BJP Consolidates Its Hold On Maharashtra

BJP Consolidates Its Hold On Maharashtra

The first civic elections after 25 years to be fought independently by the BJP and the Shiv Sena, has seen BJP fall short in the Mumbai metropolis by just 3 seats.

It won 81, out of the 227 seat Brihanmumbai Municipal Corporation (BMC).

The BJP has also scored decisive wins in the hinterland of Maharashtra, and thrown the question of which formation can control the BMC independently into considerable confusion. Congress has 31, others have 24, and MNS scored with 7 seats.

Either BJP or Shiv Sena will need 30 seats, or more, and this near impossibility, given the options, may thrust them, once again, willy-nilly, into each other’s arms.

Shiv Sena, despite a strenuous bid to go it alone and win a majority, has struggled to barely keep a nose ahead, at 84, in the end. It has just retained its title as the single largest party in the Mumbai BMC, but well short of the majority mark at 114.

The BJP nearly trebled its tally, up to 81 from 32 in 2012.

The BMC, with a budget of some Rs. 40,000 crores, the largest in the country, is viewed as a prestigious prize.

But retaining control of it, despite very patchy governance marked by allegations of corruption over its last term, is a matter of its very survival for the Shiv Sena. This, given that it has no footprint at all outside Maharashtra.

And yet, it is evidently in no position to do much except share power and decision-making once again. In fact, it is considerably weakened in comparison to its position in 2012.

The widely perceived to be Marathi manoos party has also managed to top out and hold on in adjoining Thane.

But its grip on a demographic that is rapidly changing to contain almost as many people from North India, Gujarat, and elsewhere, as it has Marathi speaking natives, is definitely slipping.

In the hinterland, the municipalities of Pune (last with Sharad Pawar’s NCP), Nasik (last with  Raj Thackeray’s MNS), and Nagpur (its own last time too), went outright to the BJP.

Pune, a large industrial and urban hub, another prize in particular, has moved out of Sharad Pawar’s grasp.

Raj Thackeray is ostensibly barely hanging on in the power equation of Maharashtra, but might get a  second wind if there is horse trading involved shortly.

These other municipality wins in the partially rural interiors, serviced largely by cooperative banks, were meant to have been hard hit by demonetisation. That they have voted solidly for BJP proves that the public there appear to be in support of the move.

This contradicts the negative rhetoric put out on the matter by the Shiv Sena, Congress, and others.

The generally routed Congress in the other municipal contests, despite its very different political positioning, could conceivably play a part in the post-BMC election scenario. It does have the next largest block of 31 seats, and has been making enthusiastic congratulatory noises in favour of Shiv Sena.

If the BJP and Shiv Sena stick together however, recent acrimony will need to be forgotten in favour of the bigger cause. This, of course, is no big impediment in Indian raj niti , or indeed politics anywhere. Nitish Kumar and the JD(U) in Bihar, something of a band of prodigal sons, will probably endorse this position too.

It might however leave the voters of Mumbai frustrated, because it was the self-same Shiv Sena/BJP combine, albeit with very many more seats in favour of the Shiv Sena, that ran the municipality very badly for the last five years.

Pot-holes likened to craters, and flooding, in the absence of adequate drainage/the destruction of mangrove swamps etc. pose serious risks every single monsoon. These two grouses are amongst a host of other shortcomings that make the richest municipality in the country amongst the poorest in terms of delivery.

And this in a city that has impossibly high real estate rates and massive over-crowding. If BJP/Shiv Sena do get together again, they will have to do much better this time.

The Devendra Fadnavis led BJP government in Maharashtra, with grudging Shiv Sena support, has evidently consolidated its hold after the results of these civic polls.

These results make it even more difficult for the Shiv Sena to withdraw support, particularly with the NCP still waiting in the wings to make up the difference.

That it has come to this between the ostensibly uneasy allies, both at the state and centre, does not affect BJP as much as it does the Shiv Sena.

The saffron regional party, that has been unable to spread outside Maharashtra, appears to be in decline.

The Maharashtra municipal elections and its apparent endorsement of demonetisation also augurs well for similarly profiled urban and rural interior assembly seats in the ongoing elections in Uttar Pradesh, conducting its fourth phase simultaneously.

BJP has, from all reports, a very good chance of winning a majority in Uttar Pradesh, and some of the other smaller states presently.  

If it does win in the 403 seat Uttar Pradesh Assembly, come the results on March 11^th, it will be able to considerably improve its numbers in the Rajya Sabha, and be in a much better position to pass legislation preparatory to the general elections in 2019.

