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India's government <keyword id="21309215" type="General" weightage="20" keywordseo="healthcare-spending" source="keywords">healthcare spending</keyword> appears to be on the rise, but a closer look reveals a concerning trend. While the headline figures might suggest an increase, the reality is a steady decline in health expenditure as a proportion of both the <keyword id="19936553" type="General" weightage="20" keywordseo="budget" source="keywords">budget</keyword> and GDP over the past five years (2018-19 to 2023-24). This decline is even starker when adjusted for inflation. In real terms, spending has barely kept pace since 2019-20. As a percentage of the total budget, health spending has shrunk from 2.4% in 2018-19 to just 1.9% in 2023-24. Similarly, the share of GDP allocated to health has fallen from 0.30% to 0.28%, as per a report from the Times of India. <h2>Growing expectations ahead of <keyword id="15478236" type="General" weightage="20" keywordseo="budget-2024" source="Orion">Budget 2024</keyword></h2>As the Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> prepares to present the full budget for the current fiscal on July 23, the expectations from the health sector has only been growing. “The Union Budget 2024-25 is a pivotal moment for India's healthcare sector. Building on the ₹64,180 crores allocated in 2023-24 under the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana, we need enhanced tax incentives and financial support for healthcare startups to catalyze innovation. Significant investments in <keyword id="21226679" type="General" weightage="20" keywordseo="digital-health-infrastructure" source="keywords">digital health infrastructure</keyword>, particularly AI, will improve patient outcomes and operational efficiency,” says Dr Sravani Reddy G, Founder &amp; CEO, Soprav Healthcare Consulting. “Strengthening public-private partnerships will improve healthcare accessibility and quality, leveraging private sector efficiency. Additionally, focused efforts on affordability and access, such as reducing out-of-pocket expenses and improving insurance coverage, are vital for a more equitable healthcare system.” “The healthcare sector in India is on the brink of excellence. There is an increased focus on treating unique patient cases, robotic surgeries, and increasing prominence of AI for accurate diagnosis. To reach the next phase, emphasis must be laid on innovation, research &amp; development, and infrastructure development. These are the foundations for India’s health sector to achieve an international standard of treatment for all,” hopes Joseph Pasangha, Group COO, SPARSH Hospital, Bengaluru. <div type="Article" hostid="261" msid="111730426" title="Pan-India rollout of U-WIN to track routine immunisations likely by Aug end" mstype="2" mssubtype="0"></div> <h2>Health tax not helping enough </h2>This situation is further complicated by the introduction of the <keyword id="22446013" type="General" weightage="20" keywordseo="health-cess" source="keywords">health cess</keyword> in 2018. This tax levy was intended to boost government spending on healthcare, particularly for the underprivileged. However, the collected funds seem to be merely filling the gap created by cuts to regular budgetary allocations for health. In 2022-23, over Rs 18,300 crore of the central government's health spending came from the health cess. Excluding this amount, the actual budgetary allocation for health stands at a concerning Rs 59,840 crore. This is lower than the pre-pandemic level of Rs 66,042 crore allocated in 2019-20, even without adjusting for inflation. <h2>Where's the money going?</h2>The intended purpose of the health cess seems to be falling short. In 2018, health spending accounted for 2.4% of the government's total expenditure. If this ratio had remained constant in 2023-24, the health budget should have been over Rs 1.07 lakh crore. Instead, the revised expenditure, including the health cess, stands at just Rs 83,400 crore. Even the additional allocations for the COVID-19 pandemic (Rs 10,655 crore and Rs 15,955 crore in 2020-21 and 2021-22 respectively) cannot mask the overall decline. When combined with the regular health budget (excluding health cess), the total spending in these years still falls short of what it would have been if the 2.4% share of 2018-19 had been maintained. <h2>More for alternative medicine</h2>While the share allocated to Ayush (Ayurveda, Yoga &amp; Naturopathy, Unani, Siddha and Homeopathy) has seen a significant increase, spending on crucial areas like health research has seen only marginal growth. Additionally, a major portion of research funding goes to the Indian Council of Medical Research, with only a temporary increase during the peak of the pandemic response. The most concerning decrease is in the allocation for health and family welfare, encompassing national programs, the National Health Mission, and health system strengthening. This critical area has seen a substantial decline in its share of both GDP and total budget expenditure, falling from a peak of over 2% in 2017-18 to a mere 1.7% in 2023-24. Excluding the health cess, this figure drops even further to 1.5%. <h2>What this means</h2>This decline in government health spending raises serious concerns about India's commitment to public healthcare, particularly for its most vulnerable populations. Increased investment in health is crucial for a growing nation like India, and a reversal of this downward trend is essential to ensure accessible and quality healthcare for all. The 2024 Interim Health Budget saw a boost in total healthcare expenditure from Rs. 79,221 crore to Rs. 90,171 crore. Experts have opined that The healthcare budget should encompass at least 2.5% of the total budget. But it remains to be seen how the exact picture will turn out to be on July 23. “The 2024-25 budget presents an opportunity to build on past successes while addressing shortcomings, ensuring that India's healthcare system remains resilient, innovative, and patient-centric. This budget can pave the way for a healthier, more equitable future for all," concludes Dr Reddy. (With inputs from TOI) <div type="Article" hostid="261" msid="111689743" title="Union Budget 2024: A handy FAQ guide to decode the upcoming budget" mstype="2" mssubtype="0"></div>

Despite pandemic and growing health scares, India’s budget share for healthcare continues to decline

