Indian Budget: India's inflation is low and stably moving to target; uncertainties remain
Fiscal Policy and Economic Stability
- Fiscal deficit seen at 4.9% vs 5.1% in interim budget.
- To reduce fiscal deficit to below 4.5% by FY26.
- Gross borrowing target retained at interim budget target of INR 14.01tln.
Infrastructure and Investment
- Will maintain strong fiscal support for infrastructure investments in the next 5 years.
- To promote the INR for overseas investments.
Tax Policy and Import Duties
- To further simplify rationalise goods and services tax.
- To review import tax structure over the next six months.
- Propose to undertake rate structure of import duties.
- To cut import tax on mobile phones and reduce import tax on some mobile parts.
- Scrap import duty on 25 critical minerals.
- To reduce import tax on gold bars and silver bars to 6%.
- To raise import duty on some telecoms equipment.
- To review Income Tax Act.
- Long-term capital gains tax to be 12.5%.
- Securities Transactions Tax on futures and options to be raised to 0.02% and 0.01% respectively.
Rural Development and Agriculture
- Announces provisions of INR 2.66tln for rural development.
- Is to fast track growth of the rural economy.
- To focus on productivity, resilience and agriculture.
Employment and Job Creation
- Large scale jobs are to be a policy goal.
- Employment incentives are to be launched under three schemes.
Urban Development
- To focus on urban development.
Energy Transition
- To support energy transition too expand list of exempted goods.
Reaction details (07:00)
- Nifty Fast Moving Consumer Goods index (FMCG) hit record high as the government announced schemes to support the rural economy.
- India's 10-year bond yield fell to the lowest since April 2022.
- Modest upticks seen in spot gold and silver whilst Indian jewelry stocks rose as the government announced a reduction to import tax on gold and silver bars.
- Nifty 50 fell after the government announced changes in capital gains tax.
23 Jul 2024 - 06:36- MetalsImportant- Source: Newswires
Subscribe Now to Newsquawk
Click here for a 1 week free trial
Newsquawk provides audio news and commentary for over 15,000professional traders and brokers worldwide. Services include:
- Real-time audio coverage from 0630 to 2200 London time plus Asia-Pac 2200 to 1000 London time
- Teams of analysts covering equities, fixed income, FX, energy, and metals markets
- Real-time scrolling news service with instant analysis
- Daily and weekly pre-market research and calendars
- Video updates covering near-term key risk events & primary trading themes
- One-to-one chat with our expert analysts