The favourable “semi-final”, it is thought, will harbinger the outcome of the final.

A broader point, in the backdrop of both Maharashtra and Uttar Pradesh, and indeed the ongoing tussles in Tamil Nadu and lesser problems in other states, such as Bengal, Orissa, Karnataka and Delhi, is that the regional parties, and not just the Congress shrunk to likewise size and stature, seem to be self-destructing.

This happening simultaneously in different parts of the country,  is entirely to a resurgent BJP’s advantage.

The SP internal feud is a case in point. The AIADMK in the aftermath of the death of J.Jayalalithaa, is another.

How the centrifugal and centripetal forces in the regional parties will multiply, particularly without the oxygen of power going forward, is something we will have to wait for in order to see.

(1,014 words)

February 23^rd, 2017

Gautam Mukherjee

ISRO: India's Profitable Space Organisation

ISRO: India’s Profitable Space Organisation

ISRO- Indian Space Research Organisation, has just launched 104 small satellites via a single payload, setting a new world record.

 The Indian Space Agency used its most powerful rocket for this launch- the XL Variant. It was earlier used to launch the famous Chandrayaan and Mars Orbiter Mission (MOM).

With this launch, Russia’s record, with 37 satellites launched simultaneously, stands shattered.

Of  ISRO’s 104, 96 satellites were from the US, one each of 5, from another five countries, and 3 from India.

The patronage of American organisations with the US being the most scientifically advanced country in the world, underlines ISRO’s competence and competitiveness in the field.

After all, even Elon Musk’s cost-slashing Space X, let alone multiples more expensive organisations like Arianespace, cannot do such launches for less than four times the ISRO cost.

Hence, with this century plus satellite launch, ISRO has taken centre stage globally.

India uses a very successful and economical PSLV- polar satellite launch vehicle, an expendable launch system, entirely indigenously developed and built.

This complicated simultaneous launch of 104 satellites marked ISRO’s PSLV C37’s 39^th flight in-series.

Launching satellites is an expensive business generally, and estimated costs range between $60 million and $ 400 million for a single launch internationally.

However ISRO has not only worked out how to launch over a hundred satellites on a single payload, but has managed to bring the cost down to as little as $15 million or less per satellite launched.

ISRO, government-owned, headquartered in Bengaluru, formed in 1969, is an exception to the rule of mostly inefficient, funds guzzling, government organisations.

With an expanded scope of works, it superseded its fledgling predecessor, the Indian National Committee for Space Research (INCOSPAR), established in 1962 by India’s first Prime Minister Jawaharlal Nehru and the iconic scientist Vikram Sarabhai. 

That it works so well administratively and scientifically to date, may have something to do with the fact that ISRO reports directly to the Prime Minister via a Department of Space.

And this, on a slim budget of just $1.4 billion per estimated 2017-18 figures, for doing very much more than just launching satellites.

Future plans include a human spaceflight programme, orbiter missions to Venus, Jupiter, the Sun and a repeat to Mars with an expanded brief.

But for the moment, it has already completed orbiting missions to both the Moon and Mars.

A telling cartoon in the Western press just after the successful Mars mission had a poor Indian peasant in droopy moustache, knee length Mahatma-style dhoti, and sweaty white turban, accompanied by a bewildered cow, knocking on the door of  a plush “fat cat” space club.

The space exploration work is in addition to its own satellite building programmes and the reliable business it runs by launching satellites and placing them in their geostationary orbits via its GSLV – geosynchronous launch vehicle programme.  

The latest launch also had a nano-satellite each from Israel, Kazakhstan, Netherlands, Switzerland, and the UAE (United Arab Emirates), apart from three from India as well.

ISRO has a separate commercial arm called ANTRIX (Antrix Corporation Limited), incorporated fairly recently, in 1992. Its latest published annual revenue was $280 million, with an operating income of $ 48 million and a profit of $30 million.

But let us also note that the most satellites launched at one time via a single payload by ISRO/Antrix heretofore was only 23, in 2015.

Going up to launching 104 small satellites this time therefore is a five-fold quantum leap.

Globally, the space industry including ground support, building, launching and placing satellites, small ones and bigger, at over 2 tonnes each, in their geostationary orbits, clocks up upwards of $ 300 billion. Of course, much of the really big money is in the launching of heavy satellites.That is till the transistorisation of satellites becomes the norm.

