Budget Jobs Schemes Not A Right, Says Sitharaman; FDI, FPI Parity To Ease Foreign Investment 

FM Nirmala Sitharaman Says Jobs Schemes Not Mandatory, Not A Right

The government’s ambitious employment-linked incentive schemes and the internship programme announced in the 2024-25 Budget are not enshrined as rights, and the private sector will only be nudged to adopt them, Union Finance Minister Nirmala Sitharaman told Business Standard in an interview. 

“There is no compulsion. There is no bureaucratic intervention. I am not enshrining it as a right. As the central government, I have the convening power to nudge people towards it.

Companies can optimally use their CSR (corporate social responsibility) funds and make sure that when they talk about employable skills in people who come out from, let’s say, engineering colleges, they can give opportunities to those people for apprenticeship on their shop floor,” said Sitharaman. Read more

More Parity Between FDI, FPI; FEMA Changes Also In Pipeline

India could take steps to create a simpler regime for overseas investment by diluting the rigid distinction between foreign portfolio investment (FPI) and foreign direct investment (FDI), the Economic Times reported Economic Affairs Secretary Ajay Seth as saying in a post-budget interview.

Similarly, norms could be revisited to help Indian industrialists whose overseas investments are greater than those in the country to invest at home more easily. This proposed revamp will include changes to the Foreign Exchange Management Act (FEMA), he said.

Currently, a single FPI is allowed to hold up to 10 per cent of a company's stock. In case of FDI, investment up to 100 per cent is allowed in most sectors. "What if an investor were to say I had come via the stock market route but want to be an FDI (player). I want to be a significant beneficial owner in this firm. Do we have a route (to make it happen)?" said Seth. More here 

Gold Rush At Jewellers After Duty Cut  

Customers in the world's second-largest bullion market have begun flocking to jewellery stores since Tuesday evening to benefit from the reduced rates of gold. They are mostly buying heavy jewellery that had eluded them for the last six months as gold prices scaled a record Rs 74,000 per 10 gm, the Economic Times reported.

Jewellers have cancelled craftsmen’s leaves with daily demand surging as much as 20 per cent since the duty cut. They are expecting the growth momentum to sustain through this festive season. India imports almost all the gold it uses for making jewellery and bars.

Gold prices decreased from Rs 72,609 per 10 gm on Tuesday to Rs 69,194 per 10 gm on Wednesday. This drop of Rs 3,415 per 10 gm followed the government cutting duty on gold imports from 15 per cent to 6 per cent in the budget. More here

Centre Readies Rs 10,000 Cr Price Stabilisation Fund To Tackle Food Inflation

Finance Minister Nirmala Sitharaman said in her Budget speech that steps were being taken to supply adequate perishable goods to markets, while stating inflation continued to be low and stable, the Business Standard reported. 

To address high food inflation, the Union Budget has made two provisions, one for the Department of Consumer Affairs and the other for the Department of Food and Public Distribution. For the Department of Consumer Affairs, an allocation of Rs 10,000 crore has been made for the Price Stabilisation Fund.

The fund, the Budget documents say, will be used for maintaining a buffer stock of pulses, onions, and potatoes and sending sufficient amounts to markets. More here

Govt To Target Debt Reduction

The Modi government 3.0 committed itself to bringing down the fiscal deficit, which is an excess of expenditure over revenues, to below 4.5 per cent of gross domestic product (GDP) next financial year, but did not specify the target after that year, Business Standard reported.

On the other hand, Finance Minister Nirmala Sitharaman stated in her latest Budget speech: “From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the Central government debt will be on a declining path as percentage of GDP.”

Till then, the Centre has been announcing fiscal deficit targets along with those for revenue deficit, which is an excess of expenditure such as salaries and pension for current needs over revenues from current streams such as taxes and non-tax receipts, and the debt to GDP ratio. More here

Internal Panel To Overhaul Income Tax Act To Be Set Up Soon

The government will set up an internal panel to overhaul the Income Tax Act, aiming to eliminate outdated provisions and enhance clarity, Revenue Secretary Sanjay Malhotra told Livemint in an interview. 

Malhotra emphasied the need for a more concise and understandable tax code by removing redundant sections and linking related provisions across different chapters. “We will set up an internal committee and review all the provisions. The purpose is to make it (the Act) easy to read and easy to understand," Malhotra said.

For GST rationalisation the Centre will work with the states, the secretary said. “While the central government will endeavour to rationalise GST rates, we are mindful that states are an equal partner, if not more. Our effort will be to bring about a consensus on these efforts through the group of ministers that has been constituted for this purpose," said Malhotra. More here