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The overall size of the budget has remained almost unchanged from the interim one presented in February, indicating the government's strong commitment to move along the <keyword id="20099794" type="General" weightage="20" keywordseo="fiscal-prudence" source="keywords">fiscal prudence</keyword> path, said experts on Tuesday. According to the <keyword id="19908389" type="General" weightage="100" keywordseo="Union-Budget" source="keywords">Union Budget</keyword> 2024-25 presented by Finance Minister Nirmala Sitharaman, the total expenditure in Budget Estimates (BE) 2024-25 is estimated at Rs 48,20,512 crore of which total <keyword id="20018917" type="General" weightage="20" keywordseo="capital-expenditure" source="keywords">capital expenditure</keyword> is Rs 11,11,111 crore. The total expenditure in the Interim Budget presented in February was estimated at Rs 47,65,768 crore of which total capital expenditure was Rs 11.11 lakh crore. Debadatta Chand, Managing Director &amp; CEO, <keyword id="19920717" type="General" weightage="20" keywordseo="Bank-of-Baroda" source="keywords" meta.keywordsubtype="org" meta.entityname="Bank of Baroda" meta.hostid="261" meta.entityid="Bank of Baroda">Bank of Baroda</keyword>, said the Union Budget complements the main takeaways from the Economic Survey and focusses clearly on medium term development of the economy. "The overall size of the budget has remained almost unchanged from the interim one. The budget has shown strong intent on moving along the fiscal prudence path and targeted the <keyword id="19942084" type="General" weightage="20" keywordseo="fiscal-deficit" source="keywords">fiscal deficit</keyword> at 4.9 per cent for the year," he said. The said action will keep the growth steady as well as robust not only for economy but also banking. Aditi Nayar, Chief Economist, ICRA Limited, said the budget has kept the capital expenditure unchanged and pared the fiscal deficit to 4.9 per cent of GDP. "The anticipated reiteration of the reduction in the fiscal deficit to below 4.5 per cent of GDP in FY2026 is welcome. Interestingly, the new medium term fiscal consolidation path has been linked to a reduction in the debt/GDP ratio instead of continued compression of the fiscal deficit/GDP ratio," she said. Buoyed by improvement in revenue collection, the government has lowered fiscal deficit target to 4.9 per cent for the current <keyword id="19910979" type="General" weightage="20" keywordseo="financial-year" source="keywords">financial year</keyword> as against 5.1 per cent estimated in February's interim budget. Ranen Banerjee, Partner and Leader Economic Advisory, PwC India, said that fiscal prudence is the highlight of the full Union Budget 2024-25. The government has gone with realistic projections on its revenue and expenditure estimates and refrained from announcing overly populist measures. "The majority of the allocations, including the capex allocation, are as outlined in the interim budget, thus providing continuity. The capex being kept at INR 11.11 trillion was expected, given that the ability to consume this allocation is limited due to disruption from the elections in the first quarter and the second quarter being typically slowed down by the monsoons," Banerjee said. Institute of Chartered Accountants of India (ICAI) President Ranjeet Kumar Agarwal said the government has announced five schemes to facilitate employment and skilling for 4.1 crore youth over the next five years with a central outlay of Rs 2 lakh crore. "This is a welcome step that will create a skilled workforce to address the existing deficit and generate <keyword id="19972727" type="General" weightage="20" keywordseo="employment-opportunities" source="keywords">employment opportunities</keyword>. Additionally, financial support for loans up to Rs 10 lakh for higher education will help students pursue higher education and acquire skills," he added. Indian Institute of Insolvency Professionals of ICAI (IIIPI) Chairman Ashok Haldia said the budget proposals for an integrated technology platform and sprucing up NCLT infrastructure will provide a fillip to the Insolvency and Bankruptcy Code (IBC) regime. IIIPI is promoted by ICAI. Meanwhile, Kumarmangalam Vijay, Partner, JSA Advocates and Solicitors, opined that in its new avatar, it seems that the Modi government is keen to deliver on its promise of 'ease of doing business'. "Its focus on making it simpler is evident from the abolition of the angel tax, the increase in new income tax regime thresholds, new Vivad se Vishwas Scheme 2024 for the resolution of pending cases and the increase in the threshold for appeal by tax departments at various levels, decriminalising the non-reporting of shares received from non-resident employers and reducing the period for re-opening of the cases," Vijay said. The Institute of Company Secretaries of India (ICSI) said there has been a focus on the manufacturing sector in the budget. Measures have been taken for simplifying the FDI/ODI rules and regulations, and the <keyword id="21847964" type="General" weightage="20" keywordseo="tax-regimes" source="keywords">tax regimes</keyword>. The enhanced Mudra loan limit and the abolition of angel tax are all set to incentivize the startup and MSME ecosystem of the country. "The nine priorities identified in this progressive and inclusive budget 2024 are aimed at generating ample opportunities for all. Besides agricultural reforms, the budget focuses on skilling, educating and employing the youth, a priority that the ICSI has been concentrating on," said ICSI President B Narasimhan. Rajesh Magow, Co-Founder and Group CEO, MakeMyTrip, said the government's continued emphasis on infrastructure development is commendable. Enhanced road infrastructure will bolster the travel and tourism sector. "We also welcome the initiatives to develop iconic spiritual and cultural sites into world-class tourist hotspots," Magow said. Furthermore, he said the provision of credit for TCS against income tax under 'Income from Salaries' is logical and will provide much-desired relief to taxpayers who travel internationally.

Budget size almost unchanged from interim, shows govt's commitment to fiscal prudence: Experts

Global brokerage firm <keyword id="19977638" type="General" weightage="20" keywordseo="Morgan-Stanley" source="keywords" meta.keywordsubtype="org" meta.entityname="Morgan Stanley" meta.hostid="261" meta.entityid="Morgan Stanley">Morgan Stanley</keyword> expects <keyword id="19956758" type="General" weightage="20" keywordseo="Finance-Minister" source="keywords">Finance Minister</keyword> <keyword id="19916618" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="keywords">Nirmala Sitharaman</keyword>'s upcoming <keyword id="19936553" type="General" weightage="100" keywordseo="Budget" source="keywords">Budget</keyword> to focus on the government's <keyword id="20634687" type="General" weightage="20" keywordseo="road-map" source="keywords">road map</keyword> for '<keyword id="19916816" type="General" weightage="20" keywordseo="Viksit-Bharat" source="keywords">Viksit Bharat</keyword>' by 2047 and spell out the <keyword id="22362494" type="General" weightage="20" keywordseo="medium-term-plan" source="keywords">medium-term plan</keyword> for <keyword id="20101140" type="General" weightage="20" keywordseo="fiscal-consolidation" source="keywords">fiscal consolidation</keyword>. "With fiscal prudence guiding the overall fiscal policy stance, we expect the focus to remain on <keyword id="22362493" type="General" weightage="20" keywordseo="capex-expenditure" source="keywords">capex expenditure</keyword> over revenue expenditure and targeted social sector spending with a focus on improving access to physical, social and digital infrastructure," said Morgan Stanley's research report on Wednesday. Sitharaman is scheduled to present the full Budget for fiscal 2024-25 on July 23, which will be the first major policy document of the new government. The brokerage firm expects the central government's fiscal deficit target to be retained at 5.1 per cent of GDP in 2024-25 in line with the interim budget (against 5.6 per cent of GDP in 2023-24) and to be on track to attain the target of 4.5 per cent of GDP by the next financial year. "The fiscal headroom has improved with a larger-than-expected transfer of surplus from the RBI, which, in our view, will help to maintain the momentum on capex expenditure and increase targeted welfare spending. In this context, we see the possibility of a slightly lower fiscal deficit target (tad below 5.1 per cent of GDP), given the support from tax and non-tax revenues," it said. It also expects the Budget to provide focus on the government's road map for 'Viksit Bharat' (developed nation) by 2047. In addition, the budget could also give a road map for a medium-term plan for fiscal consolidation beyond 2025-26, it added. The report said the impact of the Budget on the stock market has been on a secular decline, albeit actual performance is a function of pre-budget expectations (as measured by market performance ahead of the budget). As of now, the market seems to be approaching the Budget with exuberance and could be dealing with both volatility and a correction post-budget, if history is a guide, it said.