Meanwhile, ISRO’s GSLV business, for heavier payloads, will also start to grow along with more successful launches, even beyond the 2.5 tonne payload capacity GSLV Mark II, currently active.

So far, successful GSLV Mark II launches number only in the single digits. And while ISRO’s GSLV I has now been retired, the GSLV Mark III, coming up shortly, will handle the launching of satellites weighing up to 5 tonnes collectively, and save the GSLV programme from obsolescence.

For now, this record launch places India and ISRO firmly in the forefront  of the small satellite launching business. That is, for satellites up to a  cumulative weight of 1,800 kg.

Some of the US ones sent up by a start-up called Impact One this time however, weigh as little as 4.7 kg!

Clearly, to all foreign observers, ISRO has now notched up a proven track record of over 25 flawless and sequential PSLV launches. This will commend itself to the future.

For: ABP Live

(791 words)

February 15^th, 2017

Gautam Mukherjee

Budget 2017: The Best Since This Government Took Over

Budget 2017: The Best Since This Government Took Over

The first set of budget proposals after the world’s biggest demonetisation drive are also the best tabled by Finance Minister Arun Jaitley so far. They are far-sighted, bold, and impressive.

From what construction mogul  Ajit Gulabchand called a “joyless enterprise” though he was primarily talking about the state of his industry, these proposals hold out rich promise for the future.

There are several firsts. For the first time there is no bifurcation between plan and non-plan expenditure, now that there are no more five year plans. It has also merged the railway budget with itself and come to table on the first day of February instead of the last. The latter, in order to go operational a full quarter in advance.

The proposals outlined a total spend of Rs. 21.47 trillion. But lest one thinks it is all taken up by the gargantuan size of our government,   let it be known that capital expenditure is up 25.4%.

To accommodate this ambition, the fiscal deficit has been marginally relaxed from the point target of 3% to 3.2% for 2017-18. The intention however is to revert to 3% in 2019-20.

This even as the government holds a respectable $361 billion in foreign exchange reserves, representing 12 months in imports. These are not Chinese style reserves, but certainly a far cry from when India had to hawk its gold reserves back in  1991.

This tightness of the fiscal discipline of expanding a fiscal laxman rekha  by a mere 0.2% in this exercise should go down very well with all except the most jaundiced observers.

This particularly since other parameters such as inflation, the wholesale and consumer price indexes, and the current account deficit are also well in check as per the Economic Survey tabled on the 31^st of January.

The GDP, though slightly impacted in 2016-17 is expected to go well above 7% in  the subject year 2017-18, taking India to the fastest growing major economy in the world spot by at least one percentage point afresh.  

These parameters should lead, along with all the money currently in the banks, to further interest rate cuts and a boom in both the equity and debt markets.

NK Singh, who headed a parliamentary committee on suggestions regarding fiscal policy broadly agrees, and expects a “more accommodative monetary policy”, that in turn should stimulate domestic consumption, business, and industry.

That is, if global issues, such as the protectionism from the US, that is expected to hurt our IT and Pharma sectors, do not prove too onerous.

Even as it stands, this budget has expanded its allocations in a number of key old and new sectors.

There is primary emphasis on women, children, the poor and underprivileged, skilling, disease eradication,  sanitation, alleviation of conditions for scheduled castes and tribes ( up 35% at Rs. 52,393 crores). All this should play well politically while addressing the needs of the people at bottom of the pyramid.

This Government has also made the highest ever allocation for MNREGA at Rs. 48,000 crores, enhanced agricultural credit (Rs 10 lakh crores), and crop insurance (coverage extended to 40% by value).

There are bigger allocations for a plethora of headings under farming and the rural sector, including rural roads. However, there is some scepticism about  the government’s claim that it will double farm income in five years given that it would need a compounded 12.5% growth rate instead of the commendable 4.1% this year (2016-17), up from a more usual 1.2% last year (2015-16).

Defence gets Rs. 2.74 lakh crores without counting pension allocations.

Infrastructure has a whopping Rs. 3,96, 135 crores.

Transportation  gets Rs. 2.41 lakh crores. Highways have Rs. 64,000 crores.

Then there are airways, waterways, railways, (to construct 3,500 km of new track, enhance safety, improve accounting processes, modernise and transform 500 stations, turn every carriage toilet into a bio-toilet, etc.).

The objective of 100% rural electrification is on track for 2018. There is to be solar power enhancement by another 20,000MW.

A new composite poverty index will be developed.

