General Affairs
In Arun Jaitley's Budget, Defence Share At Lowest Since Independence
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India's defence budget is up by about 5.6 per cent this year but it is at its lowest as a component of the Gross Domestic Product (GDP) since Independence.
In 1962, the defence budget was 1.5 per cent of the GDP. This year it is 1.62 per cent. In real terms, this means a marginal hike though barely enough to factor in inflation over the years.
In comparison, say experts, China is estimated to have a defence budget of three per cent of the GDP.
In this year's budget, Finance Minister Arun Jaitley has announced Rs. 2,74,000 crore for defence, which accounts for 12.7 per cent of the total government spending for 2017-18. It is an increase of around 5.6 per cent over last year's budget.
"For defence expenditure excluding pensions, I have provided a sum of Rs. 2,74,114 crore including Rs. 86,488 crore for defence capital," Mr Jaitley said.
Experts say the defence budget has to address inflation and the need to modernize India's aging military hardware, which features Soviet era aircraft, outdated guns and body armor.
However, because of slow decision making, thousands of crores in the sector remain unspent and are usually returned.
Mr Jaitley also announced a web-based interactive pension distribution system for retired soldiers. "This system will receive pension proposals and make payment centrally. This will reduce the grievance of the defence pensioners," said the minister.
He announced an online tickets booking system to help defence personnel avoid queues at public counters.
In 1962, the defence budget was 1.5 per cent of the GDP. This year it is 1.62 per cent. In real terms, this means a marginal hike though barely enough to factor in inflation over the years.
In comparison, say experts, China is estimated to have a defence budget of three per cent of the GDP.
"For defence expenditure excluding pensions, I have provided a sum of Rs. 2,74,114 crore including Rs. 86,488 crore for defence capital," Mr Jaitley said.
Experts say the defence budget has to address inflation and the need to modernize India's aging military hardware, which features Soviet era aircraft, outdated guns and body armor.
However, because of slow decision making, thousands of crores in the sector remain unspent and are usually returned.
Mr Jaitley also announced a web-based interactive pension distribution system for retired soldiers. "This system will receive pension proposals and make payment centrally. This will reduce the grievance of the defence pensioners," said the minister.
He announced an online tickets booking system to help defence personnel avoid queues at public counters.
PM Narendra Modi's $59 Billion Push To Modernise Airports, Roads, Railways
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India announced record spending of 3.96 trillion rupees ($59 billion) to build and modernize its railways, airports and roads as Prime Minister Narendra Modi aims to upgrade the strained infrastructure in Asia's third-largest economy.
The government will build airports -- now a near monopoly of the state -- in smaller cities in partnership with private companies, Finance Minister Arun Jaitley said while presenting the government's budget proposals for the fiscal year starting in April. More suburban railways will come up across the country and Indian Railways, a state monopoly, will form ventures with logistics companies to provide greater connectivity to ports, he said.
Rail equipment manufacturers such as Bombardier Inc. and General Electric Co. are among companies already investing in setting up factories in India as the world's second-most populous nation seeks to accelerate economic growth by improving infrastructure. Transport Minister Nitin Gadkari has said that the government has a target of building 42 kilometers of roads a day in a nation that stands below Namibia and Azerbaijan in the World Economic Forum's infrastructure ranking.
Wednesday's proposals "shall increase the demand for procurement of rolling stock, rail equipment and signaling systems," Harsh Dhingra, chief country representative for Bombardier Transportation, said in an e-mailed statement after Jaitley announcements.
India will announce a metro rail policy, which will ensure implementation and funding, and open up job opportunities, Jaitley said. A new Metro Rail Act will facilitate greater private participation and investment in construction and operation, he said.
Indian Railways, the world's fourth-largest, carries 23 million people daily on congested and aging tracks with roots dating back to British colonial rule. Sometimes, trains slow to a walking pace. The railways employ 1.3 million people directly.
In 2015, GE and Alstom SA won contracts worth $5.6 billion to build locomotives for the railways. GE won a $2.6 billion deal for diesel engines and will invest $200 million to build a factory under a joint venture with Indian Railways, the company said then. Alstom will make electric engines in a contract worth about $3 billion.
The government will build airports -- now a near monopoly of the state -- in smaller cities in partnership with private companies, Finance Minister Arun Jaitley said while presenting the government's budget proposals for the fiscal year starting in April. More suburban railways will come up across the country and Indian Railways, a state monopoly, will form ventures with logistics companies to provide greater connectivity to ports, he said.
Rail equipment manufacturers such as Bombardier Inc. and General Electric Co. are among companies already investing in setting up factories in India as the world's second-most populous nation seeks to accelerate economic growth by improving infrastructure. Transport Minister Nitin Gadkari has said that the government has a target of building 42 kilometers of roads a day in a nation that stands below Namibia and Azerbaijan in the World Economic Forum's infrastructure ranking.
Wednesday's proposals "shall increase the demand for procurement of rolling stock, rail equipment and signaling systems," Harsh Dhingra, chief country representative for Bombardier Transportation, said in an e-mailed statement after Jaitley announcements.
