EUR 120.00 For Business Accounts Only

MOSL: Morning India (04/February/19): 1. Union Budget 2019-20 (Center announces cash transfers to farm households); 2. Automobiles; 3. SBI; 4. Bharti Airtel; 5. Titan Company; 6. Dabur India; 7. Dr Reddy's Labs

MOrning India (04/February/19): 1. Union Budget 2019-20 (Center announces cash transfers to farm households); 2. Automobiles; 3. SBI; 4. Bharti Airtel; 5. Titan Company; 6. Dabur India; 7. Dr Reddy's Labs; 8. Divi's Lab; 9. Jindal Steel; 10. Jubilant Life

 

Today’s top research theme

Union Budget 2019-20: Center announces cash transfers to farm households; But fiscal deficit targets remain within desirable limits

• As widely expected, the government attempted to fulfill populist demands in its last budget before the general elections. Nevertheless, the total cost of such populist schemes was much lower than feared. The two major announcements were (i) direct annual cash transfer costing INR750b per year to rural (not necessarily poor) population and (ii) increase in tax exemption for income up to INR0.5m for individual tax payers, which will cost the government another INR185b. Both these announcements will further incentivize consumption (or hopefully savings).

Overall, FY19 revised estimate (RE) and FY20 budgeted estimate (BE) of headline fiscal deficit of 3.4% of GDP are within the desirable limits and can broadly be achieved with no major slippages, in our view. Fiscal receipts and spending growth for FY19 and FY20, however, will likely be lower than the targets. While total spending is seen growing 13.3% YoY in FY20BE, following 14.7% in FY19RE, weaker receipts will make the achievement of the targets difficult. We, thus, do not consider the budget as highly expansionary.

Piping hot news

Essel Group gets time from lenders till September

• Essel Group said Sunday that it has sealed a formal agreement with its lenders to keep it afloat, under which it gets time till September to deleverage or pare its debt. The agreement is with those lenders who have taken pledged shares of the group flagship and listed entities, Zee Entertainment Enterprises and Dish TV India. On January 27, the group had confirmed that an understanding with the lenders had been achieved, which was finalised Sunday.