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Surge in GST collections across states paves way for stable growth ahead

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Surge in GST collections across states paves way for stable growth ahead

New Delhi, April 2 (IANS) The surge in GST collections which have crossed the Rs 2 lakh crore mark for 2023-24 reflects the strength of the Indian economy across sectors and regions of the country and augurs well for keeping the fiscal deficit in check going ahead.

Large states across the country have also registered a double-digit growth in tax collections during March which shows the depth of the Indian economy.

Karnataka has clocked the highest growth rate of 26 per cent in GST collections while Maharashtra has recorded a 22 per cent rise.

A welcome development has been that the country’s largest state Uttar Pradesh has also posted a 19 per cent jump in GST collections which is at par with Tamil Nadu.

Haryana, home to the country’s largest car maker Maruti Suzuki has also emerged as a high performer with a 23 per cent growth in GST revenue.

MS Mani, partner Deloitte India said: “GST collection also being a barometer for economic activities, as it is a transaction based tax, it can be reasonably inferred that the growth has been across regions and sectors.”

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Abhishek Jain, a partner at KPMG, said that India’s strong economic growth has led to increased tax collection. The Indian economy clocked an 8.4 per cent growth rate in the October-December quarter.

Finance Minister Nirmala Sitharaman has also stated that the economy is on track to post an 8 per cent growth rate in the Jan-March quarter. The GST collections for the year are both an outcome and a strong confirmation of this robust performance.

Economists say that with the sharp increase in GST collection, the fiscal deficit will be easier to manage which makes way for a more stable growth path ahead.

A lower fiscal deficit means the government will have to borrow less which leaves more money in the banking system for big companies to borrow and invest. This in turn leads to a higher economic growth rate and the creation of more jobs.

A low fiscal deficit also keeps the inflation rate in check which imparts stability to the economy.

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ICRA Chief Economist Aditi Nayar said: “With the CGST collections surpassing the FY2024 RE (revised estimate) the implicit growth needed to meet the Interim Budget Estimate for FY2025 has come down to single-digits, which appears likely to be exceeded.”

Experts are also of the view that given the jump in GST collections, the government may even raise the target for GST collections when the main budget is presented after the Lok Sabha polls.

–IANS

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A Budget for employment generation (IANS Opinion)

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A Budget for employment generation (IANS Opinion)

A Budget for employment generation (IANS Opinion)

Mumbai, July 23 (IANS) The 2024-25 Budget, unveiled by Finance Minister Nirmala Sitharaman on Tuesday, strategically aims to boost India’s economic landscape, focusing on job creation, fiscal consolidation, and infrastructure development.

It reflects the government’s resolve to build a resilient economy capable of withstanding global challenges.

This Budget not only aims to stimulate growth across diverse sectors, but also includes a comprehensive plan prioritising the welfare of the underprivileged, women, youth, and farmers (Garib, Mahila, Yuva, and Annadata), aligning with the goal of inclusive economic development.

One of the standout features of the Budget is its robust emphasis on creating employment opportunities. It actively encourages the involvement of the private sector in conjunction with governmental efforts to enhance job prospects.

The notable initiatives include subsidies for the first month’s wages, internships in the top 500 companies, and covering EPFO contributions to increase employment, and support women, which is expected to significantly impact job growth.

The Budget also cements India’s position as a burgeoning hub for startups by easing the angel tax and doubling the cap for Mudra loans to Rs 20 lakh per individual.

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These measures are designed to nurture entrepreneurship and provide a fertile ground for startups, thus promoting innovation and contributing to economic expansion, and making India the No 1 startup hub globally.

Skill development is addressed as a crucial component for economic growth, with the budget introducing innovative strategies for skill enhancement across various levels of the workforce. This focus is expected to bridge the skill gap and enhance employability.

Highlighting the demographic potential of India, the budget includes targeted measures to boost female participation in the workforce. Initiatives such as setting up working women’s hostels and childcare facilities are aimed at empowering women economically and facilitating their active involvement in the labour market.

Infrastructure development has been the sine qua non of PM Modi government’s long-term economic strategy for the past 10 years and remains so. The budget proposes a sweeping plan for both urban and rural development, designed to transform cities into growth engines and ensure comprehensive development of rural areas. This includes significant projects across sectors such as transportation, housing, and sanitation.