Indian Railways, the world's fourth-largest, carries 23 million people daily on congested and aging tracks with roots dating back to British colonial rule. Sometimes, trains slow to a walking pace. The railways employ 1.3 million people directly.
In 2015, GE and Alstom SA won contracts worth $5.6 billion to build locomotives for the railways. GE won a $2.6 billion deal for diesel engines and will invest $200 million to build a factory under a joint venture with Indian Railways, the company said then. Alstom will make electric engines in a contract worth about $3 billion.
Jallikattu Bill Receives President Pranab Mukherjee's Assent
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Tamil Nadu Chief Minister O Panneerselvam today said the Bill to replace an ordinance for the conduct of Jallikattu has received President Pranab Mukherjee's assent and thanked Prime Minister Narendra Modi for his support in enabling the bull taming sport to be held in the state.
In a letter to PM Modi, Mr Panneerselvam recalled his government had initially promulgated an ordinance and later replaced it with a bill passed unanimously by the state assembly.
The Bill was 'reserved' for the President's assent by Governor Ch Vidyasagar Rao and it "has received the Hon'ble President's assent on 31.1.2017," he said.
"On behalf of the Government and people of Tamil Nadu, I thank you for all your support and assistance in enabling Jallikattu to be held in Tamil Nadu once again, upholding the culture and tradition of the people of Tamil Nadu," he said in the letter.
In a letter to PM Modi, Mr Panneerselvam recalled his government had initially promulgated an ordinance and later replaced it with a bill passed unanimously by the state assembly.
The Bill was 'reserved' for the President's assent by Governor Ch Vidyasagar Rao and it "has received the Hon'ble President's assent on 31.1.2017," he said.
"On behalf of the Government and people of Tamil Nadu, I thank you for all your support and assistance in enabling Jallikattu to be held in Tamil Nadu once again, upholding the culture and tradition of the people of Tamil Nadu," he said in the letter.
Maharashtra Top Cop Rakesh Maria Retires, Says Will Pen Memoirs
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Maharashtra's Director General of Police (Home Guards) Rakesh Maria retired on Tuesday after putting in 36 years of distinguished service and said he plans to pen his memoirs.
A high-profile police officer, Mr Maria, 60, hogged the limelight for handling the investigations into some of the biggest cases like the March 1993 Mumbai serial blasts and the 26/11 terror strikes (November 26, 2008) by Pakistani extremists and more recently the sensational Sheena Bora murder case.
Chatting with media persons, Mr Maria said he is in the process of writing a book to throw light on investigations into some of the major cases solved by the Mumbai Police and in Maharashtra.
At the fag end of his career, a controversy erupted after he was abruptly promoted as DGP from the post of Mumbai Commissioner of Police when the probe into the Sheena Bora murder case, which he was personally handling, was at a crucial stage.
The sensitive and high-profile case was later handed over to the Central Bureau of Investigation, which recently filed the charge sheets against three prime accused, namely ex-media baron Peter Mukerjea, Indrani Mukerjea and her former husband Sanjeev Khanna.
Hailing from a Punjabi family, his father Vijay Maria was a well known Bollywood producer with films like 'Neelkamal', 'Kaajal', 'Preetam' and others to his credit through his co-founded company Kala Niketan.
An alumnus of Mumbai's St. Xaviers College, where he was a national level karate champion, Mr Maria later cleared the all-India civil service examination and joined the Indian Police Service in 1981.
Other major cases Mr Maria solved included the twin blasts of August 25, 2003, terror strike on Pune's famed German Bakery and arrest of several dreaded gangsters and robbers, including former mafia don Arun Gawli.
He was the first police officer to interrogate Ajmal Kasab, the sole terrorist caught alive after the 26/11 terror mayhem in Mumbai. After a trial, Kasab was hanged on November 21, 2012, in Pune's Yerawada Central Jail.
Over the years, working in different capacities in the police force, Maria is largely credited with breaking the backbone of the powerful mafia in Mumbai and surrounding places.
Maria's professional exploits have been adapted on screen in films like 'Black Friday' and 'The Attacks of 26/11', and in Suketu Mehta's award-winning 2004 book 'Maximum City - Bombay Lost & Found'.
A high-profile police officer, Mr Maria, 60, hogged the limelight for handling the investigations into some of the biggest cases like the March 1993 Mumbai serial blasts and the 26/11 terror strikes (November 26, 2008) by Pakistani extremists and more recently the sensational Sheena Bora murder case.
Chatting with media persons, Mr Maria said he is in the process of writing a book to throw light on investigations into some of the major cases solved by the Mumbai Police and in Maharashtra.
At the fag end of his career, a controversy erupted after he was abruptly promoted as DGP from the post of Mumbai Commissioner of Police when the probe into the Sheena Bora murder case, which he was personally handling, was at a crucial stage.
Hailing from a Punjabi family, his father Vijay Maria was a well known Bollywood producer with films like 'Neelkamal', 'Kaajal', 'Preetam' and others to his credit through his co-founded company Kala Niketan.
