Business Today 24-Feb-19

With the third shahi snan on Mauni Amavasya on Monday, Feb 4, 2019 attrading more than three crore devouts for a holy dip at Sangam during the Kumbh 2019, the 49-day event runs into its third week. Kumbh, the grand congregation of humanity, had started with the royal bath of saints and seers at the Triveni Sangam on Makar Sankranti, 15th January. Sanatani devouts have for ages been assembling here and at three other places - Haridwar, Nashik and Ujjain - to have holy bath in sacred waters during auspicious planetary combinations. The belief is that bath during Kumbh relieves people of all worldly pains and pangs, absolves them of their known and unknown sins and leads to salvation after end of their lives as human beings in this material…

AS BUDGETS GO, this one has a perfect focus – alleviating rural distress. That is also one of the two biggest problems facing India’s population. (The other one is jobs – but as the government has found out, high GDP growth is no longer leading to higher job creation.) In the run-up to the general elections, having recently lost three state elections because of farmer disenchantment, the government decided to try the last weapon in its armoury to woo them. It opted for a massive income support scheme – which would see each farmer with a landholding of less than two hectares get ₹6,000 in his account in a year. This is expected to benefit 12 crore small-and medium-farmer families. In fact, the government decided to bite the bullet, miss…

WHEN HE PRESENTED the Interim Budget 2019/20, Piyush Goyal failed to list any specific job creation statistics. Unlike the previous Budget where Arun Jaitley claimed that the Modi government created seven million formal jobs, all of Goyal’s job-related references were general – mostly about emerging opportunities. The government’s silence on the jobs front is no surprise. Accused of suppressing inconvenient data for long, the Modi government is yet to release the results of the Labour Ministry’s annual Employment and Unemployment Survey 2016/17 that many believe would have endorsed the anecdotal evidence of job losses due to demonetisation. The delayed publishing of the National Sample Survey Organisation’s (NSSO) Periodic Labour Force Survey 2017/18 only strengthens that suspicion. Then, there’s the resignation of two members of the National Statistics Commission – it…

IS INDIAN GDP data going the Chinese way? A day before Interim Budget 2019/20, the Central Statistics Office released surprising GDP growth numbers - 8.2 per cent for 2016/17 and 7.2 per cent for 2017/18 – when the economy was hit by both demonetisation and GST. The earlier numbers were 7.1 per cent and 6.7 per cent, respectively. The revision is due to new agri and industrial production, government expenditure data. “We are slightly surprised by the extent of the revision in construction and real estate,” says Kotak’s research team. These sectors were hit by the note ban and GST. SBI’s research department said, “A surge in consumption expenditure in 2016/17 is possibly because of people unlocking cash and converting it to purchases.” The revised data scores a point that average…

THE INTERIM BUDGET announced single-window clearances for Indian filmmakers who shoot in India, a privilege extended to international studios since 2015. Foreign studios, however, don’t view India as a filmmakers’ haven since we lack the talent and infrastructure global entities seek for production, and post-production work. The single window clearance will indeed make life easier for domestic filmmakers who currently need as many as 50-60 clearances from various authorities before they begin shooting for a film. The problem is India still doesn’t offer tax incentives for shooting in India, unlike many European countries and Australia. No wonder the Indian film fraternity prefers to shoot abroad – getting not just a cost advantage, but also access to high quality infrastructure and production talent. The question therefore in this case is not…

EXPENDITURE ON INDIA’S defence sector is expected to cross ₹3 lakh crore – for the first time ever – in 2019/20, interim finance minister Piyush Goyal announced in the last Budget speech of the current government. The minister also said that the government spent ₹35,000 crore on the One Rank One Pension scheme it introduced in 2015. But a closer look at defence expenditure numbers show that the government will end up spending more on pensions than bolstering India’s defence capabilities. For instance, the government is planning to spend ₹1.08 lakh crore on pensions as compared to ₹93,982 crore on capital outlay (capital spent on new equipment, aircraft et al). This has been the trend in previous financial years as well – 2017/18 and 2016/17. Although defence expenditure as a…