Morgan Stanley expects Budget to focus on road map for 'Viksit Bharat'

<ul><li><keyword id="12743893" type="General" weightage="80" keywordseo="budget-2023" source="Orion">Budget 2023</keyword> will likely continue to focus on capital expenditure as a growth driver and give an impetus to Make In India as well. </li><li>Post the pandemic, our fiscal deficit has doubled, and debt to GDP has gone up from 75% to 85-90%. Fiscal prudence is the need of the hour. </li><li>The Production Linked Incentive (PLI) scheme and infrastructure plan are a success and with the national logistics policy, there will be a substantial reduction in production costs and an increase in India’s competitiveness globally.</li></ul>The <keyword id="6358021" type="General" weightage="100" keywordseo="budget" source="Orion">Budget</keyword> 2023 will be Sitharaman's fifth budget as <keyword id="6355261" type="General" weightage="20" keywordseo="Finance-Minister" source="Orion">finance minister</keyword> under PM Modi government. She faces the Herculean task of promoting growth and walking on the path of fiscal discipline as well. There is a lot of expectation from this budget from all facets of the nation considering this shall be the last full budget of the Government before the National general elections in 2024. I am penning down my 7 pointers which I look forward to from this budget: 1. Growth:- India was the fastest-growing economy in 2022 and is most likely to achieve this feat in 2023 as well (amongst the top 10 economies globally). However, promoting growth in a world marred by slowdowns and recessionary trends is going to be extremely difficult in 2023. Budget is expected to be growth-oriented by increasing spend in infrastructure, healthcare, and education. Being a pre-election budget and considering rural Indian demand has been subdued since the pandemic; we should not be surprised if the budget is mildly populist too. Budget 2023 will likely continue to focus on capital expenditure as a growth driver and give an impetus to Make In India as well. 2. Taxes:- The government has 3 key revenue sources — tax revenues, asset monetization, and debt funding. Direct and indirect taxes were ahead of expectations in 2022. However, growth in tax revenues might start declining in 2023 considering that the GDP growth rate is set to slow down this year. FM might also rationalise personal income-tax rates to lift demand and growth, considering the same has remained unchanged since 2014 and it’s a pre-election budget. Thus, the Government of India needs to focus more on tax inclusiveness going forward. Historically, our tax-to-GDP ratio has been relatively very low. With comparable economies being at 24-25%, we are at about 11%. Efforts should be made to expand the tax net and find newer taxation avenues (such as carbon emission tax or green tax) to spur up income. 3. Fiscal prudence:- Considering Government had to support the needy in a difficult 2022, many subsidies, specifically on food and fertilizer, have gone up by at least ₹2-2.5 lakh crore over budget estimates in 2022. Government should prudently look to cut back some of these subsidies considering global food prices and domestic inflation has abated. Post the pandemic, our fiscal deficit has doubled, and debt to GDP has gone up from 75% to 85-90%. Fiscal prudence is the need of the hour and the Government should come out with a proper plan to contain the same over medium term. 4. Infrastructure: It may play a significant role in the government's financial plan for the upcoming fiscal year, as it does in every pre-election budget. The government might not be afraid to announce a greater allocation this year to address growth challenges in FY24 because infrastructure is a significant engine of growth and generates jobs. 5. Job creation:- For the last 2-3 years, jobs were not picking up because of Corona. India’s unemployment rate is still over 8% despite having overcome the pandemic. There is a need to find new sources of revenue so that public expenditure for people affected by inflation and unemployment can be spent on them to improve their quality of life. 6. PLI Scheme:- Global slowdown is an opportunity for India because of the challenges the U.S. is facing right now on inflation, tight monetary policy, energy crisis in Europe and China+1 strategy being implemented by global manufacturers. The Production Linked Incentive (PLI) scheme and infrastructure plan are a success and with the national logistics policy, there will be a substantial reduction in production cost and an increase in India’s competitiveness globally. The government must focus on the fast completion of projects and the efficient execution of these initiatives. 7. Disinvestment:- Government needs to get bold and move out of loss-making and sick PSU units. There is no point wasting taxpayers' money on businesses that have perennially been making losses. The Government showed its intent by selling off Air India but still has several such assets which need no further pampering or parenting. As tax collections in 2023 are not expected to be as robust as past 2 years, Government should look to bridge the gap using asset monetization. Additionally, consideration should be given to promoting initiatives such as co-lending to expand financial inclusion and extend reach to underserved customer segments. While India is domestic demand driven economy, challenging global growth issues will have its impact on exports, manufacturing and investments. Focus on fiscal consolidation can cause growth to slow down domestically and a populist budget if pursued runs the risk of causing inflation. I am sure Government will address these challenges and trade on a path of growth and fiscal prudence. I expect the budget to continue providing economic stability and a growth environment for the core sectors. (Ujwal Shah is Chief Equity Strategist and Fund Manager, IIFL Securities)