An alumnus of Mumbai's St. Xaviers College, where he was a national level karate champion, Mr Maria later cleared the all-India civil service examination and joined the Indian Police Service in 1981.
Other major cases Mr Maria solved included the twin blasts of August 25, 2003, terror strike on Pune's famed German Bakery and arrest of several dreaded gangsters and robbers, including former mafia don Arun Gawli.
He was the first police officer to interrogate Ajmal Kasab, the sole terrorist caught alive after the 26/11 terror mayhem in Mumbai. After a trial, Kasab was hanged on November 21, 2012, in Pune's Yerawada Central Jail.
Over the years, working in different capacities in the police force, Maria is largely credited with breaking the backbone of the powerful mafia in Mumbai and surrounding places.
Maria's professional exploits have been adapted on screen in films like 'Black Friday' and 'The Attacks of 26/11', and in Suketu Mehta's award-winning 2004 book 'Maximum City - Bombay Lost & Found'.
White House Hints At Including Pakistan In Donald Trump's Travel Ban List
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The White House today hinted that Pakistan could be included in US President Donald Trump's travel ban list. Trump recently signed an executive order that imposed a temporary ban on the arrival of citizens from Iran, Iraq, Libya, Somalia, Syria and Yemen.
"Maybe we will. The bottom line is we started with the seven countries that have previously been identified, did a 90-day review. Maybe during that 90-day review we find other countries or we take someone off or whatever. But it is a review process," White House Press Secretary Sean Spicer replied to a question when asked why the list does not include Pakistan.
Spicer's comment came a day after White House Chief of Staff Reince Priebus also hinted on Pakistan being included into the controversial immigration ban list.
The seven Muslim majority nations affected by the immigration ban are Syria, Iran, Iraq, Libya, Somalia, Yemen and Libya.
"Those were the seven countries that both, Congress and the Obama Administration, identified as being the seven countries that were most identifiable with dangerous terrorism taking place in their country," Mr Priebus said, in an interview, to CBS News.
"Now you can point to other countries that have similar problems, like Pakistan and others. Perhaps, we need to take it further. But for now, immediate steps, pulling the band-aid off, is to do further vetting for people travelling in and out of those countries," the White House official added.
Trump has insisted that his executive order was "not a Muslim ban". Trump's reaction comes after the travel ban - that bans entry of even green-card holders from the seven countries - met with global outrage and huge protests across the United States.
Washington state's attorney general has also sued Donald Trump over the executive order. Attorney General Bob Ferguson announced his lawsuit against the order, becoming the first state attorney general to announce a legal action against the Trump administration over one of its policies.
The Administration has however shown no signs of backing down and the US Department of Homeland Security has said that it would continue to enforce the order but comply with the court's order.
"Our number one priority as a government and as leaders is to protect the 324 million people who live in this country. So I understand that people may be inconvenienced a little coming into the nation. But this is our nation, our country. Our first and foremost responsibility is to our people," Spicer said in response to the question at George Washington University.
"If people want to come to this country and visit or travel or study, then we welcome them. We've always been a welcoming country. But the idea that we should just have an open door and let people in willy-nilly is ridiculous," he said.
The White House today hinted that Pakistan could be included in US President Donald Trump's travel ban list. Trump recently signed an executive order that imposed a temporary ban on the arrival of citizens from Iran, Iraq, Libya, Somalia, Syria and Yemen.
"Maybe we will. The bottom line is we started with the seven countries that have previously been identified, did a 90-day review. Maybe during that 90-day review we find other countries or we take someone off or whatever. But it is a review process," White House Press Secretary Sean Spicer replied to a question when asked why the list does not include Pakistan.
Spicer's comment came a day after White House Chief of Staff Reince Priebus also hinted on Pakistan being included into the controversial immigration ban list.
The seven Muslim majority nations affected by the immigration ban are Syria, Iran, Iraq, Libya, Somalia, Yemen and Libya.
"Those were the seven countries that both, Congress and the Obama Administration, identified as being the seven countries that were most identifiable with dangerous terrorism taking place in their country," Mr Priebus said, in an interview, to CBS News.
"Now you can point to other countries that have similar problems, like Pakistan and others. Perhaps, we need to take it further. But for now, immediate steps, pulling the band-aid off, is to do further vetting for people travelling in and out of those countries," the White House official added.
"Maybe we will. The bottom line is we started with the seven countries that have previously been identified, did a 90-day review. Maybe during that 90-day review we find other countries or we take someone off or whatever. But it is a review process," White House Press Secretary Sean Spicer replied to a question when asked why the list does not include Pakistan.
Spicer's comment came a day after White House Chief of Staff Reince Priebus also hinted on Pakistan being included into the controversial immigration ban list.
The seven Muslim majority nations affected by the immigration ban are Syria, Iran, Iraq, Libya, Somalia, Yemen and Libya.
"Those were the seven countries that both, Congress and the Obama Administration, identified as being the seven countries that were most identifiable with dangerous terrorism taking place in their country," Mr Priebus said, in an interview, to CBS News.
