Budget expectations: Will fiscal discipline trump populist demands?
One shouldn’t be too surprised if the govt tilts in favour of fiscal discipline given that this has been an equally difficult year for the govt too
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Amit Singhania,
Suyash Sinha
The govt is more likely to adopt a balanced approach that marries fiscal discipline with some measures to boost consumption
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Many are touting Union Budget, 2021 as a seminal one that will hold the key to several of the problems that India’s economy currently faces. But, a more discerning perspective of the nation’s present economic state suggests that the government is more likely to adopt a balanced approach that marries fiscal discipline with some measures to boost consumption. In fact, one shouldn’t be too surprised if the government tilts in favour of fiscal discipline given that this has been an equally difficult year for the government too.
Updated Feb 01, 2021 | 12:15 IST
Deposit insurance is of Rs 5 lakh. We will streamline provisions that depositors can get easy and time-bound access to their kitty in stressed banks, said FM Nirmala Sitharaman. FM proposes further recapitalisation of Rs 20,000 crore for PSBs in FY21-22
New Delhi: Finance Minister Nirmala Sitharaman in her Union Budget 2021-22 speech announced further recapitalization of Rs 20,000 crore for Public Sector Banks (PSBs) in the Financial Year 2021-22. FM further announced that the proposal to allow depositors of stressed banks to access up to Rs 5 lakh as per DICGC. Deposit insurance is of Rs 5 lakh. We will streamline provisions that depositors can get easy and time-bound access to their kitty in stressed banks, said FM Sitharaman.
February 01, 2021
× Debt financing of real estate investment trusts (REITs) and infrastructure investment trusts (InVITs) announced in the Union Budget is expected to be a gamechanger for the fundraising requirements in the real estate sector.
Ashoo Gupta, Partner, Shardul Amarchand Mangaldas & Co said: “Debt financing of real estate investment trusts (REITs) and infrastructure investment trusts (InVITs) will be enabled by making a suitable amendment this can be a gamechanger for the fundraising requirements of these entities and thereby enable greater transaction in completed brownfield projects.”
Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers International India said: “Providing flexibility to REITs and Invits to raise more debt capital would provide additional funds to acquire assets and this could lead to faster closure of transactions with lower cost.”
Budget proposes to hike FDI in insurance to 74%
February 01, 2021
Insurers welcome the move as insurance is a capital-intensive business
Finance Minister Nirmala Sitharaman has proposed to enhance the foreign direct investment (FDI) limit in insurance to 74 per cent along with relevant safeguards.
As part of the Union Budget 2021-22, she has proposed to amend the Insurance Act to increase the permissible FDI limit to 74 per cent in insurance companies and allow foreign ownership and control with safeguards.
At present, FDI up to 49 per cent is permitted in insurance companies.
“Under the new structure, the majority of directors on the board and key management persons would be resident Indians with at least 50 per cent of the directors being independent directors and a specified percentage of profits being retained as general reserve,” Sitharaman said.
Union Budget 2021 | Affordable, rental housing push likely to boost residential demand during COVID-19 pandemic
Infrastructure initiatives include MetroLite and MetroNeo to be launched for Tier-2 cities and peripheral areas of Tier-1 cities
Affordable and rental housing got a major push in Budget 2021 with the government extending the period for extra deduction of Rs 1.5 lakh available for loans up to March 31, 2022, a move expected to boost housing demand amid the ongoing COVID-19 pandemic.
Amid the prolonged pandemic scenario, this extension was needed to support the latent housing demand in the country, experts said.
Infrastructure projects, especially Metro, also received a shot in the arm. This, said real estate experts, will act as a strong catalyst in driving real estate in urban areas.