<ul><li>Integrated platform to be set up under insolvency and bankruptcy board to benefit stakeholders</li><li>IBC has recovered Rs 3.3. lakh crore for creditors, 28 cases worth Rs 10 lakh crore also dismissed </li><li>Additional tribunals will be notified</li></ul><keyword id="19912360" type="General" weightage="20" keywordseo="Finance-Minister-Nirmala-Sitharaman" source="keywords">Finance Minister Nirmala Sitharaman</keyword> is set to present the Union <keyword id="15478236" type="General" weightage="20" keywordseo="budget-2024" source="Orion">Budget 2024</keyword> in the parliament at 11 am today and has arrived at the parliament with the paperless Bahi-Khata, a practice first followed by the minister while presenting the <keyword id="6360189" type="General" weightage="20" keywordseo="union-budget" source="Orion">Union budget</keyword> for 2021-22. This will be the seventh time FM Sitharaman will be presenting the <keyword id="6358021" type="General" weightage="20" keywordseo="budget" source="Orion">budget</keyword>, inching past the record of former <keyword id="19956758" type="General" weightage="20" keywordseo="Finance-Minister" source="keywords" meta.keywordsubtype="org" meta.entityname="Finance Minister" meta.hostid="261" meta.entityid="Finance Minister">finance minister</keyword> Morarji Desai, who had 5 full-fledged and 1 interim budget presentation to his credit. President <keyword id="20109163" type="General" weightage="20" keywordseo="draupadi-murmu" source="keywords">Draupadi Murmu</keyword> had described this budget as historic, in terms of the reforms and announcements it will lay forth. Earlier in the day, the FM had met the president with a copy of the budget. The budget will set forth the tone for Modi's third tenure, and will be an important cornerstone for his vision for India's Amritkal, leading India towards becoming a developed nation, or Viksit Bharat. Sitharaman will begin her budget speech at 11 am in the Lok Sabha. You can watch the presentation live on the official Youtube channels of the government. After her speech, all budget-related documents will be available at indiabudget.gov.in <h2>FM Sitharaman tables <keyword id="20387181" type="General" weightage="20" keywordseo="Union-Budget-2024-25" source="keywords">Union Budget 2024-25</keyword></h2>FM Sitharaman, "India's inflation continues to be low, stable, moving towards 4% target. We need to focus on Gareeb, Mahila, Yuva and Annadata (Poor, Women, Youth and Farmers). Budget to focus on employment, skilling, MSME and middle class. Allocations of Rs 1.48 lakh crore have been made for education and skilling in this budget". Productivity and Resilience in Agriculture <ul><li>Aim to develop climate resilient crop varieties. Over next 2 years, 1 crore farmers will be initiated into natural farming through structural support. 10,000 need based bio-resource centers will be established. </li><li>Financing for shrimp farming, processing and export will be facilitated through NABARD </li><li>Rs 1.25 lakh crore set aside for agriculture and allied activities. </li></ul> Employment and Skilling <ul><li>Scheme A: One month wage to all those entering the formal workforce across all sectors. The scheme is expected to benefit 210 lakh youngsters</li><li>Job creation in manufacturing: Incentives given to both employee and employer in the first 4 years of the employment, basis their EPFO contribution.</li><li>Support to employers: The govt. will reimburse Rs 3,000 per month for 2 years for each additional employee hired by employer. The scheme is expected to benefit 50 lakh people</li><li>Establish working women hostels and creches to facilitate women participation in workforce</li></ul>Infrastructure Development <ul><li>Bihar and Andhra Pradesh to receive additional monetary support in the current financial year. Development of new airports, roadways and sports infrastructure to be undertaken in Bihar.</li><li>Grants for backward regions in Andhra Pradesh will be provided</li><li>3 crore additional houses in rural and urban India have been made under PM Aawas Yojana.</li><li>Women led development schemes have received an allocation of over Rs 3 lakh crore.</li><li>Credit support to MSMEs during stress periods</li><li>SIDBI to open new branches in MSME clusters within 3 years and offer direct credit to them. 24 new branches to be opened this year, covering 168 MSME clusters</li><li>To enable MSMEs and artisans to sell products in international markets, hubs to be set up under public-private partnership model. </li><li>Encourage moderation of stamp duties, also consider lowering duties for properties purchased by women.</li><li>Infra investment in economy to stand at 3.4% of GDP</li></ul>Tourism <ul><li>Development of Vishnu Path, Mahabodhi temple corridor</li><li>Support development of Nalanda as a tourist center</li><li>Development of Orissa as a popular tourist destination.</li></ul>Research, Innovation and New Gen reforms <ul><li>Expanding space economy by 5x in the next 10 years via a venture fund of Rs 1,000 crore</li><li>Land management and urban planning to incentivised for timely completion</li><li>Digitisation of terrestial maps will be undertaken</li><li>Establishing land registry and linking to farmer registry as well </li><li>E-shram portal to be integrated with other relevant portals for seamless services </li><li>Shram Suvidha and Samadhan portal will be revamped to enhance ease of compliance</li></ul>Investments Introduction of NPS Vatsalya: Investments can be made on behalf of child. Once they turn 18, this can be converted into a normal NPS account. Budget Estimates 2024-25 Total receipts (sans borrowings) Rs 32.07 lakh crore Tax receipts; Rs 25.83 lakh crore Fiscal deficit at 4.9% of GDP Solar Energy Increase in list of exempted capital goods used for manufacturing solar products No extension in exemption of custom duty for foreign products used for solar manufacturing Income Tax A comprehensive review of the Income Tax Act, of 1961 is in order Merger of two exemptions for charities of donations TDS rate on e-commerce operations to reduce to 0.1% Provisions for reassessment to be simplified. Also read: <a href="https://www.businessinsider.in/budget/news/budget-2024-25-changes-to-tax-slabs-increased-standard-deduction-and-other-changes-to-direct-taxation/articleshow/111951205.cms" data-type="tilCustomLink" target="_blank">Budget 2024-25: Changes to tax slabs, increased standard deduction and other changes to direct taxation</a> Simplification of capital gains STCG on specified financial assets to be at 20% Other financial and non-financial assets to be taxed at applicable rates Long term capital Gains on financial and non-financial assets to be at 12.5% Annual limit on exemption raised from Rs 1,00,000 Rs 1,25,000 Listed financial assets will be considered long-term if held for more than 12 months. Other taxation highlights Angel Tax to be scraped away Simpler tax regime for foreign shipping companies Security transaction rates on trading in future and options to be increased Standard deduction to increase to Rs 75,000 from Rs 50,000 under new tax regime Deduction for pensioners enhanced from Rs 15,ooo to Rs 25,000 Tax slabs under new regime revised. Employee can save up to Rs 17,500 in income taxes annually. Total revenue foregone is about Rs 8 lakh crore.

Union Budget 2024-25 key highlights: Angel tax to be scraped

With the 2024 general elections handing the <keyword id="19894848" type="General" weightage="20" keywordseo="BJP" source="keywords" meta.keywordsubtype="org" meta.entityname="BJP" meta.hostid="261" meta.entityid="BJP">BJP</keyword> and its allies a fractured, albeit ruling majority in the country for the third consecutive time, India is now gearing up for the 2024–25 <keyword id="19908389" type="General" weightage="20" keywordseo="Union-budget" source="keywords">Union budget</keyword>, which will be presented on July 22 between 11 am and 1 pm. The <keyword id="20613906" type="General" weightage="20" keywordseo="economic-survey" source="keywords">economic survey</keyword> is traditionally presented the day before. However, as per reports, the economic survey is likely to be released on July 3rd this year. The famous halwa ceremony will take place 10 days before the budget is tabled. Pre-budget consultations will begin on June 17th. FM <keyword id="19916618" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="keywords">Nirmala Sitharaman</keyword> will become the first finance minister to have presented seven straight budgets, a record previously held by <keyword id="238033" type="General" weightage="20" keywordseo="Morarji-Desai" source="Orion">Morarji Desai</keyword>, who had six consecutive budget presentations to his name. To date, Sitharaman has tabled five full and one interim budget. The first parliamentary session under Modi 3.0 will kick off on June 24, and the 264th session of the parliament will take place between the 27th of June and the 3rd of August. The year is set to see two budgets: one full-fledged budget in July and an interim budget presented on February 1, 2024. <cmsannotation type="cmsannotation" annotationid="What can we expect from this budget?" comment="subhead" text="What can we expect from this budget?">What can we expect from this budget?</cmsannotation> Presenting an interim budget is customary during election years in India since it facilitates the transfer of work and finances between the outgoing and incoming governments. With the upcoming budget, PM Modi’s government will largely focus on tackling unemployment, issues in the agriculture sector, and maintaining the flow of capital expenditure in the economy. The simplification of the <keyword id="19993914" type="General" weightage="20" keywordseo="GST-regime" source="keywords">GST regime</keyword> and rolling out the 3rd edition of the <keyword id="20359761" type="General" weightage="20" keywordseo="FAME-scheme" source="keywords">FAME scheme</keyword> (Faster Adoption &amp; Manufacturing of Electric Vehicles) will also rank highly on the budget agenda. In that stead, a meeting of the GST council is also scheduled to take place on June 22nd. Additionally, experts are also anticipating the expansion of the PLI (production-linked incentives) schemes in this budget to include other sectors as well. <cmsannotation type="cmsannotation" annotationid="Lesser-known budget milestones" comment="subhead" text="Lesser-known budget milestones">Lesser-known budget milestones</cmsannotation> Till 2019, the union budget was carried in a briefcase, a practice initiated by India’s first FM, Sir RK Shanmukham Chetty. In 2019, the budget was presented as a traditional bahi-khata for the first time. It went paperless in 2021 after the FM introduced the budget via a tablet. Apart from having presented most budgets, Sitharaman also holds the record for having delivered the longest budget speech while presenting the Union budget for 2020–21. She spoke for two hours and 42 minutes. On the other hand, India’s shortest-ever budget speech was given in 1977 by Hirubhai Patel.

