Pre-Budget 2016 last strokes

Budget Run Up – The Last Strokes

The long wish list of the budget 2016-17 in the double-digit growth pitched economy has GST implementation as the top agenda and implementation of recommendations of Justice Eswar Committee on tax reforms as the second top item.

Farm sector and rural development find a big surge in the budget run up news columns. Declining credit is a cause for worry in these sectors as the banks hit by NPAs and loan write-off are in no mood to oblige the farmers. Agriculture infrastructure targeting market yard digitisation and revamp calls for a big ticket from the challenging budget 2016.  A separate budget for agriculture would have made lot of sense but the government has no such plans. Still hopes ride high in this sector.

Make-in-India requires a big manufacturing push and this is possible mostly with the MSME  sector that has so far drawn little attention.

MSME  Ministry recently redefined the eligibility criteria whereby the aggregate value of the Plant and machinery under the same ownership located anywhere will be reckoned to classifying as MSME, providing for vertical growth. This will correct the distorted subsidy regime engendered by horizontal growth.

MSMEs Cry for Attention

Start-Ups in MSMEs, particularly in manufacturing can now look for vertical growth instead of horizontal growth with the MSME Ministry revising the definition of plant and machinery to include all such equipment owned by the same owner(s) across the districts and country to be reckoned for classification of MSME under the MSME Development Act 2006. In the long run this redefinition would do lot good to the sector. The sector may witness in the short term more NPAs.

Big Data Helps Banks but should help customers too

http://www.moneylife.in/article/big-data-help-banks-but-benefits-should-be-passed-on-to-customers-as-well/45304.html

Banks collect and use client data for better targeting. They should also reduce operational costs by using technology and pass on the benefit to customers

I recall what Greg Baxter, global head of digital strategy at Citigroup mentioned almost a year back (reported in Financial Times on 1 February 2015) that big data is a big opportunity, making a big difference in how the banks serve their customers in future. Financial health barometer can be read by every customer, not just how much balance one has in the account as much as how much the money is likely to be overdrawn every month.