Do it yourself

 The final budget presented by the finance minister has shaken the market cart, and added material uncertainty to policy making. The efforts to minimize uncertainty after demonetization have thus been negated to some extent. As has been the practice in the past few years, the budget speech of the finance minister materially diverges from the actual budgetary provisions. By changing the capital gain tax regime and mentioning that they are working on a new Income tax law, they have forced the stakeholders to build-in a higher degree of policy uncertainty and unmindful regulatory provisions in their business and investment plans. Claiming simplification while introducing new complications (e.g., more transactions under TDS/TCS) has been a hallmark of the taxation policy in recent years. Use of technology is invariably claimed as an achievement, as if there is an option. The level of uncertainty could be gauged from the fact that the priorities outlined in this budget are materially ...

  Expectation is a strange animal. More you beat it, the stronger it rises. Consistent underachievement is perhaps the only way to kill it. This is that time of the year when everyone gets an opportunity to express their wishes to the finance minister. Even though there is no empirical evidence to suggest that the finance minister would oblige even a significant minority of aspirants – not because she does not want to; but simply because she cannot. Contours of the annual union budget It is important to note that the finance minister of India is like the CFO of a business corporation. Her job is to keep account of the receipts and expenditure of the government; manage resources necessary for executing the plans approved by the Cabinet; ensure optimum utilization of available resources; and keep adequate provision for meeting the contingencies. She is accountable to all the stakeholders, insofar as the transparency of accounts is concerned. Her discretion is however limited ...

  “Progress lies not in enhancing what is, but in advancing toward what will be.” —Khalil Gibran (Lebanese Thinker Poet, 1883-1931) Allaying all fears, the finance minister presented a brave budget. She took all Covid-19 blows on (fiscal) body and refused to yield to fiscal pressures. She prudently refused to indulge in allurements of raising resources through additional taxation. The Budget for FY22 is continuation of various measures announced during 2020 to support the economy. The recognition of the need of new economy (ecommerce workers, startups, e-learning, new education techniques etc.) and willingness to let go the control over even strategic CPSEs are signs of pragmatism. This is perhaps the only budget in independent India that does not propose to make any change in income tax rate structure. It is now upon the administrative ministries, departments and state governments responsible for executing the proposals. Like Rishabh Pant, who went to Australia with a poor r...

Post budget presentation of Union Budget for FY21 on 01 February 2020, I had cautioned the investors to avoid becoming victim of their own expectations ( Mr. Market victim of his own expectations ). From the reactions over the mega Rs20.97trn stimulus package, coming from the various market participants, it appears that perhaps no one has heeded to my suggestions. The market participants in particular, and the public in general, appear disappointed, dismayed and disillusioned by the policy measures announced by the finance minister in five tranches last week. The set of policy measures has been analyzed threadbare by numerous experts, commentators, and various stakeholders, using zillions of gigabytes of data. Had the newspaper being published regularly, millions of reams of paper would have also been used by now in analysis and criticism of the set of policy measures announced. I shall therefore refrain from further analyzing the series of announcements made by the financ...

This morning I see the finance minister as CFO of a financially stressed company. She faces all the problems a highly stressed business could in bad times. For example— The business of the company has witnessed considerable slow down in past few years. The revenue has shrinked and losses have increased. The ability to modernize and expand has been constricted as stressed balance sheet and poor cash flows are hindering capital expenditure. The investors are reluctant to commit more capital as the return on past tranches of investments has been poor. The company is not able to sell non-core businesses and assets to mobilize the resources needed to sustain the ongoing capex as well as the current repayment obligations. The competitors have snatched market share with competitive pricing and better delivery. The ability to retain talent has been hampered due to a variety of constraints. The rating agencies have put the company on watch list for a possible down ...