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The State Bank of India (<keyword id="19898108" type="General" weightage="20" keywordseo="sbi" source="keywords">SBI</keyword>) in its latest report has asked for <keyword id="20213295" type="General" weightage="20" keywordseo="tax-reforms" source="keywords">tax reforms</keyword> after concerns were flagged over the recent decline in <keyword id="20202062" type="General" weightage="100" keywordseo="bank-deposits" source="keywords">bank deposits</keyword>. The report says tax Reforms for Deposits can accentuate the banking system's stability and resilience to the next level. SBI attributed the fall in deposits to the varied rates of return offered by different <keyword id="20139443" type="General" weightage="20" keywordseo="investment-options" source="keywords">investment options</keyword> for similar time frames and different tax rates on <keyword id="22837794" type="General" weightage="20" keywordseo="returns-on-deposits" source="keywords">returns on deposits</keyword>. The <keyword id="20352499" type="General" weightage="20" keywordseo="SBI-report" source="keywords">SBI report</keyword> said that "<keyword id="20658792" type="General" weightage="20" keywordseo="tax-treatment" source="keywords">Tax treatment</keyword> of bank and non-bank channels are non-uniform, even as bank deposits have a wider and denser pass-through effect across the populace sensitivity of Deposits on Tax is as much as 7 per cent" The report noted that a bank deposit of Rs 10 lac in a Savings Bank (SB) account at an investment return of 3 per cent would generate Rs 30,000 in returns and after accounting for taxes and exemptions, the <keyword id="22837795" type="General" weightage="20" keywordseo="net-return" source="keywords">net return</keyword> would be Rs 16,000. The report adds that the net returns vary significantly if deposits are made in different instruments like <keyword id="21041176" type="General" weightage="20" keywordseo="term-deposits" source="keywords">term deposits</keyword>, short and long-term investments in debt funds, liquid funds or bonds. The tax rates on these deposits also favour saving banks or term deposits. The report illustrates a term deposit of up to one year with the same principal amount of Rs 10 lac at a yield of 6.25 per cent would result in a net return of Rs 50,000 after taxes. But for term deposits exceeding one year the interest rate is higher and with an interest rate of 7.25 per cent, the gross return would be Rs 72,500. After taxes, the net return would be Rs 58,000. The data highlights that similar type of investments for the same period generates significantly different returns because of different tax treatment by the government. Similar variations are observed in other <keyword id="20105084" type="General" weightage="20" keywordseo="investment-plans" source="keywords">investment plans</keyword> as well. For instance, investments in equity and mutual funds with a 2 per cent dividend income of Rs 10,00,000 generate Rs 20,000, which after taxes the net return is Rs 16,000. However, Short-term investments of less than one year in equity and mutual funds, offering an 11 per cent return generate Rs 1,10,000, with a net return of Rs 88,000 after taxes. This investment if made in Long-term investments of more than one year the return increases to 15% on Rs 10,00,000 and generates Rs 1,50,000 annually. With a lower tax bracket of 12.5 per cent tax on long-term investments and applicable exemptions, the net return is Rs 1,43,750. These variations in returns across different deposits and investment options highlight the complexity and thus investors are choosing the higher return options over the bank deposits which in turn poses a threat to the deposit growth in the banking sector.

Decline in bank deposits because of non-uniform tax treatment on various investment options: SBI report