Budget 2023: FM has a tough task to balance growth and fiscal prudence

<ul><li>Finance minister Nirmala Sitharaman’s <keyword id="12743893" type="General" weightage="20" keywordseo="Budget-2023" source="Orion">Budget 2023</keyword> has set the tone for the Indian economy’s longer-term future, or the <keyword id="13005152" type="General" weightage="20" keywordseo="Amrit-Kaal" source="Orion">Amrit Kaal</keyword>, as the government put it. </li><li>The broad consensus amongst analysts is that the government’s focus on capital expenditure and conservatism on welfare schemes has improved the quality of spending. </li><li>Going forward, analysts expect cyclical and capital-intensive sectors like infrastructure to benefit from the government’s economic direction. </li></ul>Finance minister Nirmala Sitharaman’s<a href="https://www.businessinsider.in/budget/news/income-tax-bonanza-capex-push-emerge-as-the-stars-of-budget-2023-24/articleshow/97521646.cms"> Budget 2023</a> has set the tone for the Indian economy’s longer-term future by making room for fiscal consolidation while still boosting the government’s capital expenditure investments, made possible by cutting down on populism, say analysts. This is crucial especially at a time when the global economy is expected to slow down – according to the International Monetary Fund’s latest<a href="https://www.imf.org/en/Publications/WEO/Issues/2023/01/31/world-economic-outlook-update-january-2023"> World Economic Outlook</a>, the global economy is projected to grow at 2.9% in 2023, significantly lower than the historical average of 3.8%. “The <keyword id="6358021" type="General" weightage="100" keywordseo="budget" source="Orion">Budget</keyword> has tried to strike some balance between fiscal consolidation and growth, by continuing its focus on capital expenditure and creating fiscal space for that by cutting revenue expenditure,” said a report by CRISIL. Fiscal discipline is an easy casualty in pre-election budgets, since public interest and desire to engage in populism to curry favour with the electorate is at its highest during these times, as far as budgets are concerned. However, analysts expected the government to keep its fiscal consolidation policy on track, and as such, the announcements to cut revenue expenditure did not come as a surprise. “The government continued with its thrust on <keyword id="46930" type="General" weightage="20" keywordseo="capex" source="Orion">capex</keyword>, in-line with our expectation, and did not increase welfare spending,” said a report by Goldman Sachs. <cmsannotation type="cmsannotation" annotationid="Populism out, fiscal prudence in: On expected lines, say analysts" comment="subhead" text="Populism out, fiscal prudence in: On expected lines, say analysts">Populism out, fiscal prudence in: On expected lines, say analysts</cmsannotation> Amongst the populist measures which have seen a cutdown in Budget 2023 are food and fertilizer subsidies, which have been reduced by 31% and 22% year-on-year to ₹1.97 lakh crore and ₹1.75 lakh crore in FY24 respectively. In sharp contrast, capital expenditure outlay has been increased by 33% to ₹10 lakh crore for FY24. When compared to FY19, this is a three-fold increase. Sitharaman said that the government will meet the fiscal deficit target of 6.4% of the gross domestic product (GDP) in FY23, while the FY24 target has been set at 5.9%. Subsequentially, its target for FY25-26 is more ambitious, with the fiscal deficit projected to be less than 4.5%. The claw down on populism has been received well by economists and experts, who have called this year’s budget a “force multiplier”. “In keeping with its focus on inclusive growth, the Union Budget has hiked outlays on infrastructure and agriculture which in our view would have a force multiplier impact on the economy,” said S Ranganathan, head of research at LKP Securities. Sitharaman also announced that the gross borrowings are estimated at ₹15.43 lakh crore in FY24, lower than the Economic Survey 2023 estimate of ₹15.77 lakh crore. This should also lead to a moderation in the 10-year bond yields to 7-7.1% in FY24, according to Abheek Barua, chief economist, HDFC Bank. <cmsannotation type="cmsannotation" annotationid="Preparing for a world with slower economic growth" comment="subhead" text="Preparing for a world with slower economic growth">Preparing for a world with slower economic growth</cmsannotation> With analysts expecting a slowdown in the world economy, analysts say the Budget has been set with this in mind – this is evident from the government’s smarter allocation of funds to capex while trimming down welfare schemes. The government also expects a moderation in the GDP growth going forward – the Indian economy is projected to grow 7% in FY23, further moderating to 6-6.8% in FY24. However, brokerages are relatively conservative in their estimates, pegging GDP to grow between 6% to 6.5% in FY24. “Slower global growth will hit India’s exports, while tight financial conditions in the country could weaken domestic demand, cumulatively leading to lower revenue growth compared with this fiscal,” said the CRISIL report. On the flip side, moderating inflation will help the government in reducing its food and fertilizer subsidy bills, the report added. The slowdown in exports, combined with the thrust on capex mean that the Indian economy’s growth will be aided by domestic demand instead, according to the analysts at KPMG. “The lending capacity of banks having cleaner balance sheets, the ability of companies with lower debt to borrow, and the government’s digital investments are three key growth magnets for the coming years,” the financial advisory firm said in its report. <cmsannotation type="cmsannotation" annotationid="Fiscal deficit targets ‘ambitious’, but ‘quality’ of spending better" comment="subhead" text="Fiscal deficit targets ‘ambitious’, but ‘quality’ of spending better">Fiscal deficit targets ‘ambitious’, but ‘quality’ of spending better</cmsannotation> However, analysts at Motilal Oswal noted that the government’s fiscal deficit target of 4.5% in FY25-26 could prove to be a challenge. “It is possible only and only if the government keeps its spending growth extremely muted for the subsequent two years, thus restricting its ability to support economic growth,” the brokerage said. It added that the ambitious spending cuts could result in the government falling short of its target in FY24 – either in terms of fiscal deficit, or the market borrowing target it has set for itself. “Government continues to focus on better spending quality,” the brokerage said, given that the focus was on capex over welfare measures. <cmsannotation type="cmsannotation" annotationid="‘Positive for infrastructure and capex-sensitive sectors’" comment="subhead" text="‘Positive for infrastructure and capex-sensitive sectors’">‘Positive for infrastructure and capex-sensitive sectors’</cmsannotation> The broader consensus amongst analysts is that the spending allocations have been done in a smart manner. A moderation in subsidies and allocation of more funds for capex are expected to hit two targets with a single stone, being lower fiscal deficit, and keeping the economy chugging along. “Our equity strategists view the budget as positive for infrastructure and capex-sensitive sectors, given the large capex outlays in the budgets. Our sector analysts also think that the budget is positive for industrials and infrastructure,” said a Goldman Sachs report. The government’s capex push will benefit infrastructure and capex-sensitive sectors. As far as the markets are concerned, analysts believe<a href="https://www.businessinsider.in/stock-market/news/capital-intensive-cyclical-and-value-stocks-to-continue-their-outperformance/articleshow/95659482.cms"> cyclical and capital-intensive stocks will benefit the most</a>. “We prefer BFSI, IT, Industrials, Auto and Cement while we are underweight on Energy in our model portfolio,” said Motilal Oswal, adding that going forward, factors like the upcoming policy meet of the Reserve Bank of India will be important to understand the monetary direction in the near-term. Earlier, a report by ICICI Securities had outlined how cyclical and capital-intensive stocks have outperformed since FY21. The central bank’s expectation of a revival of India Inc’s capital expenditure cycle, and now the government’s capex push has aligned the stars for cyclical and capital-intensive stocks to continue performing well. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/gautam-adani-says-it-would-not-have-been-morally-correct-to-continue-with-adani-enterprises-fpo/articleshow/97542675.cms">Gautam Adani says it would not have been ‘morally correct’ to continue with Adani Enterprises FPO</a> <a href="https://www.businessinsider.in/budget/news/income-tax-bonanza-capex-push-emerge-as-the-stars-of-budget-2023-24/articleshow/97521646.cms">Income tax bonanza, capex push emerge as the stars of Budget 2023-24</a> <a href="https://www.businessinsider.in/budget/news/indian-economy-projected-to-grow-between-6-6-8-in-fy24-says-economic-survey-2023/articleshow/97489284.cms">Indian economy projected to grow between 6-6.8% in FY24; private capex necessary for job creation: Economic Survey 2023</a>

