The finance minister has begun his budget speech in Parliament. The FM has stated that his priority will be to present a clear roadmap for the economy in this budget however he has played down expectations by stating that his task is challenging. The FM has said that the fiscal deficit target for FY16 and FY17 would be 3.6% of GDP and 3.2% GDP respectively. But the target for FY14 of 4.1% of GDP was a challenge.
Regarding the Goods and Services Tax (GST) he has stated that the finance ministry will work with state governments to operationalise the GST at the earliest.
The FM has promised to overhaul of the subsidy regime, including the fertilizer subsidy.
To boost the insurance and the defense sectors, the FDI limit in these sectors has been raised to 49% each.
The FM has stated that there will be no retrospective taxation in the Modi government.
To recapitalize the banking sector, the FM has stated that banks will raise money from the public. Banking sector in India will require Rs 2,400 bn for meeting the Basel 3 norms.
To boost the real estate sector, the FM has proposed to modify the REIT structure to act as a pass through vehicle which will enable realty firms to access funds more easily.
The FM has also set aside Rs 10 bn for irrigation schemes.
Regarding MNREGA, the FM has stated that more productive works will be taken up under this scheme.
After opening in the red the Indian indices have fallen further in the morning session as the finance minister presents the union budget in Parliament. Mid and small caps have fallen more than the benckmark indices.
The BSE-Sensex is trading down 265 points. The NSE-Nifty is trading down 80 points. The BSE Mid Cap index is trading down 1.4% and the BSE Small Cap index is trading down 1.6%. The rupee is trading at 59.76 to the US dollar.