"Now you can point to other countries that have similar problems, like Pakistan and others. Perhaps, we need to take it further. But for now, immediate steps, pulling the band-aid off, is to do further vetting for people travelling in and out of those countries," the White House official added.
Trump has insisted that his executive order was "not a Muslim ban". Trump's reaction comes after the travel ban - that bans entry of even green-card holders from the seven countries - met with global outrage and huge protests across the United States.
The Administration has however shown no signs of backing down and the US Department of Homeland Security has said that it would continue to enforce the order but comply with the court's order.
"Our number one priority as a government and as leaders is to protect the 324 million people who live in this country. So I understand that people may be inconvenienced a little coming into the nation. But this is our nation, our country. Our first and foremost responsibility is to our people," Spicer said in response to the question at George Washington University.
"If people want to come to this country and visit or travel or study, then we welcome them. We've always been a welcoming country. But the idea that we should just have an open door and let people in willy-nilly is ridiculous," he said.
Business Affairs
Budget 2017: Government sets all-time high disinvestment target for FY18
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The government on Wednesday set an ambitious target of garnering Rs 72,500 crore through the disinvestment route in 2017-18, a 60 per cent increase over the 2016-17 target of Rs 56,500 crore. This is the highest ever divestment target set by any government in India outdoing the Rs 69,500 crore of 2015-16.
The increase comes even as successive governments have forever failed to achieve these targets. Even in the current financial year, the government is hopeful of raising only Rs 45,500 crore, which would be 20 per cent less than the target it had set at the start of the year. That, has been the government's best showing so far. In fiscals 2014-15 and 2015-16, the government did not even manage half the targets. In the last 26 years, government has failed to achieve its target 17 times.
"It is true we have not been able to meet the budgetary targets but you should also look at our track record and the sheer volume of divestments," said Finance Minister Arun Jaitley. "Till a few years ago, government would generate Rs 25-30,000 crore by selling stakes in 5 years. Today we are doing that much in just one year. Next year, one major item that will be listed for disinvestment are the general insurance companies."
Other state run companies that will see a divestment in 2017-18 are railway public sector enterprises IRCTC, IRFC and IRCON. Divestment through exchange traded funds comprising shares of 10 central PSEs are also in the offing. Last month, government raised Rs 6000 crore through its second tranche of CPSE ETF.
"We will continue to use ETF as a vehicle for further disinvestment of shares. Accordingly, a new ETF with diversified CPSE stocks and other government holding will be launched in 2017-18," Jaitley said.
The government has often come in for criticism in the way disinvestments have been carried out in the past where state run Life Insurance Corporation emerges as a white knight in cases where the interest from retail and institutional investors is low. LIC has participated in stake sale processes at the last moment in at least 6 occasions in the last 2 years.
"Now they are saying enterprises will themselves buy their shares, and that will be called disinvestment. Also, they are asking each enterprise to buy the shares of another enterprise and call it disinvestment. Third, the state owned financial institutions will buy stake (in PSEs) and that is termed disinvestment", says former disinvestment minister Arun Shourie. "It is a fraud because you are taking it from one pocket, putting it in another and giving it a big name".
The government on Wednesday set an ambitious target of garnering Rs 72,500 crore through the disinvestment route in 2017-18, a 60 per cent increase over the 2016-17 target of Rs 56,500 crore. This is the highest ever divestment target set by any government in India outdoing the Rs 69,500 crore of 2015-16.
The increase comes even as successive governments have forever failed to achieve these targets. Even in the current financial year, the government is hopeful of raising only Rs 45,500 crore, which would be 20 per cent less than the target it had set at the start of the year. That, has been the government's best showing so far. In fiscals 2014-15 and 2015-16, the government did not even manage half the targets. In the last 26 years, government has failed to achieve its target 17 times.
"It is true we have not been able to meet the budgetary targets but you should also look at our track record and the sheer volume of divestments," said Finance Minister Arun Jaitley. "Till a few years ago, government would generate Rs 25-30,000 crore by selling stakes in 5 years. Today we are doing that much in just one year. Next year, one major item that will be listed for disinvestment are the general insurance companies."
Other state run companies that will see a divestment in 2017-18 are railway public sector enterprises IRCTC, IRFC and IRCON. Divestment through exchange traded funds comprising shares of 10 central PSEs are also in the offing. Last month, government raised Rs 6000 crore through its second tranche of CPSE ETF.
"We will continue to use ETF as a vehicle for further disinvestment of shares. Accordingly, a new ETF with diversified CPSE stocks and other government holding will be launched in 2017-18," Jaitley said.
The government has often come in for criticism in the way disinvestments have been carried out in the past where state run Life Insurance Corporation emerges as a white knight in cases where the interest from retail and institutional investors is low. LIC has participated in stake sale processes at the last moment in at least 6 occasions in the last 2 years.
The government has often come in for criticism in the way disinvestments have been carried out in the past where state run Life Insurance Corporation emerges as a white knight in cases where the interest from retail and institutional investors is low. LIC has participated in stake sale processes at the last moment in at least 6 occasions in the last 2 years.
