Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: form 3cd :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: ACCOUNTING STANDARD :: VAT RATES :: articles on VAT and GST in India :: empanelment :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: TDS
 
 
« Budget Extravaganza »
 With demonetisation inducing tax compliance will PM Modi cut tax rates in Budget 2017?
 State plan budget utilisation in Odisha
 Maharashtra wants budget advanced to February
 Coastal economic zones may get 10-year tax exemption in next Budget
 Why advancing the Union Budget date may not make much difference
 Govt keen 2017-18 budget should not clash with polls: Arun Jaitley
 Finance Ministry seeks industry suggestions on taxation for Budget
 Budget should focus on fiscal firm up
 Finance ministry keen to present Budget on February 2 or earlier
 Poor railway performance may mar merged Budget
 Cabinet’s formal nod to be sought for Budget on Feb. 1

Budget 2011: Govt to provide more stimulus, says Credit Suisse
February, 22nd 2011

Many have already written off the budget on Monday 28 February as likely to be a dull transitional affair ahead of the main action this time next year when the Direct Tax Code is implemented. However, Credit Suisse sees it rather differently. Here is their pre-budget view:

The budget comes at a vital point in the economic cycle, presenting the government with key choices. Does it stimulate economic activity to offset the pain of higher interest rates and inflation, or choke off aggregate demand to deal directly with the pressing inflation problem as well the countrys gaping twin deficits?

In our view, we will see more in the way of stimulative action than fiscal tightening, although the finance minister might still publish a forecast for the central government budget deficit not too far above that of 2010/11. We expect the latter to come in at around 4.7% of GDP well below the original 5.5% objective, thanks partly to the bigger than anticipated windfall from the sale of 3G telecom licences.

Many of the key budget measures are likely to focus on inflation in one or way or another. We anticipate a sizeable boost to welfare spending, designed to protect the real incomes of the poorest members of society, as well as further import duty cuts on some foodstuffs/fuels and a rise in income tax allowances for those on lower incomes. Additional spending on agriculture, particularly irrigation, is also likely.

Of crucial importance, in our view, are detailed, credible and extensive steps to ease supply-side bottlenecks in agriculture as well as labour and product markets. After all, Indias inflation problem is not just a short-term cyclical phenomenon but a long-term structural issue that could seriously crimp future economic growth. Unfortunately, however, we would be surprised to see anything more than a fairly vague re-statement of the commitment to channel USD1trn of funds into infrastructure improvements during the upcoming 5-year plan.

The combination of a modestly expansionary budget, the absence of 3G licence revenues, weaker economic growth and higher debt service costs is likely to see the central governments financial position deteriorate in 2011/12. If our assumptions are right, then the deficit will probably rise to around 5.5% of GDP in 2011/12.

Hence, contrary to widespread expectations, we think net central government debt issuance in 2011/12 is likely to be higher than in 2010/11 by almost Rs 1 trillion, at around Rs 4.3 trillion; bond yields are likely to remain elevated.

With the government set to leave the Reserve Bank of India to deal with the immediate inflation problem, we believe additional rate rises are highly likely. We continue to expect the next 25bps hike to come at the 17 March meeting, followed by another of couple of quarter-point steps by end fiscal Q2.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Organic SEO Outsourcing Organic Search Engine Optimization Outsourcing Organic Website SEO Organic SEO India Website SEO India Organic Search Engine Optimization India Organic Internet SEO India Organic Web

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions