Budget 2019 What matters most

Too many promises and lots of ideas but how and when will budget ideas be implemented and more importantly how will it be funded is a big ?? because funding is depending on private partnership. Secondly this budget is filled with contradictory goals

The govt wants 90000 crores from RBI , is going to borrow more and substantially enough that it wants to borrow sovereign debt in foreign funds .

Too much populism and mismanagement can make India another Pakistan and Argentina is a big big risk when governments depend on external debt to finance deficits in the distant future.

Budget is very Inflationary ! u will pay more excise and government earns more cess of at least 40000 crores vide oil tax on petrol and diesel. Expect everything to face inflation or mehengai tax even if there is no or little change in normal taxes.

Huge push on reviving a property market with more deduction of 150000 but middle class is over saturated with having empty second and third flats that they are unable to sell .  Model tenancy law will be revolutionary if it can meander through the complex and archaic legal system and free up locked empty houses for use thus increasing supply of rentable property, making postponing a property purchase more lucrative.

There is a big push for govt to recapitalize psu banks 70000 crores is huge but will the npa ko evergreen karo, ji mantri ji, chalta hai and corruption culture of babus in banks change ? will politicians meddling in banks and creating massive NPAs stop ? Essar RCom Kingfisher and Jet Air , N Modi are salient examples of crony capitalism.

INDIRA Gandhi had nationalized banks . The PSU banks have become bankrupt thrice received bailouts to keep them afloat  since then, showing the desperation of Rulers /mantris to control the strings of the economy.

Farmers and psu banks are good candidates for permanent bailouts. How do i become a farmer or a psu staffer ??

The markets are crashing as Modi govt policy reminds it of the Indira Era.

Govt has a disinvestment target of 105000 crores and wants to increase public shareholding to 35% but govt holdings will include PSU and LIC holdings (what hypocrisy).

The govt spells out vide policy to small investors – dont invest in PSU cos as it will keep dis-investing while keeping control .. an unmitigated disastrous way of destroying taxpayer and investor wealth. Wonder who will invest when even UPA era disinvestment is in losses . Atal era disinvestment candidates like  ONGC etc will be in losses very soon the way the govts want to milk them.

Govt wants to lay the red carpet for foreign funds but fails to understand that the local small investor is suffering and bleeding .

Govt it seems, want to incentivize the rich to QUIT India and follow Gandhi bapus advise , as it increases taxes on the rich with added cess .

Gold purchases will fall as u pay 2.5 % more,  Excise / Cess on oil will make more problems for Automakers which are already a all time lows .

Tax of 20% on buyback is ridiculous especially when govt reintroduced LTCG .

This will make a huge impact on investor psyche especially because the policy is shifting towards Indira era policy.

Excise / Cess on oil will make more problems for Automakers which are already a all time lows .

 

 

 

 

 

Budget 2019 Vote on account what matters most.

Budget math doesnt add up  .. it seldom does in India

The fisc deficit is more than 4.5 % of gdp say some pundits especially considering state govt loan mafis and schemes like raytu bandhu and nrega

When lawyers become FM fiscal math jugglery is a given.. like PC had used oil bonds and other tools to hide deficits ,, this govt has used small savings to lend to Air India , PSU ETF and LIC to fund IDBI and its disinvestment  etc which is putting small savers and lic policyholders and pension funds and eventually the taxpayer at a huge risk .