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The allocated capital expenditure of Rs 11.1 lakh crore, or 3.4 per cent of GDP, represents the highest investment in infrastructure in the past 26 years, underscoring the government’s commitment to this sector.

Fiscal consolidation has been a consistent theme over the past 10 years and continues with this budget. The fiscal deficit is projected to decrease to 4.9 per cent in FY25, down from 5.1 per cent in the interim budget, with further reduction planned for the following year. This fiscal prudence is achieved without modifications to the existing tax structures, ensuring a stable tax environment conducive to improving India’s credit rating.

Further enhancements to the taxation system are evident in both direct and indirect taxes. The budget proposes more attractive terms for the new tax regime, including higher deductions and broader, lower tax slabs. Indirect tax changes aim to support domestic manufacturing, address rate inversions, and simplify the overall tax process. Adjustments to the capital gains tax structure have also been introduced to streamline taxation and encourage investment.

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Environmental sustainability and climate finance are other critical areas addressed by the budget, recognising the importance of ecological considerations in sustainable economic planning. The government views these initiatives as crucial for ensuring that economic progress does not compromise environmental goals. Technology plays a pivotal role in all major governmental initiatives, with the budget emphasizing its importance in achieving sustainable development goals.

The FY2024-25 Budget lays down a robust blueprint for India’s future economic direction. It balances economic growth with fiscal discipline and social welfare, ensuring a stable foundation for sustainable development.

The Budget’s strategic focus on job creation, infrastructural investment, and fiscal consolidation is poised to significantly shape India’s economic landscape in the coming years, steering the country towards achieving the vision of Viksit Bharat by 2047. Through these measures, the budget ensures long-term growth and resilience.

(Ashish Kumar Chauhan is the Managing Director and CEO of the National Stock Exchange)

–IANS

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Budget in line with our quest for sustainable inclusive growth: FICCI Raj State Council

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Budget in line with our quest for sustainable inclusive growth: FICCI Raj State Council

Budget in line with our quest for sustainable inclusive growth: FICCI Raj State Council

Jaipur, July 23 (IANS) The Union budget sets up the roadmap for nine priority areas for Viksit Bharat.

“The emphasis on skilling, infrastructure, MSME, and energy transition is in sync with our quest for sustainable and inclusive growth,” said Ashok Kajaria, Chairman, FICCI Rajasthan State Council and CMD, Kajaria Ceramics Ltd.

MSMEs form the backbone of Rajasthan’s industrial ecosystem and access to affordable finance is one of the key issues faced by them. The Credit Guarantee Scheme for MSMEs, new credit assessment model, credit support during stress period and reduction in threshold for onboarding in TReDS would be a great enabler in this direction, he added.

He also welcomed the reduction in customs duty on gold and silver to 6% and mentioned that it would help in increasing the cost competitiveness of the jewellery industry in the state. Safe harbour rates for foreign mining companies selling raw diamonds in the country would also help the industry, he added.

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The state has a fairly developed Startup ecosystem and abolition of the angel tax would provide an impetus to the entrepreneurship and innovation. Continued focus on infrastructure through capex and long term interest free loan to states would have a multiplier effect on the development of infrastructure. The thrust on energy transition, green energy and local manufacturing of solar cells & panels provide opportunities to the state, he stated.

–IANS

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Budget will steer India towards sustainable path: Experts

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Budget will steer India towards sustainable path: Experts

Budget will steer India towards sustainable path: Experts

New Delhi, July 23 (IANS) The Union Budget 2024-25 presented by Finance Minister Nirmala Sitharaman on Tuesday included several key initiatives like energy transition pathways, climate finance, improving water resources management, and measures related to irrigation and flood management that will boost India’s fight against impacts of climate change, say climate and energy experts.

While the budget lacked details on crucial announcements related to carbon pricing, the use of nuclear power or even how its plan the PM Awas Yojana Urban 2.0 will help build heat-resilient cities, they say.

It has focused on building capacity for each aspect of climate change: mitigation, adaptation and loss and damage.