Union budget 2024-25 : When will it be presented, what to expect and more

<ul><li>34.7 crore <keyword id="20290357" type="General" weightage="20" keywordseo="ayushmann-bharat" source="keywords">Ayushmann Bharat</keyword> cards generated </li><li>Avg growth of the manufacturing sector at 5% over last decade</li><li>Reduction in dependence on non-institutional credit </li></ul> The <keyword id="6354872" type="General" weightage="100" keywordseo="economic-survey" source="Orion">Economic Survey</keyword> 2023-24 noted that the country's energy requirements are set to burgeon by 2-2.5x by 2027, underlining the need for energy efficiency and seamlessly transitioning to clean energy solutions. By means of sovereign green bonds, the government managed to raise Rs 16,000 crore between January-February 2023, alongside an additional Rs 20,000 crore between October and December 2023. As for social security, Ayushmann Bharat, of which over 34.7 crore cards have been generated, has saved over Rs 1.25 lakh crore of OPD expenses of the poor and under-privileged families. The country's labor market has also seen solid improvement, with unemployment rates declining to 3.2% in 2022-23. The net payroll additions under Employee Provident Fund Organization has also doubled over the past 5 years, signaling a healthy growth in formal employment. As per the survey, care economy and agro-processing are the two key areas where there is untapped potential for boosting quality employment, and increasing women participation in the labor force. The agriculture sector has registered an average annual growth of 4.18% over the last 5 years, with the sector growing about 1.4% during 2023-24, as per provisional estimates. To provide further fillip to the sector, the government has been focused on reducing the sector's dependence on non-institutional, informal credit. As a result, its share has come down from 90% in 1950, to just 23.4% in 2021-22. However, as the survey observed, the country's agricultural growth policies should be consistent with climate change and water security practises. <h2>Thrust on MSMEs, manufacturing and clean energy</h2>Over the last decade, the manufacturing sector managed to mark an average annual growth rate of 5.2%, majorly driven by chemicals, wood products and furniture, transport equipment, pharmaceuticals, machinery, and equipment. <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> also emerged as a net exporter of finished steel over the last 10 years, and was a significant producer and consumer of the same during FY24. India's indigenous coal production also jumped up, with India actively working to reduce its import dependence. In FY 24, India producued 997.2 million tonnes of coal, imported 261 million tonnes, and consumed 1233.86 million tonnes. India's pharma market, valued at $50 billion, is the 3rd largest in the world, and India ranks prominently amongst clothing manufacturing nations as well. As of FY24, it is the second largest manufacturer, and one of the top 5 exporting nations of clothing, with the export of textiles and apparel, including handicrafts increasing by 1% to reach Rs 2.97 lakh crore. A similar growth was witnessed in India's electronics manufacturing segment, making up for 3.7% of global market share, with exports rising to Rs 1.9 lakh Crore in FY23. Per the survey, "the PLI schemes for key sectors have attracted significant investments, boosted production, sales and exports and generated jobs, particularly in the case of white goods. Keeping in view India’s vision of becoming ‘Aatmanirbhar’, over Rs 1.28 Lakh Crore of investment was reported until May 2024, which has led to production/sales of Rs 10.8 Lakh Crore and employment generation (direct &amp; indirect) of over Rs 8.5 Lakh under PLI scheme". Focus has also been on boosting research, development, innovation and entrepreneurship in the country. The number of granted patents increased seventeen-fold from 5,978 in 2014-15 to 1,03,057 in 2023-24. More than 45% of the recognised start-ups are emerging from Tier 2/3 cities. The country's services sector contributed to about 55% of the total size of the economy in FY24. The clean energy sector in the country also saw new investment of Rs 8.5 lakh crore between 2014 and 2023. India is prominently making a mark in space, with 55 active space assets, out of which 18 are communication satellites, nine navigation satellites, five scientific satellites, three Meteorological Satellites, and 20 are Earth Observation satellites.

Economic Survey shows India's energy needs to grow 2.5x, healthy growth in formal employment

<ul><li>Before presenting the <keyword id="6360189" type="General" weightage="20" keywordseo="union-budget" source="Orion">Union Budget</keyword> in the parliament, the Indian government releases the annual <keyword id="6354872" type="General" weightage="100" keywordseo="economic-survey" source="Orion">Economic Survey</keyword>.</li><li>The Economic Survey throws light on the trends in different sectors and tracks the state of the country’s economic performance in the past one year.</li><li>The Chief Economic Advisor authors the Economic Survey in India and is later approved by the Union Finance Minister.</li></ul>In India, the Economic Survey prepares the background framework for the Union Budget. It facilitates a bird’s eye view of the trends noticed in different sectors over the previous year like agriculture, manufacturing, employment, infrastructure, prices, exports, imports, foreign exchange reserve, and money supply for example. <cmsannotation type="cmsannotation" annotationid="Economic Survey’s objectives" comment="subhead" text="Economic Survey’s objectives">Economic Survey’s objectives</cmsannotation> The various objectives of the Economic Survey in India can be summed up under three heads: <ul><li>Reviewing the country’s economic development over the past 12 months.</li><li>Summarising how the different development projects of the country perform.</li><li>Highlighting the government’s policy initiatives.</li></ul><cmsannotation type="cmsannotation" annotationid="The format of the Economic Survey" comment="subhead" text="The format of the Economic Survey">The format of the Economic Survey</cmsannotation> After Arvind Subramanian took charge as the Chief Economic Advisor (CEA) of the country, the Economic Survey became a two-volume report and his successor KV Subramanian continued the same trend. The first volume generally has chapters on the future course of the economy. Therefore, the first volume provides a scope for the CEAs to narrate their views. The second volume lists the country’s economic developments over the past year. The principal focus of the second volume is to explain the immediate economic issues faced by the different sectors with the help of statistical data. It throws light on the major challenges anticipated along with the solutions presumed. <cmsannotation type="cmsannotation" annotationid="Trends and practices" comment="subhead" text="Trends and practices">Trends and practices</cmsannotation> The first economic survey was released in the financial year (FY) 1950-51. In the next 14 years that followed, it was presented along with the Union Budget. Starting from 1964, it preceded the budget and was released a day before the budget session in the parliament. As per some reports, the 2021-22 Economic Survey might get back to its one-volume format after eight consecutive years. Most probably, this year’s Economic Report might contain the key data for the FY across different industry segments while leaving out the policy prescriptions that are usually a part of the main volume. <cmsannotation type="cmsannotation" annotationid="Why is the Economic Survey Important?" comment="subhead" text="Why is the Economic Survey Important?">Why is the Economic Survey Important?</cmsannotation> The Economic Survey is one of the most critical documents in the country’s administration. It gains utmost importance in financial planning as it contains insights on the country’s economic health. It talks about the different economic factors that might impact the budget. This is an invaluable document in highlighting the key concerns about the economy. The Economic Survey also reviews resource allocation in the budget. <cmsannotation type="cmsannotation" annotationid="Is releasing the Economic Survey mandatory for the government?" comment="subhead" text="Is releasing the Economic Survey mandatory for the government?">Is releasing the Economic Survey mandatory for the government?</cmsannotation> The Indian Constitution neither binds the government to present the Economic Survey nor is the government obliged to go with its recommendations. It is completely left to the government to decide if it will adopt or reject the suggestions made in the Economic Survey. We can say the Economic Survey is a kind of report card of the country’s economy and it also serves as the vehicle to promote economic reforms. <cmsannotation type="cmsannotation" annotationid="Where can we access the Economic Survey?" comment="subhead" text="Where can we access the Economic Survey?">Where can we access the Economic Survey?</cmsannotation> The document of the Economic Survey is made available to the public in PDF format on the exclusive website for the Union Budget <a href="https://www.indiabudget.gov.in/">https://www.indiabudget.gov.in/</a> or on the <keyword id="47209" type="General" weightage="20" keywordseo="finance-ministry" source="Orion">Finance Ministry</keyword>’s website <a href="https://finmin.nic.in/">https://finmin.nic.in/</a>. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/budget/news/with-covid-expenses-rising-taxpayers-need-more-than-an-insurance-rebate-says-a-wealth-manager/articleshow/89199947.cms">With COVID expenses rising, taxpayers need more than an insurance rebate, says a wealth manager ⁠</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/budget/news/budget-2022-expectation-why-india-needs-an-urban-mgnrega/articleshow/89199969.cms">Budget 2022 expectation: Why India needs an urban MGNREGA</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/budget/news/heres-why-there-is-less-adoption-of-the-new-tax-regime-and-how-budget-2022-can-make-it-more-attractive/articleshow/89195776.cms">Here’s why there is less adoption of the new tax regime and how budget 2022 can make it more attractive</a>