Budget for the Amrit Kaal: Powered by capex, rooted in fiscal consolidation

<div class="image-container" style="width:620px"><div class="image"></div>AP Images</div>
Nobel Prize-winning economist Paul Krugman <a href="http://www.nytimes.com/2013/01/11/opinion/krugman-coins-against-crazies.html">addresses the debt-ceiling standoff and "trillion-dollar coin" squarely in his New York Times column today.</a>
Krugman makes a number of key points that are often ignored as both sides try to shout each other down:
<ul>
<li>The bills that need to be paid through the government's borrowing more money (after raising the <keyword id="648838" type="UNKNOWN" weightage="60" keywordseo="debt-ceiling">debt ceiling</keyword>) have already been approved by Congress. If House Republicans refuse to raise the debt ceiling, therefore, they will be reneging on paying bills that Congress has already approved. (Imagine if a business did that: Promised to pay, had the capacity to pay, and then just refused to pay because a minority owner didn't want to.)</li>
<li>Even if Congress raises the debt ceiling, President Obama will not have any new spending power. Specifically, he will not be able to spend any money that Congress has not already told him to spend.</li>
<li>If Congress does not raise the debt ceiling, President Obama might be forced to break a law no matter what. He might either break the law by not paying bills that Congress has asked him to pay, or he might break it by borrowing more money even though Congress hasn't raised the debt ceiling.</li>
<li>The "default" threat is reckless and destructive. If the country actually defaulted, which it has never done, the financial markets might collapse. And the economy would likely take a big hit. Importantly, this would hurt Republicans and Democrats alike.</li>
<li>The Republicans are approaching this negotiation like suicide bombers. As Krugman puts it: "Republicans go wild at this analogy, but it’s unavoidable. This is exactly like someone walking into a crowded room, announcing that he has a bomb strapped to his chest, and threatening to set that bomb off unless his demands are met."</li>
<li>The "trillion-dollar coin" sounds like a joke--and, at one level, it is. But it has become an important negotiating chit now that one political party is threatening to hold the country hostage by behaving like suicide bombers.</li>
</ul>
It's worth adding one point...
Some more reasonable-sounding Republicans, like Senator Rand Paul, are <a href="http://www.businessinsider.com/debt-ceiling-rand-paul-obama-spending-2013-1">now advocating an approach that won't cause the country to default...</a>on its bonds. Paul wants to introduce legislation that would force the government to pay bondholders, the military, and Social Security checks--but immediately cut spending on everything else. This, Paul says, would balance the budget overnight.
This approach sounds more reasonable.
But <a href="http://www.businessinsider.com/republican-default-would-destroy-the-economy-2013-1">as I explained here</a>, by suddenly cutting $1.1 trillion of spending, it would immediately shrink the economy by 7%.
Hundreds of thousands of government workers and contractors would be thrown out of work.
Businesses that benefit from government spending and the spending of these government employees would get whacked.
These businesses would have to lay off people.
And so on.
And, importantly, because so many people would lose their jobs, the government's tax revenue would quickly drop, thus forcing additional cuts. This is the "austerity" trap that has buried Greece and other countries in Europe.
So, although it sounds more reasonable, this approach would be devastating to the economy and country.
The bottom line is this.
The Republican Party of my parents--the party of fiscal prudence and conservatism--appears to be an ancient memory.
The current Republican Party is neither fiscally prudent nor economically literate.
Rather, it is a party controlled by extremists who either don't understand how the economy works or, worse, don't care.
It's no wonder, therefore, that so many reasonable Americans are coming to realize that Obama may have no choice but to "<a href="http://www.businessinsider.com/process-of-minting-trillion-dollar-coin-2013-1">mint the coin.</a>"
SEE ALSO: <a href="http://www.businessinsider.com/the-trillion-dollar-coin-and-the-republican-debt-ceiling-fight-2013-1">The Trillion-Dollar Coin Is No More Absurd And Outrageous Than Forcing The Country To Default</a>

If The Republicans Seriously Threaten To Default, They Will Surrender Any Claim To 'Economic Prudence And Conservatism'

<ul class="summary-list"><li>Harvard donations are down following a year of campus turmoil.</li><li>The university released its FY 2024 financial report this week.</li></ul>Harvard saw a dip in donations in the most recent fiscal year amid a wave of big-name backers <a target="_blank" class="" href="https://www.businessinsider.com/1600-harvard-alumni-may-pause-donations-anti-semitism-row-2023-11">pulling their financial support</a> after fallout from the <a target="_blank" class="" href="https://www.businessinsider.com/harvard-university-israel-hamas-what-happened-students-palestine-2023-10">university's response to the Israel-Hamas war.</a>In fiscal year 2024, which ended June 30, the Ivy League institution brought in just under $1.2 billion in cash gifts, according to a Harvard financial <a target="_blank" class="" href="https://finance.harvard.edu/files/fad/files/fy24_harvard_financial_report.pdf">report</a> released Thursday. That figure represents a nearly 15% drop since fiscal year 2023, which saw the school reap just under $1.4 billion, according to the report.The decrease in year-over-year donations at the university follows a <a target="_blank" class="" href="https://www.businessinsider.com/harvard-bill-ackman-wall-street-law-firms-growing-rift-2023-10">tumultuous year</a> of tense campus protests and high-level administrative turnover in the aftermath of the crisis in the Middle East.Some wealthy alumni publicly vowed to suspend donations to Harvard following the university's bungled response to the campus unrest that <a target="_blank" class="" href="https://www.businessinsider.com/tensions-escalate-colleges-harvard-penn-yale-over-war-israel-hamas-2023-10">spread across higher education institutions</a> nationwide last year."As the University addressed long-standing challenges that were highlighted by the events of the past year, alumni and others demonstrated both their concern and their care for the future of the institution through growing levels of support over the course of the year," Harvard President Alan Garber said in a statement shared with Business Insider on Thursday.Garber celebrated other aspects of the financial report, including a 9.6% investment return for the school's endowment which is valued at $53.2 billion — <a target="_blank" class="" href="https://www.businessinsider.com/what-is-harvard-endowment-legacy-admissions-alumni-funding-2023-7">the largest in the country.</a>Earlier this month, Garber hinted at the coming downturn in donations, telling the university's student newspaper, <a target="_blank" class="" href="https://www.thecrimson.com/article/2024/10/11/garber-disappointed-2023-fundraising-numbers/">The Harvard Crimson</a>, that the year's commitments were "disappointing" compared to prior years. He had privately warned about a decline in philanthropic gifts as far back as March, the student outlet reported.The drop in donations since FY 2023 represents the biggest dip in the last nine years, Bloomberg <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-10-17/harvard-warns-of-rising-costs-as-donations-slide-after-backlash?srnd=homepage-americas&amp;sref=yaJhKSOh">reported</a>.Chief Financial Officer Ritu Kalra lauded the university's endowment return in a conversation with Harvard's online public relations arm but cautioned that the fund is not a checking account; it's 14,600 different endowments, many of which are delegated to a specific school or program, Kalru said."That requires us to spend responsibly from the endowment, as we have to be able to support future generations of students and scholars even if we face periods of lower growth," she said.The university aims for an 8% endowment return, Kalru said, a figure that is essential in helping to make up the <a target="_blank" class="" href="https://www.businessinsider.com/harvard-elite-colleges-legacy-admissions-financial-endowments-alumni-donations-2023-10#:~:text=Harvard%20has%20the%20biggest%20college,a%20majority%20of%20its%20revenue.">gap left over after tuition revenues</a> and funding research. Tuition for an undergraduate degree at the Ivy League institution these days clocks in at $56,550, according to the university website. That number jumps to more than $80,000 when housing, food, and student services are added.For the second year in a row, Harvard's operating expenses grew faster than its operating revenues, Karlu said, adding that some of the discrepancy between the two can be explained by long-term, strategic investments, such as improved technology infrastructure and AI capabilities."Of course, the pace of our recent spending underscores the need for prudence going forward," she said. "While it has been purposeful in the short term, it won't be sustainable without a commensurate growth in revenue over the long term."Harvard remains under scrutiny more than a year after Hamas attacked Israel, setting off a flurry of campus protests and turmoil over antisemitism at several Ivy League institutions. Then-Harvard <a target="_blank" class="" href="https://www.businessinsider.com/harvard-president-claudine-gay-to-resign-reports-2024-1">President Claudine Gay resigned</a> in January following a plagiarism scandal sparked by the conflict.

