The budget's changes on tax and duties changes are credit positive for energy and commodity producers, but negative for automakers. Changes to levies on crude oil will lower cash production costs for national oil companies, but will not compensate for the impact of lower oil prices.
Finally, the budget is positive overall for India's securitisation markets as changes in the distribution tax norms for securitisation trusts will improve investors' post-tax returns and make investments in securitisation products more appealing, which could attract a new class of investors to the asset class.
Achieving the fiscal deficit target of 3.5% will be challenging if the GDP growths of past years are revised downwards. The CSO wing of Govt of India started a new methodology of GVA using International Standards, foregoing the previous sample method. Since this is a new scheme, there could be potential downward revisions possible this year in 2016.
India did not reduce the Gasoline and Diesel prices in accordance with the lower crude oil price which dropped significantly over the past 18 months. When the crude oil prices head upwards, the govt might run down to lose revenue if it were to keep the gasoline and diesel prices at current levels.
The infrastructure spending roads alone will not boost the nation's GDP growth, as expected by the many economists. There is a disconnect of world's other developed nations and India in highway and roads usage pattern. Even when you build world class highways, 80% of trucks on highway do not engine capacity to go beyond 35mph speed. Having this underlying archaic issue of truck speeds, any amount of highways building in India will not result in speedier movement of goods and services any time soon in the next 10 years.
The Finance Minister has chosen to supply Dialysis equipments and services in health care programme. This is a notorious issue in India. The Central Government keeps announcing new scheme and freebies to Indian citizens on healthcare support. However, many state governments already in the process of offering free Health Care insurances. There seems to be no cohesiveness between central and state governments to design, equip, modernize and deploy sophisticated healthcare programme for the nation.
No specific Infrastructure proposal has been announced for Major City traffic congestion. Numerous studies have shown the GDP loss due to traffic congestion would be in the ranges of Rs 200 Crores to Rs 20000 crores in Metro cities.
Banks get a big boost: Rs 25,000 crore towards recapitalisation of public sector banks. However, given the bad loans of Rs 1.3 Lakh crores, the amount Rs 25,000 crores is not enough.
Finally, the budget is positive overall for India's securitisation markets as changes in the distribution tax norms for securitisation trusts will improve investors' post-tax returns and make investments in securitisation products more appealing, which could attract a new class of investors to the asset class.
Achieving the fiscal deficit target of 3.5% will be challenging if the GDP growths of past years are revised downwards. The CSO wing of Govt of India started a new methodology of GVA using International Standards, foregoing the previous sample method. Since this is a new scheme, there could be potential downward revisions possible this year in 2016.
India did not reduce the Gasoline and Diesel prices in accordance with the lower crude oil price which dropped significantly over the past 18 months. When the crude oil prices head upwards, the govt might run down to lose revenue if it were to keep the gasoline and diesel prices at current levels.
The infrastructure spending roads alone will not boost the nation's GDP growth, as expected by the many economists. There is a disconnect of world's other developed nations and India in highway and roads usage pattern. Even when you build world class highways, 80% of trucks on highway do not engine capacity to go beyond 35mph speed. Having this underlying archaic issue of truck speeds, any amount of highways building in India will not result in speedier movement of goods and services any time soon in the next 10 years.
The Finance Minister has chosen to supply Dialysis equipments and services in health care programme. This is a notorious issue in India. The Central Government keeps announcing new scheme and freebies to Indian citizens on healthcare support. However, many state governments already in the process of offering free Health Care insurances. There seems to be no cohesiveness between central and state governments to design, equip, modernize and deploy sophisticated healthcare programme for the nation.
No specific Infrastructure proposal has been announced for Major City traffic congestion. Numerous studies have shown the GDP loss due to traffic congestion would be in the ranges of Rs 200 Crores to Rs 20000 crores in Metro cities.
Banks get a big boost: Rs 25,000 crore towards recapitalisation of public sector banks. However, given the bad loans of Rs 1.3 Lakh crores, the amount Rs 25,000 crores is not enough.
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