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Budget’s growth focus to face macro challenges

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The Budget is focused on growth, but will face macro challenges, Japanese brokerage Nomura said in a report.

First, the ability of the government — both central and states — to spend 2.9 per cent of GDP on capex will face execution hurdles. Identification of projects, on-the-ground implementation, coordination with different agencies — all typically lead to a smaller amount being spent than allocated.

Second, if revenues disappoint or other expenses rise (higher subsidies or more allocation towards rural employment, for example), then there is a risk of the capex amount being pruned.

Third, we see other growth challenges. India is currently in the midst of a business cycle recovery. However, we expect India’s growth to decelerate from H2 CY2022 onwards, reflecting weaker consumption demand from low income households (due to scarring effects and high inflation), weaker export growth and continued sub-par private capex due to low capacity utilisation.

Rising oil prices (a negative term of trade effect) and tighter global financial conditions are also growth headwinds.

Hence, if the capex-led push is not fruitful, then the growth slowdown could be material. We currently expect GDP growth of 8.7 per cent y-o-y in FY22 (reduced recently from 9.2 per cent owing to the impact of Omicron.

Nomura said we continue to expect higher inflation and wider current account deficits, largely due to rising commodity prices, although an expansionary budget may also play an incremental role. On inflation, while food prices appear in check, core inflationary pressures are rising across clothing, household goods and services and personal care items.

Firms are passing higher input prices onto consumer prices. Domestic fuel prices are currently on hold, but will likely be adjusted higher after the state elections. We expect services price inflation to also rise as the economy opens.

We expect elevated global commodity prices, high inflation and steady domestic demand to result in higher imports, widening the current account deficit to 2.6 per cent of GDP in 2022, up from a deficit of 1.3 per cent in 2021.

The Budget is unambiguously focused on reviving growth, via higher public capex. Capital expenditure generally results in a higher growth multiplier, so the continued focus on infrastructure spending, including support to states to spend on capex, is important at a time when private capex is sluggish.

The government expects to miss its budgeted fiscal deficit target of 6.8 per cent of GDP for FY22 (year ending March 2022) marginally, with an actual outturn of 6.9 per cent (Figure 1). The sharp rise in receipts of corporate taxes, robust income taxes and strong indirect taxes (in part due to higher fuel excise duties in the first half of the year) have resulted in net tax revenues exceeding budget estimates by Rs 2.2trn (1.0 per cent of GDP). However, contrary to our expectation, the government has revised up its capex commitment for the year by Rs 485bn (0.2 per cent of GDP), though this primarily reflects the government clearing its liabilities of the recently divested Air India. Also, in line with our expectations, revenue expenditure (revex) has been higher by Rs 2.4trn (1.0 per cent of GDP), reflecting the second wave support package, food and fertiliser subsidies, export incentives and extra spending by some departments. Finally, the disinvestment target has now been calibrated lower by Rs 970bn (0.4 per cent of GDP).

Business

Maharashtra govt issues notice to Ola Electric over missing trade certificates

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Pune, April 4: The Maharashtra government has issued a notice to Ola Electric Mobility Limited, asking the company to explain why some of its stores in the state are operating without valid trade certificates.

According to the notice from the Transport Commissioner’s Office, several Ola Electric showrooms and service centres in Maharashtra are being run without the required documents.

The notice also accuses the company of illegally selling vehicles through these unauthorised outlets.

According to media report, the notice, dated March 31, gives the company three days to respond.

“This is a very serious matter, and you are requested to provide an explanation within three days as to why action should not be taken against your company for this act,” the notice said.

It was reportedly signed by Joint Transport Commissioner Ravi Gaikwad. However, as of now, Ola Electric has not responded officially on the issue.

The notice follows an earlier inspection drive initiated by the state transport authority.

On March 21, NDTV Profit had reported that Maharashtra’s Transport Commissioner had instructed all Regional Transport Offices (RTOs) to carry out special checks at Ola Electric stores.

These inspections reportedly revealed that many outlets were functioning without the necessary trade certificates.

As per the Central Motor Vehicles Act, 1988, and the Central Motor Vehicle Rules, 1989, every vehicle distributor or manufacturer must obtain a trade certificate to register and sell vehicles.

In addition, Rule 35 of the same law states that each showroom or dealership must have a separate certificate from the concerned registration authority.

The shares of the electric two-wheeler manufacturer closed lower by Rs 1.42 or 2.63 per cent to close the intra-day trade at Rs 52.62 on the National Stock Exchange (NSE).

Earlier this week, the company saw a sharp drop in its electric two-wheeler sales in March 2025, selling 23,430 units — a steep 56 per cent decline compared to the same month last year.

The company said on April 1 that the fall was mainly due to disruptions caused by its recent shift to handling vehicle registrations in-house, a process that began in February.