EXPLAINED: India’s annual Economic Survey

As expected and in relief for the citizens, the central government neither tweaked nor put any additional tax burden on citizens, in the interim Budget for 2024-25 tabled by Union Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword>. "Keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties," Sitharaman said in her Budget speech on Thursday. However, certain tax benefits to start-ups and investments made by sovereign wealth or pension funds as well as tax exemption on certain income of some IFSC units are expiring in March 2024. To provide continuity in taxation, she proposed to extend the date by another year. Moreover, in line with the government's vision to improve ease of living and ease of doing business, she announced to improve tax-payer services. "There are a large number of petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962, which continue to remain on the books, causing anxiety to honest tax-payers and hindering refunds of subsequent years," she said. She proposed to withdraw such outstanding direct tax demands up to Rs 25,000 for the period up to financial year 2009-10 and up to Rs 10,000 for financial years 2010-11 to 2014-15. "This is expected to benefit about a crore tax-payers," she added. Presenting the Union Budget 2023, Sitharaman on Thursday pegged the fiscal deficit target for 2024-25 at 5.1% of gross domestic product (GDP). In 2023-24, the government pegged the fiscal deficit target for 2023-24 at 5.9% of gross domestic product (GDP). Today, Sitharaman said that the fiscal deficit of 2023-24 was downwardly revised to 5.8%. The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings that may be needed by the government. The government intends to bring the fiscal deficit below 4.5% of GDP by the financial year 2025-26. The government intends to bring the fiscal deficit below 4.5% of GDP by the financial year 2025-26. A capital expenditure, or capex, is used to set up long-term physical or fixed assets. Last year, which was the last full Budget under the Prime Minister Narendra Modi-led government's second term, the government proposed to increase capital expenditure outlay by 33% to Rs 10 lakh crore in 2023-24, which was estimated to be 3.3% of the GDP. With the substantial increase in capex, it is central to the government's efforts to enhance growth potential and job creation, crowd in private investments and provide a cushion against global headwinds. The interim budget, tabled today, will take care of the financial needs of the intervening period until a government is formed after the Lok Sabha polls after which a full budget will be presented by the new government in July. With this Budget Presentation, Sitharaman equalled the record set by former Prime Minister Morarji Desai, who as finance minister, presented five annual budgets and one interim budget between 1959 and 1964. The Budget Session of Parliament commenced on Wednesday with President Droupadi Murmu addressing a joint sitting of Lok Sabha and Rajya Sabha. The Indian economy is projected to grow close to 7% in the financial year 2024-25 which starts this April, said the Ministry of Finance in a review report. India's economy grew 7.2% in 2022-23 and 8.7% in 2021-22. The Indian economy is expected to grow 7.3% in the current financial year 2023-24, remaining the fastest-growing major economy.

FM Nirmala Sithraman keeps tax slabs unchanged

<ul class="summary-list"><li>Business Insider looked at how young adults aged 25 to 34 spent their money in 1989 compared to 2022.</li><li>The findings show us how prices and habits changed since boomers were young adults.</li></ul>In 1989, you could see "Batman" and "When Harry Met Sally" in the movie theater. People wore <a target="_blank" href="https://www.businessinsider.com/i-tried-to-live-like-i-was-in-the-80s">brightly colored fashion</a> and bought <a target="_blank" href="https://www.businessinsider.com/nintendo-game-boy-history-evolution-ds-3ds-switch-2019-4">Nintendo Game Boy</a> consoles.In 2022, many people were still <a target="_blank" href="https://www.businessinsider.com/dream-job-in-office-work-full-time-flexibility-benefits-2024-3">working from home</a> amid the pandemic's disruptions to the workplace. They were wearing a lot of athleisure, and perhaps venturing back to movie theaters — this time to see "The Batman."In the intervening 33 years, how young adults spent their money changed dramatically. Business Insider analyzed spending data for young adults aged 25 to 34 in 1989 — which would cover part of the <a target="_blank" href="https://www.businessinsider.com/typical-baby-boomer-net-worth-debt-real-estate-retirement-2021-12">baby boomer generation</a> — and in 2022 — which would largely be people of the <a target="_blank" href="https://www.businessinsider.com/millennials-annual-income-price-of-happiness-wealth-retirement-generations-survey-2023-11">millennial</a> generation — on various kinds of food, housing, education, and more.Young adults in 1989 were spending more — when adjusted for inflation — on beef, alcohol, and homes they owned than this age group decades later in 2022.Here's how expenditures looked between the two:For this analysis, Business Insider compared average annual expenditures for <a target="_blank" href="https://www.bls.gov/cex/csxgloss.htm">households</a> that were headed by 25- to 34-year-olds in 2022 to similar 1989 households. We used data from the Consumer Expenditure Surveys program published by the Bureau of Labor Statistics, or BLS. BI calculated inflation-adjusted figures for 1989 using <a target="_blank" href="https://www.bls.gov/cpi/">consumer price index</a> data to put those costs into 2022 dollars.We wanted to examine how spending for baby boomers when they were young adults compared to millennials who were around the same age in 2022.The differences in average spending between young adults in 1989 and 2022 could be due to changes in prices or shifting habits.Take a look at rented dwellings, for example. The <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://fred.stlouisfed.org/series/CUUR0000SEHA">consumer price index data for rent of primary residence</a> suggests a lot of the increase between 1989 and 2022 is because of price increases but can also be explained by young adults being more likely to rent apartments.Millennials and <a target="_blank" href="https://www.businessinsider.com/gen-z-working-to-live-rather-than-living-to-work-2024-1">Gen Zers</a> also have different habits and living situations than their parents' generations. For example, millennials are finding it hard to become <a target="_blank" href="https://www.businessinsider.com/millennials-house-home-real-estate-mortgage-rates-rent-debt-boomers-2022-9">homeowners</a> in the US. <a target="_blank" href="https://news.gallup.com/poll/509690/young-adults-drinking-less-prior-decades.aspx">Young adults who drink alcohol are consuming fewer alcoholic drinks</a> on average than older peers in 2021-2023 or young adults back in 2001-2003, and diets have changed.Taken together, the data offers a window into how young adults' budgets have changed over the last three decades, either due to rising costs for things like healthcare, seafood, fresh fruits, housing, and used vehicles, or due to changing habits and lifestyles. Below is a closer look at what's going on. <h2 id="c8ec59cd-d329-4fbf-8c48-7568d2b85e03">Millennials are spending a lot more on healthcare and rented housing</h2>Health insurance spending stands out between the average young adult in 1989 versus in 2022. After adjusting for inflation, the average young adult spent $755 in 1989. In 2022, it was over 200% higher.A Bureau of Labor Statistics <a target="_blank" href="https://www.bls.gov/opub/btn/volume-12/how-did-the-covid-19-pandemic-affect-healthcare-spending.htm">report</a> from November 2023 by Grace Hill looked at the effects of the pandemic on healthcare spending overall and broken down by age groups and other groupings."The only age groups to increase overall healthcare spending in 2020 were the 25–34- and 45–54-years age groups," the report stated. "These age groups had the largest increases in health insurance expenditures: the largest component in healthcare spending."Additionally, young adults in 2022 were spending more on rent and related expenses than was the case in 1989. Based on average data, young adults were spending roughly 60% more on apartments and other rented housing.<h2 id="0ff748d5-9c31-4517-a485-9e80a72ee47f">Millennials are spending less on used vehicles and mortgage interest</h2>The average young adult in 2022 spent more on gas and motor oil than this group in 1989. However, they weren't spending as much on used cars and trucks.Data not adjusted for inflation shows that used cars and trucks expenditures increased more than the CPI for used cars and trucks between 1989 and 2022.A December <a target="_blank" href="https://www.bls.gov/opub/reports/consumer-expenditures/2022/home.htm">BLS report</a> about consumer expenditures said households in general, not just among young adults, spent more in 2022 on rent and related expenses and owned homes than in 2021."High home prices, high mortgage lending rates, and particularly high rental rates for apartments placed upward pressure on spending over the year," the BLS report said. "Mortgage interest and principal payments are essential expenditures for owned dwellings, and a rapidly changing mortgage environment sent an exogenous shock through the market."The report added that the high 30-year fixed rate mortgage in 2022 led to "consumers on the margin out of owned dwellings and into the rental market."While BLS doesn't directly track price changes for owned housing, it approximates them with a measure of owners' equivalent rent of residences, which is up over 160% between 1989 and 2022. Meanwhile, young adult spending for owned dwellings was up over 120% before adjusting 1989 expenditures for inflation.<h2 id="22a433a5-514a-4ec4-aa67-c64ab853a237">Young adults in 2022 spent more money on fresh fruits, vegetables, and seafood</h2>Young adults in 1989 were spending less on fresh fruits and vegetables — as well as processed vegetables — than those in this age range decades later. The average young adult in 2022 spent 71% more on fresh fruits than their counterparts in 1989. Plus, the average young adult in 2022 spent 22% more on fish and seafood and 4% more on poultry.While not the exact years we looked at for our analysis, an analysis from the <a target="_blank" href="https://www.pewresearch.org/short-reads/2016/12/13/whats-on-your-table-how-americas-diet-has-changed-over-the-decades/">Pew Research Center</a> shows how food consumption has changed between 1970 and 2014 including a big increase in chicken and cheese per year.We can also look at consumer price index data to see how inflation impacted food spending. Before adjusting 1989 data for inflation, young adults in 2022 spent 304% more on fresh fruits than young adults in 1989. Over that period, prices for fresh fruits based on CPI were up by nearly 170%, meaning that while part of the change in spending between the two years can be explained by price increases, young adults were also eating a lot more fresh fruit in 2022 than in 1989.<h2 id="4a62dd21-8983-457f-80b3-798e0dfc5e5d">In 2022, young adults spent less on alcohol, beef, and dairy products</h2>Average annual spending data shows that the average young adult in 2022 spent almost 40% less on beef than the average young adult in 1989. The average young adult also spent around 55% less on fresh milk and cream. The Pew Research Center report mentioned earlier also showed people were eating a lot less beef in 2014 than in 1970. The same was true for drinking milk.Based on our analysis, the average young adult in 2022 was spending more on nonalcoholic beverages and less on alcoholic beverages than the average young adult in 1989. A <a target="_blank" href="https://news.gallup.com/poll/509690/young-adults-drinking-less-prior-decades.aspx">Gallup post</a> shows alcoholic beverage drinkers who were between 18 and 34 years old for 2021-2023, which would also include <a target="_blank" href="https://www.businessinsider.com/gen-z-drinking-less-alcohol-bad-news-concert-venues-promoters-2023-6">Gen Z</a>, had an average of 3.6 alcoholic drinks in the past seven days. For 2001-2003, the average consumption was 5.2 alcoholic drinks among drinkers aged 18 to 34.Our analysis shows young adults weren't spending as much on <a target="_blank" href="https://www.today.com/video/why-cereal-is-losing-its-popularity-over-grab-and-go-options-193180229829">cereals</a> and cereal products, which was <a target="_blank" href="https://www.bls.gov/cex/csxgloss.htm#cu">defined</a> as including "ready-to-eat and cooked cereals, pasta, flour, prepared flour mixes, and other cereal products such as cornmeal, corn starch, and rice," in 2022 as young adults in 1989. Based on reporting from multiple outlets, <a target="_blank" href="https://www.wsj.com/finance/investing/cereal-decline-breakfast-trend-6dd591e8">cereal's popularity</a> has fallen while <a target="_blank" href="https://www.washingtonpost.com/food/2023/10/24/breakfast-sandwich-popularity-cereal/">breakfast sandwiches</a>, bars, and other items that are easy to take with you are now favorable.