"Now they are saying enterprises will themselves buy their shares, and that will be called disinvestment. Also, they are asking each enterprise to buy the shares of another enterprise and call it disinvestment. Third, the state owned financial institutions will buy stake (in PSEs) and that is termed disinvestment", says former disinvestment minister Arun Shourie. "It is a fraud because you are taking it from one pocket, putting it in another and giving it a big name".
Budget'17: No service tax on rail tickets booked through IRCTC, says Arun Jaitley
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Finance Minister Arun Jaitley on Wednesday announced the withdrawal of service tax on railway tickets booked through IRCTC website. The announcement was made during the Budget 2017 presentation in the Parliament. This is the first time since 1924 when railway budget was presented, after its merger, with the annual budget.
Currently, a tax of Rs 20 is levied on sleeper class tickets and Rs 40 on AC class tickets while transacting via IRCTC website. He also said that all Indian Railways' coaches will be fitted with bio-toilets by 2019.
Giving priority to safety, the Finance Minster said that the government will create a Rail safety fund with corpus of Rs 100,000 crore over a period of five years. He announced total Rs 55000 crore for Railways in Budget 2017.
The Finance Minister said that at least 500 stations will be made differently abled friendly by providing lifts and escalators. He also said that the Railway tariffs to be fixed on the basis of cost, social obligation and competition.
"Railway related state-run companies like Ircon, IRCTC to be listed on stock exchanges," Jaitley said.
Arun Jaitley also outlined some of the challenges India Railways is facing. "Our Focus is on passenger saftey and swachch railways," says Jaitley.
He also said that unmanned level crossings will be eliminated by 2020.
Capital and development expenditure pegged at Rs 1.31 lakh crore for railways in 2017-18 from Budget.
A proposal to redevelop 25 new railway stations in FY18 was also mooted.
Finance Minister Arun Jaitley on Wednesday announced the withdrawal of service tax on railway tickets booked through IRCTC website. The announcement was made during the Budget 2017 presentation in the Parliament. This is the first time since 1924 when railway budget was presented, after its merger, with the annual budget.
Currently, a tax of Rs 20 is levied on sleeper class tickets and Rs 40 on AC class tickets while transacting via IRCTC website. He also said that all Indian Railways' coaches will be fitted with bio-toilets by 2019.
Giving priority to safety, the Finance Minster said that the government will create a Rail safety fund with corpus of Rs 100,000 crore over a period of five years. He announced total Rs 55000 crore for Railways in Budget 2017.
Giving priority to safety, the Finance Minster said that the government will create a Rail safety fund with corpus of Rs 100,000 crore over a period of five years. He announced total Rs 55000 crore for Railways in Budget 2017.
The Finance Minister said that at least 500 stations will be made differently abled friendly by providing lifts and escalators. He also said that the Railway tariffs to be fixed on the basis of cost, social obligation and competition.
"Railway related state-run companies like Ircon, IRCTC to be listed on stock exchanges," Jaitley said.
Arun Jaitley also outlined some of the challenges India Railways is facing. "Our Focus is on passenger saftey and swachch railways," says Jaitley.
He also said that unmanned level crossings will be eliminated by 2020.
Capital and development expenditure pegged at Rs 1.31 lakh crore for railways in 2017-18 from Budget.
A proposal to redevelop 25 new railway stations in FY18 was also mooted.
'Shift in focus from quantity to quality of higher education welcome step'
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The Union Finance Minister Arun Jaitley's announcements in higher education are being seen as an important signal from the government, on the need to up the quality of higher education in India.
In his budget speech, Jaitley said on Wednesday: "In higher education, we will undertake reforms in the UGC (University Grants Commission). Good quality institutions would be enabled to have greater administrative and academic autonomy. Colleges will be identified based on accreditation and ranking, and given autonomous status. A revised framework will be put in place for outcome based accreditation and credit based programmes."
Pramath Raj Sinha, the first dean of the Indian School of Business and the co-founder Ashoka University reads these as "a recognition now that quality of higher education has to be fixed." This, he feels, "is not only a welcome step but is urgently required and should be implemented.....over the last 25 years of economic liberalization in India, higher education has seen liberalisation only in terms of more number of institutions getting created...a lot of private institutions have also come up but overall the quality has actually gone down."
He feels the measures announced by the finance minister are all towards improving quality, which is welcome.
"So far, it has really been on creating more institutions and about larger numbers and improving access and in the process quality has suffered." Giving examples of other countries, he says, "Britain for example, has created a hierarchy of categories where they review the quality of institutions and the best quality institutions are given more freedom and more funding and overtime, the lower grade institutions are encouraged to migrate to the upper level as there is an incentive for them to move up."
He, therefore, feels that creating a strata of more autonomous deserving institutions, introduces a sensible set of regulations that encourage the institutions that are doing well to do better, and also allows institutions that are not doing well to aspire to do better.
The Union Finance Minister Arun Jaitley's announcements in higher education are being seen as an important signal from the government, on the need to up the quality of higher education in India.
