It is not yet clear as to how much of the specified bank notes (Rs 500 and Rs 1000) have not returned to the banking system. However, the impact of demonetisation on the economy is now becoming clear.

All available estimates from the official central statistical office (CSO) to rating agencies to international agencies, such as the International Monetary Fund (IMF) and the World Bank have lowered their forecast for the growth rate of the economy. While the official statistics has not included the estimates of the months after demonetisation, the slowdown of the economy does have implications for income distribution as well as government&rsquo;s ability to spend.

The budget tomorrow will be important not just for the signals for reviving the economy but also for measures to insulate the poor from the after effects of the demonetisation.

Macro-economic indicators of the economy have already pointed out the fragility of economic growth. The declining trend in exports has not been arrested, and the decline in private investment also suggests a decline&nbsp;in demand in the economy. While all these point out to an urgent need to&nbsp;revive economic activities&nbsp;in an uncertain international environment, there&nbsp;is also the need&nbsp;to&nbsp;provide&nbsp;relief to the poor and informal workers in the economy.

&nbsp;

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<h5>The demonetisation has only added to the misery of the farmers as far as realisation of output prices are concerned</h5>
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There is now enough evidence to suggest that the worst hit as a result of the liquidity squeeze after demonetisation have been the informal sector workers and the agricultural sector in particular.

While this may not have impacted the sowing figures, given that last year was the second year of a back to back drought, it is clear that the agricultural and the rural sector has been going through distress. This was only partly a result of the drought in 2014 and 2015. A large part of the distress was also due to falling agricultural commodity prices since August 2014. The demonetisation has only added to the misery of the farmers as far as realisation of output prices are concerned.

There has been a&nbsp;declining profitability in agriculture for most of the crops and the growth rate of real agricultural wage in rural areas have been falling in real terms. This is unprecedented in the recent history, and the data indicate that the decline in real wages since November 2013 is the worst.

The rural poor not only have been suffering from declining profitability and wages in agriculture, but also from declining non-farm activity.

The biggest deceleration has been in construction, which was also the sector which absorbed majority of the workers in rural areas in the non-farm sector. Recent estimates from the CSO suggest that the growth of construction sector has reached its lowest at 2.9 per cent&nbsp;by the first advance estimates. The decline in availability of employment opportunities and a decline in real wages, cumulatively contributed to the already vulnerable situation of rural poor. Recent data from automobile sale, notably motorcycle sales and the sale of durable goods suggest a sharp decline in sales of these, confirming a slump in rural demand.

It is in this context that the budget of this year is expected to not only provide relief to the middle class and the poor but also take steps to revive the economy. The decline in private investment since last year has also meant that the onus of increasing investment falls on the government. However, with the expected pay out for seventh pay commission and increase in interest payments, the room for manoeuvrability is all the less in this year&rsquo;s budget.

The final factor that will make budget making a challenging exercise is the slowdown in revenue generation due to the deceleration in growth rate of economic activity. Global trend in protectionism also adds to the uncertainty in commodity prices, including petroleum products but also for ability of exports to cover up for the deficit in demand.

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<h5>The only option for reviving the economy is through increased expenditure of poverty alleviation programmes</h5>
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&nbsp;

Clearly, the only option for reviving the economy is through increased expenditure of poverty alleviation programmes. This will not only help revive demand in the rural economy, already suffering from demand depression in the last two years but also help alleviate some of the suffering for the poor after the demonetisation. This will require ramping up expenditure on existing social security measures such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) but also strengthening National Food Security Act and other rural development expenditure.

There is already some evidence that the demand for work under MGNREGA has increased by 60 per cent&nbsp;after demonetisation, aided by the return of migrant workers to their rural bases. The increase in spending on rural employment and rural infrastructure will not only boost employment generation but will also push up rural wages and economic activity in rural areas.

While such a step may appear to be fiscally difficult given the government&rsquo;s commitment to bring down the fiscal deficit, the need for a fiscal stimulus was never greater. The revival of demand is also the only option given the limits of monetary policy. With increasing likelihood of non-performing assets increasing, the urgency of increasing credit off-take is also the surest way of insulating the banking sector from the crisis of low credit and high deposit situation they are in.

The National Democratic Alliance (NDA) government has now completed half of its term. So far the economy has not shown signs of the promised recovery. The fear at this juncture is not just the failure of revival of the economy but also the likelihood of the economy getting into stagnation. This budget provides the last opportunity for the government to revive the economy and the only way out is to inject demand in the rural economy.