The government is unlikely to announce capital infusion for public sector banks (PSBs) in the upcoming <keyword id="6358021" type="General" weightage="20" keywordseo="budget" source="Orion">Budget</keyword> as their financial health has improved significantly and they are on track to earn a combined profit of Rs 1 lakh crore, sources said. Their capital adequacy ratio is much above the regulatory requirement and varies between 14-20 per cent. To augment their resources, banks are raising growth funds from the market and also by selling their non-core assets, they added. The government last provided capital support to banks in 2021-22. It had earmarked Rs 20,000 crore for recapitalisation of PSBs through supplementary demands for grants. The government infused Rs 3,10,997 crore to recapitalise banks during the last five financial years i.e., from 2016-17 to 2020-21, out of which Rs 34,997 crore were sourced through budgetary allocation and Rs 2,76,000 crore through issuance of recapitalisation bonds to these banks. Finance Minister <keyword id="129243" type="General" weightage="80" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> is scheduled to present the fifth and final full Budget of the Modi 2.0 government on February 1. All the 12 public sector banks earned a cumulative profit of about Rs 15,306 crore in the first quarter which increased to Rs 25,685 crore in the September quarter. On a year-on-year basis, the growth was 9 per cent in the first quarter while it surged to 50 per cent in the second quarter. During the second quarter, <keyword id="13451504" type="COMPANY" weightage="80" keywordseo="sbi" source="Orion" meta.marketcap="528426.26077014" meta.tagname="State Bank of India" meta.tagpopularcount="0" meta.sectorid="15" meta.entitytype="company" meta.matchtype="exact" meta.aum="0" meta.entityid="11984" meta.tagseoname="state-bank-of-india" meta.sector="Banks" meta.tagnameorg="State Bank of India">SBI</keyword> reported the highest-ever profit of Rs 13,265 crore. On a year-on-year basis, this was 74 per cent higher. In the first half of FY23, the cumulative net profit of all PSBs increased by 32 per cent to Rs 40,991 crore. The combined profit more than doubled to Rs 66,539 crore in 2021-22 despite COVID-19 pressure. Many state-owned banks after a hiatus also declared dividends in last financial year. In all, nine banks, including SBI, declared dividends of Rs 7,867 crore to shareholders. Recently, the Finance Minister had said the government's efforts to reduce bad loans are yielding results with 12 PSBs reporting a 50 per cent jump in combined net profit at Rs 25,685 crore in the September quarter. NPAs declined as a result of the government's 4Rs strategy of Recognition, Resolution, Recapitalisation and Reforms, she had said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rupee-breaches-80-level-against-usd-for-the-first-time-in-2-months/articleshow/97241273.cms">Rupee breaches 80 level against USD for the first time in 2 months</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/canara-bank-q3-profit-surges-92-to-2882-crore/articleshow/97245895.cms">Canara Bank Q3 profit surges 92% to ₹2,882 crore</a>

Govt may not announce capital infusion for PSU banks in Budget 2023-24

The upcoming Indian budget for 2023-24 will be a challenging one for the government to follow the roadmap for fiscal consolidation amidst a global environment of declining inflation, said a top economist of the <keyword id="6354731" type="General" weightage="50" keywordseo="state-bank-of-india" source="Orion">State Bank of India</keyword> in a report. For <keyword id="3658" type="General" weightage="50" keywordseo="india" source="Orion">India</keyword>, this could make things difficult to set a nominal gross domestic product (GDP) number significantly higher than 10 per cent, with a deflator of about 3.5 per cent. But this could also mean a higher GDP growth than anticipated at about 6.2 per cent, he said. He also said the fiscal deficit of the Indian government for FY23 will be about Rs.17.5 lakh crore. According to Dr. <keyword id="6448502" type="General" weightage="80" keywordseo="soumya-kanti-ghosh" source="Orion">Soumya Kanti Ghosh</keyword>, Group Chief Economic Adviser, SBI, for FY23, total receipts of the Government would be higher than the budget estimates (BE) by around Rs 2.3 lakh crore, on account of higher direct tax receipts (about Rs 2.2 lakh crore), higher GST receipts (Rs 95,000 crore) but lower dividends (about Rs 40,000 crore), lower fuel tax net of cess (Rs 30,000 crore) and lower disinvestment receipts (about Rs 15000-20,000 crore). "Meanwhile, expenditure is likely to be on the higher side of the BE by around Rs 3 lakh crore on account of higher subsidy bill and additional spending announced by the Government. Taking this into account, the fiscal deficit of the Government in FY23 is expected to come to Rs 17.5 lakh crore. However, higher nominal GDP growth (15.4 per cent) estimates will help in keeping the fiscal deficit at 6.4 per cent of the GDP," <keyword id="4757" type="General" weightage="80" keywordseo="ghosh" source="Orion">Ghosh</keyword> said. As regards FY24, the government's expenditure is likely to increase by around 8.2 per cent over FY23 estimates to Rs 46 lakh crore, Ghosh said in the report. The subsidy bill which increased significantly in FY23 is estimated to be reduced in FY24 to around Rs 3.8-4 lakh crore and capital expenditure is expected to grow by 12 per cent. Meanwhile, receipts (minus borrowing and other liabilities) are expected to grow by about 12.1 per cent with tax revenue receipts growth likely at 11 per cent. With nominal GDP growth at 10 per cent, tax buoyancy is thus expected at close to 1.1 compared to the expected tax buoyancy of 1.5 in FY23. Thus, the fiscal deficit for FY24 is estimated at around Rs 17.95 lakh crore or 6 per cent of GDP in FY24, thereby resulting in fiscal consolidation of 40 bps from the current fiscal, the report notes. "As far as borrowing is concerned, we believe net market borrowing of the Centre in FY24 will be around Rs. 11.7 lakh crore and with repayments of Rs 4.4 lakh crore, gross borrowing is expected at Rs 16.1 lakh crore. We believe a switch of about Rs 50,000 crore is also likely to be announced," the report said. With higher tax devolution from the Centre, the states are likely to borrow around Rs 8 lakh crore in FY23, lower than earlier anticipated. "In FY24, the overall gross borrowing by Centre and States is likely to be Rs 24.3 lakh crore (Rs. 22.2lakh crore in FY23) and net borrowings Rs. 17 lakh crore (Rs 16.7 lakh crore in FY23). We further believe that the Government will continue to rely on small saving schemes (Rs 5 lakh crore likely in FY24). According to the report, the government can give a hard push to <keyword id="2757237" type="General" weightage="50" keywordseo="sukanya-samriddhi-yojana" source="Orion">Sukanya Samriddhi Yojana</keyword> (SSY), by encouraging fresh registrations in a mission-drive mode, allowing one-time registrations for all leftover cases up to 12 years. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/ongc-reliance-industries-paytm-siemens-among-stocks-in-focus/articleshow/97045293.cms">Sensex, Nifty50 likely to open on a tepid note amid mixed global cues: ONGC, Reliance Industries, Paytm, Siemens among stocks in focus</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/international/news/chinas-gdp-sinks-to-3-in-2022-second-lowest-in-50-years/articleshow/97047786.cms">China's GDP sinks to 3% in 2022, second lowest in 50 years</a>