In his budget speech, Jaitley said on Wednesday: "In higher education, we will undertake reforms in the UGC (University Grants Commission). Good quality institutions would be enabled to have greater administrative and academic autonomy. Colleges will be identified based on accreditation and ranking, and given autonomous status. A revised framework will be put in place for outcome based accreditation and credit based programmes."
Pramath Raj Sinha, the first dean of the Indian School of Business and the co-founder Ashoka University reads these as "a recognition now that quality of higher education has to be fixed." This, he feels, "is not only a welcome step but is urgently required and should be implemented.....over the last 25 years of economic liberalization in India, higher education has seen liberalisation only in terms of more number of institutions getting created...a lot of private institutions have also come up but overall the quality has actually gone down."
He feels the measures announced by the finance minister are all towards improving quality, which is welcome.
"So far, it has really been on creating more institutions and about larger numbers and improving access and in the process quality has suffered." Giving examples of other countries, he says, "Britain for example, has created a hierarchy of categories where they review the quality of institutions and the best quality institutions are given more freedom and more funding and overtime, the lower grade institutions are encouraged to migrate to the upper level as there is an incentive for them to move up."
He, therefore, feels that creating a strata of more autonomous deserving institutions, introduces a sensible set of regulations that encourage the institutions that are doing well to do better, and also allows institutions that are not doing well to aspire to do better.
Budget 2017: Tax benefit reduced significantly on rented property
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The Budget 2017 has brought bad news for people earning rental income. This is because the government has restricted set off of "loss from house property" from other income streams to Rs 200,000. The balance loss is allowed to be carried forward to next 8 years.
Poorva Prakash, Senior Director at Deloitte Haskins and Sells LLP, says, "This could adversely impact the investor who invest in house property primarily for earning rental income. Due to this proposed change there is a deferred tax benefit. Also, the tax payer may not be able to fully absorb loss in the same year or in the subsequent year in case they don't have sufficient house property rental income."
It is pertinent to note that for tax payer having self occupied house property, the amount of deduction that can be claimed on account of interest is restricted to Rs 200,000 (as per Section 24(b) of the Income Tax Act, 1961). It appears that the proposed change may not impact such category of tax payers. The intention is to correct the anomaly between self occupied and rented-out property.
Experts say buying a second home to earn rental income might not be an attractive investment after the budget. Generally, people buy second house to set off the unlimited deduction on account of interest income from their other incomes, including salary, business income and capital gains. But with limit being put on the set off amount people will not be able to adjust their entire income
Amit Maheshwari, Partner at Ashok Maheshwary & Associates LLP, says, "This will impact the real estate as the investors buying such assets on leverage to benefit from house property losses on account of big difference in rental yields and interest rates will suffer a major blow. The capping is too low in the present scenario. This has been brought to plug this tax planning technique and discourage purchasing of properties for investment purposes."
In addition to interest income you can claim a deduction of R1.5 lakh for principal repayments under Section 80C.
The Budget 2017 has brought bad news for people earning rental income. This is because the government has restricted set off of "loss from house property" from other income streams to Rs 200,000. The balance loss is allowed to be carried forward to next 8 years.
Poorva Prakash, Senior Director at Deloitte Haskins and Sells LLP, says, "This could adversely impact the investor who invest in house property primarily for earning rental income. Due to this proposed change there is a deferred tax benefit. Also, the tax payer may not be able to fully absorb loss in the same year or in the subsequent year in case they don't have sufficient house property rental income."
It is pertinent to note that for tax payer having self occupied house property, the amount of deduction that can be claimed on account of interest is restricted to Rs 200,000 (as per Section 24(b) of the Income Tax Act, 1961). It appears that the proposed change may not impact such category of tax payers. The intention is to correct the anomaly between self occupied and rented-out property.
Experts say buying a second home to earn rental income might not be an attractive investment after the budget. Generally, people buy second house to set off the unlimited deduction on account of interest income from their other incomes, including salary, business income and capital gains. But with limit being put on the set off amount people will not be able to adjust their entire income
Amit Maheshwari, Partner at Ashok Maheshwary & Associates LLP, says, "This will impact the real estate as the investors buying such assets on leverage to benefit from house property losses on account of big difference in rental yields and interest rates will suffer a major blow. The capping is too low in the present scenario. This has been brought to plug this tax planning technique and discourage purchasing of properties for investment purposes."
In addition to interest income you can claim a deduction of R1.5 lakh for principal repayments under Section 80C.
Union Budget: Bharat Net allocation moves up to Rs 10,000 cr for 2017-18
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The allocation for the ambitious Bharat Net project is being stepped up to Rs 10,000 crore in 2017-18 and high-speed broadband on optical fibre will be available in over 1.5 lakh gram panchayats with hotspots and access to digital services at low tariffs, Finance Minister Arun Jaitley said.
A 'Digi Gaon' initiative will also be launched to provide telemedicine, education and skills through digital technology, Jaitley said in his Budget speech.
