InvestorQ : What could be the major points to be assessed and presented in the budget of 2020?
Deepa Salunkhe made post

What could be the major points to be assessed and presented in the budget of 2020?

Juvina Maggie answered.
2 years ago

Here are some of the data pointers for the FM as she embarks on a major spree to seek feedback before presenting the budget.

· Government is likely to miss the divestment target by a wide margin with only Rs.18,022 crore collected by way of divestments so far. Also, there is likely to be a delay in privatisation of Air India, BPCL and Concor

· RBI has warned that the NPAs of banks might grow to 9.9% by September and that would be a challenge for the FM while presenting the budget

· In case of NBFCs the focus will be on liquidity enhancement and striving to revive rural demand and consumption

· Bank credit growth slowed to 7.2% in November from 13.8% in the year-ago month and that can be attributed to too much of government bond holdings. Loans to industry growth declined to 2.4 % to Rs.27.72 trillion in November

· Finance Ministry has capped expenditures for the last quarter of FY20, under revised criteria, of 3-8% reduction from the existing figures and we could see restricted budgeted expenditures.

· Fiscal deficit hitting 115% of the budget estimate till November has set alarm bells as the tax revenues and disinvestment proceeds are well short of targets

· In addition, the Rs.1.45 trillion impact of lowering of tax rate for corporates is also likely to negatively impact revenue mobilisation. More borrowing is not an option either.

· There are general expectations of cut in personal income tax even as corporate tax rate reduction to 22% from 30%, and to 15% from 25% for new manufacturing entities, has increased the common man's expectation from the budget

· With slowdown and lack of industrial activity, GST and direct tax revenues are expected to be way below targets for the year.

· Central GST mop-up at the end of December stands at Rs.3.72 trillion against the full-year target of Rs.5.26 trillion. That looks like a talk task.