(WION)

This year's budget will be important for signals for reviving the economy, but also to insulate the poor from the effects of demonetisation

It is not yet clear as to how much of the specified bank notes (Rs 500 and Rs 1000) have not returned to the banking system. However, the impact of demonetisation on the economy is now becoming clear. All available estimates from the official central statistical office (CSO) to rating agencies to international agencies, such as the International Monetary Fund (IMF) and the World Bank have lowered their forecast for the growth rate of the economy. While the official statistics has not included the estimates of the months after demonetisation, the slowdown of the economy does have implications for income distribution as well as government’s ability to spend. The budget tomorrow will be important not just for the signals for reviving the economy but also for measures to insulate the poor from the after effects of the demonetisation. Macro-economic indicators of the economy have already pointed out the fragility of economic growth. The declining trend in exports has not been arrested, and the decline in private investment also suggests a decline in demand in the economy. While all these point out to an urgent need to revive economic activities in an uncertain international environment, there is also the need to provide relief to the poor and informal workers in the economy. The demonetisation has only added to the misery of the farmers as far as realisation of output prices are concerned × There is now enough evidence to suggest that the worst hit as a result of the liquidity squeeze after demonetisation have been the informal sector workers and the agricultural sector in particular. While this may not have impacted the sowing figures, given that last year was the second year of a back to back drought, it is clear that the agricultural and the rural sector has been going through distress. This was only partly a result of the drought in 2014 and 2015. A large part of the distress was also due to falling agricultural commodity prices since August 2014. The demonetisation has only added to the misery of the farmers as far as realisation of output prices are concerned. There has been a declining profitability in agriculture for most of the crops and the growth rate of real agricultural wage in rural areas have been falling in real terms. This is unprecedented in the recent history, and the data indicate that the decline in real wages since November 2013 is the worst. The rural poor not only have been suffering from declining profitability and wages in agriculture, but also from declining non-farm activity. The biggest deceleration has been in construction, which was also the sector which absorbed majority of the workers in rural areas in the non-farm sector. Recent estimates from the CSO suggest that the growth of construction sector has reached its lowest at 2.9 per cent by the first advance estimates. The decline in availability of employment opportunities and a decline in real wages, cumulatively contributed to the already vulnerable situation of rural poor. Recent data from automobile sale, notably motorcycle sales and the sale of durable goods suggest a sharp decline in sales of these, confirming a slump in rural demand. It is in this context that the budget of this year is expected to not only provide relief to the middle class and the poor but also take steps to revive the economy. The decline in private investment since last year has also meant that the onus of increasing investment falls on the government. However, with the expected pay out for seventh pay commission and increase in interest payments, the room for manoeuvrability is all the less in this year’s budget. The final factor that will make budget making a challenging exercise is the slowdown in revenue generation due to the deceleration in growth rate of economic activity. Global trend in protectionism also adds to the uncertainty in commodity prices, including petroleum products but also for ability of exports to cover up for the deficit in demand. The only option for reviving the economy is through increased expenditure of poverty alleviation programmes × Clearly, the only option for reviving the economy is through increased expenditure of poverty alleviation programmes. This will not only help revive demand in the rural economy, already suffering from demand depression in the last two years but also help alleviate some of the suffering for the poor after the demonetisation. This will require ramping up expenditure on existing social security measures such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) but also strengthening National Food Security Act and other rural development expenditure. There is already some evidence that the demand for work under MGNREGA has increased by 60 per cent after demonetisation, aided by the return of migrant workers to their rural bases. The increase in spending on rural employment and rural infrastructure will not only boost employment generation but will also push up rural wages and economic activity in rural areas. While such a step may appear to be fiscally difficult given the government’s commitment to bring down the fiscal deficit, the need for a fiscal stimulus was never greater. The revival of demand is also the only option given the limits of monetary policy. With increasing likelihood of non-performing assets increasing, the urgency of increasing credit off-take is also the surest way of insulating the banking sector from the crisis of low credit and high deposit situation they are in. The National Democratic Alliance (NDA) government has now completed half of its term. So far the economy has not shown signs of the promised recovery. The fear at this juncture is not just the failure of revival of the economy but also the likelihood of the economy getting into stagnation. This budget provides the last opportunity for the government to revive the economy and the only way out is to inject demand in the rural economy. (WION)

Inequality and the Indian budget

India&#39;s economic growth has been pegged at 6.5 per cent for the current fiscal, down from 7.6 per cent recorded in the last financial year, but is expected to rebound in the range of 6.75-7.5 per cent in 2017-18.

The Economic Survey for 2016-17, tabled in the Parliament by finance minister Arun Jaitley underlined the need for more reforms.