"Under the Bharat Net, optical fibre has been laid in 1,55,000 kms. I have stepped up allocation for Bharat Net project to Rs 10,000 crore in 2017-18 and by the end of 2017-18, high speed broadband on optical fibre will be available in more than 1.5 lakh gram panchayats with hotspots and access to digital services at low tariff," Jaitley said.
The minister said the recent spectrum auctions have removed the spectrum scarcity in the country. "This will give a major fillip to mobilising broadband and Digital India, for the benefit of people living in rural areas," he pointed out.
The allocation for the ambitious Bharat Net project is being stepped up to Rs 10,000 crore in 2017-18 and high-speed broadband on optical fibre will be available in over 1.5 lakh gram panchayats with hotspots and access to digital services at low tariffs, Finance Minister Arun Jaitley said.
A 'Digi Gaon' initiative will also be launched to provide telemedicine, education and skills through digital technology, Jaitley said in his Budget speech.
"Under the Bharat Net, optical fibre has been laid in 1,55,000 kms. I have stepped up allocation for Bharat Net project to Rs 10,000 crore in 2017-18 and by the end of 2017-18, high speed broadband on optical fibre will be available in more than 1.5 lakh gram panchayats with hotspots and access to digital services at low tariff," Jaitley said.
The minister said the recent spectrum auctions have removed the spectrum scarcity in the country. "This will give a major fillip to mobilising broadband and Digital India, for the benefit of people living in rural areas," he pointed out.
General Awareness
Union Finance Minister Arun Jaitley Presented Economic Survey 2016-17 in the Parliament
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The Union Finance Minister Shri Arun Jaitley presented the Economic Survey 2016-17 in the Parliament on January 31, 2017 that provides a base for the government to prepare the annual Budget.
- The survey has been authored by Chief Economic Adviser Arvind Subramanian.The Economic Survey depicts the state of the economy and is generally presented in Parliament a day before the presentation of the annual Budget.
- It acts as a precursor to the budget. It states the outlook, prospects and challenges of the economy while recommending reform measures that are essential to propel and thrive the economy.
Important Highlights of the Economic Survey 2016-17
GDP Growth
The Economic Survey has estimated that the GDP growth rate for FY18 will be in the range of 6.75 percent to 7.5 percent.
- Demonetization and rising oil prices have been identified as the major risk to the growth rate. However, remonetization and sufficient circulation of currency notes may return the growth rate to normal position.
- The growth rate for the current fiscal has been estimated at 7.1 percent from the previous 7.6 percent by the Central Statistics Office. This estimate does not take into account the effect of demonetization.
- Fixed investment (gross fixed capital formation) to GDP ratio (at current prices) is estimated to be 26.6 per cent in 2016-17 as compared to previous 29.3 percent.
Government Revenues
The survey stated that the indirect taxes grew by 26.9 percent during April-November 2016.
- Besides, the revenue expenditure experienced a boost in the same period due to increase in the salaries of government employees by 23.2 percent with the Seventh Pay Commission and 39.5 percent increase in the grants for creation of capital assets.
Inflation
As per the Consumer Price Index (CPI), inflation remained under control for the third successive financial year. The average CPI inflation was 5.9 percent in 2014-15, 4.9 percent in 2015-16 and 4.8 percent during April-December 2016.
- Based on Wholesale Price Index (WPI), inflation was 2.0 per cent in 2014-15 and lowered to (-)2.5 percent in 2015-16. During April-December 2016 it averaged to 2.9 percent. As per the report pulses contributed major risk to food inflation.
Trade Growth
The survey stated that the growth in export was increased by 0.7 percent during April-December of 2016-17 amounting to USD 198.8 billion.
- Similarly, during April-December of 2016-17, imports declined by 7.4 per cent to USD 275.4 billion.
- Besides, trade deficit declined to USD 76.5 billion in 2016-17 (April-December) compared to USD 100.1 billion in the previous year.
- The current account deficit (CAD) too lowered in the first half (H1) of 2016-17 to 0.3 percent of GDP from 1.5 percent in H1 of 2015-16 and 1.1 percent in 2015-16 full year.
- In the first half of 2016-17, India’s Foreign Exchange Reserves increased by USD 15.5 billion.
External Debt
India’s external debt declined from March 2016 by USD 0.8 billion to USD 484.3 billion in September 2016.
- The short-term debt that contributed major share in total external debt declined to 16.8 percent at end-September 2016 and foreign exchange reserves provided a cover of 76.8 percent to the total external debt stock.
Agriculture Sector Growth
As per the survey, the agriculture sector is estimated to grow at 4.1 percent in the current fiscal as compared to 1.2 percent in 2015-16 due to better monsoon.
- The total area coverage under Rabi crops was recorded to be 616.2 lakh hectare on January 13, 2017 which is 5.9 percent higher than previous year.
- Similarly the area coverage under wheat as on January 13, 2017 is 7.1 percent higher while the area coverage under gram is 10.6 percent higher than that in the corresponding week of last year.
Industrial Growth
The survey estimates a growth rate of the industrial sector to be moderate at 5.2 percent in 2016-17 from 7.4 percent in 2015-16.