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Business

Cabinet okays 4 projects worth Rs. 18,658 crore to expand track network of Indian Railways

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New Delhi, April 4: The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved four projects to expand the track network of Indian Railways with an investment of Rs 18,658 crore, according to an official statement issued on Friday.

The four projects covering 15 districts in three states – Maharashtra, Odisha, and Chhattisgarh – will increase the existing network of Indian Railways by about 1,247 km.

These projects include Sambalpur-Jarapda 3rd and 4th Lines, Jharsuguda-Sason 3rd and 4th Lines, Kharsia-Naya Raipur-Parmalkasa 5th and 6th Lines, and Gondia-Balharshah doubling

The enhanced line capacity will improve mobility, providing enhanced efficiency and service reliability for Indian Railways. These multi-tracking proposals will ease operations and reduce congestion, providing the much-needed infrastructural development on the busiest sections across Indian Railways. The projects are in line with PM Modi’s vision of a New India, which will make people of the region “Aatmanirbhar” with comprehensive development in the area, which will enhance their employment/ opportunities, the official statement said.

The projects are part of the PM-Gati Shakti National Master Plan for multi-modal connectivity which entail integrated planning and will provide seamless connectivity for movement of people, goods and services.

With these projects, 19 new stations will be constructed, enhancing connectivity to two Aspirational Districts (Gadchiroli and Rajnandgaon). The multi-tracking project will enhance connectivity to around 3,350 villages and about 47.25 lakh population.

Kharsia-Naya Raipur-Parmalkasa lines will provide direct connectivity to new areas such as Baloda Bazar, and this will create possibilities for the setting up of new industrial units, including cement plants, in the region.

These lines are essential routes for the transportation of commodities such as agricultural products, fertiliser, coal, iron ore, steel, cement, and limestone. The capacity augmentation works will result in additional freight traffic of magnitude 88.77 MTPA (Million Tonnes Per Annum), the statement said.

With rhe Railways being an environment friendly and energy efficient mode of transportation, the new projects will help both in achieving climate goals and minimising logistics costs of the country. The projects are expected to reduce oil import by 95 crore litres and lower CO2 emissions by 477 crore kg, which is equivalent to planting 19 crore trees, the statement added.

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‘Waqf Bill will benefit Muslims, no threat to religious sites,’ says Shahabuddin Razvi

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New Delhi, April 4: Maulana Shahabuddin Razvi, the National President of All India Muslim Jamaat, expressed his support for the Waqf (Amendment) Bill, stating that it would significantly benefit Muslims and ensure the betterment of their socio-economic conditions.

He praised the passage of the bill in both the Lok Sabha and Rajya Sabha and thanked the Modi government.

Maulana Shahabuddin, giving his first reaction to passage of bill, said, “The Waqf Amendment Bill does not harm common Muslims, it will benefit them. The only ones who stand to lose are the Waqf land mafias who have illegally occupied valuable land. Common Muslims will not be affected by this.”

He further stated that the bill is aimed at protecting the interests of the poor and vulnerable sections of the Muslim community.

The Maulana explained that the revenue generated from Waqf land would be used to improve the socio-economic status of impoverished Muslims, particularly those unable to afford quality education for their children.

“The income from Waqf land will be used for the benefit of poor Muslims, helping children from low-income families get a better education, and assisting orphans and widows in their development,” he said.

Maulana Shahabuddin assured that the funds would be used according to the intention of the Waqf and aimed at opening schools, colleges, madrasas, and orphanages to uplift the educational and social standing of underprivileged Muslims.

Addressing concerns about the impact on religious sites, Maulana Shahabuddin stated, “The Waqf Amendment Bill poses no threat to religious sites. Mosques, madrasas, Eidgahs, cemeteries, and shrines will remain unaffected. The government will not interfere with these religious institutions in any way.”

He further cautioned the Muslim community against falling prey to misleading political narratives, urging them not to be swayed by political figures seeking to exploit the situation for their own gain.

“Some politicians are misleading Muslims for their own interests. I appeal to the Muslim community to not fall for their provocations,” he added.

In the early hours of Friday, the Rajya Sabha approved the Waqf (Amendment) Bill, 2025, with a majority of 128 votes against 95, following a heated debate. The Bill had been passed in the Lok Sabha just a day earlier, after nearly 12 hours of intense discussions.

Drawing a parallel to the Citizenship Amendment Act (CAA) controversy, Maulana Shahabuddin recalled how political leaders misled the Muslim community, causing unwarranted fear that Muslims would lose their citizenship.

“When the CAA law was introduced, Muslims were misled into believing that their citizenship would be revoked. However, after its implementation, it became clear that no Muslim in India lost their citizenship, and instead, many were granted citizenship,” he stated.

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