Retail inflation is likely to be well below RBI&#39;s target of 5 per cent in the current fiscal as demonetisation would discourage any price headwind, the Economic Survey for 2016-17 said.&nbsp;The new inflation targeting approach by the Monetary Policy Committee (MPC) and gains from macro-economic stability will help India consolidate gains on price control, meaning prices will be less susceptible of individual whims and caprice of governments, the survey said.

The survey&#39;s GDP growth figure for the current fiscal is lower than 7.1 per cent the Central Statistics Office had forecast earlier this month.

The survey lists some of the challenges that might impede India&#39;s progress. These include ambivalence about property rights and the private sector, deficiencies in state capacity, especially in delivering essential services and inefficient redistribution.&nbsp;

The survey highlights difficulties in privatising public enterprises, even for firms where economists have made strong arguments that they should be in the private sector.

In this context, it pointed towards the need to further privatise civil aviation, banking and fertiliser sectors. The survey stated that the capacity of the state in delivering essential services such as health and education is weak due to low capacity, with high levels of corruption, clientelism, rules and red tape.

At the level of states, competitive populism is more in evidence than competitive service delivery, it added. Constraints to policy making due to strict adherence to rules and abundant caution in bureaucratic decision-making favours status quo, it cautioned.

According to the survey, redistribution by the government is far from efficient in targeting the poor. This is intrinsic to current programmes because spending is likely to be greatest in states with better institutions.

It noted that over the past two years, the government has made considerable progress towards reducing subsidies, especially related to petroleum products.&nbsp;Technology has been the main instrument for addressing the leakage problem and the pilots for direct benefit transfer in fertiliser represent a very important new direction in this regard, it said.

Noting that India has come a long way in terms of economic performance and reforms, the survey said there is still a journey ahead to achieve dynamism and social justice and completing this journey will require broader societal shifts in the underlying vision.

Highlights of the Economic Survey

* GDP growth for next fiscal pegged at 6.75-7.5 per cent

 
* Growth this fiscal to be 6.5 per cent.

 
* Prescribes cut in individual I-T rates, real estate stamp duties.

 
* Income Tax net could be widened gradually by encompassing all high income earners.

 
* Time table for cutting corporate tax should be accelerated.

 
* Tax administration could be improved to reduce discretion and improve accountability.

 
* Growth to return to normal as new currency comes in circulation.

 
* Demonetisation to affect growth rate by 0.25-0.5 per cent, but to have long-term benefits.

 
* GST, other structural reforms should take the trend growth rate to 8-10 per cent.

 
* Fiscal windfall likely from Pradhan Mantri Garib Kalyan Yojana, low oil price.

 
* Farm sector to grow at 4.1% this fiscal, up from 1.2% last year.

 
* Fiscal gains from GST will take time to realise.

 
* Demonetisation may affect supplies of certain agricultural products like sugar, milk, potatoes and onions.

 
* Growth rate of industrial sector to moderate at&nbsp;5.2% this fiscal, from 7.4% last fiscal.

 
* Efforts to collect taxes on disclosed and undisclosed wealth should not lead to tax harassment.

 
* Universal Basic Income Scheme is an alternative to plethora of state subsidies for poverty alleviation.

(PTI)

The Economic Survey for 2016-17, tabled in the Parliament by finance minister Arun Jaitley underlined the need for more reforms