India's fiscal deficit for FY23 estimated at ₹17.5 L crore, FY24 ₹17.95 L crore: SBI

<ul><li>Sensex gained 0.59% to 38,273.73 points during the initial trade.</li><li> The Nifty50 rose 0.59% to 11,314.00. </li><li>These are the top stocks that are buzzing the D-street today.</li><li><a href="https://www.businessinsider.in/">Check out the latest news and updates on Business Insider.</a> </li></ul>Despite the mixed cues from global markets, Indian stock market opened on a positive note on Tuesday with the BSE Sensex gaining 0.59% to 38,273.73 points during the initial trade. The Nifty rose 0.59% to 11,314.00. On the Nifty50 chart, Grasim, ONGC, Eicher, Titan and UPL Limited were among the top gainers - rising as much as 5%, whereas, Indusind Bank, Tech M, JSW Steel were among the top losers. These are the top stocks that are buzzing on D-street today. Tata Motors gained nearly 2% during the morning trade <div type="image" title="Tata Motors August 18" msid="77605551" hostid="261"></div> Tata Motors gained nearly 2% during the morning trade after the company refuted claims of stake sales in its premium car segment JLR. The company said there is adequate liquidity with the company to manage its operations and capital expenditure. Yes Bank gained 3% during the early trade hours <div type="image" title="yes Bank August 18" msid="77605556" hostid="261"></div> Yes Bank shares gained 3% during the early trade hours after the bank in a notice to shareholders for the AGM said that it is looking at trebling up stock options to be granted to senior executives to 22.5 crore, which can be seen as a move to retain talent. SBI Cards up over 2% <div type="image" title="SBI cards August 18" msid="77605595" hostid="261"></div> The share price of SBI Cards was trading up over 2% after the company said it raised ₹500 crore via 5.75% 2023 bonds. Bandhan Bank gains nearly 2% <div type="image" title="Bandhan Bank August 18" msid="77605647" hostid="261"></div> Bandhan Bank shares gained nearly 2% after the Reserve Bank of India (RBI) lifted the restriction regarding the remuneration of Bandhan Bank’s MD and CEO after the promoter shareholding was brought down to 40% in line with the central bank’s norms. In September 2018, the RBI, among other restrictions, said that the remuneration of the MD and CEO of Bandhan Bank stands frozen at the existing level in view of non-compliance with RBI’s licensing norms for new private sector banks. Britannia gains nearly 2% during early hours of trading <div type="image" title="Britannia shares August 18" msid="77605697" hostid="261"></div> FMCG major Britannia gained nearly 2% during early hours of trading after the company said its board has declared an interim dividend of ₹83 per share for the current fiscal and approved issue of bonus debentures. Reliance Industries trades 2% higher <div type="image" title="RIL August 18" msid="77605757" hostid="261"></div> Reliance Industries shares were trading 2% higher after the Supreme Court asked Centre to clarify its stand on why Reliance Jio, which is earning revenue by sharing Reliance Communication’s (RCom) spectrum be not asked to pay the AGR related dues to the government. The Supreme Court will continue hearings in the AGR case today. SEE ALSO:<a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-today-ril-sbi-cards-hal-manappuram-airtel-bandhan-bank-britannia/slidelist/77603872.cms" data-type="tilCustomLink"> Top stocks to watch today— RIL, SBI Cards, HAL, Manappuram, Airtel, Bandhan Bank and more</a> <a href="https://www.businessinsider.in/business/startups/news/oyo-byjus-investor-lightspeed-india-closes-its-third-fund-with-275-million/articleshow/77603896.cms" data-type="tilCustomLink">OYO, Byju's investor Lightspeed India closes its third fund with $275 million</a>