Millennial vs. boomer budgets: How spending has changed for young adults in the last 30 years 

New Delhi [India], February 1 (ANI): Ahead of the presentation of the interim budget 2024-2025, Union Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> arrived at the Ministry of Finance on Thursday. MoS finance Bhagwat Karad and Pankaj Chaudhary also accompanied her to the finance ministry. The Union Finance Minister will table the interim budget as the <keyword id="19895394" type="General" weightage="20" keywordseo="lok-sabha" source="keywords">Lok Sabha</keyword> polls are due to be held this year. This will be her sixth Budget as the Finance Minister and last in the second term of the Modi government. The interim budget will take care of the financial needs of the intervening period until a government is formed after the Lok Sabha polls. A full budget will be presented by the new government. The Budget Session of Parliament commenced on Wednesday with President Droupadi Murmu addressing a joint sitting of Lok Sabha and <keyword id="19895369" type="General" weightage="20" keywordseo="rajya-sabha" source="keywords">Rajya Sabha</keyword>. <keyword id="19916494" type="General" weightage="20" keywordseo="sitharaman" source="keywords">Sitharaman</keyword> equaled the record of former Prime Minister Morarji Desai, who as finance minister, presented five annual budgets and one interim budget between 1959 and 1964. In her address, the President said 2023 was a historic year for the country and among other steps, the country kept up the momentum of being the fastest-growing major economy. "The year 2023 was a historic year for <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> when it grew the fastest among major economies despite the global crisis. India grew about 7.5 per cent for two consecutive quarters," she said. The last session before Lok Sabha polls, expected to be held in April-May this year, will have a total of eight sittings spread over 10 days. A day before the session was set to start, Parliamentary Affairs Minister Pralhad Joshi, at an all-party meeting, said the budget session would mainly be devoted to the financial business relating to the interim union budget for 2024-25 and discussion on the Motion of Thanks on the President's Address. However, essential legislative and other business may also be taken up during this session. The all-party meeting was attended by 45 leaders from 30 political parties. In addition, he also informed that Supplementary Demands for Grants for 2023-24 in respect of the Union Government will be discussed. The presentation and discussion on the Interim Budget of the Union Territory of Jammu and Kashmir for 2024-25 along with Supplementary Demands for Grants of Union Territory of Jammu and Kashmir for the financial year 2023-24 will also be taken up and voted. The Indian economy is projected to grow close to 7 per cent in the financial year 2024-25 which starts this April, said the Ministry of Finance in a review report. India's economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22. The Indian economy is expected to grow 7.3 per cent in the current financial year 2023-24, remaining the fastest-growing major economy. The last full Budget of Modi government 2.0 had proposed to increase capital expenditure outlay by 33 per cent to Rs 10 lakh crore in 2023-24, which would be 3.3 percent of the GDP. It was almost three times the outlay in 2019-20. (ANI)

Nirmala Sitharaman arrives at Finance Ministry ahead of Budget 2024

<ul><li>The Indian Space Research Organisation (<keyword id="6358064" type="UNKNOWN" weightage="20" keywordseo="isro">ISRO</keyword>) is turning into a facilitator as it looks for the private sector to play a bigger role in space technology in the ‘second space age’.</li><li>Despite the COVID-19 cash crunch, the <keyword id="10279586" type="UNKNOWN" weightage="20" keywordseo="Budget-2021-22">Budget 2021-22</keyword> has not deprioritised the space sector with a 3.48% increase in expenditure allocation.</li><li>Money earmarked for <keyword id="7832818" type="UNKNOWN" weightage="20" keywordseo="new-space-india-limited">New Space India Limited</keyword> — the Indian Space Research Organisation’s commercial arm — saw its budget increase 138 times.</li><li>According to space policy expert Chaitanya Giri, the government is looking to monetise ISRO's intellectual property and bring in fresh revenue.</li></ul>The Indian Space Research Organisation (ISRO) is on the road to transforming itself from an end-to-service provider for India’s space programme into a facilitator. The latest budget allocation is a signal that the Indian government is serious about giving private players a serious role In the ‘second space age’. Despite the cash crunch caused by the COVID-19 pandemic, India did not cut back on the money for the space programme. In fact, the outlay increased by 3.5%. More importantly, bulk of the funds will be routed to a new entity, New Space India Limited (<keyword id="7835598" type="UNKNOWN" weightage="20" keywordseo="nsil">NSIL</keyword>). <div type="image" title="Budget allocation for the DoS has increased by 3.5% for 2021-22" msid="80683124" hostid="261" caption="&amp;lt;p&amp;gt;Budget 2021-22 allocation for the Department of Space&amp;lt;/p&amp;gt;"></div> NSIL, the commercial arm ISRO saw a 138 times jump in allocation. The money that earlier went from the Department of Space (DoS) to ISRO, will now be routed to NSIL, which will then authorise the participation of private players. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">NSIL expenditure budget </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2019-20 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2021-22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹700 crore </td></tr></tbody></table> “That means that the government is super serious about commercialising whatever IP (intellectual property) it has under its kitty and just monetising that. It’s a departure from the mindset of yesteryears where ISRO was only there to cater to the government’s requirements,” Chaitanya Giri, space policy expert and fellow with think tank Gateway House, told Business Insider. Doubling down on space sector reforms The push for private sector participation in the space sector is a strategic necessity, according to Giri. “For our commercial sector to get started on this front, it will need governmental space agency ISRO to get things done at its end first,” he points out. India’s edge in the global market was its ability to keep things cheap. An advantage that has now been diluted by the emergence of companies like Elon Musk’s SpaceX who have made launching satellites more competitive. Its Crew Dragon capsule is another indication that the second space age will be run by the commercial sector. “They will be building the rockets, launch services, building space capsules and providing logistics,” explained Giri. NSIL is set up, but what comes next? Last year, in May, Finance Minister Nirmala Sitharaman announced <a href="https://www.businessinsider.in/science/space/news/india-tells-isro-to-give-startups-and-private-players-access-to-geospatial-data-and-testing-facilities/articleshow/75776128.cms">major reforms</a> for the space sector as a part of the Atma Nirbhar package — including the setting up of the Indian National Space Promotion and Authorisation Centre (IN–SPACe). “In-SPACe was supposed to be formed by the end of last year — by December 2020 — so it’s getting slightly extended. But, I’m pretty sure that it will be completely established within the next two months,” Pawan Kumar Chandana, co-founder of Skyroot Aerospace told Business Insider in a <a href="https://www.facebook.com/BusinessInsiderIndia/videos/410805019999418">pre-budget interaction</a>. <div type="javascript" title="Custom" contenttype="Video"><cdata><![CDATA[]]></cdata></div> According to Giri, the Indian Space Research Organisation (ISRO) has always built its own rockets and satellites. But, that will no longer be the case. “They want to include all of these small startups that have emerged and start giving them contracts according to their niche,” said Giri. <keyword id="9455914" type="UNKNOWN" weightage="20" keywordseo="IN-SPACE">In-SPACe</keyword> opens up ISRO’s treasure trove of satellite data to private players and will allow start ups to use the apex space agency’s testing facilities to develop their own technologies. The challenge lies in setting the price points for this use. “Like always, when it comes to finance, every rupee counts when it comes to the government… And, the government's mandate is to encourage the private sector, so they cannot charge it as high as they may want to,” Chandana explained. DataLabs by <a href="https://inc42.com/datalab/to-infinity-and-beyond-indias-space-technology-startups-are-starting-to-blow-their-thrusters/">Inc42</a> shows that there are around 120 active startups working in the space sector right now. Most of them emerged in or after 2014. Moreover, the Economic Survey 2020-21 pointed out that only around 40 startups are already working with the government. "This number is likely to increase in coming years with technology to play a big role,” it added optimistically. SEE ALSO: <a href="https://www.businessinsider.in/politics/news/new-citizenship-law-pulls-india-down-in-the-democracy-rankings-and-2021-is-not-looking-better/articleshow/80671194.cms">New citizenship law pulls India down in the democracy rankings — and 2021 is not looking better</a> <a href="https://www.businessinsider.in/finance/banks/news/bank-unions-strongly-oppose-divestment-bad-bank-and-fdi-in-insurance-with-threats-to-go-on-strike/articleshow/80668430.cms">Bank unions strongly oppose divestment, a bad bank and threaten to strike</a> <a href="https://www.businessinsider.in/science/space/news/budget-2021-22-prioritises-gaganyaan-indias-human-spaceflight-mission-over-all-others-heres-why/articleshow/80663272.cms">Budget 2021-22 prioritises Gaganyaan, India’s human spaceflight mission, over all others — here’s why</a> <a href="https://www.businessinsider.in/business/news/mukesh-ambani-ratan-tata-and-anand-mahindra-might-come-together-for-indias-new-national-hydrogen-mission/articleshow/80645570.cms">Mukesh Ambani, Ratan Tata, and Anand Mahindra might come together for India’s new National Hydrogen Mission</a>