Harvard donations dropped nearly 15% amid wealthy alums' vows to cut off support 

<ul class="summary-list"><li>A decade of low growth and high debt is coming, IMF chief Kristalina Georgieva said in a Thursday speech.</li><li>"Inflation is not fully defeated. Fiscal buffers have been depleted. And debt is up," she said.</li></ul>The world could soon sink into an era of depressed growth and spiraling debt, IMF managing director Kristalina Georgieva said in a <a href="https://www.imf.org/en/News/Articles/2024/04/sp041124-outlook-global-economy-policy-priorities-kristalina-georgieva" target="_blank" rel="noopener">speech</a> delivered at an Atlantic Council event."Without a course correction, we are indeed heading for 'the Tepid Twenties' — a sluggish and disappointing decade," she said Thursday. "Inflation is not fully defeated. Fiscal buffers have been depleted. And debt is up, posing a major challenge to public finances in many countries," she outlined. The IMF now expects medium-term global growth to reach just above 3% — well below historical averages, Georgieva said. That's on account of stalling productivity across economies that's chipped into growth potential:Although the US' post-pandemic economy has largely been a story of success, its rebound stands in stark contrast to a wide-spread slowdown, with low-income countries taking on most of this burden."The sobering reality is global economic activity is weak by historical standards. Prospects for growth have been slowing since the global financial crisis," she said.To counteract this, Georgieva called for policies that will decisively slash inflation and debt, allowing governments to pursue productivity-boosting policies, such as those that ramp up the geen and digital transition.While central banks are generally making headway with price stability, global debt has churned so high that some countries are at risk of falling into distress, Georgieva cautioned. Though higher debt is not a new trend, the return of high interest rates has made debt servicing a challenge across the world."In advanced economies, excluding the US, interest payments on public debt will average about 5 percent of government revenues this year," she said. "But the cost of servicing debt is most painful in low-income countries. Their interest payments are set to average about 14 percent of government revenue—roughly double the level from 15 years ago."As some countries are already facing debt distress, Georgieva called for improved restructuring programs. For all countries, she advocated for fiscal prudence, recommending a closure of tax loopholes, and improved public spending. This may be crucial, as the IMF forecasts deficits to remain too high to stabilize debt one-third of advanced and emerging economies.

Welcome to the 'tepid twenties,' a decade of sluggish growth and rising debt, IMF chief says

The <keyword id="6355187" type="General" weightage="50" keywordseo="lok-sabha" source="Orion">Lok Sabha</keyword> on Friday passed the Finance Bill 2023 without any discussion through voice vote, amid protests by the Congress-led opposition. Finance Minister <keyword id="129243" type="General" weightage="50" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> announced that a panel under the finance secretary would be set up to look into the issue of pensions. As many as 75 amendments are there in the Finance Bill, all of which were approved through voice vote, even as the Congress members protested in the well of the <keyword id="7173" type="General" weightage="80" keywordseo="house" source="Orion">House</keyword>, shouting slogans and seeking a JPC probe in the Adani matter. The opposition MPs raised slogans and showed placards saying "Allow <keyword id="5268" type="General" weightage="50" keywordseo="rahul-gandhi" source="Orion">Rahul Gandhi</keyword> to speak in the House" and "We fought the British, we will fight Modi and RSS". Meanwhile, <keyword id="679937" type="General" weightage="80" keywordseo="sitharaman" source="Orion">Sitharaman</keyword> announced while speaking on the bill, that a committee under the finance secretary would be set up to look into the issue of pensions and for evolving an approach which addresses the needs of employees, while maintaining fiscal prudence to protect common citizens. She also informed the House that the approach will be designed for adoption by both the central government and state governments. Sitharaman further said, "It has been represented that payments for foreign tours through credit cards are not being captured under the Liberalised Remittance Scheme (LRS) and they escape tax collection at source. The RBI is being requested to look into this with a view to bring credit card payments for foreign tours within the ambit of LRS and tax collection at source thereon." Soon after the finance bill was passed, the Lower House was adjourned till March 27. Opposition members could be seen tearing their placards and throwing them at the Speaker's chair after the House was adjourned. The Finance Bill 2023, gives effect to the financial proposals of the central government for 2023-24. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/digitalisation-credit-growth-government-policies-to-drive-msme-growth-say-experts/articleshow/98962354.cms">Digitalisation, credit growth, government policies to drive MSME growth, say experts</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/telecom/news/ipl-2023-jio-introduced-new-cricket-plans-providing-3gb-data-per-day/articleshow/98962965.cms">IPL 2023: Jio introduced new cricket plans providing 3GB data per day</a>

Finance Bill passed in Lok Sabha amid opposition protest

Bankers welcomed Finance Minister <keyword id="129243" type="General" weightage="80" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword>'s budget proposals as being growth accretive, and hailed the focus on capital expenditure while continuing with fiscal consolidation. On the critical question of revival in private capital expenditure, which has been lagging for several years now, private sector lender <keyword id="13918428" type="DOMAIN" weightage="20" keywordseo="kotak-mahindra-bank" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="kotak mahindra bank" meta.entityname="Kotak Mahindra Bank Ltd." meta.entityid="12161" meta.seoname="kotak-mahindra-bank-ltd">Kotak Mahindra Bank</keyword>'s whole time director <keyword id="818755" type="General" weightage="80" keywordseo="kvs-manian" source="Orion">KVS Manian</keyword> opined that it will take another 12 months to revive even though corporates have been investing off and on lately. “No bad news is good news. It is a fairly decent budget. The FM has maintained a fair balance on fiscal prudence, sustainability and ease of doing business,” Manian told PTI after the presentation of the budget. <keyword id="13222" type="DOMAIN" weightage="20" keywordseo="sbi" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="sbi" meta.entityname="State Bank of India" meta.entityid="11984" meta.seoname="state-bank-of-india">SBI</keyword> chairman <keyword id="2003868" type="General" weightage="80" keywordseo="dinesh-khara" source="Orion">Dinesh Khara</keyword> said the budget is growth accretive, fiscally prudent and consumption supportive. “The huge emphasis on capital expenditure could be the perfect recipe for a private investment cycle that is already visible. Support for MSME and Agriculture will broad base credit growth,” Khara added. He also said that the “reasonable Government borrowing numbers” will support lower interest rates and the move towards a clutter free new tax regime will significantly spur consumption. Banking industry's lobby grouping Indian Banks Association's chairman A K Goel said the increased capital expenditure could help in further increasing the demand for bank funds and the Agriculture Accelerator Fund woill also be helpful. <keyword id="686923" type="General" weightage="80" keywordseo="umesh-revankar" source="Orion">Umesh Revankar</keyword>, the executive vice chairman of <keyword id="12730794" type="DOMAIN" weightage="20" keywordseo="shriram-finance" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="shriram finance" meta.entityname="Shriram Finance Ltd." meta.entityid="13106" meta.seoname="shriram-finance-ltd">Shriram Finance</keyword> said the income tax benefits announced will boost purchasing power for middle-class consumers. "I believe the announcements made will trigger a pick-up in credit off take for small enterprises, the consumption-driven two-wheeler business and lending to transportation," he added. Non-bank lender Tata Capital's managing director and chief executive <keyword id="128186" type="General" weightage="80" keywordseo="rajiv-sabharwal" source="Orion">Rajiv Sabharwal</keyword> said the strong agricultural credit outlay, support measures, ease of doing business, and digitization drive across various sectors will improve multiple clusters within the economy. American lender Bank of America's country head Kaku Nakhate said allowing foreign banks to conduct acquisition financing from GIFT City is a welcome step and also hailed the dual budget proposal for a single window clearance for IFSCA, SEZ, <keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>, SEBI and GSTN at GIFT City. KPMG's national head of tax, <keyword id="309284" type="General" weightage="80" keywordseo="rajeev-dimri" source="Orion">Rajeev Dimri</keyword>, also welcomed Finance Minister Nirmala Sitharaman's measures for ensuring that the relaxations given to common taxpayers have not derailed fiscal math, and the government has stayed on the path of fiscal consolidation. Pointing out to the Goods and Services Tax revenue accretion over the last few months, he said the taxpayers should be credited for the performance. The budget rightly “rewards” the taxpayers for their commitment, Dimri said. LuLu Financial Holdings Managing Director Adeeb Ahamed said the budget is focussed with equal focus on traditional and emerging sectors. Adeeb, who has significant investments in India's financial services sector through LuLu Forex and LuLu Finserv, said the move to ramp up the credit guarantee scheme for MSMEs will give a fillip to enabling faster access to financial services. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/first-impressions-samsung-galaxy-s23-s23-plus-and-s23-ultra-go-heavy-on-photography-and-gaming/articleshow/97532856.cms?utm_source=social_sticky_amp&amp;utm_medium=social_sharing&amp;utm_campaign=Click_through_social_share">First Impressions: Samsung Galaxy S23, S23 Plus, and S23 Ultra bet big on photography and gaming</a> <a href="https://www.businessinsider.in/tech/mobile/news/new-patent-suggests-that-apple-could-bring-a-foldable-iphone-with-a-self-healing-display-in-the-future/articleshow/97302738.cms">New patent suggests that Apple could bring a foldable iPhone with a self-healing display in the future</a>