Top stock movers on Dalal Street today — Tata Motors, SBI Card, Bandhan Bank, RIL, Britannia

<ul><li>In the Asain market, the SGX Nifty was trading 0.36% higher at 7:49 am, indicating a green start for Nifty50. </li><li>Here’s a list of stocks to watch for in trade today. </li><li><a href="https://www.businessinsider.in/">Check out the latest news and updates on Business Insider. </a></li></ul>Amidst positive cues from the global markets, the Indian equities are likely to open on a higher note. In the Asain market, the SGX Nifty was trading 0.36% higher at 7:49 am, indicating a green start for Nifty50. The US stocks ended the Tuesday lower as investors cheered the news of President Donald Trump leaving the hospital where he is being treated for COVID-19. The Dow Jones Industrial Average rallied 465.83 points, whereas the S&amp;P 500 gained over 1.80% on Monday. These are the stocks to watch out for during the trading session on October 6: SBI The headhunter for state-owned banks and financial institutions, the Banks Board Bureau (BBB) recommended the names of Swaminathan Janakiraman and Ashwini Kumar Tewari for the posts of managing director at State Bank of India. The country’s largest lender bank is headed by a chairman with four managing directors to assist. Also, the current SBI chairman’s tenure ends on October 7. Watch out for announcements on the change of guard at the helm of SBI as well. The shares of SBI ended 0.45% lower on Monday. HDFC and HDFC Bank The Housing finance major HDFC, in its second-quarter update ending September 30, said that its individual loan disbursements reached 95% of the level in the year-ago period, and September saw the strongest recovery since the outbreak of the COVID-19 pandemic, suggesting business is returning to pre-crisis levels. The individual loan business has continued to see a month-on-month improvement in July-September 2020, the company said in its regulatory filing. The HDFC Bank advances as of September 30 rose 16% YoY to ₹10.4 lakh crore, and the deposits increased 20% to ₹12.3 lakh crore. The shares of HDFC Ltd ended 0.46% lower yesterday, whereas HDFC Bank ended 0.50% higher. Tata Motors Tata Motors-owned subsidiary Jaguar Land Rover (JLR) reported a 12% dip in sales in the second quarter ended September 30. However, the sales improved by nearly 50% during the July-September quarter as against 74,067 units in the April-June period of the current fiscal, the company said in a statement. The shares of Tata Motors ended 0.52% higher yesterday. Britannia Industries Bakery and dairy products major Britannia Industries said its board has approved issuing bonus debentures and payment of dividend to reward its shareholders in such difficult and unprecedented times due to the coronavirus pandemic. The board approved 1 bonus debenture for 1 share held, and payment of ₹12.5/share as dividend. The shares of Britannia Industries ended 0.56% higher yesterday. Deepak Fertilisers and Petrochemicals The wholly-owned arm of Deepak Fertilisers and Petrochemicals, Smartchem Tech, raised ₹105 crore via debentures from international finance corporation. A debenture is a loan that is issued to corporates based on their reputation at a fixed rate of interest. The shares of Deepak Fertilisers and Petrochemicals ended 2.3% lower yesterday. Future Consumer Future Capital Investment, the promoter of Future Consumer, invoked pledge of 18 lakh shares from September 14-16. The shares of Future Consumer ended 4% lower on Monday. Infibeam Avenues and RIL The digital payments, e-commerce software company Infibeam Avenues has entered into a definitive agreement with Jio Platforms and its affiliates. The shares of Infibeam Avenues were locked in 5% upper circuit on Monday. Escorts The automaker Escorts has completed the acquisition of 2 crore equity shares of KAI from KBT, constituting 40% of the share capital of KAI for an aggregate value of ₹90 crore. The shares of Escorts ended 3.32% higher on Monday. Majesco The board of Majesco will consider a proposal for buyback of fully paid-up equity shares on October 8. The shares of Majesco ended 0.15% lower on Monday. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/tcs-shares-hit-record-high-board-to-mull-over-share-buyback-and-earnings-on-october-7/articleshow/78486980.cms" data-type="tilCustomLink">TCS' value crosses ₹10 trillion after share price rallies more than 7% ahead of earnings</a> <a href="https://www.businessinsider.in/politics/world/news/trump-tweets-that-hes-leaving-the-hospital-and-says-dont-be-afraid-of-covid-a-deadly-virus-thats-killed-over-209000-americans/articleshow/78502663.cms" data-type="tilCustomLink">Trump tweets that he's leaving the hospital and says 'don't be afraid of Covid,' a virus that's killed over 209,000 Americans</a>