ISRO will transform in 2021 as India pumps big money to draw in startups for the 'second space age'

<ul><li>India’s upcoming <keyword id="6358021" type="ORGANIZATION" weightage="20" keywordseo="budget">budget</keyword> may set out a framework for setting up a <keyword id="6605010" type="UNKNOWN" weightage="20" keywordseo="bad-bank">bad bank</keyword> to handle the expected influx of bad loans post-pandemic.</li><li>According to the <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>), gross non-performing assets (NPAs) could balloon to 14.8% by September under the worst-case scenario.</li><li>A bad bank would allow regular banks to sell their bad loans and focus on bringing in new business.</li></ul>India’s government owned banks like State Bank of India, Punjab National Bank and Bank of Baroda have a huge amount of bad loans. Anywhere from 16.2% to 17.6% of all the money that these public sector banks have lent are unlikely to return or are under stress. This may only get worse and which is why the proposal for a bad bank⁠, which will absorb all these sour loans, is back on the table ahead of the Union <keyword id="8420431" type="UNKNOWN" weightage="20" keywordseo="budget-2021">Budget 2021</keyword> scheduled on February 1. Even the RBI Governor Shaktikanta Das recently <a href="https://indianexpress.com/article/business/economy/shaktikanta-das-rbi-bad-loan-npas-banking-sector-7149385/">indicated </a>that the central bank is open to the idea of creating a bad bank. “If there’s a proposal to set up a bad bank, the RBI will look at it. We have regulatory guidelines for asset reconstruction companies,” Das said speaking at an event on January 16. <cmsannotation type="cmsannotation" annotationid="What is a bad bank?" comment="subhead" text="What is a bad bank?">What is a bad bank? </cmsannotation> If a bad bank is set up in the upcoming budget, it will have the power to purchase bad loans from banks at the market price. It acts as an aggregator of all the stressed assets in the banking system. This will allow the banks to clear their balance sheets and improve their fundraising capabilities. While the bad bank focuses on the resolution of bad loans, regular banks will be able to focus on bringing in new business. The Finance Ministry has <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/bad-banks-plan-back-on-table-to-tackle-npas/articleshow/80143468.cms?from=mdr">reportedly</a> reached out to stakeholders for inputs on the likely framework. <div type="image" title="Indian banks" msid="80343116" hostid="261"></div> <cmsannotation type="cmsannotation" annotationid="RBI itself is fearing that the amount of loans that may go bad is likely to rise" comment="subhead" text="RBI itself is fearing that the amount of loans that may go bad is likely to rise">RBI itself is fearing that the amount of loans that may go bad is likely to rise</cmsannotation> Indian banks are on the cusp of a fresh cycle of bad loans, and a setting up of a bad bank may be on the docket for Nirmala Sitharma’s ‘never-seen-before’ 2021 Budget. The Reserve Bank of India (RBI) has <a href="https://www.businessinsider.in/finance/banks/news/rbi-estimates-bad-loans-could-be-as-high-as-14-8-september-2021-in-the-worst-case-scenario/articleshow/80225314.cms">projected </a>that bad loans may hit 14.8% by September under the worst-case scenario — nearly double from the current 8.5%. <div type="image" title="RBI projected GNPA" msid="80343148" hostid="261"></div> The government is mulling the proposal of creating a bad bank to avoid excessive dependence on capital infusion. Thanks to the series of <a href="https://www.businessinsider.in/policy/economy/news/rbi-is-using-lessons-from-2008-financial-crisis-to-handle-the-covid-19-lockdown-effect-on-the-economy/articleshow/75039749.cms">measures</a> announced by the government as part of its ₹20 lakh crore stimulus package, and liquidity measures from the RBI through the pandemic, the banking system is flooded with excess liquidity right now. However, that may no longer be the case as the business environment gets tougher, while the demand for credit continues to stagnate, and bad loans continue to increase. <div type="image" title="RBI growth projections for key economies" msid="80343215" hostid="261"></div> This has implications for the banking sector as its balance sheet is linked with corporate and household sector vulnerabilities "We are looking at various options, including the option you mentioned [of a bad bank], and it is still in the works... The RBI has been asking us, and we ourselves also feel that we need to recapitalise. We have recapitalised to a large extent and this year too, we have kept some money for recapitalisation so that commitment is there," the Department of Economic Affairs (DEA) Secretary Tarun Bajaj <a href="https://www.business-standard.com/article/economy-policy/govt-exploring-setting-up-bad-bank-all-other-options-dea-secretary-120121801397_1.html">told</a> the Confederation of Indian Industries (CII) in December. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bank group </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Liquidity coverage ratio as of 30 September 2020 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Public sector banks </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">181.83% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Private sector banks </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">148.35% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Foreign banks </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">201.32% </td></tr></tbody></table>Source: RBI Financial Stability Report <cmsannotation type="cmsannotation" annotationid="One bad bank or many" comment="subhead" text="One bad bank or many">One bad bank or many </cmsannotation> While the privatisation of banks — or at least the reduction of government stake in public banks — is currently on the cards as well, <a href="https://www.financialexpress.com/opinion/bad-bank-should-india-have-one/1980470/">experts believe</a> that an Indian bad bank should be spearheaded by the government until there’s a change in the status quo. Meanwhile, the industry body CII, has recommended that the government create multiple bad banks by allowing Alternate Investment Funds (AIFs) to buy bad loans. "Hitherto the NPAs have largely been sold to asset Reconstruction Companies (ARCs) only and mostly not for cash consideration which means that the sale price was not a ‘true sale’ since ARCs could pay through 'security receipts',” explained the Pre-Budget Memorandum 2021-22. Security receipts are an instrument where the payment is made only upon recovery of some money — a sort of participatory note. According to the RBI, outstanding security receipts currently stand at around ₹1.46 lakh crore and recovery is a mere 10-12%. Without recovery, there isn’t any cash going back to the banks. "The need of the hour is to increase avenues for ‘cash realisation’ against sale of loans and to increase avenues for capital to compete for such loans to maximize realisation for banks,” said the apex industry body. It proposes allowing AIFs and foreign portfolio investors (FPIs) to purchase bad loans and make the market more competitive with the asset reconstruction companies (ARCs). <cmsannotation type="cmsannotation" annotationid="Bad loans during COVID-19 and its aftermath" comment="subhead" text="Bad loans during COVID-19 and its aftermath">Bad loans during COVID-19 and its aftermath</cmsannotation> The stock market may have recovered but the true impact of COVID-19 on businesses is yet to emerge. For now, the onslaught of non-performing assets (NPAs) has been kept at bay due to the RBI’s <a href="https://www.businessinsider.in/personal-finance/news/interest-payments-on-home-loans-car-loans-and-others-extended-by-another-three-months-by-rbi/articleshow/75884387.cms">loan moratorium</a>, which was in place till 31 August 2020. The Supreme Court further put a stay in place to hear petitions requesting the extension of moratorium, compound interest accrued, possible restructuring and other matters with respect to issue. The apex court is <a href="https://www.businessinsider.in/finance/banks/news/supreme-court-reserves-judgement-on-loan-moratorium-case/articleshow/79777686.cms">yet to announce its verdict</a>. <div type="image" title="Quarterly slippage ratio" msid="80343230" hostid="261"></div> The timing seems right for the Finance Ministry to consider the creation of a ‘bad bank’ with the Indian banking system gearing up to deal with a spike in bad loans and assess the true extent of stressed assets post the pandemic. Sitharaman has a tall order to fill when it comes to banking reforms during this year’s budget with privatisation of banks and creating demand for credit also on the docket. SEE ALSO: <a href="https://www.businessinsider.in/budget/news/indian-government-budget-dilemma-curb-the-sale-of-cigarettes-or-let-the-over-12-billion-tobacco-industry-provide-the-much-needed-cash/articleshow/80340422.cms">Indian government’s budget dilemma – curb the sale of cigarettes or let the over $12 billion tobacco industry provide the much needed cash</a>

What is a bad bank and why are some people pushing for it ahead of Budget 2021?

<ul><li>Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> declared that India’s first human spaceflight mission, <keyword id="6797456" type="UNKNOWN" weightage="20" keywordseo="Gaganyaan">Gaganyaan</keyword>, will conduct its first unmanned launch by the end of the year.</li><li>Other space exploration missions like Chandrayaan-3, Shukrayaan, and Mangalyaan-2 did not make it into her <keyword id="10279586" type="UNKNOWN" weightage="20" keywordseo="Budget-2021-22">Budget 2021-22</keyword> address.</li><li>Here are some of the reasons why these missions may not be on the government’s docket this year.</li></ul>Finance Minister Nirmala Sitharaman has made sure that <keyword id="2898734" type="PERSON" weightage="20" keywordseo="Indian-astronauts">Indian astronauts</keyword> will have a shot at being in space and orbiting the planet by next year in the Budget 2021-22. India’s first human spaceflight mission, Gaganyaan, is <a href="https://www.businessinsider.in/science/space/news/gaganyaans-first-unmanned-test-flight-wont-be-happening-this-year/articleshow/76332705.cms">estimated</a> to be a year behind schedule due to the impact of COVID-19. The mission is required to clear <a href="https://www.businessinsider.in/science/space/news/isro-will-send-two-unmmaned-missions-into-space-before-gaganyaan/articleshow/73517340.cms">two uncrewed missions</a> before human testing can begin. Sitharaman has promised that at least one is likely to take place before the end of the year. <div type="image" title="gaganyaan1" msid="80663324" hostid="261" caption="&amp;lt;p&amp;gt;Human Space Flight Centre has been set up in Bangalore&amp;lt;/p&amp;gt;"></div> “As a part of the Gaganyaan mission activities, <a href="https://www.businessinsider.in/science/space/news/isro-selects-four-iaf-pilots-for-gaganyaan-to-train-in-russia/articleshow/73064466.cms">four Indian astronauts</a> are being trained on Generic Space Flight aspects in Russia. The first unmanned launch is slated for December 2021,” she said during her speech. While this is encouraging news for India's ambitions to explore space, other missions — like Chandrayaan-3 for exploring the Moon, <a href="https://www.businessinsider.in/science/space/news/isro-to-launch-venus-mission-in-2025/articleshow/78420140.cms">Shukrayaan</a> headed to Venus and Mangalyaan-2 to Mars — did not make it into the Finance Minister’s address. <keyword id="6358064" type="UNKNOWN" weightage="20" keywordseo="isro">ISRO</keyword> takes up one mission at a time According to space expert Chaitanya Giri, the <keyword id="116095" type="ORGANIZATION" weightage="20" keywordseo="Indian-Space-Research-Organisation">Indian Space Research Organisation</keyword> (ISRO) is not in the habit of pursuing more than one mission at a time. Even at the time of Chandrayaan, the same team that worked on the payloads for <keyword id="1506013" type="PERSON" weightage="20" keywordseo="mangalyaan">Mangalyaan</keyword>. So, the team working on Ganganyaan is likely to be the same one that will work on Chandrayaan-3 before going to work on Shukrayaan. “It’s a COVID year, and they had to make a choice,” Giri told Business Insider in an exclusive interview. <div type="image" title="gaganyaan2" msid="80663343" hostid="261" caption="&amp;lt;p&amp;gt;Inauguration of the Human Space Flight Centre for the Gaganyaan Project with ISRO director K Sivan (center)&amp;lt;/p&amp;gt;"></div> Modi’s word against the rest of the world The reason Gaganyaan trumps others is because Prime Minister Narendra Modi gave his word in 2018 that the mission would take place before India’s 75th year of independence. A timeline that has now been disrupted due to COVID-19. With the first uncrewed launch will take place in December 2021, the actual manned mission is expected to take place well into 2022. The astronauts training to go into space have spent over a year in Russia. At home, the space capsule is ready as well. ISRO has successfully conducted the pad-abort test and space capsule recovery experiment. “The <a href="https://www.businessinsider.in/isro-pads-up-to-make-indias-manned-mission-into-space-a-reality/articleshow/64887057.cms">precursors</a> for orbital human spaceflight have already been accomplished. ISRO only needs to go ahead and demonstrate that they can do it now,” said Giri. <div type="image" title="gaganyaan crew module" msid="80663352" hostid="261" caption="&amp;lt;p&amp;gt;Crew Module floating in the Andaman Sea after splash down&amp;lt;/p&amp;gt;"></div> In addition to Modi’s promise, the success of Gaganyaan is also important from a geopolitical point of view. India has been racing to catch up to China in the realm of planetary exploration. Chandrayaan-2’s Vikram lander <a href="https://www.businessinsider.in/moon-landing-drama-play-by-play-of-isro-losing-communication-with-chandrayaan-2s-lander/articleshow/71018307.cms">failed to touch down</a> on the Moon but China succeeded with <a href="https://www.businessinsider.in/chinas-lunar-rover-does-what-indias-chandrayaan-2-is-hoping-to-do-on-the-moons-south-pole/articleshow/70942638.cms">Chang’e 5</a>. Human spaceflight is the next frontier in their race to catch up to their western counterparts like the US, Europe, Russia, and Japan. SEE ALSO: <a href="https://www.businessinsider.in/budget/news/no-covid-cess-but-agri-infra-cess-will-hike-prices-of-fuel-imported-alcohol/slidelist/80629471.cms">No COVID-cess but agri infra cess will hike prices of fuel, imported alcohol</a> <a href="https://www.businessinsider.in/budget/news/indias-health-budget-sees-a-137-jump-in-2021/slidelist/80626468.cms">India’s health budget sees a 137% jump in 2021</a> <a href="https://www.businessinsider.in/budget/news/india-budget-2021-updates-and-highlights-from-nirmala-sitharaman-speech/articleshow/80624564.cms">Union Budget 2021 highlights: Pensioners over 75 years need not file IT returns, says FM</a>