A new body will look at public sector asset reconstruction, monetising land banks, and unlocking their value including land belonging to the Airport Authority of India.

Another set of strategic oil reservoirs will be built in Orissa and Rajasthan. Two new AIIMS facilities will come up in Jharkhand and Gujarat.

With the banks flush with the proceeds from demonetised cash, and large tax accruals expected, (already up 35% for individuals and 17% overall), the Government proposes to only recapitalise banks with a modest sum of Rs. 10,000 crores.

There are multiple provisions on digitisation including a major one lakh villages ‘digi-gaon’ push, now that there is ample spectrum issued.

Cash transactions in excess of Rs. 3 lakhs, as suggested by the NK Singh Committee, are henceforth banned.

The government  is clearly determined to keep the money forced into the banking system after November 8^th 2016, by simultaneously offering a range of convenient digital transaction apps and incentives.

These include the BHIM App, already in use by 1.25 crore people, and an even more widespread AADHAR PAY coming up. Some 20 lakh AADHAR based swipe machines will be introduced by 2020.

This budget also notably breaks new ground by encapsulating policy on putting a virtual stop to cash in political funding and charitable institutional donations, often referred to as the mother lode of black money.

The government formally incorporated the Election Commission’s (EC) suggestion of not allowing any cash donation from a single source of more than Rs. 2,000/- down from the Rs. 20,000/- today . It also intends to introduce Political Funding Bonds for those who want to make their donations anonymously rather than by cheques and online transfers.

And the tax exemption that registered political parties enjoy will henceforth depend on conformity to these new norms and the fine print such as one single recognised party account that regulates them.

Continuing with the government’s commitment to improve the ease of doing business, the Foreign Investment Promotion Board (FIPB) has been scrapped. 

There was a windfall gift for both the depressed real estate sector and the world of equity.  For real estate – the eligibility for long term capital gains on property sale has been reduced from three years since purchase, to two. And a slew of financial instruments that will be free of capital gains tax altogether will also be introduced.

For equity and real estate alike-the base year for indexing has been changed from 1.4.1981 to 1.4.2001. This will effectively lead to a much lower incidence of capital gains tax for both.

The bulk of the junior salaried class  that has taxable income of between Rs. 2.5 and Rs. 5 lakhs after factoring in the standard deduction, will be taxed at a mere 5% going forward.

A gentle surcharge of 10% was added on taxable incomes of between Rs. 50 lakhs and Rs. 1 crore, which attract 30% tax plus cesses anyway, for the first time. And a similar surcharge on incomes above Rs. 1 crore was retained from the last fiscal.

But, alongside this, there was relief provided to numerically 96% of Indian corporate entities, all with a turnover of under Rs. 50 crores, with their taxation reduced by 5%, to 25%.

Several other taxes including service tax were left alone for now in view of their expected  engulfing by the impending GST roll-out.

The Finance Minister also managed to pleasantly surprise the stock market. He imposed no fresh taxes on capital gains on listed and unlisted stocks, or atop the securities transaction tax, or on foreign institutional investment.

And the Sensex ran up 485 points in appreciation, alongside the approbation from most of the captains of business and industry.

For: The Sunday Guardian

 (1,284 words)

February 1^st, 2017

Gautam Mukherjee

Budget 2017: A New Dawn

Budget 2017: A New Dawn

These budget proposals coming  after the world’s biggest demonetisation drive are  far-sighted, bold, and impressive.

There are several firsts. It does not distinguish between plan and non-plan expenditure. It has merged the railway budget with itself, and come to table on the first day of February instead of the last.

It outlined proposals for a total spend of Rs. 21.47 trillion. Capital expenditure is up 25.4%.

The fiscal deficit has been marginally relaxed from the point target of 3% to 3.2% for 2017-18.  

This even as the government holds $361 billion in foreign exchange reserves, representing 12 months in imports.

This tightness of the fiscal discipline should go down very well with all analysts. This particularly since other parameters such as inflation, the wholesale and consumer price indexes, and the current account deficit are also well in check.

 These parameters should lead, along with all the money currently in the banks, to further interest rate cuts and a boom in both the equity and debt markets. That is, if global issues, such as the protectionism from the US, do not prove too onerous.

This,  in turn should stimulate domestic consumption, business, and industry.

Even as it stands, this budget has expanded its allocations in a number of key old and new sectors.

There is primary emphasis on women, children, the poor and underprivileged, skilling, disease eradication,  sanitation, alleviation of conditions for scheduled castes and tribes ( up 35% at Rs. 52,393 crores).