Top stocks to watch—SBI, HDFC Bank, Tata Motors, RIL, Infibeam, Britannia, Future Consumer and others

Mumbai, May 25 () An investor advisory has blasted the corporate governance practices at State Bank of India, saying the nation's largest lender is weighed down by its own laws which mostly overrule all other regulations, making a mockery of the rights of public shareholders. The immediate reaction from Institutional Investor Advisory Services (IiAS) is the invite that SBI has sent out to shareholders for an EGM on June 17 amidst COVID pandemic, as the State Bank of India Act of 1955, which created it, does not envisage or allow it to hold the extra-ordinary general meeting digitally/electronically or even an e-voting. "SBI's ability to become a beacon of good corporate governance is being scuttled by the half-century old State Bank Act, 1955. It is compelled to hold a physical EGM on June 16 at a time when the COVID-19 pandemic is raging," IiAS says in a note, calling up on the board to advise government to amend the SBI Act. Stating that SBI shareholders have lesser rights compared to shareholders of other companies, it notes that "SBI continues to be governed in a quaint manner" by not making the changes that allow public shareholders to assert their rights, even though the SBI Act has been modified over the past half century, "but the investors have not been allowed inside the tent". The public own around 20 per cent of SBI valued at Rs 27,300 crore. "The SBI Act ensures that all the progressive changes that Sebi or any other regulator makes for listed companies, SBI need not follow them even though a listed company it's accountable to its public shareholders and therefore should not be allowed to operate in isolation," it says, adding SBI board must advise government to ensure that public shareholders enjoy the same rights as in any other listed company. It can be noted that the SBI Act allows for votes to be taken either by show of hands or by a poll. It cannot even issue a postal ballot, cannot allow e-voting, and holding a virtual meeting remains a far cry. "But these are relics of the past ages. Beyond the convenience an e-voting facility provides, it importantly changes the way votes are counted and called for e-voting also given the times we are in. "E-voting can be an important shift, since the decisions will be weighed by actual shareholding, not by those that have the time to attend a general meeting," it said. State Bank called for a public gathering of its shareholders at its auditorium here on June 17 despite the corporate affairs ministry allowing all other listed companies to hold virtual meetings due to the lockdown. "This is because SBI is weighed down by a Luddite Act that doesn't provide for such a meeting.. and the EGM may pose an unnecessary risk to the health and safety of shareholders and senior management," says IiAS. There are also other provisions of the SBI Act that have left shareholders irate in the past. It can be noted that SBI shareholders do not vote on dividends, which are subject to the RBI guidelines and require only board nod. Again like other state-owned banks, SBI does not need shareholders' approval to appoint auditors. SBI's board structure is defined in the SBI Act: it is required to have a chairperson and a vice-chairperson, two managing directors, one employee representative director, up to six directors (minimum two) having special knowledge of the working of co-operative institutions and of rural economy or experience in commerce, industry, banking or finance and four shareholder directors. An RBI nominee and the government too is a must. IiAS also questions the independence of the board, which according to the SBI Act, other than the shareholder directors, all board members need the government approval, raising legitimate questions about the board's ability to distance itself from the government agenda and run the bank independently because the interest of the largest shareholder and that of the entity are not always aligned. Similarly, SBI shareholders have not say on or a right to vote on mergers and acquisitions -- shareholders can only voice their objections and the grievance redressal mechanism will decide whether these concerns have merit. BEN BAL BAL

