India's Budget today: What the Commodities markets expect?ndia's Union Budget for2016-17 will be presented by Arun Jaitley, Union Finance Minsiter, in a few hours. The budget presented amidst turmoil in the global economy and slump in commodity prices is vital to the Indian economy.
Commodity Online presents key areas to look for in the budget:
General
Increased Public Investments/ Capital Expenditure - With economic growth being driven by public investments and private consumption, and given the continued weakness in private investments, the government is likely to undertake higher public investment, chiefly towards building infrastructure (roads, power, irrigation and railways) in an attempt to spur private investments and demand.
Agriculture
Focus on investment and reforms:CARE Ratings expects loans at lower interest rates for distressed farmers. Allocations towards development and improvement in agri infrastructure (including marketing infrastructure and dissemination of timely market information). Direct transfer of fertilizer subsidy to farmers. Allocation to be made towards Research & Development, Technological advancements and improving productivity.
Bullion
Budget expectation of the gold and gem industry is largely on bringing down the import duty of gold from the present 10 percent to 2 percent, which is anticipated to boost the domestic consumption of the yellow metal, says Geofin Commoities. Customs duty on gold is currently at 10%, and the trade largely expects the government to cut it down to 2% in the budget as the current account deficit is under control.
Rubber
Increasing the import duty on natural rubber is anticipated. Hefty imports of natural rubber pressurizing the domestic prices and resulted in producers not tapping. With a view to protest the domestic growers against cheap import, the Finance Ministry is likely to increase the duty on natural rubber from the current 25 percent to 40 percent.
There are proposals for Natural Rubber to be included under the definition of agriculture produce under the Service Tax Act as well. Also, there are industry representations to cut import duty on maize and oilseeds. The edible oil industry is seeking a cut in oilseed import duty to 5 percent from the present 30%.
Commodity Online presents key areas to look for in the budget:
General
Increased Public Investments/ Capital Expenditure - With economic growth being driven by public investments and private consumption, and given the continued weakness in private investments, the government is likely to undertake higher public investment, chiefly towards building infrastructure (roads, power, irrigation and railways) in an attempt to spur private investments and demand.
Agriculture
Focus on investment and reforms:CARE Ratings expects loans at lower interest rates for distressed farmers. Allocations towards development and improvement in agri infrastructure (including marketing infrastructure and dissemination of timely market information). Direct transfer of fertilizer subsidy to farmers. Allocation to be made towards Research & Development, Technological advancements and improving productivity.
Bullion
Budget expectation of the gold and gem industry is largely on bringing down the import duty of gold from the present 10 percent to 2 percent, which is anticipated to boost the domestic consumption of the yellow metal, says Geofin Commoities. Customs duty on gold is currently at 10%, and the trade largely expects the government to cut it down to 2% in the budget as the current account deficit is under control.
Rubber
Increasing the import duty on natural rubber is anticipated. Hefty imports of natural rubber pressurizing the domestic prices and resulted in producers not tapping. With a view to protest the domestic growers against cheap import, the Finance Ministry is likely to increase the duty on natural rubber from the current 25 percent to 40 percent.
There are proposals for Natural Rubber to be included under the definition of agriculture produce under the Service Tax Act as well. Also, there are industry representations to cut import duty on maize and oilseeds. The edible oil industry is seeking a cut in oilseed import duty to 5 percent from the present 30%.