With barely four months to go before the United Nations Climate Change Conference, commonly known as COP, will be held in Baku, Azerbaijan, here’s a look at how the world’s fifth-largest economy has prioritised in its national budget:

Under the mitigation category, the Budget introduces the Critical Mineral Mission to enhance domestic production, recycling, and overseas acquisition of critical minerals necessary for various strategic sectors.

This mission will focus on technology development, workforce training, extended producer responsibility, and establishing financing mechanisms.

PM Surya Ghar Muft Bijli Yojana: This initiative aims to install rooftop solar plants for one crore households, providing free electricity up to 300 units per month. The program, which has been allocated Rs 6,250 crore is expected to reduce reliance on non-renewable energy sources and promote renewable energy adoption.

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Pumped storage projects: The government plans to promote pumped storage projects to facilitate electricity storage and manage the variable nature of renewable energy, ensuring a more stable integration into the power grid.

Nuclear energy development: The budget outlines plans to partner with the private sector in developing Bharat Small Reactors and Bharat Small Modular Reactors. It also includes research and development for new nuclear technologies, supported by government funding.

Advanced ultra-supercritical thermal power plants: A joint venture between NTPC and BHEL will set up an 800 MW commercial plant using Advanced Ultra Super Critical technology, aiming for higher efficiency in thermal power generation.

Support for traditional industries: Financial support will be provided for energy audits and cleaner energy transitions in 60 clusters of traditional micro and small industries. This initiative aims to help these industries adopt more sustainable practices.

For climate-resilient agriculture, the government will release 109 high-yielding, climate-resilient crop varieties. Additionally, one crore farmers will be encouraged to adopt natural farming practices with support for certification and branding.

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Responding to the Budget, Aarti Khosla, Director, of Climate Trends, said: “The Budget 2024-25 reflects India’s commitment to sustainable development with significant allocations like Rs 1.52 lakh crore for climate-resilient agriculture and the introduction of initiatives like the PM Surya Ghar Muft Bijli Yojana for rooftop solar.

She said that the focus on critical minerals, a policy for pumped storage projects and the decision to develop a policy document on energy transition pathways are laudable too. However, what remains to be seen is how the role of nuclear power in India’s energy mix takes shape.

“The budget lacks timelines for announcements on taxonomy, carbon pricing mechanisms and detailed strategies for mobilising climate finance for adaptation and mitigation efforts in vulnerable communities.”

Calling the Union Budget forward-looking, Vibha Dhawan, Director General, TERI, said: “The Budget is more substantial in terms of the direction it sets for the next five years than the numbers presented. I am pleased to see that adaptation and mitigation both will be the focus of Green Taxonomy.”

He said that the funding for the agriculture sector is to cover the entire ecosystem, particularly R&D, infrastructure, and supply chain, very crucial for food security in the context of rising climate vulnerability. The continuity of the biofuel agenda and push for renewable energy and green hydrogen are aligned with the long-term priorities of energy security and climate mitigation.

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Arunabha Ghosh, CEO, of the Council on Energy, Environment and Water (CEEW), said: “The Budget has several promising provisions to build a sustainable economy. It addresses not only India’s clean energy ambitions (with a focus on rooftop solar and pumped hydro storage) but also outlines actions on water treatment, air quality, and recovery from riverine floods.”

Suranjali Tandon, Associate Professor, at the National Institute of Public Finance and Policy, said that the investors and industry have been demanding a taxonomy and transition pathway as guidance for the flow of finance and reorientation of economic activity.

“The Budget announcements that clearly mention the establishment of a carbon market, taxonomy and transition pathways mark significant progress in planning towards Net Zero in 2070,” Associate Professor said.

Rishabh Jain, Senior Programme Lead, CEEW, said that the announcement of a Critical Mineral Mission for India will encourage private and government companies to develop capabilities in the critical minerals supply chain and build competitiveness in the medium to long term.

–IANS

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FICCI-NEAC says budget announcements will boost linkages of NE with rest of India

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FICCI-NEAC says budget announcements will boost linkages of NE with rest of India

FICCI-NEAC says budget announcements will boost linkages of NE with rest of India

Guwahati, July 23 (IANS) Leading industry body FICCI North East Advisory Council (NEAC) on Tuesday hailed the Union budget saying that it has taken positive steps towards the holistic development of the northeastern states.