Services Sector
The Service sector has been estimated to grow at 8.9 percent in 2016-17 which is almost similar to that in 2015-16.
Social Infrastructure, Employment and Human Development
The survey highlighted that the Parliament has passed the “Rights of Persons with Disabilities Act, 2016” to enhance the rights and entitlements of Persons with Disabilities. It envisages increasing the reservation in vacancies in government establishments from 3 percent to 4 percent for those persons with disability.
- The Survey says Apparel and Leather industry have immense opportunity for job creation for the weaker sections, especially for women and can lead to social transformation in the country.
- It points out that the capacity of the State to provide essential services such as health and education to weaker section of the society is weak due to low capacity, with high levels of corruption, clientelism, rules and red tapism.
The Union Finance Minister Shri Arun Jaitley presented the Economic Survey 2016-17 in the Parliament on January 31, 2017 that provides a base for the government to prepare the annual Budget.
- The survey has been authored by Chief Economic Adviser Arvind Subramanian.The Economic Survey depicts the state of the economy and is generally presented in Parliament a day before the presentation of the annual Budget.
- It acts as a precursor to the budget. It states the outlook, prospects and challenges of the economy while recommending reform measures that are essential to propel and thrive the economy.
Important Highlights of the Economic Survey 2016-17
GDP Growth
The Economic Survey has estimated that the GDP growth rate for FY18 will be in the range of 6.75 percent to 7.5 percent.
- Demonetization and rising oil prices have been identified as the major risk to the growth rate. However, remonetization and sufficient circulation of currency notes may return the growth rate to normal position.
- The growth rate for the current fiscal has been estimated at 7.1 percent from the previous 7.6 percent by the Central Statistics Office. This estimate does not take into account the effect of demonetization.
- Fixed investment (gross fixed capital formation) to GDP ratio (at current prices) is estimated to be 26.6 per cent in 2016-17 as compared to previous 29.3 percent.
Government Revenues
The survey stated that the indirect taxes grew by 26.9 percent during April-November 2016.
- Besides, the revenue expenditure experienced a boost in the same period due to increase in the salaries of government employees by 23.2 percent with the Seventh Pay Commission and 39.5 percent increase in the grants for creation of capital assets.
Inflation
As per the Consumer Price Index (CPI), inflation remained under control for the third successive financial year. The average CPI inflation was 5.9 percent in 2014-15, 4.9 percent in 2015-16 and 4.8 percent during April-December 2016.
- Based on Wholesale Price Index (WPI), inflation was 2.0 per cent in 2014-15 and lowered to (-)2.5 percent in 2015-16. During April-December 2016 it averaged to 2.9 percent. As per the report pulses contributed major risk to food inflation.
Trade Growth
The survey stated that the growth in export was increased by 0.7 percent during April-December of 2016-17 amounting to USD 198.8 billion.
- Similarly, during April-December of 2016-17, imports declined by 7.4 per cent to USD 275.4 billion.
- Besides, trade deficit declined to USD 76.5 billion in 2016-17 (April-December) compared to USD 100.1 billion in the previous year.
- The current account deficit (CAD) too lowered in the first half (H1) of 2016-17 to 0.3 percent of GDP from 1.5 percent in H1 of 2015-16 and 1.1 percent in 2015-16 full year.
- In the first half of 2016-17, India’s Foreign Exchange Reserves increased by USD 15.5 billion.
External Debt
India’s external debt declined from March 2016 by USD 0.8 billion to USD 484.3 billion in September 2016.
- The short-term debt that contributed major share in total external debt declined to 16.8 percent at end-September 2016 and foreign exchange reserves provided a cover of 76.8 percent to the total external debt stock.
Agriculture Sector Growth
As per the survey, the agriculture sector is estimated to grow at 4.1 percent in the current fiscal as compared to 1.2 percent in 2015-16 due to better monsoon.
- The total area coverage under Rabi crops was recorded to be 616.2 lakh hectare on January 13, 2017 which is 5.9 percent higher than previous year.
- Similarly the area coverage under wheat as on January 13, 2017 is 7.1 percent higher while the area coverage under gram is 10.6 percent higher than that in the corresponding week of last year.
Industrial Growth
The survey estimates a growth rate of the industrial sector to be moderate at 5.2 percent in 2016-17 from 7.4 percent in 2015-16.
Services Sector
The Service sector has been estimated to grow at 8.9 percent in 2016-17 which is almost similar to that in 2015-16.
Social Infrastructure, Employment and Human Development
The survey highlighted that the Parliament has passed the “Rights of Persons with Disabilities Act, 2016” to enhance the rights and entitlements of Persons with Disabilities. It envisages increasing the reservation in vacancies in government establishments from 3 percent to 4 percent for those persons with disability.
- The Survey says Apparel and Leather industry have immense opportunity for job creation for the weaker sections, especially for women and can lead to social transformation in the country.
- It points out that the capacity of the State to provide essential services such as health and education to weaker section of the society is weak due to low capacity, with high levels of corruption, clientelism, rules and red tapism.
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