Inflationary.. please all budget .. RBI will have hands full dealing with inflationary impact

BUDGET 2019 Vote on account

1. Within 2 years, Tax assessment will be done electronically no manual intervention.
2. IT returns to be processing in just 24 hours and Refund given.
3. Minimum 14% revenue of GST to states by Central Govt.
4. Tax free Gratuity limit increase to 20 Lakhs from 10 Lakhs
5. No Taxes vide rebate us 87A upto 5 lakh annual income after all deductions.
6. INDL Income upto 6.5 lakhs  after deductions tax free
7. Standard deduction has increase from 40000 to 50000
8. Ceiling Limit of TDS u/s 194A has increased from 10000 to 40000

HAPPY BUILDER LOBBY and multiple home owners

8. No tax on second self-occupied house
9. Recommendations to GST council for reducing GST rates for home buyers
10. Ceiling Limit of TDS u/s 194I has increased from 180000 to 2400000. Ceiling Limit of TDS u/s 194I has increased from 180000 to 240000
11. Capital tax exemption u/s 54 has increased to reinvestment in two residential houses.
12. Benefit u/s 80IB has increased to one more year i.e. 2020
13. Benefit has given to unsold inventory has increased to one year to two years.

 

 

GENERAL Budget provisions

14. State share has increased to 42%
15. PCA restriction has abolished from 3 major banks
16. 2 lakhs seats will increase for the reservation of 10%
17. 60000 crores for manrega
18. 1.7 Lakh crore to ensure food for all
19. 22nd AIIMS has to be opened in Haryana
20. Approval has to be given to PM Kisan Yojana
21. Rs. 6000 per annum has to be given to every farmer having upto 2 hectare land. Applicable from Sept 2018. Amount will be transferred in 3 installments
22. National kamdhenu ayog for cows. Rs. 750 crores for National Gokul Mission
23. 2% interest subvention for farmers pursuing animal husbandry and also create separate department for fisheries.
24. 2% interest subvention for farmers affected by natural calamities and additional 3% interest subvention for timely payment.
25.Custom duty has abolished from 36 Capital Goods
26. Bonus will be applicable for workers earning 21000 monthly
27. The scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide assured monthly pension of Rs. 3,000 with contribution of Rs. 100 per month for workers in unorganized sector after 60 years of age.
28. Our government delivered 6 crores free LPG connections under Ujjawala scheme
29. 2% interest relief for MSME GST registered person
30. 26 weeks of Maternity Leaves to empower the women
31. More than 3 Lakhs crores for defence
32. Custom duty has abolished from 36 Capital Goods
33. Single window for approval of India film makers

 

Sec 80 C Options At a Glance – Fixed Income

Fixed Income Tax savings options under Sec 80C for all

For table 1 pf postal investments the rates are for current yr and next yr as there is downward revision

For 5 Yr Tax savings  Fds from banks the first rate is regular and second is senior citizen rate

FIXED INC	SENIOR	ALL	ALL	ALL
	CITIZENS
INVESTMENT	SCSS	PPF	NSC	MIS / FD
INC STATUS	TAXABLE	TAX FREE	TAXABLE	TAXABLE
RATE %	9.3 / 9.2	8.8 / 8.7	8.6 / 8.5	8.5
TENURE (Yrs)	5	15+ 5…	5	5
MAX LIMIT Rs	1500000	100000	NO LIMIT	4.5 / 9 L
LOAN	N.A	RATE +2%	N.A	N.A
5yr TAX FD	IDBI	YES	SBI	OBC
TAXABLE	AXIS		KVB	IOB
RATE %	9 / 9.75	8.75 / 9.5	8.75/ 9	9 / 9.5
5yr TAX FD	NHB	HUDCO
RATE %	9.25 / 9.85	9

The Vadra-DLF Tagle

RTI / IAC activist and  Ramon Magsaysay Award winner, Ex IRS turned politician Arvind Kejriwal… has exposed the tangle between DLF and Robert Vadra in his recent expose.

Simple question here is why did DLF a company neck deep in debt having a debt: equity ratio of close to 1:1, doing a fire sale of assets to reduce debt on its highly leveraged balance sheet give Vadra interest free debt be it a loan or an advance?

Direct Involvement:

1. DLF  2. Robert Vadra, the fastest Indian billionaire in recent times with an estimated net worth of a staggering $2.1 Billion, husband of Priyanka Vadra , daughter of Sonia Gandhi and a member of the Nehru-Gandhi family by marriage.

