Finance Minister Nirmala Sitharaman presents Budget: ‘Customs duty cuts will boost local manufacturing’

What will be the impact of customs duty cuts? Can it lead to dumping?

There is a logic for these cuts. There is a need to bring these items to India, and existing customs duties add a cost. Cuts on most of these items are meant to enhance manufacturing or value addition, or to help the cause of exporters who are bringing these items and using them to make goods for exports.

Rationale behind changes in taxation on buyback of shares?

It is a relief, not an additional tax. The buyback proceeds will be taxed in the hands of minority shareholders as capital gains tax at 12.5% for long-term gains. The promoters will pay additional buyback tax. The whole objective of making that change was the misuse of tax arbitrage by the promoter.

The fiscal deficit for the next financial year is 4.3% from 4.4% Which is a gradual?

Drastic changes in fiscal deficit do not go down well as one or the other sector gets hurt. We will have to be gradual, but keep it well within the band, which gives confidence and shows that we care for prudent fiscal management. There is no point in bringing it down to 4% immediately. It is a responsible and realistic number.

Is the Gross Market Borrowing for next year on the higher side?

We do not think it is on the higher side because the net borrowing is in the range of Rs 11.73 lakh crore, which is around the number for the last couple of years. We have a larger Gross Borrowing number because we have Rs 5.5 lakh crore of loans that have to be repaid this year. We have a plan to manage this.

Is a 15% increase in defence budget linked to global uncertainty?

Across that board, we have kept the global uncertainty in mind. Uncertainty globally is impacting many areas, and we are seized of it in everything that we do, not just in one areas is particular

The budget has increased estimates of miscellaneous capital receipts to Rs 80,000 crore from the revised estimates of Rs 37,000 crore. Sources of these receipts.

The intent is that we will have a very strong asset monetisation plan in place. The last budget has announced the National Monetisation Pipeline of Rs 10 lakh crore. The pipeline is being prepared, and we hope to reap dividends from it this year.

WIll High Level Committee on Banking for Viksit Bharat also look at mergers of state-run banks to create bigger banks?

The high-level committee is going to look into it. Terms of Reference (ToR) of the committee will be prepared. We are looking for the committee to go into the entire expanse of the banking sector so that they come up with recommendations that help us to plan for banking for 2047. By the time we become Viksit Bharat, we need to understand what other steps we need to take in the banking area, and based on those recommendations, we will move forward. There are a large number of aspects related to banking requirements and expansion of the banking network and procedures that are impeding deposits as well as credit. All these aspects will be looked at by the committee.

On mandating Trade Settlement and Discounting System (TReDS) as settlement platform for all purchases from CPSEs.

All discounted and non-discounted bills by CPSEs have to be settled on TReDS so that MSMEs can get their payments for their supplies within 45 days. This is possible by CPSEs, and it has been tested. We want CPSEs to be pioneers, and corporates will also follow.