This Government has made the highest ever allocation for MNREGA at Rs. 48,000 crores, enhanced agricultural credit (Rs 10 lakh crores), and crop insurance (coverage extended to 40% by value).

There are bigger allocations for a plethora of headings under farming and the rural sector, including rural roads.

Defence gets Rs. 2.74 lakh crores without counting pension allocations.

Infrastructure has Rs. 3,96, 135 crores.

Transportation  gets Rs. 2.41 lakh crores. Highways have Rs. 64,000 crores.

Then there are airways, waterways, railways, (to construct 3,500 km of new track, enhance safety, improve accounting processes etc.).

The objective of 100% rural electrification is on track for 2018. There is to be solar power enhancement by another 20,000MW.

A new composite poverty index will be developed.

A new body will look at public sector asset reconstruction, monetising land banks, and unlocking their value.

Another set of strategic oil reservoirs will be built in Orissa and Rajasthan. Two new AIIMS facilities will come up in Jharkhand and Gujarat.

There are multiple provisions on digitisation including a major one lakh villages ‘digi-gaon’ push, now that there is ample spectrum issued.

Cash transactions in excess of Rs. 3 lakhs, as suggested by the NK Singh Committee, are henceforth banned.

The government  is clearly determined to keep the money in the banking system by simultaneously offering a range of convenient digital transaction apps and incentives.

These include the BHIM App, already in use by 1.25 crore people, and an even more widespread AADHAR PAY coming up. Some 20 lakh AADHAR based swipe machines will be introduced by 2020.

This budget also breaks new ground by putting a virtual stop to cash in political funding and charitable institutional donations, often referred to as the mother lode of black money.

It has incorporated the Election Commission’s (EC) suggestion of not allowing any cash donation from a single source of more than Rs. 2,000/- . It also intends to introduce Political Funding Bonds for those who want to make their donations anonymously rather than by cheques and online transfers.

And the tax exemption that registered political parties enjoy will henceforth depend on conformity to these new norms.

Continuing with the government’s commitment to improve the ease of doing business, the Foreign Investment Promotion Board (FIPB) has been scrapped. 

There was a windfall gift for both the depressed real estate sector and the world of equity.  For real estate – the eligibility for long term capital gains on property sale has been reduced from three years to two. And a slew of financial instruments that will be free of capital gains tax altogether will also be introduced.

For equity and real estate alike-the base year for indexing has been changed from 1.4.1981 to 1.4.2001. This will effectively lead to a much lower incidence of capital gains tax for both.

The bulk of the junior salaried class  that has taxable income of between Rs. 2.5 and Rs. 5 lakhs after factoring in the standard deduction will be taxed at a mere 5% going forward.

A gentle surcharge of 10% was added on taxable incomes of between Rs. 50 lakhs and Rs. 1 crore for the first time. And a similar surcharge on incomes above Rs. 1 crore was retained from the last fiscal.

But, alongside, there was relief provided to 96% of Indian corporate entities, all with a turnover of under Rs. 50 crores, with their taxation reduced to 25%.

The Finance Minister imposed no fresh taxes on capital gains on listed and unlisted stocks, the securities transaction tax, or on foreign institutional investment.

And the Sensex ran up 485 points in appreciation.

 (844 words)

February 1^st, 2017

Gautam Mukherjee

Budget 2017: Intelligent & Positive Road Map On Basant Panchami

Budget Proposals 2017-18: Intelligently Positive Road Map On Basant Panchami

The first set of budget proposals after the world’s biggest demonetisation drive are also the best tabled by Finance Minister Arun Jaitley so far. They are far-sighted, bold, and impressive.

This budget also represents several firsts. It is the first that does not distinguish between plan and non-plan expenditure. It has merged the railway budget with itself and come to table on the first day of February instead of the last.

It outlined proposals for a total spend of Rs. 21.47 trillion. Capital expenditure is up 25.4%.

The fiscal deficit has been marginally relaxed from the point target of 3% to 3.2% for 2017-18. The intention is to revert to 3% in 2019-20.

This even as the government holds $361 billion in foreign exchange reserves, representing 12 months in imports.

This tightness of the fiscal discipline in this exercise should go down very well with the prospective foreign investor. This particularly since other parameters such as inflation, the wholesale and consumer price indexes, and the current account deficit are also well in check. 

The GDP, though slightly impacted is expected to go well above 7% in  the subject 2017-18, taking India to the fastest growing major economy in the world spot by at least one percentage point.  

