What does a deeper look at the Budget 2024 maths reveal?

Summary

In this episode of Mutra, Deputy Editor Sharad Ragavan and Associate Professor Radika Pande dissect the intricacies of the recent budget. They discuss the balance between fiscal consolidation and expenditure, with a focus on increased revenue expenditure and steady capital expenditure. The conversation spans tax revenue projections, the quality of government spending, and the fiscal deficit target set at 4.9%. They also touch on the government's shift towards reducing the debt-to-GDP ratio and the implications of factor market reforms.

Takeaways

• 📈 The budget projects an increase in revenue expenditure by 55,000 CR compared to the interim budget, while keeping capital expenditure the same at 11.11 lakh CR.
• 💼 The government received a higher-than-anticipated dividend from the RBI, providing additional fiscal space of around 1.5 lakh CR, which influenced the budget allocations.
• 🏢 There's a strategic balance in the budget aimed at accelerating fiscal consolidation while also boosting spending, with a tilt towards the former.
• 💼 The employment incentive scheme and PM AAS yoga are among the areas receiving increased funding in the budget.
• 📉 The net tax revenue projection for the central government has been reduced by around 18,000 CR compared to the interim budget, with states receiving a larger share.
• 📊 The gross tax revenue projections for the year are similar to the previous financial year, with a slight reduction in corporate tax expectations due to subdued company profits.
• 🌐 The nominal GDP growth assumption is conservatively set at 10.5%, which could provide a cushion for tax revenue if it surpasses this estimate.
• 🔽 The fiscal deficit target for the year is set at 4.9% of GDP, with plans to reduce it further to 4.5% in the next financial year.
• 📉 There's a reduction in the government's reliance on short-term borrowing, which could help in reducing market yields.
• 🌐 The government is shifting its focus from just meeting fiscal deficit targets to reducing the debt-to-GDP ratio, indicating a new fiscal policy framework.

Q & A

What was the main focus of the discussion in the video?

The main focus of the discussion was the analysis of the budget, particularly the changes in revenue and capital expenditure, tax revenue projections, and the government's fiscal consolidation strategy.

How did the post-election budget projections differ from the interim budget projections?

The post-election budget showed an increase in revenue expenditure by 55,000 CR compared to the interim budget, while keeping the capital expenditure the same. The government used the additional RBI dividend to increase revenue expenditure and reduce the deficit.

What was the additional revenue expenditure allocated for in the budget?

The additional revenue expenditure was allocated for employment incentive schemes, increased allocation for PM AAS yoga, and financial assistance for states like Bihar and Andhra Pradesh.

How did the tax revenue projections for the full year budget compare to the interim budget?

The gross tax revenue projections were broadly the same between the interim and full year budgets, with a slight reduction in net tax revenue to the central government, which was compensated to the states.

What was the projected growth rate for income tax and corporate tax collections in the budget?

The projected growth rate for income tax was around 13.5%, which was considered realistic. The corporate tax growth rate was scaled down to 12.8% from the interim budget's projection of 14.5% due to subdued company profits.

What was the nominal GDP growth assumption in the budget, and why is it considered conservative?

The nominal GDP growth was assumed to be 10.5%, which is considered conservative because it assumes a real GDP growth of 7% and a GDP deflator of 3.5%. This is seen as conservative because recent trends show WPI and CPI inflation rates that could push nominal GDP growth higher.

What was the government's target for fiscal deficit in the budget?

The government targeted a fiscal deficit of 4.9% of GDP for the year, which is a step towards the fiscal consolidation path with a target of 4.5% for the following year.

How did the budget address the issue of borrowing and debt?

The budget aimed to reduce reliance on short-term borrowing and increase long-term borrowing to manage debt more effectively. It also indicated a shift in focus from targeting a specific fiscal deficit number to reducing the debt to GDP ratio.

What was the government's approach to factor market reforms as discussed in the budget?

The government announced a new economic framework that would include factor market reforms such as land and labor, with an emphasis on collaboration between the central government and state governments. The budget also tied a portion of the capital expenditure allocation to the implementation of these reforms.

What was the audience's question regarding the government's commitment to the new tax regime?

The audience questioned why the government was not encouraging public investments by increasing ATC limits, given its commitment to the new tax regime. The response indicated that the government was nudging people towards the new tax regime, which does not have many exemptions and deductions, and that future incentives would be provided under the new tax regime.