Bankers say private capex will take one more year to revive

<ul><li>It’s gratifying that the government assured it will not diverge from the original spirit of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003. </li><li>Willingness and ability to invest comes from higher disposable incomes. <keyword id="14925728" type="General" weightage="20" keywordseo="budget-2023-24" source="Orion">Budget 2023-24</keyword> has taken several initiatives to boost disposable income levels of the Indian tax payers. </li><li>The capex outlay of ₹10 trillion and the railway capex allocation of ₹2.4 trillion is likely to be value accretive for several sectors like cement, EPC contractors, railway wagons, signalling systems. </li></ul>Stock markets expect a macro environment that promotes economic <keyword id="42546" type="General" weightage="20" keywordseo="growth" source="Orion">growth</keyword>, without stretching the fiscal deficit. The Union Budget managed this tightrope rather well. Budget 2023-24 reiterated the first advance estimate of FY23 GDP at 7%, which positions India as the fastest-growing large economy. The Union Budget announced an agricultural credit target of ₹20 trillion for FY24, in a bid to boost agricultural growth and farm incomes, while the capex outlay has expanded 33% to ₹10 trillion or 3.3% of GDP. Effective capex is ₹14.5 trillion or 4.5% of GDP. If growth is one side of the story, the other side is fiscal conservatism. The FM confirmed that FY23 will see the government sticking to its 6.4% fiscal deficit target. Along expected lines, the fiscal deficit for FY24 has been cut by 50 basis points to 5.9%. Budget has also provided a glide path to reach a 4.5% fiscal deficit by 2025-26. This glide path should serve to boost the confidence of global investors and rating agencies about the India story. What is gratifying is that the government has assured it will not diverge from the original spirit of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003. More disposable income in the hands One of the key triggers of capital market robustness is the willingness and ability to invest. That comes from higher disposable incomes. Budget 2023-24 has taken several initiatives to boost disposable income levels of the Indian tax payers. The budget has acceded to the long standing demands of raising basic exempt incomes. While the Budget did not alter the rebate system, it has raised the basic exemption limit to ₹3 lakh and effectively made income up to ₹7 lakh fully tax-free. This would still be in the form of rebate and subject to signing up for the next tax regime. Budget 2023-24 has sought to make the new tax regime more attractive by raising the basic tax free income. While most exemptions are being done away with, standard deduction will continue in the new tax regime. This is likely to make the new tax regime more attractive and also put more disposable income in the hands of people. The Budget also addressed the demands of higher income groups by cutting the peak effective tax rate from 42.7% to 39%, to bring it closer to global benchmarks. The above tax changes are likely to have a positive impact on capital market robustness. Sectoral gainers from Union Budget 2023-24 There are several gainers from Union Budget announcements. <ul><li>The capex outlay of ₹10 trillion and the railway capex allocation of ₹2.4 trillion is likely to be value accretive for several sectors. These include manufacturers of cement, EPC contractors, railway wagons, signalling systems etc. </li><li>Investment of ₹75,000 crore in 100 critical transport infrastructure projects will boost steel, aluminium and logistics companies. The ₹10,000 crore outlay for urban infrastructure and higher focus on affordable housing will benefit cement, construction and home finance. </li><li>The government decision to set up 100 labs to develop applications for 5G services will be positive for telecom and fibre optic companies. The enhancement in agricultural credit limit to ₹20 trillion will be a boost for Indian companies into seeds, tractors, farm equipment etc. </li><li>The reduction in customs duty on acid fluorspar will benefit fluorine chemistry players while the focus on organic and micro farming will boost fertilizer and agrochemical companies. Reduced import duties on shrimp feed will benefit shrimp farming companies while lower customs on lithium ion equipment will favour new age battery companies. </li></ul>Overall, this is a growth oriented budget with focus on fiscal prudence. Both consumption and capex, the twin engines of growth are set to fire. This is a twin engine budget. (The author is the Chairman of IIFL Securities)

Budget to boost confidence of global investors and rating agencies on the India story