Corporate governance: SBI weighed down by its own laws, says IiAS

Mumbai, Feb 2 () The revised 3.8 per cent fiscal deficit for FY20 looks ambitious as it is based on projected 18 per cent rise in tax collections against a paltry 5.1 per cent higher realisaition so far, and around Rs 65,000 crore mop-up through disinvestment in the last two months of the current fiscal, SBI Research said in a report on Sunday.
The revised deficit target is propped on the belief that the divestment will fetch Rs 65,000 crore through the next two months. As against the Rs 1.05 lakh crore budgeted target, the divestment proceeds has been one of the lowest in recent years at a paltry Rs 17,800 crore.
The Union Budget for 2020-21 used the permissible 50 bps deviation under Section 4(3) of the FRBM Act to widen the fiscal deficit at 3.8 per cent of the GDP, revealing a revenue shortfall of around Rs 2.60 lakh crore, of which states are losing Rs 1.09 lakh crore.
"After adjusting for the expenditure rationalisation of around Rs 88,000 crore, the revised fiscal deficit for FY20 comes to around Rs 63,086 crore over the budgeted numbers. The saving grace is the jump in non-tax revenue of around Rs 32,335 crore or 20 bps of fiscal deficit, possibly reflecting the AGR payments/interim dividend from RBI in lieu of telecom.
"Clearly, the Supreme Court judgement has helped the government contain fiscal deficit at 3.8 per cent instead of 4 per cent. If this amount goes up (potentially up to Rs 90,000 crore) the fiscal deficit number can even be lower than 3.8 per cent or alternatively it can be possible that any slippage in disinvestment receipts/tax receipts could be taken care of," SBI Research said in the report.
However, the problem is that the "revised estimates pegs income tax collections growing at 18 per cent as against 20 per cent budgeted earlier, which in our opinion, is a tad optimistic as the year-to-date FY20 collections as on December is only 5.1 per cent higher year-on-year," the report said.
The only saving grace has been for the second time in the fiscal after the April collections GST mop-up crossed Rs 1 lakh crore-mark at over Rs 1.2 crore.
FY21 nominal GDP growth is projected at a reasonable 10 per cent, says the report and pegs real GDP numbers for FY21 to be 5.5-6 per cent and fiscal deficit at Rs 29,491 crore, more than the FY20 revised number of 3.5 per cent of GDP.
On the new income tax regime leading to a consumption boost, the report said that the new tax regime will most likely makes no sense as given the optionality clause wherein income tax rates will be significantly reduced for the individual taxpayers who forgo certain deductions and exemptions. The new personal income tax rates will entail estimated revenue forgone of Rs 40,000 crore per year.
"Assuming a marginal propensity to consume of 0.70, the proposed revenue foregone of Rs 40,000 crore will translate into a consumption boost of Rs 1.33 lakh crore, but only if people migrate to the new tax regime.
"Our estimates suggest that given the increased tax liability under the alternative dispensation, such a possibility of migration looks remote. We are thus sceptical of a consumption boost," the report said.
Many analysts and tax experts have already flayed the move on income tax front, saying this will badly hit savings by way of investing in select assets classes likes mutual funds, housing and even stock markets as dividend distribution will also be taxed at the hands of the investor.
The budget has set an all-time high target of Rs 2.1 lakh crore of disinvestment for FY21 on back of the planned stake sale in LIC and the pending/remaining disinvestments of FY20. The disinvestment target of FY20 is now revised downwards from Rs 1.05 lakh crore to Rs 65,000 crore.
"We believe 10 per cent nominal GDP growth for FY21 can surprise on the upside, thanks to a lower base in FY20. Because, with FY19 growth now at 6.1 per cent, FY20 growth on an unchanged base can potentially be at 5.7 per cent, against 5 per cent earlier. This implies there could downside bias to 5 per cent GDP estimate in forthcoming CSO releases that can push up nominal GDP growth in FY21," it noted.
Gross tax revenue is expected to grow by 12 per cent in FY21 to Rs 24.2 lakh crore. This revenue target from taxation is supported by 10.4 per cent growth in custom duty, 14 per cent in income tax and 11.5 per cent rise in corporation tax.
Tax buoyancy for FY21 is estimated at 1.2 times. GST collection target is budgeted to increase at 12.8 per cent to Rs 6.9 lakh crore over FY20 revised estimates.
Major subsidies will remain flat at Rs 2.28 lakh crore.
For FY21, the government borrowing is budgeted at Rs 7.8 lakh crore and net borrowing requirement is pegged at Rs 5.40 lakh crore, considering repayments of Rs 2.39 lakh crore.
Total dividend from the Reserve Bank of India, banks and financial institutions is estimated at Rs 89,648 crore for FY21, almost 41 per cent lower than revised estimated of FY20 (Rs 1,51,636 crore), on the basis of a lower dividend transfer from the apex bank.
Considering declining tax revenue, non-tax revenue for meeting fiscal deficit is the key. 
"Using the data from FY1972 to FY2017, our econometric estimates show that neither non-tax revenue growth causes GDP growth, nor GDP growth causes non-tax revenue growth.
"While the government taking recourse to non-tax revenue is fine this depends on growth picking up. In fact, higher non-tax revenues can cause sectoral imbalances. A case in point is the telecom sector which witnessed a rise in leverage in 2010 after the major spectrum auctions," the report said. BEN BAL
BAL

