Internet Banking Login ContactFind a Branch
24hr Customer Care
India Toll Free Number
Dial city code
- India Toll Free Number 18001038181/33443399
Dial city code 33443399
Union Budget Review & Investment Outlook - Feb 2019
Budget provides a fiscal dose to consumption
- From economic perspective, the crux of today’s budget can be summarized by the stimuli provided through Farm Income Support and Tax Rebates & Deductions to Low / Middle Income Class. More than half the country's families will receive some cash benefit: 120 mn Small & Marginal Farmer Families and 30 mn Low / Middle Income Salary Taxpayers. The stimuli or a fiscal boost, as may be used interchangeably, amounts to nearly 0.5% of GDP, as demonstrated below.
Break up of Fiscal Boost.
Rs bn % to GDP Farm Income Support 750 0.4 Tax Rebate & Deductions 232 0.1 Total 982 0.5
- How would the above get funded? Following are the likely sources basis budget documents: Increase in Direct Tax / GDP (0.2%) and Indirect Tax / GDP (0.1%) while there is an expenditure compression of 0.1% of GDP assumed in the budget on items other than the two new schemes. To achieve the higher revenue collection, the GST growth has been pegged at 18%, much higher than what has been achieved so far.
- The quality of expenditure, purely from the point of view of sustainability of economic growth perspective, had marginally deteriorated – Capital Expenditure is likely to reduce by 0.1% of GDP. Thus, the Budget is positive for Consumer businesses but not so for capex / infra oriented businesses.