India's economic growth has been pegged at 6.5 per cent for the current fiscal, down from 7.6 per cent recorded in the last financial year, but is expected to rebound in the range of 6.75-7.5 per cent in 2017-18. The Economic Survey for 2016-17, tabled in the Parliament by finance minister Arun Jaitley underlined the need for more reforms. Retail inflation is likely to be well below RBI's target of 5 per cent in the current fiscal as demonetisation would discourage any price headwind, the Economic Survey for 2016-17 said. The new inflation targeting approach by the Monetary Policy Committee (MPC) and gains from macro-economic stability will help India consolidate gains on price control, meaning prices will be less susceptible of individual whims and caprice of governments, the survey said. The survey's GDP growth figure for the current fiscal is lower than 7.1 per cent the Central Statistics Office had forecast earlier this month. The survey lists some of the challenges that might impede India's progress. These include ambivalence about property rights and the private sector, deficiencies in state capacity, especially in delivering essential services and inefficient redistribution. The survey highlights difficulties in privatising public enterprises, even for firms where economists have made strong arguments that they should be in the private sector. In this context, it pointed towards the need to further privatise civil aviation, banking and fertiliser sectors. The survey stated that the capacity of the state in delivering essential services such as health and education is weak due to low capacity, with high levels of corruption, clientelism, rules and red tape. At the level of states, competitive populism is more in evidence than competitive service delivery, it added. Constraints to policy making due to strict adherence to rules and abundant caution in bureaucratic decision-making favours status quo, it cautioned. According to the survey, redistribution by the government is far from efficient in targeting the poor. This is intrinsic to current programmes because spending is likely to be greatest in states with better institutions. It noted that over the past two years, the government has made considerable progress towards reducing subsidies, especially related to petroleum products. Technology has been the main instrument for addressing the leakage problem and the pilots for direct benefit transfer in fertiliser represent a very important new direction in this regard, it said. Noting that India has come a long way in terms of economic performance and reforms, the survey said there is still a journey ahead to achieve dynamism and social justice and completing this journey will require broader societal shifts in the underlying vision. Highlights of the Economic Survey * GDP growth for next fiscal pegged at 6.75-7.5 per cent * Growth this fiscal to be 6.5 per cent. * Prescribes cut in individual I-T rates, real estate stamp duties. * Income Tax net could be widened gradually by encompassing all high income earners. * Time table for cutting corporate tax should be accelerated. * Tax administration could be improved to reduce discretion and improve accountability. * Growth to return to normal as new currency comes in circulation. * Demonetisation to affect growth rate by 0.25-0.5 per cent, but to have long-term benefits. * GST, other structural reforms should take the trend growth rate to 8-10 per cent. * Fiscal windfall likely from Pradhan Mantri Garib Kalyan Yojana, low oil price. * Farm sector to grow at 4.1% this fiscal, up from 1.2% last year. * Fiscal gains from GST will take time to realise. * Demonetisation may affect supplies of certain agricultural products like sugar, milk, potatoes and onions. * Growth rate of industrial sector to moderate at 5.2% this fiscal, from 7.4% last fiscal. * Efforts to collect taxes on disclosed and undisclosed wealth should not lead to tax harassment. * Universal Basic Income Scheme is an alternative to plethora of state subsidies for poverty alleviation. (PTI)

India's GDP growth to be lower at 6.5% in FY17: Economic Survey

India&#39;s Election Commission, the authority that presides over poll processes in the country, has allowed the federal government to present the annual Budget ahead of key votes in five states, but laid down two caveats.

Firstly, the federal government cannot announce schemes in poll-bound states. Secondly, the government cannot talk about its achievements in the states which are going to polls next month.

Local elections will be held in five states of the country -- Uttar Pradesh, Uttarakhand, Punjab, Manipur and Goa -- just days after the Budget is presented by the government on February 1.

The federal government was also told that they cannot not announce a full-blown Budget, and instead opt for a vote-on-account.

Vote-on-account is taken by a government during an election year. That is because the government receives the budgetary allocation only by mid-May after its details are forensically studied by a parliamnetary committee. So in case of an election year, during which time governments can change, the Election Commission allows the incumbent dispensation to only pass a vote-by-account.

Earlier in the day, the Supreme Court dismissed a plea seeking postponement of the Budget to deter the federal government from lavishing extra attention on states that are slated to vote.

The current government under Indian Prime Minister Narendra Modi has maintained that advancing Budget presentation was necessary as it would ensure that all budgetary provisions are allocated to different sectors from April 1, the beginning of the new fiscal.

The Budget is usually presented around last week of February and, as a result, the approval of the budget spills over to the next financial year, delaying the start of new programmes.

Opposition parties, however, said the government could use the Budget presentation as a key&nbsp;tool&nbsp;to influence voters.

(WION with inputs from PTI)

But the Election Commission has told the government to not announce any schemes for poll-bound states

India's Election Commission, the authority that presides over poll processes in the country, has allowed the federal government to present the annual Budget ahead of key votes in five states, but laid down two caveats. Firstly, the federal government cannot announce schemes in poll-bound states. Secondly, the government cannot talk about its achievements in the states which are going to polls next month. Local elections will be held in five states of the country -- Uttar Pradesh, Uttarakhand, Punjab, Manipur and Goa -- just days after the Budget is presented by the government on February 1. The federal government was also told that they cannot not announce a full-blown Budget, and instead opt for a vote-on-account. Vote-on-account is taken by a government during an election year. That is because the government receives the budgetary allocation only by mid-May after its details are forensically studied by a parliamnetary committee. So in case of an election year, during which time governments can change, the Election Commission allows the incumbent dispensation to only pass a vote-by-account. Earlier in the day, the Supreme Court dismissed a plea seeking postponement of the Budget to deter the federal government from lavishing extra attention on states that are slated to vote. The current government under Indian Prime Minister Narendra Modi has maintained that advancing Budget presentation was necessary as it would ensure that all budgetary provisions are allocated to different sectors from April 1, the beginning of the new fiscal. The Budget is usually presented around last week of February and, as a result, the approval of the budget spills over to the next financial year, delaying the start of new programmes. Opposition parties, however, said the government could use the Budget presentation as a key tool to influence voters. (WION with inputs from PTI)

Indian govt allowed to present Budget ahead of state elections

The Government of India has made several changes in its Annual Financial Statement, commonly referred to as budget. Some of these changes are:

<ul>
	<li>Omission of plan and non-plan expenditure</li>
	<li>No separate Railway budget</li>
	<li>The budget in the Indian Parliament may be tabled earlier than before</li>
</ul>

What does each one of them mean? 
 