Budget 2021-22 prioritises Gaganyaan, India’s human spaceflight mission,  over all others — here’s why

<ul><li>Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> announced the <keyword id="10690208" type="UNKNOWN" weightage="20" keywordseo="national-hydrogen-mission">National Hydrogen Mission</keyword> during the <keyword id="10279586" type="UNKNOWN" weightage="20" keywordseo="Budget-2021-22">Budget 2021-22</keyword> on February 1.</li><li>According to Gateway House fellow Chaitanya Giri, the new initiative will benefit domestic companies like Reliance, Tatas, Mahindra &amp; Mahindra, and Indian Oil.</li><li>He proposes setting up a coalition with companies can help each other and also help India diversify its clean energy options.</li></ul>India is planning to capitalise on one of the most abundant elements on earth — <keyword id="169046" type="COMPANY" weightage="20" keywordseo="hydrogen">hydrogen</keyword>. Finance Minister Nirmala Sitharman announced the National Hydrogen Mission during the Budget 2021-22 to gain from this universally-available element. The green energy source could also bring together some of India’s biggest companies like Reliance, Tatas, Mahindras, and Indian Oil, according to Chaitanya Giri — a fellow of space and ocean studies with the Mumbai-based think tank Gateway House who wrote a paper on the <a href="https://www.gatewayhouse.in/wp-content/uploads/2019/10/Methane-Economy_FINAL.pdf">Methane Economy. </a> According to him, the need of the hour is a coalition of stakeholders like the Hydrogen Council or the European Hydrogen Coalition. “Companies like Indian Oil, the Tatas, the Mahindras, the Eicher — let them be a part of the coalition. Then speciality chemicals companies like Reliance can be also a part of it,” he told Business Insider in an exclusive interview. Why does India need a hydrogen coalition? The answer is simple — no one company nor an industry can pull this off alone. You need the auto sector, fuel companies, speciality chemicals and advanced materials companies to work together. To make hydrogen a feasible solution, India doesn’t need just fuel — it will need cars that can process it. It also needs fueling stations and technology to ensure it remains safe as Hydrogen is an explosive element by nature. Countries like Germany have already demonstrated that a coalition is an excellent way forward. It <a href="https://bioenergyinternational.com/research-development/germany-pledges-eur-300-million-for-green-hydrogen-research">aim</a>s to set up 400 hydrogen fueling stations by 2023. “They are using the Hydrogen Council to the best extent possible,” said Giri. India can also seek help from Norway, Sweden or New Zealand to create a blueprint of a system. But their projects have to be scaled to meet the size of India. The population of these countries are only one-fourth the size of urban cities in India — Norway has a population of 55 lakh whereas Mumbai has over two crore people. At best, their national-scale ideas can be replicated to Indian cities but can be useful initially. Giri believes that international players with technology to make hydrogen safe — like Air Products and Linde — are already here in India. “These companies will take up contracts for setting up gas infrastructure and storage devices alongside the highways. They will be crucial for dispensing infrastructure like gas fueling stations,” he said. How will India make Hydrogen? Currently, there are two approaches to collect hydrogen. One is the electrolysis of water. However, water is a scarce resource. The other is <keyword id="6354703" type="UNKNOWN" weightage="20" keywordseo="natural-gas">natural gas</keyword> which can be split into two parts Hydrogen and one part Carbon. The hydrogen can be used for fuel and the leftover carbon, once solidified, can be used to create speciality materials for sectors like space, aerospace, auto, shipbuilding, electronics and more. While these two approaches are already on the market, there is one more approach which is not yet business-ready — absorbing Methane directly from the air and then using scrubbers to convert that gas into hydrogen and carbon. Prototypes are already in the works in Europe, Saudi Arabia and the US. “We just need to implement them on-ground and commercialise these technologies in a way that you have a substantial quantity of fuel,” explained Giri. What will happen to lithium batteries and electric cars? Electric cars are currently the flavour of the season but the use of lithium batteries comes with a set of challenges. For one, most of the lithium batteries are imported and there are ‘range anxiety’ issues which hydrogen fuel can ease. Electric cars can go for around 200-250 kilometres before needing to recharge. Hydrogen cars will be able to go twice the distance if not more. That means less fueling stations and less stress for the drivers. Most importantly, there’s more hydrogen around than there is lithium in the world. “Lithium batteries will fall behind due to the sheer abundance of Hydrogen,” said Giri. Hydrogen, if done right, will be a good alternative for a conventional internal combustion engine. It can also help meet the massive energy needs of India’s exploding population. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/heres-why-indias-biggest-banking-stocks-went-nuts-today-and-what-they-missed/articleshow/80626013.cms">Here's why India's biggest banking stocks went nuts today — and what they missed</a> <a href="https://www.businessinsider.in/science/health/news/india-needs-a-regulator-for-private-hospitals-and-doctors-says-chief-economic-advisor/articleshow/80585394.cms">India needs a regulator for private hospitals and doctors, says Chief Economic Advisor</a> <a href="https://www.businessinsider.in/india/news/migrant-workers-to-get-minimum-wages-rental-homes-but-experts-unhappy-with-lack-of-mnrega-push/articleshow/80631215.cms">Migrant workers to get minimum wages, rental homes but experts unhappy with lack of MNREGA push</a>

Mukesh Ambani, Ratan Tata, and Anand Mahindra might come together for India’s new National Hydrogen Mission

New Delhi, The <keyword id="2734036" type="PERSON" weightage="20" keywordseo="halwa-ceremony">Halwa ceremony</keyword>, marking the final stage of the Budget making process, was held in North Block on Saturday afternoon in the presence of <keyword id="309842" type="COMPANY" weightage="20" keywordseo="Union-Finance">Union Finance</keyword> and Corporate Affairs Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword>. A customary Halwa ceremony is performed every year before the "lock-in" process of the Budget preparations gets underway. This normally happens around middle of January when the exercise to finalise and print budget details starts in the basement of North Block. This year, as the budget is going paperless, the ceremony got delayed since the need for lock-in is not required. The <keyword id="6360189" type="COMPANY" weightage="20" keywordseo="union-budget">Union Budget</keyword> 2021-22 is to be presented on February 1. The Halwa is prepared in a large utensil in the presence of <keyword id="47209" type="COMPANY" weightage="20" keywordseo="Finance-Ministry">Finance Ministry</keyword> officials, including ministers, and sharing the sweet dish is considered auspicious before starting any good work. Due to the Covid-19 pandemic, there was question mark over the ceremony this year. On the occasion, the Finance Ministry also launched the 'Union Budget Mobile App' for hassle-free access to Budget documents by the MPs and the general public using the simplest form of digital convenience. The app facilitates complete access to 14 Union Budget documents, including the Annual Financial Statement (commonly known as Budget), Demand for Grants (DG), Finance Bill etc. as prescribed by the Constitution. The Budget documents will be available on the app after the completion of the Budget speech by the Finance Minister on February 1. At the Halwa ceremony, Sitharaman was accompanied by Union Minister of State for Finance &amp; Corporate Affairs Anurag Singh Thakur; A.B. Pandey, Finance Secretary &amp; Secretary (Revenue); T.V. Somanathan, Secretary, Expenditure; Tarun Bajaj, Secretary, Economic Affairs; Tuhin Kanta Pandey, Secretary, DIPAM; Debashish Panda, Secretary, Financial Services; K.V. Subramanian, Chief Economic Advisor; Rajat Kumar Mishra, Additional Secretary (Budget) and other officials of the Finance Ministry. Later, Sitharaman reviewed the status of the compilation of the Union Budget 2021-22 and extended her best wishes to the officials concerned. SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/recession-in-india-will-end-latest-by-march-says-a-top-economist/articleshow/80399198.cms">Recession in India will end latest by March, says a top economist</a> <a href="https://www.businessinsider.in/tech/news/amazfit-smartwatch-gts-2-review-feature-rich-but-theres-still-room-for-improvement/articleshow/80398998.cms">Amazfit GTS 2 review – feature-rich, but there’s still room for improvement</a> <a href="https://www.businessinsider.in/tech/apps/news/whatsapp-to-soon-introduce-voice-and-video-calls-for-web-multi-device-support-jiomart-integration-and-more/articleshow/80398791.cms">WhatsApp to soon introduce voice and video calls for Web, multi-device support, JioMart integration and more</a>

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