3.8 pc fiscal deficit target looks ambitious: SBI Research

<ul><li>After a rate cut in February, the mandate of the central bank was clear: it wants to boost lending and thereby stimulate economic growth. </li><li>However, the country’s commercial lenders have been slow to pass on the rate cut to consumers. </li><li>As a result, the governor of the Reserve Bank of India, <keyword id="6359111" type="UNKNOWN" weightage="20" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword>, met with the CEO’s of the country banks to do so. The banks complained that they didn’t have much room to cut rates but said they would try their best. </li></ul>After <a href="https://www.businessinsider.in/rbi-policy-update-cuts-interest-rate-citing-low-inflation-and-it-may-boost-growth/articleshow/67880230.cms">a rate cut </a>in February, the mandate of the central bank was clear: it wants to boost lending and thereby stimulate economic growth as the country heads into national elections. And now it wants Indian banks to follow suit. However, the country’s commercial lenders have been slow to pass on the rate cut to consumers in the form of cheaper small business loans, home loans and car loans. As a result, the governor of the Reserve Bank of India, Shaktikanta Das, met with the CEO’s of the country banks - such as Punjab National Bank, ICICI Bank, Kotak Bank, Bank of Baroda etc - yesterday to exhort them <a href="https://www.business-standard.com/article/finance/rbi-governor-das-asks-bankers-to-pass-on-rate-cut-benefits-to-consumers-119022101292_1.html">to cut lending rates</a> for customers so as to encourage consumer confidence and investment. While the banks’ response was mostly non-committal, they said they would <a href="https://www.thehindu.com/business/will-try-to-pass-on-rate-cut-banks/article26333312.ece">try their best to cut rates</a> on home loans and personal loans. They have complained in the past of their high borrowing costs and shrinking margins - both of which are a consequence of their stock of bad loans. They also pointed to a lack of liquidity in the banking system, as consumers are hoarding cash ahead of elections. After the rate cut decision, wherein the base lending rate was cut by 25 basis points to 6.25%, the State Bank of India only cut home loan rates by <a href="https://economictimes.indiatimes.com/markets/stocks/news/sbi-cuts-interest-rate-on-home-loan-by-5-bps/articleshow/67910450.cms">a mere 5 basis points</a>. The only other bank to do the same was Bank of Maharashtra - by the same measly amount. Earlier this week, the chairman of State Bank of India, Rajnish Kumar, said that banks did not <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/headroom-to-cut-rates-does-not-exist-sbi-chairman/articleshow/68044675.cms">have the room to cut lending rates</a> because it would need to cut its deposit rates first. And it couldn’t do this unless other banks did so as well, because otherwise its customers would park their money in banks with higher deposit rates. SEE ALSO: <a href="https://www.businessinsider.in/rbi-policy-update-cuts-interest-rate-citing-low-inflation-and-it-may-boost-growth/articleshow/67880230.cms">India’s central bank cuts interest rate to give growth a chance</a> <a href="https://www.businessinsider.in/rbi-pays-interim-dividend-central-government/articleshow/68057230.cms">The Modi administration’s overspending gets rewarded with an interim dividend from the central bank</a>