<ul><li>Stock market investors are expecting a balanced <keyword id="6358021" type="General" weightage="100" keywordseo="budget" source="Orion">Budget</keyword> with a focus on job creation, and increased spending on infrastructure.</li><li><keyword id="464286" type="General" weightage="50" keywordseo="narendra-solanki" source="Orion">Narendra Solanki</keyword>, Head- Equity Research Anand Rathi Shares &amp; Stock Brokers, said that investors are expected to remain focused on three key factors from the pre-election year <keyword id="12743893" type="General" weightage="20" keywordseo="budget-2023" source="Orion">Budget 2023</keyword>.</li><li>History suggests India's shares are likely to see muted trading ahead of the union budget reading, usually held on February 1.</li></ul>Stock market investors are expecting a balanced Budget with a focus on job creation, increased spending on infrastructure, reigning in the deficit, and bringing the economy back on track, experts said on Wednesday. Stock markets have been subdued in the run-up to the Union Budget with BSE's benchmark Sensex is almost flat so far this month. Even the corporate earning season failed to excite the markets, while some indices like IT and bankex have seen some positive movements. The muted performance of the markets could be due to Foreign Portfolio Investors (FPIs) moving funds out of India as they are looking for emerging markets with cheaper valuations. They have taken out over Rs 16,500 crore from domestic equities so far this month. Moreover, inflation and possible global recession continue to play on investors' minds. Narendra Solanki, Head- Equity Research Anand Rathi Shares &amp; Stock Brokers, said that investors are expected to remain focused on three key factors from the pre-election year Budget 2023, firstly equity investors are expecting a uniform tax structure for capital gains which might help taxpayers to have more disposable income. Secondly, investors will be looking for fiscal consolidation which is necessary for financial stability in the economy and thirdly, investors are contemplating policy reforms to rationalise bottlenecks for growth such as subsidies, a clear roadmap for disinvestment targets and expediting the much-awaited PSU privatisation or consolidation, he added. History suggests India's shares are likely to see muted trading ahead of the union budget reading, usually held on February 1. Overall, the pre-budget rallies were seen in six out of the last 10 years, and post-budget, the market declined six times out of the past 10 years. Moreover, the National Stock Exchange's (NSE) benchmark index Nifty 50 has fallen seven times on Budget days. The Budget is a presentation of the state of affairs of the government's books along with anticipated expenses and income for the coming year. It is generally believed that if a Budget includes measures that are seen as positive for businesses and the overall economy, it may have a positive impact on stock markets. On the other hand, if a Budget includes steps that are seen as negative for businesses and the economy, it may have a negative impact on stock markets. Additionally, announcements or changes in interest rates, taxes and government spending can also impact stock markets. "The impact of the <keyword id="2407175" type="General" weightage="20" keywordseo="upcoming-budget" source="Orion">upcoming Budget</keyword> would depend on the actual budget proposal and markets will be keenly watching the fiscal deficit for FY24. A figure above 6 per cent will disappoint the market. But, this is unlikely," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said. He further said that a proposal that can have a negative impact on the market can be a possible hike in the capital gains tax. Any positive news which will have a meaningful impact on the economy or leave more disposable income in the hands of the salaried class and/or the corporates will push the markets higher, Sumit Chanda, Founder and CEO, JARVIS Invest, said. "Any changes to the tax slab of the salaried class or any incentive to the corporates for capex or reduced taxes will be viewed positively and one can expect the markets to rally post the Budget," he added. In addition, push to private and government spending, disinvestment, expanding the PLI (Product-linked incentive) scheme and relief in tax slabs are some of the measures that may have a positive impact on the market, Kamlesh Shah, President, ANMI, said. Geojit's Vijayakumar believes that the impact of the Budget will be short-lived. Market trends would be dictated more by developments in the global economy, particularly in the US. If the Fed commentary after the February 1 meeting is dovish and data shows inflation declining in the US, markets will rally. Amar Ambani, Head - Institutional Equities, Yes Securities, said the government is likely to be modest in its asset monetization targets, unlike the lofty projections of the prior Budgets. In all probability, India's GDP growth target would be a low double-digit affair amid a challenging global backdrop, and the government would not stray from its fiscal prudence roadmap. According to market experts, healthcare, fertilizer, infrastructure, defence insurance, manufacturing, digitalisation (IT), communication, education, Small and Medium Enterprises (SMEs) etc are sectors that are expected to benefit from the Budget. SEE ALSO: <a href="https://www.businessinsider.in/science/space/news/nasa-collaborates-with-spinlaunch-to-test-an-innovative-mass-accelerator-launch-system/articleshow/90772382.cms">NASA collaborates with SpinLaunch to test an innovative mass accelerator launch system — a slingshot to send payloads to space</a> <a href="https://www.businessinsider.in/science/space/news/astronomers-may-have-just-found-the-most-distant-astronomical-object-ever-observed/articleshow/90703688.cms">Astronomers may have just found the most distant astronomical object ever observed</a>

Stock market investors expect balanced budget, focus on job creation, infra spending

<ul><li>Bengaluru-based startup <keyword id="467634" type="General" weightage="20" keywordseo="verse" source="Orion">Verse</keyword> Innovation has decided to lay off 5% of its workforce or 150 employees to cut costs and streamline operations. </li><li>It also announced pay cuts for 11% of its employees, who are earning ₹10 lakh per annum or more. </li><li>This has happened months after the startup raised $800 million as fresh funding in April this year.</li></ul>VerSe Innovation, the parent company of short video platform Josh and news aggregator Dailyhunt, has become the latest unicorn that has resorted to retrenchments this year, after Byju’s, Udaan and Zomato. The co-founders of the Bengaluru-based startup, Virendra Gupta and Umang Bedi, announced in a town hall meeting that it has decided to lay off 150 employees or 5% of its workforce, <a href="https://techcrunch.com/2022/11/28/verse-innovation-layoff-salary-cut/?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAKe8ojKWqU0ImCcT4s4MwaVYq5ygyPzZhY3aM6nNl-DwFl9s2r0Wagyd6fNEoNL6uXnBiWRFKTSceuX2G_AUKLr7Ny6r8JprFJX9lg5l5mjMGX4l1bWEmEF2pOC0-ZtsbTCCFGWMds38OjymS1_XaoY2qGgAhJ73igSRtCLaYA4B">according to Techcrunch</a>. They also announced an 11% pay cut for the remaining employees who are earning ₹10 lakh per annum or more. “Given the current economic climate, like other businesses, we’ve evaluated our strategic priorities. Considering the long-term viability of the business and our people, we have taken steps to implement our regular bi-annual performance management cycle and made performance and business considerations to streamline our costs and our teams, <a href="https://techcrunch.com/2022/11/28/verse-innovation-layoff-salary-cut/">said</a> Umang Bedi, co-founder of VerSe Innovation, in a prepared statement. This move comes months after the startup raised $800 million as fresh funding in April this year, led by CPP Investments. Ontario Teachers’ Pension Plan Board, Sumeru Ventures and Luxor Capital, Sofina Group and Baillie Gifford also participated in the funding round. Bedi further said that the next year will be tough and the measures taken will help the company to sustain in the market. “We have exercised fiscal and employee prudence, and implemented an 11% salary cut for individuals with annual salaries of ₹10 lakh or more,” Bedi added. According to media <a href="https://www.moneycontrol.com/news/business/startup/dailyhunt-and-josh-parent-verse-lays-off-150-staff-announces-company-wide-pay-cuts-9615571.html">reports</a>, the startup’s losses widened to ₹2,563 crore in FY22, even as its operating revenue grew by 46% to ₹965 crore. Backed by <keyword id="6355629" type="General" weightage="20" keywordseo="google" source="Orion">Google</keyword> and <keyword id="10387" type="General" weightage="20" keywordseo="microsoft" source="Orion">Microsoft</keyword>, the company became a unicorn after it raised $227 million from Microsoft, Sequoia, Matrix Partners India, Qatar Investment Authority and others in November 2020. Tech majors like Amazon, Meta, Twitter and Salesforce have been cutting jobs leaving thousands of techies jobless, globally. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/icici-bank-launches-digital-lending-solution-ilens-powered-by-tcs/articleshow/95849140.cms" style="">ICICI Bank launches digital lending solution iLens, powered by TCS</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/telecom/news/reliance-jio-users-are-reportedly-unable-to-call-and-send-messages/articleshow/95846445.cms" style="">Reliance Jio users tweet about network issues, unable to call and send messages</a>

Google, Microsoft backed VerSe Innovation sacks 150 employees, cuts pay for employees earning ₹10 lakh or more

<ul><li>Income tax bonanza for the salaried class and the government’s capital expenditure push have emerged as the stars of Budget 2023-24.</li><li>While the income tax exemptions are expected to increase disposable incomes of taxpayers and thereby boost demand, the capex push is aimed at promoting growth and increasing job opportunities, say experts.</li><li>The government also announced a slew of measures for the agriculture and green energy sectors, promoting the use of technology to boost output and transition to green energy.</li></ul>An upward revision in income tax slabs and a continued push on capital expenditure investments emerged as the key highlights of the Union Budget 2023-24. While the revised tax slabs under the new tax regime will benefit the middle-class and salaried individuals, the government also announced a 33% increase in its capital investment outlay for FY24 to boost growth and promote job creation. “We are steering an ambitious people-centric agenda to address global challenges and to facilitate sustainable economic development,” finance minister Nirmala <keyword id="679937" type="General" weightage="80" keywordseo="sitharaman" source="Orion">Sitharaman</keyword> said, announcing the budget. Despite an increase in capital expenditure outlay, the government has continued on its path of fiscal consolidation. Sitharaman said that while the government will meet the fiscal deficit target of 6.4% in FY23, it has been reduced to 5.9% in FY24, and further below 4.5% in FY 25-26. Sitharaman also announced that the gross borrowings are estimated at ₹15.43 lakh crore in FY24, lower than the Economic Survey 2023 estimate of ₹15.77 lakh crore. “This budget is a Bahubali budget. With one arrow multiple targets are shot. Fiscal prudence is achieved with lower deficit and path set till FY26. Consumption is supported through tax cuts. Investment outlay is enhanced. Numbers are realistic or conservative to enhance the credibility,” said Nilesh Shah, managing director, Kotak Mahindra Asset Management Company. <cmsannotation type="cmsannotation" annotationid="Here are all the major announcements of Budget 2023-24" comment="subhead" text="Here are all the major announcements of Budget 2023-24">Here are all the major announcements of Budget 2023-24</cmsannotation> Slabs for income tax computation enhanced under the new regime: Under the new income tax regime, individuals with an annual income of up to ₹9 lakh will now have to pay an income tax of ₹45,000, which is an effective tax rate of 5%. The government has also increased the limit for rebate under section 87A of the Income Tax Act to ₹7 lakh from ₹5 lakh earlier. The following are the new tax slabs: <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Slab </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tax rate </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹0-3 lakh </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nil </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3-6 lakh </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹6-9 lakh </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹9-12 lakh </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">15% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹12-15 lakh </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% </td></tr><tr><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹15 lakh and above </td><td style="border-left:solid #000000 0.6000000000000001pt;border-right:solid #000000 0.6000000000000001pt;border-bottom:solid #000000 0.6000000000000001pt;border-top:solid #000000 0.6000000000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> In addition to this, there’s good news for salaried individuals as well, with the standard deduction being hiked to ₹52,500 from ₹50,000 earlier. Further, the tax exemption limit for leave encashment has been raised from ₹3 lakh to ₹25 lakh. Lastly, the new income tax regime will be applicable by default going forward. However, assessees will have an option to opt out and file their returns under the old regime. “More money in the hands of the middle class will have a cascading effect across the economy which needs this push as we continue to depend on domestic demand to beat the global uncertainty,” Sanjeev Krishan, chairperson, PwC in India. Capital expenditure outlay gets a major boost: In a bid to promote growth and job creation, the government has announced a 33% increase in capital expenditure outlay to ₹10 lakh crore for FY24, or about 3.3% of the gross domestic product (GDP). The capex outlay for FY23 is estimated at ₹7.5 lakh crore. Sitharaman outlined that infrastructure is one of the seven priorities of the government, which is now backed by the 33% increase in capex outlay for this segment. Overall, the government’s capex outlay has increased over three-fold from ₹3.1 lakh crore in FY19 to ₹10 lakh crore in FY24. Here’s how the government’s capex spending has trended since 2019 <div type="image" title="Capex spending FY19-FY24." msid="97524051" hostid="261" sizebytes="16064" caption="&amp;lt;p&amp;gt;Indian government&amp;#39;s capex spending trends since FY19&amp;lt;/p&amp;gt;"></div> “This is a positive development for domestic commercial vehicle space and more so for medium and heavy commercial vehicle (M&amp;HCV) domain,” said ICICI Direct. The government announced an allocation of ₹2.7 lakh crore for roadways and ₹2.4 lakh crore for railways. “A 33% increase in capital expenditure to ₹10 lakh crore, the highest ever, will go a long way in building roads, ports, and airports — crucial for making India a reliable investment destination. Investment of ₹2.4 lakh crore in railways is commendable,” said Anand Rathi, founder and chairman, Anand Rathi Group. Apart from this, Sitharaman also announced an outlay of ₹10,000 crore per annum to develop urban infrastructure. The government has also announced a 66% increase in funding for the PM Awaas Yojana to ₹79,000 crore in FY24, which will benefit engineering, production and construction companies. Further detailing the infrastructure push, Sitharaman said that the government has identified 100 critical transport infrastructure projects for steel, ports, fertilizers and other sectors with an investment outlay of ₹75,000 crore, which includes a private sector investment of ₹15,000 crore. Agri Accelerator Fund to encourage innovation: In a bid to promote the adoption of technology in the agriculture sector, the government announced a new Agri Accelerator Fund to promote agri-tech startups in rural areas, with a cluster-based and value chain approach through public-private partnerships. “The proposal to set up an Agri Accelerator Fund for agri-tech startups is a welcome move, and was much anticipated. Agri-tech startups who are focusing on improving the market reach for agricultural products and produce, as well as last mile delivery of products to farmers should benefit from this move,” said Raj Ramachandran, partner, JSA. Sitharaman also announced a slew of measures for the agriculture sector, which are: <ul><li>Increase in agriculture credit target to ₹20 lakh crore, with a special focus on animal husbandry, dairy and fisheries.</li><li>A new sub-scheme of PM Matsya Sampada Yojana with a targeted investment of ₹6,000 crore to further enable activities of fishermen and fish vendors.</li><li>Computerisation of 63,000 primary agricultural credit societies with an investment outlay of ₹2,516 crore.</li></ul>Green energy ambitions get a boost: The government also announced a slew of measures to encourage and promote green energy in India, including ₹35,000 crore priority capital for transition from fossil fuels to green energy. Of this, the specific outlay for National Hydrogen Mission has been set at ₹19,700 crore. The government has set a target of 5 million metric tonnes of hydrogen production capacity by 2030. Key players in the hydrogen space are Mukesh Ambani and Gautam Adani. Their green energy bets, primarily based on green and blue hydrogen, amount to $125 billion. <cmsannotation type="cmsannotation" annotationid="‘Force multiplier’ budget, say analysts" comment="subhead" text="‘Force multiplier’ budget, say analysts">‘Force multiplier’ budget, say analysts</cmsannotation> Overall, the budget has been well-received by experts, with the broad consensus being that this is a growth-oriented budget. “Growth with fiscal consolidation continues to be the continuing theme with capital expenditure at 3.3% of GDP while being committed to the long term 4.5% deficit target. Providing more incentives under the new tax regime to middle class Indians, will also widen the net of those who can invest,” said Radhika Gupta, MD and CEO, Edelweiss Asset Management. Sensex zoomed 1,180 points reacting to the tax announcements made by the government. The tax exemptions under the new regime will increase the disposable income in the hands of taxpayers, according to ICICI Securities, helping boost demand. “In keeping with its focus on inclusive growth, the Union Budget has hiked outlays on infrastructure and agriculture which in our view would have a force multiplier impact on the economy,” said S Ranganathan, head of research at LKP Securities. According to economists, the reduction in fiscal deficit targets for FY24 through FY26 will also offer relief for bond markets, with the 10-year bond yield projected to moderate to 7-7.1% in FY24, according to Abheek Barua, chief economist, HDFC Bank. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/sensex-zooms-as-finance-minister-delivers-tax-bonanza-to-middle-class/articleshow/97510050.cms">Sensex zooms 1,180 points as FM delivers tax bonanza to middle-class</a> <a href="https://www.businessinsider.in/budget/news/budget-2023-24-nirmala-sitharaman-speech-highlights-and-updates/articleshow/97512649.cms">Budget 2023-24 highlights: Those with income below ₹7 lakh a year need not pay income tax</a> <a href="https://www.businessinsider.in/budget/news/government-to-set-up-three-centres-of-excellence-in-artificial-intelligence/articleshow/97520242.cms">Budget 2023 gives a boost to artificial intelligence – government to set up three centers of excellence</a>

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