Outlines

00:00

📈 Economic Analysis of the Indian Budget

The video segment begins with a discussion on the intricacies of the Indian budget, focusing on the changes post-elections. The revenue expenditure is noted to have increased by 55,000 CR, while the capital expenditure remains at 11.11 lakh CR. The government's strategy to balance fiscal consolidation with spending is highlighted, with a significant portion of the additional RBI dividend being allocated to boost revenue expenditure. Key allocations are mentioned, including employment incentive schemes, PM-AAS yoga, and financial assistance to states like Bihar and Andhra Pradesh. The conversation also touches on the fiscal space created by the anticipated RBI dividend and the government's approach to managing it.

05:00

💼 Corporate and Income Tax Projections

This part of the script delves into the budget's tax projections, comparing them with the previous financial year. The gross tax revenue is expected to increase by 10.8%, mirroring the growth rate of the previous year. The net tax revenue projection after excluding the state's share is also discussed. A detailed analysis of the expected changes in income tax and corporate tax collections is provided, with a focus on the potential impact of subdued corporate profits due to rising commodity prices. The discussion also covers the government's conservative approach to tax revenue projections and the possibility of surpassing these targets, especially considering the robust Advanced Tax collections observed.

10:01

🏢 Disinvestment and Asset Monetization Outlook

The conversation shifts to the government's plans for disinvestment and asset monetization. Despite previous years' underachievement, the budget maintains a target of 50,000 CR for miscellaneous receipts. The potential shortfalls in achieving these targets are discussed, along with the challenges in capital expenditure due to the election cycle and monsoon months. The script also mentions the increase in the state's share and the implications of interest-free loans on the budget.

15:02

📉 Fiscal Deficit and Government Expenditure Quality

The script discusses the government's focus on improving the quality of expenditure, with a rising share of capital expenditure as a percentage of GDP. It contrasts this with the declining share of revenue expenditure, leading to a compression in the overall size of the government budget. The fiscal deficit target for the year is set at 4.9%, with plans to reduce it further to 4.5% in the subsequent year. The strategy to reduce reliance on short-term borrowing to manage market yields and the broader fiscal policy framework focusing on debt-to-GDP ratio reduction are also covered.

20:04

🌐 Factor Market Reforms and Economic Framework

The final part of the script addresses audience questions about the government's commitment to factor market reforms, labor codes, and land reforms. It highlights the announcement of a new economic framework that includes land and labor reforms, and the government's intent to collaborate with state governments for implementation. The script also touches on the political implications of these reforms and the government's approach to nudging state governments towards reform through financial assistance.

25:05

💼 Tax Regime and Public Investments

The last paragraph addresses questions about the government's approach to tax regimes and public investments. It discusses the shift towards the new tax regime, the incentives provided for it, and the rationale behind not increasing the ATC limit, which is part of the old tax regime. The script emphasizes the government's efforts to encourage a tax regime without numerous exemptions and deductions, and the focus on moving individuals and businesses towards this new system.

Keywords

💡Budget

A budget is a financial plan that outlines government or organizational spending and revenue forecasts. In the video, the budget is a central theme, with detailed discussions on the Indian government's financial plans post-elections. The script mentions changes in revenue expenditure and capital expenditure, reflecting the government's priorities and fiscal policies.

💡Revenue Expenditure

Revenue expenditure refers to the spending by a government on goods, services, and transfers that do not lead to the creation of future assets. In the script, there's a mention of an increase in revenue expenditure by 55,000 CR, indicating the government's focus on immediate consumption to stimulate the economy or fulfill social obligations.

💡Capital Expenditure

Capital expenditure, or capex, is the investment in assets that are expected to generate future benefits, such as infrastructure development. The script notes that the capital expenditure has been kept the same, suggesting a continued focus on long-term growth and development projects.

💡Fiscal Consolidation

Fiscal consolidation is the process of reducing budget deficits and stabilizing or reducing government debt. The video discusses the government's attempt to strike a balance between fiscal consolidation and boosting spending, indicating a strategic approach to managing public finances.

💡Mutual Funds

Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio. The script mentions mutual funds in the context of investment advice, suggesting they are a recommended tool for individuals to grow their wealth.

💡Market Risks

Market risks refer to the potential losses that can occur due to fluctuations in the financial markets. In the video, the mention of market risks in mutual fund investments serves as a cautionary note to potential investors about the inherent uncertainties in financial markets.