The budget is represented under two accounts: revenue account and capital account. The revenue account means day to day running of the various government departments and services, interest payments etc. 
 
<img alt="" class="img-responsive" src="http://s.wionews.com/photos/budget_slide_1-20160922112651.jpg" />

<div class="media-description">
 
Capital account involves long-term investments such as machinery, plants, etc.
</div>

 
<img alt="" class="img-responsive" src="http://s.wionews.com/photos/budget_slide_3-20160922113120.jpg" />

<div class="media-description">
&nbsp;
</div>

Till this year&rsquo;s budget, revenue expenditure and capital expenditure were further divided into plan expenditure and non-plan expenditure. 
 
Plan expenditure: means the expenditure done under the five year plans, that is decided beforehand during the planning process. 
 
Non-plan expenditure: means expenditure that lies outside the plan and for which no provision can be made as it is largely unforeseen, unpredictable and contingent on circumstances.&nbsp; E.g. expenditure on repairs and maintenance of assets, unfinished schemes, defence, law and order, etc. 
 
From next year, the expenditure under both the accounts will not be divided into plan and non-plan as the premier economic planning institution, Planning Commission of India, no longer exists. It has been replaced by NITI Aayog, a think tank. 
 
<img alt="" class="img-responsive" src="http://s.wionews.com/photos/budget_slide_2-20160922112918.jpg" />

<div class="media-description">
 
From next year, the expenditure under revenue account and capital account will not be divided into plan and non-plan.
</div>

The 12th five year plan will end in 2017 and after that, there will be no five year plans, thus redefining the Indian Economy textbooks. 
&nbsp; 
If not five year plans, then what? &nbsp; 
 
The NITI Aayog will be preparing a 15-year vision document aligned with the country&rsquo;s social goals and sustainable development targets. The first 15-year vision document will start from 2017-18. Aayog will also prepare a seven-year National Development Agenda which will lay down the schemes, programmes and strategies to be reviewed after every three years. 
 
The vision document is similar to the Directive Principles of the State Policy of the Constitution, guiding where India should be heading but not enforceable by law. &nbsp; 
&nbsp;At the same time, one should be looking at the documents laid before Parliament under the Fiscal Responsibility and Budget Management (FRBM) Act, 2003:

<ul>
	<li>Medium term fiscal policy statement: It sets out three-year rolling targets for four specific fiscal&nbsp;indicators in relation to GDP, namely (i) revenue deficit, (ii) fiscal deficit, (iii) tax to GDP&nbsp;ratio and (iv) total outstanding debt at the end of the year.</li>
	<li>Fiscal policy strategy statement: It outlines the strategic priorities of the government in the fiscal area for the&nbsp;ensuing financial year relating to taxation, expenditure, lending and investments, administered pricing,&nbsp;borrowings and guarantees. The statement explains how the current policies are in conformity with sound&nbsp;fiscal management principles and gives the rationale for any major deviation in key fiscal measures.</li>
	<li>Macro-economic framework statement: It contains assessment regarding&nbsp;the GDP growth rate, fiscal balance of the Indian government and the external sector balance of the economy.</li>
</ul>

&nbsp;Concerns with merger of railway budget with general budget 
 
The proposal to merge the two budgets was given by the Bibek Debroy Committee at NITI Aayog. It is said that after the merger, Indian Railways will save around $1.5 billion every year by not paying the dividend it has to pay for gross budgetary support from the Indian government. 
 
Indian economist Bibek Debroy, in an interview, has raised four concerns regarding this merger that still need to be addressed by the railway ministry and finance ministry:

<ul>
	<li>What happens to dividends? Dividends i.e. corporate dividends is actually a repayment of debt that the Indian government extends to the railways in perpetuity and only the interest gets repaid, the principal is never extinguished.&nbsp;</li>
	<li>What happens to the existing debt? Does that continue or not?&nbsp;</li>
	<li>What happens to the gross budgetary support? In what form will it be extended now?</li>
	<li>What happens to the windows that the railways has for borrowing? Right now, the railways borrows through Indian Railway Finance Corporation (IRFC).</li>
</ul>

&nbsp; 
Why does the budget needs to be presented earlier than usual? 
 
At present, the budget is presented on 28th February every year. The budget session of Parliament is divided into two parts: the first is held between last week of February to middle of March and the second session is held from last week of April to middle of May. 
 
Usually, the budget gets passed in the second part of the session. After that, the country experiences monsoon season for 3 to 4 months hampering the infrastructure spending. 
 
Also, unlike India, most countries around the world have their fiscal year as the calendar year. 
 
With the Goods and Services tax scheduled to be rolled out next year, it is not certain whether the Indian government would table its Annual Financial Statement on a different date.&nbsp; 
&nbsp;

The Government of India has made several changes in its Annual Financial Statement, commonly referred to as budget

The Government of India has made several changes in its Annual Financial Statement, commonly referred to as budget. Some of these changes are: Omission of plan and non-plan expenditure No separate Railway budget The budget in the Indian Parliament may be tabled earlier than before What does each one of them mean? The budget is represented under two accounts: revenue account and capital account. The revenue account means day to day running of the various government departments and services, interest payments etc. Capital account involves long-term investments such as machinery, plants, etc. Till this year’s budget, revenue expenditure and capital expenditure were further divided into plan expenditure and non-plan expenditure. Plan expenditure: means the expenditure done under the five year plans, that is decided beforehand during the planning process. Non-plan expenditure: means expenditure that lies outside the plan and for which no provision can be made as it is largely unforeseen, unpredictable and contingent on circumstances. E.g. expenditure on repairs and maintenance of assets, unfinished schemes, defence, law and order, etc. From next year, the expenditure under both the accounts will not be divided into plan and non-plan as the premier economic planning institution, Planning Commission of India, no longer exists. It has been replaced by NITI Aayog, a think tank. From next year, the expenditure under revenue account and capital account will not be divided into plan and non-plan. The 12th five year plan will end in 2017 and after that, there will be no five year plans, thus redefining the Indian Economy textbooks. If not five year plans, then what? The NITI Aayog will be preparing a 15-year vision document aligned with the country’s social goals and sustainable development targets. The first 15-year vision document will start from 2017-18. Aayog will also prepare a seven-year National Development Agenda which will lay down the schemes, programmes and strategies to be reviewed after every three years. The vision document is similar to the Directive Principles of the State Policy of the Constitution, guiding where India should be heading but not enforceable by law. At the same time, one should be looking at the documents laid before Parliament under the Fiscal Responsibility and Budget Management (FRBM) Act, 2003: Medium term fiscal policy statement: It sets out three-year rolling targets for four specific fiscal indicators in relation to GDP, namely (i) revenue deficit, (ii) fiscal deficit, (iii) tax to GDP ratio and (iv) total outstanding debt at the end of the year. Fiscal policy strategy statement: It outlines the strategic priorities of the government in the fiscal area for the ensuing financial year relating to taxation, expenditure, lending and investments, administered pricing, borrowings and guarantees. The statement explains how the current policies are in conformity with sound fiscal management principles and gives the rationale for any major deviation in key fiscal measures. Macro-economic framework statement: It contains assessment regarding the GDP growth rate, fiscal balance of the Indian government and the external sector balance of the economy. Concerns with merger of railway budget with general budget The proposal to merge the two budgets was given by the Bibek Debroy Committee at NITI Aayog. It is said that after the merger, Indian Railways will save around $1.5 billion every year by not paying the dividend it has to pay for gross budgetary support from the Indian government. Indian economist Bibek Debroy, in an interview, has raised four concerns regarding this merger that still need to be addressed by the railway ministry and finance ministry: What happens to dividends? Dividends i.e. corporate dividends is actually a repayment of debt that the Indian government extends to the railways in perpetuity and only the interest gets repaid, the principal is never extinguished. What happens to the existing debt? Does that continue or not? What happens to the gross budgetary support? In what form will it be extended now? What happens to the windows that the railways has for borrowing? Right now, the railways borrows through Indian Railway Finance Corporation (IRFC). Why does the budget needs to be presented earlier than usual? At present, the budget is presented on 28th February every year. The budget session of Parliament is divided into two parts: the first is held between last week of February to middle of March and the second session is held from last week of April to middle of May. Usually, the budget gets passed in the second part of the session. After that, the country experiences monsoon season for 3 to 4 months hampering the infrastructure spending. Also, unlike India, most countries around the world have their fiscal year as the calendar year. With the Goods and Services tax scheduled to be rolled out next year, it is not certain whether the Indian government would table its Annual Financial Statement on a different date.