India’s central bank is calling on the country’s lenders to lower rates

New Delhi, May 8 () SBI Cards and Payment Services on Friday reported a 66 per cent decline in net profit at Rs 84 crore for the March quarter on additional provisions due to the COVID-19 crisis as well as rise in total expenses. The credit card company, promoted by country's largest lender SBI, had posted a net profit of Rs 249 crore in the corresponding January-March period of the preceding fiscal year 2018-19. The company, operated under the brand name SBI Card, registered 23 per cent growth in revenues from operations to Rs 2,433 crore during the fourth quarter of FY20, as against Rs 1,983 crore in same period a year ago, it said in a regulatory filing. Total income rose by 21 per cent to Rs 2,510 crore from Rs 2,076 crore. The total expenses of the company jumped 42 per cent to Rs 2,398 crore from Rs 1,691 crore. For the full year 2019-20, net profit grew by 44 per cent to Rs 1,245 crore from Rs 865 crore in preceding fiscal. "Excluding COVID-19 impact, PAT for FY20 would have been Rs 1,662 crore, growth of 92 per cent," it said in a release. Total income in FY20 was up by 34 per cent at Rs 9,752 crore, from Rs 7,287 crore a year earlier. SBI Card said it registered 28 per cent growth in cards, 27 per cent growth in spends and 30 per cent growth in receivables during FY20. On the diversified revenue stream, it said interest income was 52 per cent of revenue from operations. The company's gross non performing assets (NPAs) stood at 2 per cent at the end of March 2020. The impact of COVID-19 on credit quality is uncertain and additional provisions of Rs 489 crore have been created, it said, adding portfolio analysis has also been undertaken and significant measures have been implemented to mitigate credit risks. The board of SBI Card approved payment of interim dividend of Re 1 per share (10 per cent ) for the financial year ended March 31, 2020. During the quarter ended March 2020, the company had come up with its Initial Public Offering (IPO) and was listed on BSE and NSE. On the COVID-19 pandemic, SBI Card said globally, countries and businesses are under lockdown and there is a high level of uncertainty about the duration of the lockdown and the time required for things to get normal. "The extent to which COVID-19 pandemic will impact the Company's operations and financial results is dependent on the future developments, which are highly uncertain," it added. Citing RBI circulars in March and April, it said SBI Card has offered a moratorium on credit card dues to eligible borrowers in accordance with a board-approved policy. "In this backdrop, the company, based on current estimates, has created an additional management overlay on Expected Credit Loss (ECL) amounting to Rs 48,925.57 lakh during the quarter and year ended March 31, 2020," it said. Stock of SBI Card closed 2.15 per cent down at Rs 561.45 on BSE. KPM ABMABM

SBI Card Q4 net plunges 66 pc to Rs 84 cr on COVID-19 provisions, rise in expenses

<a href="http://www.businessinsider.in/searchresult.cms?query=sbi&amp;sortorder=effectivedate">State Bank of India’s</a> (SBI) profits tanked as India’s largest lender posted 66 per cent slump in fourth quarter at Rs 1,263.81 crore. 
 
The SBI had posted net profit of Rs 3,742.02 crore in the corresponding, January-March quarter of the previous fiscal 2014-15. 
 
For financial year 2015-16 fiscal, SBI posted 24 per cent decline in net profit to Rs 9,950.65 crore and the bank’s net profit in 2014-15 stood at Rs 13,101.57 crore. 
 
Regarding assets, SBI's total <a href="http://www.businessinsider.in/searchresult.cms?query=npas&amp;sortorder=effectivedate">non-performing assets</a> (NPAs) or bad loans rose to 6.5 per cent of gross advances as of March 2016, from 4.25 per cent a year ago. 
 
In absolute terms, the gross NPAs reached Rs 98,172.80 crore, as against Rs 56,725.34 crore. 
 
"Total income (standalone) has increased to Rs 53,526.97 crore for the quarter ended March 31, 2016 from Rs 48,616.41 crore for the same quarter year ago", SBI said in a regulatory filing. 
 
In a separate filing to exchanges, SBI said the central board of the bank at a meeting held today has declared a dividend of 2.60 per cent for financial year 2015-16.

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