💡Gross Tax Revenue

Gross tax revenue is the total tax revenue collected by the government before any deductions or refunds. The script compares the interim and final budgets, noting that there is not much change in gross tax revenue, which is a key indicator of the government's fiscal health.

💡Net Tax Revenue

Net tax revenue is the amount of tax revenue remaining after refunds and adjustments. The video discusses a reduction in net tax revenue to the central government, which is significant as it affects the government's fiscal capacity to fund its programs and services.

💡Disinvestment

Disinvestment refers to the sale of government-owned shares in companies to reduce public ownership. The script mentions disinvestment as part of the government's strategy to raise non-tax revenue, indicating a move towards privatization and fiscal consolidation.

💡Asset Monetization

Asset monetization is the process of converting underutilized or idle assets into cash through sale or lease. The video discusses asset monetization as part of the government's broader economic strategy to unlock value from public assets and improve fiscal efficiency.

💡Fiscal Deficit

A fiscal deficit occurs when a government's expenditures exceed its revenues. The video highlights the government's projection of a fiscal deficit at 4.9% of GDP, which is a key indicator of the government's financial management and its impact on economic stability.

Highlights

The budget projections after the elections show an increase in revenue expenditure compared to the interim budget estimates.

The government received a higher-than-anticipated dividend from the RBI, providing additional fiscal space.

The budget aims to balance fiscal consolidation with boosting spending, with a tilt towards accelerating fiscal consolidation.

The employment incentive scheme and PM AAS yoga are among the areas receiving increased funding.

Financial assistance for states like Bihar and Andhra Pradesh is part of the budget.

Capital expenditure remains unchanged, focusing on maintaining fiscal consolidation.

Gross tax revenue projections are similar to the previous year, with adjustments in capital gains and income tax.

There is a reduction in net tax revenue for the central government, with an increase in states' share.

The budget projects a realistic increase in income tax and a more conservative growth in corporate tax due to potential pressures on company profits.

The nominal GDP growth assumption is conservative, potentially allowing for better-than-expected tax revenue.

The quality of government expenditure has improved, with a focus on capital expenditure over revenue expenditure.

The fiscal deficit target for the year is set at 4.9%, with a plan to reduce it to 4.5% in the following year.

The government's borrowing strategy includes a reduction in short-term borrowing to manage market yields.

There is a shift in focus from targeting a specific fiscal deficit number to reducing the debt-to-GDP ratio.

The budget includes measures to nudge states towards implementing factor market reforms, including labor and land reforms.

The government encourages a shift to the new tax regime, which is more streamlined and less reliant on exemptions.

The budget's overall approach indicates a commitment to fiscal responsibility and structural reforms.

Transcripts

are you sure here's the 30C lesson on

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related documents carefully hello and

welcome to this episode of mutra I'm TCA

Sharad ragavan Deputy editor at the

print and this time we're going to be

discussing the budget mats the budget

happened a few days ago and there were a

lot of headlines about it a lot of

interviews but the nitty-gritties of the

actual numbers in the budget that's what

we're going to analyze and to do that we

have with us radika pande associate

professor at nipfp thank you so much

radika for joining thank you Sharad but

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thank you so much and now radika coming

to the budget how does this budg buget

projections it comes after the elections

how do they vary from the interim budget

projections which were before the

election yeah so after the elections if

we see there is there are two more two

most important changes one is that the

revenue expenditure has increased as

compared to the interim budget so uh

while the capex has been kept uh same

which is 11.11 lakh CR cap the revenue

expenditure has increased by 55,000 CR

over the interim uh budget estimates so

uh we know that the government got the

RBI dividend more than anticipated so

there is an additional fiscal space of

around rupees 1.5 lakh CR and we

discussed that earlier that what the

government would do would it focus more

on fiscal consolidation or boosting

spending or a balance or a combination

or a balance and we see that the

government has tried to strike a balance

here and uh you know it's the Tilt is

more toward towards uh you know

accelerating the path of fiscal

consolidation so we see that of the uh

additional um uh RBI dividend around

55,000 CR has been used to uh increase

Step Up Revenue expenditure and the rest

has been used to reduce the deficit so

that's the combination and if you look

at the revenue expenditure the

additional 55,000 CR a part of it is

going on the employment incentive scheme

that was uh announced anounced in the

budget a part of it is going on the PM

AAS yoga because there the allocation

has increased as compared to the interim

uh as compared to the interim budget and

then there are few other uh increase and

there is also there's going to be

financial assistance for Bihar and Andra

Pradesh and a few more States so on the

expenditure side we see that there has

been an increase of 55,000 CR on Revenue

expenditure but capital expenditure has

been kept same now on the uh Revenue

side the gross tax revenue is broadly

same uh because what we saw from interim

budget to uh the ful year budget that

capital gains tax has been reduced

whereas uh income tax has capital gains

tax has been increased whereas income

tax has been uh reduced the slabs have

been rationalized yeah yes and then the

corporate tax on foreign companies has

been uh reduced so overall if we see

there is uh not much change between the

interim budget and the final budget when

we look at the gross tax revenue uh but

there is a uh reduction in the net tax

revenue to the central government there

is a reduction of around 18,000 CR from

the interim budget to the full year

budget and this uh additional is being

is going to the states so in absolute

level the uh states share in the uh

Devolution in the total uh centers taxes

has increased in absolute levels

but not in terms of as a proportion of

the gross tax revenue which is still

same as 35% which was similar to what

was in FY 24 remember that the finance

commission recommendation is 41% 41% of

the shareable taxes have to be uh given

to States but what we see is 35% but in

absolute term there is an increase and

rest we know is accounted for by cesses

and sarch charges which are not shared

with the states right so now sticking to

the tax uh projections that they have

for the year uh by how much are Income

Tax and corporate tax collections

expected to increase by and are these

realistic yeah so now when we are

talking about realistic let's talk in

terms of you know comparing with uh FY

24 that is the last year and because we

have the benefit of the provisional

actual numbers because this time around

the government has also released the

provisional actual uh so we don't need

to compare with the revised estimates

which is one way of doing but a better

way of doing is to uh compare with the

provisional actuals which are one step

closer to the final numbers actual final

numbers yeah though they are un audited

but they are uh closer to the actual

numbers so okay so when we look at the

from the tax side when we see the gross

tax revenue the uh gross tax revenue is

likely to increase by 10.8% which is

similar to what was projected in FY 24

you know the same growth rate has been

maintained uh the net tax revenue is

likely to increase by 11% net tax

revenue which is after excluding the

state's share now when we come to income

and corporation tax you know earlier in

interim budget the growth was projected

at more than 14% but now for the final

uh budget we have seen that the growth

rate projection for corporation tax has

been scaled down a bit and uh that is

because you know today there's a

statement also that you know the

company's profits for the first quarter

have been subdued and therefore they

have Revis downwards their uh growth

assumptions for corporation tax for FY

25 so in the interim budget the

corporate tax were expected to grow by

14.5% now they are expected to grow by

12.8% and there could be challenges on

corporate taxation front because you

know profits are now coming under

pressure the comp's profits are now

coming under pressure mainly because of

increase in the commodity prices you

know commodity prices are uh rebounding

again so uh on the corporation tax there

could be some challenge but on income

tax last year we saw that income taxes

grew by more than 25% and this time they

have kept the target at somewhere around

13.5% which seems realistic even though

they have increased the standard

deduction and they have rationalized the

taxes but on income taxes I think the

assumptions are realistic because even

if we look at the uh first quarter

Advanced Tax collections they have been

quite robust the other uh important

Point uh underpinning all this

discussion is the growth rate of nominal

GDP right and the nominal GDP growth has

been assumed at 10.5% which is the same

which is the same as interim budget and

uh again it is on a conservative side

because it assumes a real GDP growth of

7% and a GDP deflator of 3 and a half%

which does seem very conservative which

which seems conservatives because you

know and GDP deflator is a combination

of WPI and CPI more so WPI WPI has a 60%

weight roughly and CPI has 40% weight so

now we are seeing that WPI is inching up

you know earlier it was in the

contractionary zone now it's inching up

so if WPI Rises if GDP deflator Rises

our nominal GDP growth uh could surpass

10.5% and that would again give cushion

to the tax to GDP ratio so that is again

something that could support the uh

assumption so overall the tax revenue

projections look realistic they look

conservative the only uh pressure could

emerge from corporate uh taxes if the uh

profit margin of companies uh continue

to remain under pressure due to to the

rise in commodity prices and on income

tax uh uh most likely there is going to

be some sort of balancing between the

reduction in the due to the tax laab

restructuring and this ltcg and

short-term capital gains and all of that

being raised absolutely and also you

know the income tax collections have

been rising because of the change in the

treatment of dividend distribution tax

that was introduced in fy21 so we are

seeing a a surge in collections of uh

income tax so we do see that that is

likely to continue and only pressure

could emerge from the corporate tax okay

and now the other major thing that a lot

of people look look at in the budget

especially recently is what they're

projecting on disinvestments correct and

their asset monetization and things like

that because they went very big on all

of this uh over the last few years

there's the public sector Enterprises

policy there was the asset monetization

scheme and all of that so what is the

the Outlook this year yeah so it's

similar to what they had done in the

interim budget and now the practice is

that uh they uh you know give a combined

category which is miscellaneous receipts

or other Capital re it's not called

disinvestment it's not called

disinvestment it's not called asset

monetization and they give a uh one

figure which is 50,000 CR which is

similar to what was there in the last

year even though last year they were uh

they under achieved the target it was

50,000 CR they achieved around 33,000

33,000 CR so again they have kept on

around 50,000 CR so we don't see much uh

traction happening there and uh there

could be some again shortfall due to uh

this uh disinvestment and asset

monetization the other shortfall could

also arise due to capital expenditure

because you know it's again they are

targeting 11.11 lakh cor and given now

you know in the first two months capix

was quite subdued due to the election

cycle and now only eight months are left

and even amongst those eight months

these are the monsoon month Monsoon

months so we don't see much activity

happening during the monsoon month and

also that State's share has been

increased from 1.3 lakh CR to 1.5 lakh

CR and that is also a conable part of it

is tied to the rolling out of these are

those interest free loans interest free

loans 50e interest free loans and the

interim budget were 1.3 lakh CR now it

is 1.5 lakh CR so there is a challenge

on the absorption of the implementation

execution of Big Ticket capital

expenditure or Big Ticket investment

projects and uh there could be some

savings on account of under spending on

capital expenditure similar to what we

saw last year last year also there was a

saving of 50,000 CR the target was 10

thou 10 lakh CR and there was a saving

of 50,000 CR okay so now since we are

talking about uh capital expenditure

and you mentioned Revenue expenditure

before that can we say that the quality

of overall government expenditure has

improved and the size of the budget also

if you could tell us a little bit about

that yeah certainly this uh quality of

expenditure has improved because if we

see uh expressed as a share of GDP we

see that you know capital expenditure as

a share of GDP has been rising since uh

uh preco time you know particularly from

covid onwards we saw that the share of

capital expend as a share of GDP has

risen and now it's reached 3.4% of GDP

and uh correspondingly the share of

Revenue expenditure Revenue expenditure

as a share of GDP has been gradually

declining and uh the uh cumulative

impact of these two Trends has been that

the size of the government budget is

also getting compressed the size of

government budget can be expressed as a

ratio of total government expenditure

upon GDP and if if we look at that ratio

for uh the current year the total

expenditure to GDP is uh likely to be

15% it used to be 16% uh 2 years back

and slightly higher amount earlier so we

are seeing a gradual compression of the

size of the budget the share of capital

expenditure Rising the share of Revenue

expenditure uh gradually declining

though in this year's uh budget the full

budget we are seeing that there has been

again some reversal of that because of

the constraints because of the diverse

expectations of expenditure because of

new items of expenditure like uh

employment generation schemes and so on

there is a slight uptake in Revenue

expenditure but if we look over the

medium term we see that the quality of

expenditure has uh improved and the

focus has been more towards

capex okay and now the other metric of

uh the quality of government spending or

you know how well it is be doing with

its finances is of course the fiscal

deficit right and uh the government has

pegged it at

4.9% for this year which we kind of

expected they might do but it's still at

the lower end of what we thought they

might do we thought maybe 5% yes so

because we uh you know we were expecting

a greater chunk would be towards uh

boosting spending but here what we are

seeing is that while there has been an

increase in Revenue expenditure but

greater Focus has has been on

accelerating the path of fiscal

consolidation so that next year when

they might not get the benefit of higher

dividend uh reducing the fiscal deficit

to 4.5% is not much of a problem for

them because FY 26 fiscal defit Target

is 4.5% so that's why they have tried to

accelerate the path of fiscal uh

consolidation from uh 5.1% which was

earlier invis in the interim budget to

4.9% of uh G GDP and there also you know

the borrowing have also been uh lowered

by 12,000 CR through the issuance of

dated Securities and what they have done

very interestingly is that they have cut

their Reliance on short-term borrowing

right and which is you know we have to

place it in the larger context you know

what we talked about inclusion of

government bonds and what all sorts of

implications could arise due to that and

we saw that there was an influx of uh uh

foreign funds and RBI did intervene

through the sale of bonds so that was

putting an upward pressure on yields and

therefore what government has done is

that it has cut its Reliance on

short-term borrowing which would have

the uh objective of which would have the

consequence of reducing the yields so

that is one important thing and the

other is that they have reduced their

Reliance on short-term borrowings so

overall Market borrowing there is not

much of a reduction through government

securities reduction is happening on T

bills and on U the uh small saving

instruments right so now since we are

talking about borrowing and debt the

government has indicated both in

interviews and in the budget itself that

the focus is shifting from targeting a

particular fiscal deficit number say for

example 3% as is mandated by law they're

now focusing more on bringing the debt

to GDP ratio down right could you tell

us a little bit more about this yeah so

if we go back to 2018 when the uh NK SN

committee gave its recommendations on

the new fbm architecture there also uh

the fbm was amended to introduce debt to

GDP ratio as an anchor for uh fiscal

policy because uh prior to that the only

targets were in terms of the deficits

fiscal deficit Revenue deficit effective

Revenue deficit and so on now Focus has

shifted now from uh you know the what

the budget speech indicated was that

there would be a shift from uh focusing

on a single number of fiscal deficit to

fixing it at such a level that there is

a reduction in the debt to GDP ratio now

debt to GDP ratio is a stock it's an

outstanding stock and that requires uh

you know that you have to bring down the

ratio either through increasing in GDP

or through reducing reduction in

borrowing so uh fiscal deficit has to be

fixed in a way that there is a reduction

in debt to GDP ratio that's what the

government has articulated as the new

fiscal policy framework now the next

logical step should be that they should

come up with a uh Glide path for Deb to

GDP ratio right at least set some

targets set some Target that you you

want to reduce the debt to GDP ratio but

by how much do you want to reduce it by0

5% or quarter per of uh how much do you

want to reduce it each year that is is

very important and that should be made

part of the fbm legislation so that it

is clear to the various stakeholders to

households to investors to foreign

investors and it imparts transparency to

the fiscal framework already we see that

credit rating agencies have given a

thumbs up to the fiscal framework uh

announced by the government so the next

step should be to have a transparent uh

Glide path towards the debt to GDP ratio

absolutely especially now if there's

greater scrutiny on because of bond

inclusion and all of that we need to be

more transparent absolutely but now

radika we have a number of questions

from the audience and now I know that

there were a lot of you who asked

several questions but I can take only

one per person so that's what I'm going

to do um a lot of your questions are

have probably already been answered in

the discussion we've had so far and so

I've chosen the ones that wouldn't have

gotten covered during the discussion so

Satoshi asks do you think strong tax

buoyancy would be maintained in the next

few years thanks to the progress in

formalization under the new employment

linked incentive schemes as well as GST

and digitization policies I think when

we see tax Bo Andy all the tax numbers

that they have projected in for fi25

most of them are quite on the

conservative side and therefore even tax

buoyancy is on the conservative side so

it is likely to be maintained and the

government might be able to do better

than uh what they have assumed in the uh

in the budget so yes you know till now

tax have been taxes have been B and they

are likely to be so in the uh in this

financial year itself and collections

have uh in the last few years outpaced

what the budget estimate has been

absolutely so last year also we saw that

even they outpaced the uh Revenue the

revised estimates also there were more

than that so that is likely to uh

continue at least in uh this financial

year okay and uh Gotham asks isn't the

exemption given to

corporates uh on utilizing CSR funds for

employment a wrong precedent as this

defeats the very purpose of CSR and it's

getting back to the company itself in

terms of an asset yeah so see uh firstly

the CSR guidelines are formulated by

Ministry of corporate Affairs and uh

anything what for what all purposes the

uh CSR funds can be uh utilized that is

all provided or mandated by the MCA

through their guideline now CSR is to be

spent on some of the important pressing

problems and given that employment is

one of the pressing problems I think a

small proportion you know it's it's

capped at 10% 10% of the training

expenses have to be uh can be utilized

through CSR so I don't see any uh

problem in that how well it will be

implemented we'll see we don't have much

experience on how the these schemes

would actually work but in terms of the