Merger of Rail Budget with Union Budget and more: What it means for India

A united opposition on Thursday visited the office of India&#39;s Election Commission to discuss the date of the Budget Session and demanded that it be presented once the assembly elections are over.

&quot;Populist measures could be taken in budget, so a just and fair election can&#39;t be held. We demand that budget be presented after March 8, which is when polling for elections will be over,&quot; said Congress leader Ghulam Nabi Azad after meeting the poll panel.

Trinamool Congress, Congress, Samajwadi Party (SP), Bahujan Samaj Party (BSP), Janata Dal (United), Rashtriya Janata Dal (RJD) and other opposition parties met the Commission.

The Budget Session of the Parliament will begin on February 1.

The Election Commission on Tuesday announced seven-phase polling for 403 assembly constituencies in the politically crucial state of Uttar Pradesh, two-phase polling in Manipur and one-phase polling each in the states of Punjab, Uttarakhand and Goa respectively.

While the Election Commission said it will examine a representation made by parties opposing the February 1 Budget plan, finance minister Arun Jaitley defended the move asking why Opposition parties are afraid of it when they have claimed that demonetization is an unpopular decision.

Parties including Congress, Left, SP and BSP wrote to the Election Commission and the President opposing the advancing of the budget presentation to February 1 before the polls.

&quot;It is a collective and serious concern of the Opposition parties that advancing the presentation of budget to February 1 will provide an opportunity to the government to make populist announcements to influence voters. This will not only give unfair advantage to the ruling party but will also undermine the process of free and fair elections. It is therefore demanded that in view of the forthcoming elections and the precedent of 2012, the advancement of the presentation of the budget should not be allowed,&quot; Leader of the Opposition in the Rajya Sabha Ghulam Nabi Azad said in a letter to Chief Election Commissioner Nasim Zaidi.

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(This report first appeared in DNA)

The opposition parties met the election commissioner today.The Budget Session of the Parliament is scheduled to begin on February 1

A united opposition on Thursday visited the office of India's Election Commission to discuss the date of the Budget Session and demanded that it be presented once the assembly elections are over. "Populist measures could be taken in budget, so a just and fair election can't be held. We demand that budget be presented after March 8, which is when polling for elections will be over," said Congress leader Ghulam Nabi Azad after meeting the poll panel. Trinamool Congress, Congress, Samajwadi Party (SP), Bahujan Samaj Party (BSP), Janata Dal (United), Rashtriya Janata Dal (RJD) and other opposition parties met the Commission. The Budget Session of the Parliament will begin on February 1. The Election Commission on Tuesday announced seven-phase polling for 403 assembly constituencies in the politically crucial state of Uttar Pradesh, two-phase polling in Manipur and one-phase polling each in the states of Punjab, Uttarakhand and Goa respectively. While the Election Commission said it will examine a representation made by parties opposing the February 1 Budget plan, finance minister Arun Jaitley defended the move asking why Opposition parties are afraid of it when they have claimed that demonetization is an unpopular decision. Parties including Congress, Left, SP and BSP wrote to the Election Commission and the President opposing the advancing of the budget presentation to February 1 before the polls. "It is a collective and serious concern of the Opposition parties that advancing the presentation of budget to February 1 will provide an opportunity to the government to make populist announcements to influence voters. This will not only give unfair advantage to the ruling party but will also undermine the process of free and fair elections. It is therefore demanded that in view of the forthcoming elections and the precedent of 2012, the advancement of the presentation of the budget should not be allowed," Leader of the Opposition in the Rajya Sabha Ghulam Nabi Azad said in a letter to Chief Election Commissioner Nasim Zaidi. (This report first appeared in DNA)

India: Opposition demands budget be presented after upcoming five-state elections

Rebutting the charge of Opposition parties that the annual federal budget was being deliberately presented ahead of the assembly elections in five states, the government said the federal budget was an annual constitutional exercise covering the entire country and not just a few states.

The federal government was replying to the Election Commission which had asked it to respond to a representation by opposition parties urging the poll panel to make the government postpone the budget till assembly polls are over, PTI reported.

The opposition had alleged that the budget would be used to woo voters in the poll-bound states.

The cabinet secretariat replied to the Election Commission today.

The government said that advancing the budget presentation was necessary as it would ensure that all budgetary provisions were allocated to different sectors from April 1, the beginning of the new fiscal.

The budget is usually presented around the last week of February and, as a result, the approval of the budget spills over to the next financial year, delaying the start of new programmes, the government said.

The Budget Session has been convened from January 31 when the President will address the joint sitting of the two Houses. The federal budget and the Economic Survey are to be presented the next day.

