Corporate Tax Exemptions – Desirable or Not?

The Finance Commission has expressed concern about the low tax/GDP ratio in India and has discussed in detail, ways to reduce this. Other than low tax base, significant amount of tax revenue is lost through invocation of large number of tax exemptions companies receive. (As an effort to plug this, the Finance Minister added an … Continue reading Corporate Tax Exemptions – Desirable or Not?
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Finance Commission Report – Understanding the Formula for Devolution to States

The report of 15th Finance Commission (FC), constituted every five years, was tabled in the parliament on the day of the budget. The Finance Commission is an important constitutional body which determines the flow of revenue from centre to states and more importantly, fix a formula for the distribution of total pie among different states. Role of the commission is critical as most of the taxes are levied at the national level and states’ own tax revenue is less than half of their expenditure. The devolution forms the bedrock of India’s federal structure, giving states financial independence. Here is a look at how the commission arrives at the division and other details. Continue reading Finance Commission Report – Understanding the Formula for Devolution to States

Budget – Deficit Terminologies, Trends And Sources of Finance

The budget has sharply revised fiscal deficit (FD) for FY21, up from 3.5% in budget estimates (BE) to as high as 9.5%. Other than FD, budget also looks at other deficit numbers such as revenue deficit, primary deficit and effective revenue deficit. So, what all are these deficits and their importance?? Here is a brief look. … Continue reading Budget – Deficit Terminologies, Trends And Sources of Finance
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Budget – Revenue & Expenditure Analysis (Part II)

Against total receipt of Rs 19.8 lakh crore, government is projected to spend nearly Rs 34.8 lakh crore in FY22. Other than interest payments, broad areas which account for maximum expenditure are Defence, Subsidies and rural & agriculture sector. Here is a look at the details of various government expenses. Government’s expenditure classification is more … Continue reading Budget – Revenue & Expenditure Analysis (Part II)
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Buget 2021-22 – Not A ‘Never Before’ Budget

The budget for the year 2021-22, presented in the Parliament today, wasn’t quite the ‘never before’ budget as stated by the Finance Minister a few days back. To qualify for that, the minister should have found innovative ways to raise resources or ways to reduce expenditure while managing the same outcome. Or even, any path-breaking initiative to comprehensively monitor, review and audit all major government schemes and progressively reduce allocation on ineffective schemes. Yet, the budget has soothed nerves by not imposing any additional tax or Covid cess which gets reflected in the stock market movement. Here is a look at some of the highlights. Continue reading Buget 2021-22 – Not A ‘Never Before’ Budget

The Economic Survey 2020-21 – Highlights

The Economic Survey, tabled in the Parliament today, makes a sombre reading with narrative woven around the ‘once in a century’ pandemic. The Survey projects the economy to shrink from Rs 145.7 lakh crore to Rs 134.4 lakh crore in the current financial year (FY21), a decline of about 7.8% (constant price). However, the bigger concern is that GDP is projected to reach only Rs 149.2 lakh crore in FY22, only 2.4% higher than FY20 level. Here is a look at some of the issues raised in the Survey. Continue reading The Economic Survey 2020-21 – Highlights

The Year That was – Economy & Policy

The year 2020 is possibly the most horrible year since the end of second world war. The all-pervasive influence of the pandemic made the turbulence of last few years a breeze. However, that was not the only crisis India, as a nation had to face with China creating another trouble spot on the borders. Here is a look at some of the far-reaching events of the year. Continue reading The Year That was – Economy & Policy

Food Processing Industry – An Overview

Covid-19 seems to have brought greater attention to food processing industry, with most of the population having increased their spending on the same. For the nation, the challenge was to produce enough to feed its people fifty years ago, the objective now is to help agri-producers move up the value chain. India, at the moment, … Continue reading Food Processing Industry – An Overview
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State of the Economy – Analysing the Liquidity Condition

Indian economy, indeed, global economy is going through an extraordinary loose monetary policy phase to minimise the impact of Covid-19. While the policy hasn’t yet led to the intended outcome of higher borrowing, it certainly has led to sharp increase in market liquidity. This poses another set of risks, although not immediately. But what exactly … Continue reading State of the Economy – Analysing the Liquidity Condition
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