These parameters should lead, along with all the money currently in the banks, to further interest rate cuts and a boom in both the equity and debt markets. 

That is, if global issues, such as the protectionism from the US, do not prove too onerous.

NK Singh, who headed a parliamentary committee on suggestions regarding fiscal policy broadly agrees, and expects a “more accommodative monetary policy”, that in turn should stimulate domestic consumption, business, and industry.

Even as it stands, this budget has expanded its allocations in a number of key old and new sectors.

There is primary emphasis on women, children, the poor and underprivileged, skilling, disease eradication,  sanitation, alleviation of conditions for scheduled castes and tribes ( up 35% at Rs. 52,393 crores).

This Government has made the highest ever allocation for MNREGA at Rs. 48,000 crores, enhanced agricultural credit (Rs 10 lakh crores), and crop insurance (coverage extended to 40% by value).

There are bigger allocations for a plethora of headings under farming and the rural sector, including rural roads.

Defence gets Rs. 2.74 lakh crores without counting pension allocations.

Infrastructure has Rs. 3,96, 135 crores.

Transportation  gets Rs. 2.41 lakh crores. Highways have Rs. 64,000 crores.

Then there are airways, waterways, railways, (to construct 3,500 km of new track, enhance safety, improve accounting processes etc.).

The objective of 100% rural electrification is on track for 2018. There is to be solar power enhancement by another 20,000 MW.

A new composite poverty index will be developed.

A new body will look at public sector asset reconstruction, monetising land banks, and unlocking their value.

Another set of strategic oil reservoirs will be built in Orissa and Rajasthan. Two new AIIMS facilities will come up in Jharkhand and Gujarat.

With the banks flush with the proceeds from demonetised cash, and large tax accruals expected, (already up 35% for individuals and 17% overall), the Government proposes to only recapitalise banks to the modest sum of Rs. 10,000 crores.

There are multiple provisions on digitisation including a major one lakh villages ‘digi-gaon’ push, now that there is ample spectrum issued.

Cash transactions in excess of Rs. 3 lakhs, as suggested by the NK Singh Committee, are henceforth banned.

The government  is clearly determined to keep the money forced into the banking system after November 8^th 2016 by simultaneously offering a range of convenient digital transaction apps and incentives.

These include the BHIM App, already in use by 1.25 crore people, and an even more widespread AADHAR PAY coming up. Some 20 lakh AADHAR based swipe machines will be introduced by 2020.

This budget also notably breaks new ground by encapsulating policy on putting a virtual stop to cash in political funding and charitable institutional donations, often referred to as the mother lode of black money.

The government formally incorporated the Election Commission’s (EC) suggestion of not allowing any cash donation from a single source of more than Rs. 2,000/- down from Rs. 20,000/- . It also intends to introduce Political Funding Bonds for those who want to make their donations anonymously rather than by cheques and online transfers.

And the tax exemption that registered political parties enjoy will henceforth depend on conformity to these new norms and the fine print such as one single recognised party account that regulates them.

Continuing with the government’s commitment to improve the ease of doing business, the Foreign Investment Promotion Board (FIPB) has been scrapped.  

There was a windfall gift for both the depressed real estate sector and the world of equity.  For real estate – the eligibility for long term capital gains on property sale has been reduced from three years since purchase to two. 

And a slew of financial instruments that will be free of capital gains tax altogether will also be introduced.

For equity and real estate alike-the base year for indexing has been changed from 1.4.1981 to 1.4.2001. This will effectively lead to a much lower incidence of capital gains tax for both.

The bulk of the junior salaried class  that has taxable income of between Rs. 2.5 and Rs. 5 lakhs after factoring in the standard deduction will be taxed at a mere 5% going forward.

A gentle surcharge of 10% was added on taxable incomes of between Rs. 50 lakhs and Rs. 1 crore, which attract 30% tax plus cesses anyway, for the first time. And a similar surcharge on incomes above Rs. 1 crore was retained from the last fiscal.

But, alongside, there was relief provided to numerically 96% of Indian corporate entities, all with a turnover of under Rs. 50 crores, with their taxation reduced by 5%, to 25%.

The Finance Minister also left the stock market alone. He imposed no fresh taxes on capital gains on listed and unlisted stocks, the securities transaction tax, or on foreign institutional investment.

And the Sensex ran up by 485 points in appreciation. Not something that generally happens after a budget presentation.

 (1,028 words)

February 1^st, 2017

Gautam Mukherjee