The parliamentary committees have already been informed to study budgetary proposals in the recess period between February 10 and March 8, the government had said earlier.

It said that the government had made its intentions clear to advance the session in September last year and the federal cabinet had also cleared the proposal.

The opposition parties had written to the President and the Election Commission objecting to the presentation of the federal budget on February 1 ahead of the assembly elections and demanded that the government be asked to defer the annual exercise till March 8, the last day of voting.

A delegation of opposition parties comprising Congress, JD U(), BSP, SP, DMK and RJD had met chief election commissioner, Nasim Zaidi, on January 5, urging it to defer the budget presentation till March 8 at the least. 
 
Punjab and Goa go to polls on February 4 and the last phase of Assembly polls in Uttar Pradesh and Manipur will be held on March 8.

(WION with inputs from PTI) 
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The opposition parties had alleged that the presentation of the budget was being pushed ahead to woo voters in the poll-bound states.

Rebutting the charge of Opposition parties that the annual federal budget was being deliberately presented ahead of the assembly elections in five states, the government said the federal budget was an annual constitutional exercise covering the entire country and not just a few states. The federal government was replying to the Election Commission which had asked it to respond to a representation by opposition parties urging the poll panel to make the government postpone the budget till assembly polls are over, PTI reported. The opposition had alleged that the budget would be used to woo voters in the poll-bound states. The cabinet secretariat replied to the Election Commission today. The government said that advancing the budget presentation was necessary as it would ensure that all budgetary provisions were allocated to different sectors from April 1, the beginning of the new fiscal. The budget is usually presented around the last week of February and, as a result, the approval of the budget spills over to the next financial year, delaying the start of new programmes, the government said. The Budget Session has been convened from January 31 when the President will address the joint sitting of the two Houses. The federal budget and the Economic Survey are to be presented the next day. The parliamentary committees have already been informed to study budgetary proposals in the recess period between February 10 and March 8, the government had said earlier. It said that the government had made its intentions clear to advance the session in September last year and the federal cabinet had also cleared the proposal. The opposition parties had written to the President and the Election Commission objecting to the presentation of the federal budget on February 1 ahead of the assembly elections and demanded that the government be asked to defer the annual exercise till March 8, the last day of voting. A delegation of opposition parties comprising Congress, JD U(), BSP, SP, DMK and RJD had met chief election commissioner, Nasim Zaidi, on January 5, urging it to defer the budget presentation till March 8 at the least. Punjab and Goa go to polls on February 4 and the last phase of Assembly polls in Uttar Pradesh and Manipur will be held on March 8. (WION with inputs from PTI)

Budget covers entire country, not few states: Indian Govt to election body on advancing budget date

Hungary&#39;s government is drawing up a list of incentives to lure companies leaving Britain after the Brexit vote, economy minister Mihaly Varga told business daily Vilaggazdasag in an interview published today. 
 
The interview did not go into details on what sort of offers would be made to persuade companies to move to Hungary, or how far the plan had progressed. 
 
Varga said Britain&#39;s exit from the EU would probably affect Hungary in the longer term, as it would hit the EU&#39;s budget, and thus the development funds flowing to eastern Europe. 
 
But Varga said this was not an immediate issue, as Britain&#39;s negotiations with the EU would last at least for two years, and there was no need to amend Hungary&#39;s budget this year or next. 
 
He said Hungary also had no plan to follow Britain&#39;s example in leaving the EU. 
 
&quot;There is no such intention, no such plan, no such scenario or idea,&quot; Varga told the paper. 
 
He said he expected market turbulence to subside this week after Friday&#39;s sharp falls. 
 
(Reuters)

Budapest has no plan to follow London's example in leaving the EU, said economy minister Mihaly Varga

Hungary's government is drawing up a list of incentives to lure companies leaving Britain after the Brexit vote, economy minister Mihaly Varga told business daily Vilaggazdasag in an interview published today. The interview did not go into details on what sort of offers would be made to persuade companies to move to Hungary, or how far the plan had progressed. Varga said Britain's exit from the EU would probably affect Hungary in the longer term, as it would hit the EU's budget, and thus the development funds flowing to eastern Europe. But Varga said this was not an immediate issue, as Britain's negotiations with the EU would last at least for two years, and there was no need to amend Hungary's budget this year or next. He said Hungary also had no plan to follow Britain's example in leaving the EU. "There is no such intention, no such plan, no such scenario or idea," Varga told the paper. He said he expected market turbulence to subside this week after Friday's sharp falls. (Reuters)

Hungary prepares incentives to lure firms leaving Britain after Brexit vote

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