Robert Shares the directorship with his mother Maureen,  others in his family died either by accident or by suicide. Strangely.. his wife Priyanka Vadra has no stake in his companies , which if not sexist is nothing but ring-fencing the brahmastra of Congress.

Indirect Involvement (Nepotism angle)(Crony Capitalism angle):

1. IndiRan National Congress, State and Central Govts and their govt machinery. 2. PSU Banks that provided Loans to DLF and Vadra. 3. Sonia Gandhi and Priyanka Vadra.

Read Hindu: Attack on Vadra is attack on party: Congress

Now Robert Vadra is no ordinary man or aam admi as he first claimed, and being the son in law of the first family of Indian politics has loads of perks. He is a special person or khass admi, as he is exempted from airport security checks , a privilege reserved for President, Vice President, Prime Minister, former presidents, former vice-presidents, Speaker of the Lok Sabha, Chief Justice of India etc … Read this

The SPG Act is a draconian law passed by Indira Gandhi and he is a Special Case as per Mr P Chidambaram in a reply to an RTI Query by a team member of  Avnish Singhs RTI Anonymous.

This news is not new, it was a tad bit stale… but no media house or political party risked itself or its sweat heart deals or its fortunes by exposing the nepotism in the system fearing loss of business, exposure of skeletons in cupboard, the full force of govt machinery DRI CBI etc.. you get the drift!

Robert Vadra posted a message on his Facebook account which read: “Mango people in banana republic.” before closing it.

Read about the Real Estate Bubble and PSU Banks

Value Research: The Realty Bubble 

Vox : Housing bubbles and interest rates

DNA/ Ajit Dayal Are the banks keeping property prices up?

PKDEY: PSU bank loans to realty cos up

Moneylife/Sucheta D: Public sector banks – Loans turning bad

Read about the DLF Vadra Nexus. 

Moneylife/Sucheta D: Kejriwal asks for white paper, SIT probe into Haryana government, DLF and Robert Vadra nexus

FP  Politicians and real estate: Why are we missing the big picture?

Look closely at all the Robert Vadras of Indian politics

Kejriwal breaks ‘Omerta Code’ on DLF-Vadra ‘sweetheart deal’

Plot thickens: Vadra, DLF, and a ‘smoking gun’ of sorts…

Haryana govt is DLF’s agent: Kejriwal’s 5 big allegations

DLF borrows money at 12.38%; lends free to Vadra

Auditors too think DLF and Vadra may have lied about the ‘advance’

 Of course, Robert Vadra is right! We are a ‘banana republic’

BS Vadra: ‘A little help from my friends’

Caste politics and Indian Secularism

In india politics is all about caste and subcaste and religion and minority. No politician is secular and Wiki has a separate page on Indian sham secularism.

While reading this article on the Murder of the Ranvir Sena Chief , I was glancing through the comments and felt amazed …It went like this

Saurav “The Kala Kauaa” Kumar • a day ago • Hide
Hope one day some one Kills Lalu Prasad Yadav (who was responsible for the killing of 100 innocents in Bihar) in same way.
16 Vote up 3 Vote down •Reply•Share ›

drpk • a day ago • Hide
Lalu is king of Dogs!!!
9 Vote up 3 Vote down •Reply•Share ›

mk • a day ago • Hide
Please dont insult Dogs. Lalu is pig, king of pigs
11 Vote up 2 Vote down •Reply•Share ›

Pig • a day ago • Hide
Please don’t insult Pigs, Lalu is Lalu, Husband of Rabri
5 Vote up 2 Vote down •Reply•Share ›

l • a day ago • Hide
Please don’t insult Pigs, Lalu is donkey, king of donkeys
3 Vote up 2 Vote down •Reply•Share ›

Nitish Kumar • a day ago • Hide
Pig: No friends Lalau hai gobar (yadav) kha sada hua aalu…..
1 Vote up 1 Vote down •Reply•Share ›

We all know that the man being discussed is a master of caste politics and jod tod niti, once an invincible force from bihar, now an aging man scared that the chara ghotala will finally catch up with him.