intent and purpose I don't see any

problem with the utilization of CSR uh

fund because uh if it could be used to

address some of the address one of the

major grave problems of the economy

there should not be any problem no

absolutely right employment and Skilling

is possibly our biggest problem yeah and

if companies can spend some amount of

their CSR funds on this and they can

show that that is that is the that's

going to be a big social service and

that will improve the quality

employability and benefit the companies

in the long run absolutely adiya asks uh

even though the Finance Minister

mentioned about the factor market

reforms in Her speech looking at the

entire speech she does not really talk

about the labor codes or their

notification or any kind of initiatives

on land reforms has the government truly

given up given up on its reform agenda

for or now due to political compulsion

there were some land reforms though yeah

so they what she announced was uh that

the government would come up with a new

economic framework which would uh

capture all factor market reforms which

would include land which would include

labor and the fact that they want to

have a collaborative uh effort from

States as well because you know if we

look at the labor codes there were some

resistance from States so now all this

would require collaboration from States

as well as the central government and

that is why if you see what the Finance

Minister mentioned was that the 1.5 lakh

CR which has been allocated for uh

assistance towards capital expenditure a

large part of that would be linked with

these uh reform so this is I think a way

to nudge the state governments also to

implement uh the various factor market

reforms and to simplify uh the registry

and all of these things and to implement

these reforms so I think it's going to

be uh the conditions to utilize the fund

will be conditional upon States

partnering with the central government

in rolling out these reforms and there

was some talk about digitization of land

records which is a big reform yeah crop

surveys digitization of land record so

all those things integrating digital

public infrastructure in agriculture so

those reforms were there and they are

likely to be taken forward as part of

the uh you know their Vision towards

vixit bhat which would have a new

economic framework you know rational

iation of FDI laws overseas Investments

all these were part of that so

everything cannot be rolled out as part

of the budget speech but the government

has articulated its intent and they want

States also to be equal Partners towards

that and to nudge them uh they have they

will be some part of that 1.5 lakh CR

loan would be tied to the implementation

of these reforms right and yes you're

absolutely right the labor code

notification did not find mention read

from on that what you will uh the

political compulsions of course are not

something that we are going to go into

this is an economic show so now we have

another question this is also by

somebody named adya it's from a

different handle so I don't know if it's

the same adya or not but uh they ask

when the government seems to be so

committed that they want everyone to be

shifted to the new tax regime and

they've provided incentives in every

budget in respect of the new tax regime

what is stopping the government from

introducing the new tax regime and why

the government is not encouraging public

Investments by increasing ATC limits ATC

limit is part of the old tax regime and

the new tax regime has been introduced

already has been introduced and this

entire the the rationalization of slabs

that have been introduced are all part

of the new tax regime increase in

standard deduction is also applicable to

only those individuals who are part of

the new tax regime so by all measures

the government is trying to nudge people

to move from the old tax regime to the

new tax regime uh they want people to

move to a regime which is uh which does

not have many exemptions and deduction

so therefore the exemption limit under

Section ATC and all those incentive

measures which earlier used to be part

of budget statements do not find mention

here because now the nudge clearly is to

move towards new tax regime and whatever

incentives would be provided in Du

course also would be part would be under

the new tax regime right so there you go

now looking deeper into the budget past

all of the announcements past all of the

words and looking at the numbers what it

shows is that now the capital

expenditure amount has not been

increased but a little more of the hus

of this spending has been put on the

state governments uh which is which is

interesting Revenue expenditure of

course has increased by some amount

because there are all of these

employment linked incentive schemes and

some other announcements that have been

made on the revenue side the income tax

revenue projections seem uh realistic

corporate tax revenue might come lower

than what is projected and what what is

projected is already lower than earlier

because their profits are down the

quality of government expenditure is has

been improving over the medium term

which means that there's more

expenditure on growth generating areas

like capital expenditure and less on

Revenue expenditure and the fiscal

deficit has come at 4.9% which again

seems like a realistic uh number I think

the projection is 4.9% which seems

realistic and they're on track for 4.5%

in the next year and the focus seems to

be shifting towards bringing the debt to

GDP uh level down now this is a great

articulation of intent but we would love

to to see actual targets being fixed to

this because that's the only way we can

hold the government accountable but on

that note that's all we have for you

thank you so much for watching

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