factory activity returned to modest growth in January, bouncing from a contraction in December triggered by the government’s scrapping of high value banknotes, a business survey showed on Wednesday. Compiled by IHS Markit, the Nikkei Manufacturing Purchasing Managers’ Index rose to 50.4 in January from 49.6. A reading above 50 indicates expansion. In a sign factories have started the year on a better footing, a sub-index measuring new orders also nudged back above the breakeven mark, with domestic demand driving the pace as export orders remained in contraction.
Fed leaves interest rates unchanged, remains upbeat on economy
The Federal Reserve held interest rates steady on Wednesday in its first meeting since President Donald Trump took office, but painted a relatively upbeat picture of the U.S. economy that suggested it was on track to tighten monetary policy this year. The U.S. central bank said job gains remained solid, inflation had increased and economic confidence was rising, although it gave no firm signal on the timing of its next rate move. Fed policymakers are still awaiting clarity on the possible impact of Trump’s economic policies. “Measures of consumer and business sentiment have improved of late,” the Fed said in a unanimous statement following a two-day policy meeting in which it left its benchmark interest rate in a range of 0.50 percent to 0.75 percent.
Govt to reduce time for revising tax return to 12 months
Union Finance Minister Arun Jaitley on Wednesday proposed to reduce the time period for revising a tax return to 12 months from completion of the financial year. The minister also proposed to reduce the time for completion of scrutiny assessments from 21 months to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and thereafter. “Time period for revising a tax return is being reduced to 12 months from completion of the financial year, at par with the time period for filing of return,” according to Union Budget 2017-18 presented by Finance Minister Arun Jaitley in Parliament.
Start-ups can avail of 3-year tax holiday in a block of 7 years
Eligible start-ups can now avail their three-year tax holiday in a block of seven years instead of five years giving them more time to take advantage of the benefit. “The profit linked deduction available to the start-ups for 3 years out of 5 years is being changed to 3 years out of 7 years,” Finance Minister Arun Jaitley announced in his Budget speech on Wednesday. For the purpose of carry forward of losses in respect of such start-ups, the condition of continuous holding of 51 per cent of voting rights has been relaxed subject to the condition that the holding of the original promoter/promoters continues, the FM said.
Source: The Hindu Business Line
RBI says it hasn’t authorised use of Bitcoins, flags risks
The Reserve Bank of India (RBI) on Wednesday said it has not authorised dealings in or use of virtual currencies, and cautioned those investing in the instruments like Bitcoins. “The RBI advises that it has not given any licence/authorisation to any entity/company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc., dealing with virtual currencies will be doing so at their own risk,” it said in a statement. Those investing in such virtual currencies are exposing themselves to potential financial, operational, legal, customer protection and security related risks, it warned.
Apple weighs legal action against Trump’s executive order on immigration
Apple is considering legal action against President Donald Trump’s administration to challenge his executive order on immigration, chief executive Tim Cook said on Wednesday. In an interview with the Wall Street Journal, the Apple boss declined to go into detail about possible legal recourse, but said he has heard “heart-wrenching stories” from employees about how Trump’s order to temporarily halt entry to the U.S. for refugees from seven Muslim-majority counties, was affecting them. Cook said he has contact with “very, very senior people in the White House” and is trying to convince them that removing the ruling is important for Apple and the broader U.S.
Budget 2017 to have positive impact on job market: Experts
The budget is expected to bring positive impact on job market as the focus on infrastructure and ease of doing business is aligned with the government’s vision of job creation, experts say. The government’s focus on digitatisation, transparency in governance & politics, upliftment of women & youth, quality of education, rural India is evident in this budget and this is expected to boost job creation in the economy. “While directly budget suggest employment opportunities for youth in tourism, footwear, leather and textile industry, impetus on infrastructure and ease of doing business are aligned to the government’s vision of job creation especially in the manufacturing sector,” TeamLease Co-Founder & EVP Rituparna Chakraborty said.
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