Indian polity is maturing, they have to an extent rejected castist politics for development in Bihar, in UP the picture to me is more confusing as to whether  it was the populist MBA Akhilesh who got the vote or was it thef MU vote bank of his father  Mulayam that brought him to power.

Are an increasing number of  Indian people to rise above religion, mullahs diktats, cast and sub caste while choosing their leader? Or do we have to go a long way for that?

Mixing Political Interests with National Interests – The big PSU Scam !

Samuel Johnson made this famous pronouncement that patriotism is the last refuge of a scoundrel on the evening of April 7, 1775

The favourite hobby of UPA politicians is to justify decisions made for their narrow Political Interests as National Interests, and benefit handsomely from this.

Take the 3G scam… Can anyone believe that only Mr. Raja benefited from it?

Every Indian knows that politicians take cuts … what they detest is the fact that even after taking cuts these politicians cant get the work done, so much so that they are ready to forgive if they see tangible on ground benefits . Take the case of the Late Pramod Mahajan, a witty minister with dealings with Reliance Tele, who ushered in the telecom revolution, which cut per call rate from Rs 20 /Rs 16 to Rs 1.

Currently the Congress UPA is playing the National Interests card to rob the taxpayer, the average citizen and moreso the small shareholders of multiple navratna PSUs and  the policyholders of multiple psus like the Life Insurance Corp of India, which has now become the unofficial bailout mechanism for the disinvestment ministry.

Thankfully activist foreign funds that have invested in such firms, who have nothing to loose, are taking on such company managements and the government, a luxury most Indians cannot afford as they fear the draconian enforcement establishment and harassment mechanism the govt operates.

The Children’s Investment Fund (TCI)  will file a legal suit against Coal India’s board in the next two weeks in additional to the law suit against the government of India under the UK-Indian bilateral treaty.

The nononsense CIO of TCF Chris Hohn added:

The only relevant thing will be the public interest. There is a concept of the rule of law, which is that nobody, including the government, is above the law.
So, if the government advertised that they wanted to give away 2G licences to telecoms for free, that’s not legal. Even if they put it in the prospectus, even if they tell everybody, it’s not legal. Our legal case will revolve around public interest.

Sooner or later the people of India will realise that the system is ripping them off and benefiting only a handful of wealthy industrialists. We think that FSA coal pricing system is encouraging massive corruption within India.

This video is worth watching…

http://www.moneycontrol.com/video/business/will-file-suit-despite-cil-board-decisionfsa_693207.html

Rupee crosses 52, Where do we go from here?

Rupee just crossed the 52 mark to the dollar.The rupee has been in a downward trend declining from 44 in a few months time to the 50 odd levels we saw a week back.

This fall to 52.45 from 50 odd levels happened at a very rapid pace in just a few days after statements coming from the FinMin and the RBI that showed their will to abandon the defense of the rupee which almost engineered the fall. Market expects the Rupee to touch 54 or even 56.

Subir Gokarn, a deputy governor at the RBI, said last week the RBI would be careful about using foreign exchange reserves aggressively to protect depreciation of the rupee.

The RBI Gov D Subba Rao blamed the fall on the ongoing EU crises. He was non commital on RBI policy.

Economic Affairs Secretary on Monday said the ability of Indian monetary authorities to intervene and stem the rupee’s slide was limited

The RBI has always maintained that it does not protect any particular level on the rupee and would only intervene to iron out excessive volatility.

Late reports on CNBC TV18 indicate that the govt has finally come out with a plan and a magic number 51 at which the rupee will be defended.

If this is true it will  once and for all end the debate on who dictates and determines RBI policy .

Never mind what the RBI officials say, the fact is that RBI has intervened on multiple occasions in the past especially to drive the Rupee down whenever there were heavy Fund inflows especially to protect exporters while it limited its intervention whenever there were massive outflows.