FICCI-NEAC Chairman Ranjit Barthakur said that significant allocations for infrastructure and connectivity, particularly the Rs 1.11 lakh crore for capital expenditure and specific assistance for flood management in Assam in the budget would bridge the regional disparities and enhance the connectivity of the northeast with the rest of the country.

“This budget truly recognizes and addresses the unique needs of our region. We need substantial investment in connectivity infrastructure in the northeast, particularly in riverways, international road and rail connectivity as well as airways,” Barthakur told the media.

He said that the allocation of Rs 1.52 lakh crore for agriculture and allied sectors, along with the targeted support for shrimp production and the creation of large-scale vegetable clusters, is poised to transform the agricultural landscape of the northeastern states.

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The emphasis on natural farming and increased agricultural credit would improve the overall agricultural output and the northeast would benefit from this.

Noting that the focus on green growth, including the PM Surya Ghar Muft Bijli Yojana, highlights the importance of integrating environmental considerations into economic development, the FICCI-NEAC Chairman said that the northeastern states, with their rich biodiversity and unique ecosystems, would benefit greatly from these initiatives.

Barthakur said: “The next generation reforms outlined in the budget are crucial for the northeastern states. Collaboration with states for land-related reforms and urban planning will address our unique challenges and improve productivity and market efficiency. This will drive overall economic development in the region.”

Ravi Patwa, Chairman FICCI Assam State Council, said that the budget’s support for MSMEs, including credit guarantee schemes and financial support for food irradiation units, would significantly benefit the northeastern states.

Special financial incentives for MSMEs in the northeastern states would enable them to compete globally and contribute to the region’s economic growth, he said.

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Speaking on the tourism sector, Joydeep Gupta, Co-Chairman of the FICCI Assam State Council, said that the promotion of tourism in the northeastern states is a welcome move.

“The comprehensive development initiatives and investments in cultural heritage sites and natural landscapes would make the northeast a key tourist destination.

“This will not only enhance our region’s visibility but also create new economic opportunities for local communities,” he said.

–IANS

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Centre has earmarked substantial funds for TN: BJP

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Centre has earmarked substantial funds for TN: BJP

Centre has earmarked substantial funds for TN: BJP

Chennai, July 23 (IANS) Tamil Nadu BJP Spokesperson A.N.S. Prasad on Tuesday said that Prime Minister Narendra Modi-led Central government has unveiled a visionary Budget and earmarked substantial funds for the comprehensive development of Tamil Nadu.

He said that over the past decade, the state has received a significant investment of several lakh crores of rupees, transforming its landscape and empowering its people.

“This year’s Budget continues to prioritise Tamil Nadu’s growth, with a focus on key sectors and projects. The Modi government’s Budget is akin to the legendary Akshaya Patra, perpetually nourishing the holistic development of every Indian, their homes, and the nation,” Prasad said.

He said that this Budget is much like the timeless wisdom of how Saint Thiruvalluvar’s Thirukkural quenched people’s thirst for knowledge and enlightenment.

He said that there is an allocation of Rs 10,000 crore for the Chennai-Bengaluru Industrial Corridor and Rs 5,000 crore for the development of the Enayam International Container Terminal.

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“There is an allocation of Rs 3,000 crores for the upgradation of the Madurai-Tuticorin highway Social Welfare, Rs 2000 crores for the Pradhan Mantri Awas Yojana, benefiting over 1 lakh families, Rs 1500 crores for the Ayushman Bharat scheme, expanding healthcare coverage to 50 lakh citizens Education and skill development,” Prasad said.

He said that Rs 1,000 crore has been allocated for the establishment of a new IIT campus in Tirupati while Rs 500 crore has been allocated for the upgradation of skill development centres across the state.

“Rs 1,200 crores is allocated for the irrigation projects in the Cauvery delta region, and Rs 800 crores for the development of rural roads and connectivity,” Prasad said.

He said that this Budget allocation demonstrates the Central government’s commitment to Tamil Nadu’s growth and development.

He said that with a focus on infrastructure, social welfare, education, and agriculture, the state is poised for unprecedented progress.

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“The people of Tamil Nadu can look forward to improved living standards, increased economic opportunities, and a brighter future,” Prasad said.

–IANS

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