Is Inflation down in India ?

As i see the headline Food inflation eases to 10.63% in BS, i wonder if inflation is really down and whether it means anything to the aam admi.

WPI inflation numbers are meaningless to the common man when vegetable prices which generally crash in winter are not only holding firm but are also up, the cost of milk is up and so is the cost of most fmcg goods which are facing dual heat with lower grammage and higher pricing.

The govt is also fuelling inflation flames with increased money supply, increased borrowing funding spending, the depreciating rupee and 15 to 20% increase in MSP of food grains.

In tow is the increase in electricity tariffs, the increase in  lpg and diesel prices and the cascading effect of those increases, or more inflation through currency devaluation, if the prices don`t go up.

I had wondered some time ago and asked if India was facing stagflation… i most certainly feel we are if i take into account today`s situation.

So are we back in the bad old days of late 90s ?

Debating Inflation

It is not shocking to see the stance taken by the CongI UPA Govt in the activities in parliament in today’s inflation debate that after its bitter media campaign by its young guns like Pilot etc being interested in debating inflation.

Mint reports

Attendance was thin in the treasury benches and several senior leaders, including Congress party president and UPA chairperson Sonia Gandhi and Congress general secretary Rahul Gandhi, skipped the first day of the debate in the Lok Sabha.

“Fundamentally, the big structural problem is that the top echelons of power in the Congress party do not take ownership of what is happening in Parliament,” said Pratap Bhanu Mehta, president, Centre for Policy Research, a New Delhi-based think tank.

“This is a very strange situation. Normally, when a debate begins in the House, there is good attendance for both the first speaker from the opposition and the ruling party. Gradually, as debate proceeds, attendance dwindles…Maybe, because, in this case, the motion is something everyone agrees to and there will be no division, fewer MPs were present,” said a former Lok Sabha official and an expert on parliamentary matters, who wanted to remain anonymous.

“This debate on price rise is important not just because it is politically significant but also because it involves the government as government, it involves a larger policy framework. But if the top echelons of the party do not show ownership, the ordinary MP (member of Parliament) is bound to be disinterested too,” Mehta added.

Is India facing mild Stagflation?

As the normally docile RBI shocked both markets and the finance ministry with a .5% change in repo and reverse repo window, it is a clear indication that things are not looking good.

India’s fiscal deficit has quadrupled from a year ago to Rs 1.6 lakh crore in the first quarter, in line with the Reserve Bank of India’s (RBI) apprehensions.

Against the government’s optimism that it will rein in fiscal deficit at 4.6 per cent of gross domestic product (GDP) for this financial year, the deficit has already reached 39.4 per cent of the target in three months. At this point of time last year, it was 10.5 per cent of the 2010-11 target.

In its monetary review, RBI had blamed the large fiscal deficit the key source of demand pressure, complicating the taming of inflation.

Chief economic advisor Kaushik Basu had yesterday called it a challenge to achieve the fiscal deficit target of 4.6 per cent, but said the government was serious in achieving it.  ,,, BS

Now does Indian situation  fit into stagflation definition?

1. We have an impending oil shock still in the making as oil is at 117$ a barrel and it is not winter yet. Gold is already up and how.
2. An ever expanding money supply, govt debt and Negative real Interest rates not just in India but world over lead by the US.
3. NREGA , Sonia and her jholawalas or the NAC and Kaushik Basu the trinity whose policys have massively distorted the labor market, and artificially jacked up both the cost of labor and input.
4. A Wage Price Spiral and real interest rates above 10%.
5. Restricted supply of raw materials including food grains.

WIKI : The resource shortage may be a real physical shortage or a relative scarcity due to factors such as taxes or bad monetary policy which have affected the “cost” or availability of raw materials. This is consistent with the cost-push inflation factors in neo-Keynesian theory

A great read T N Ninan: Indira Gandhi redux

So are we facing mild Stagflation already or are we to face it soon?