Business
Govt expenditure on big infra projects to drive growth in 2025-26: Report

New Delhi, Jan 13: The Centre’s capital expenditure in big-ticket infrastructure projects such as highways, railways and power development and investments in critical sectors such as defence are expected to propel India’s economic growth in the financial year 2025- 2026 and beyond, according to a report by financial services firm Prabhudas Lilladher (PL).
“We are already witnessing an uptick in momentum in railways, defence, power, data Centers, etc., the execution of which will accelerate growth in FY26 and beyond,” the report states.
The government allocated a massive Rs 11.1 lakh crore for infrastructure projects in the budget for 204-25 and this is expected to be increased further in the forthcoming budget for 2025-26.
The anticipated measures to pump-prime the economy could provide the much-needed push to stimulate demand and support long-term growth, the report states.
The report states that the forthcoming budget will be instrumental in shaping the economic recovery, with expectations of a growth-driven focus aimed at boosting middle-class spending with inflation having eased.
In addition, sectors such as healthcare, tourism, discretionary consumption, and financialisation are poised to benefit from the recovery, according to the report.
The report’s observations on the economic revival are supported by the surge in industrial growth which touched a 6-month high of 5.2 per cent in November, up from 3.5 per cent in October of the current financial year (2024-25), according to data released by the Ministry of Statistics on Friday.
The increase also marks a significant rise over the industrial growth of 2.5 per cent recorded a year before in November 2023.
The growth rate of the manufacturing sector, which accounts for more than three-fourths of the index of industrial production (IIP), accelerated to 5.8 per cent during Nov 2024 from 4.1 per cent in October. This augurs well for employment generation as the sector plays a key role in providing quality jobs to the young graduates passing out from the country’s engineering institutes and universities.
The figures on use-based classification show that the production of capital goods, which comprise machines used in factories, went up by a robust 9 per cent. This segment reflects the real investment taking place in the economy which has a multiplier effect on the creation of jobs and incomes going ahead.
There was also a double-digit surge of 13.1 per cent in the production of consumer durables such as electronic goods, refrigerators, and TVs during November 2024 reflecting the higher consumer demand for these items amid rising incomes.
Business
RBI desires to go extremely calibrated on future repo rate actions: Experts

New Delhi, Feb 8: The monetary policy in India is easing since last few months and as rate cuts transmit with a lag, it makes sense to act with a forward-looking estimate if the monetary policy has to work its way on real economy, according to experts.
The October policy saw the stance getting changed to neutral (vs. withdrawal of accommodation). This was followed with 50bps of CRR reduction in December, plethora of liquidity supporting measures in January and now a 25bps of repo rate reduction in February 2025.
“We interpret the neutral stance as the RBI desire to go extremely calibrated on future repo rate actions, given the change in global dynamics, where the markets have significantly dialled down quantum of rate cuts by the US Fed in 2025,” said Mittal.
The fact that stance is neutral, it means that everything that transmit between now and April — Q3 FY25 GDP data, global dynamics, currency, crude, March heat waves — will matter.
“We are expecting 50bps of rate cutting cycle,” Mittal said, adding that liquidity will play much larger role.
In a big relief for banks, RBI Governor Sanjay Malhotra announced that the implementation of the proposed Liquidity Coverage Ratio (LCR), as well as project financing norms, will be deferred by a year and will not be implemented before March 31, 2026.
“A key announcement for banks concerned the postponement of the LCR guidelines implementation, now scheduled for no earlier than April 1, 2026, and to be rolled out in a phased manner,” said Mittal.
Additionally, the RBI indicated that more time would be needed to finalise project financing norms and expected credit loss rules.
According to Ajay Kumar Srivastava, Managing Director and CEO, Indian Overseas Bank, with the inflation rate expected to moderate further in FY26 and GDP growth estimated at 6.7 per cent, “we believe this rate cut will provide a boost to the economy and stimulate investment and consumer demand, fostering overall economic momentum”.
“We also appreciate the RBI’s focus on enhancing digital security in the banking and payments system,” he added.
Business
New Income Tax Bill set to be tabled in Parliament next week

New Delhi, Feb 8: Aiming to put more money in the hands of the middle class and simplify the whole filing process, the new Income Tax Bill is set to be tabled in the Parliament next week after receiving approval from the Union Cabinet.
The bill, which was granted approval in the Cabinet meeting chaired by Prime Minister Narendra Modi on Friday, will be introduced in the Parliament next week before it is sent to the Parliament’s Standing Committee on Finance.
Before the Income Tax Bill was cleared by the Cabinet, people in the know said that the legislation would likely provide directions to widen the tax net, given the contraction in the tax base following the exemption limit being raised to Rs 12 lakh in the Union Budget.
The current Income Tax Act was enforced in the country in 1961 and now, the new Income Tax Act is being made according to the needs of the 21st century to replace the existing law, according to sources close to the development.
A review committee was formed for the new Income Tax law in the country to replace the earlier cumbersome law. According to sources, the new Income Tax Bill has been prepared by the government on the recommendation of the committee.
In this era of technology and massive digitalisation, taxpayers can perform several things online on his or her own. In such a scenario, there will be smooth changes in the new I-T Bill for the common man who can understand it seamlessly online. This is an attempt to make the system simple and convenient for common people.
Along with this, the government’s intention behind giving such a big relief to the taxpayers is to increase private consumption which would directly benefit the health of the economy.
Business
Scams in UPA regime dragged down GDP growth rate to 5.6pc in 2012-13: BJP

New Delhi, Feb 7: The BJP has slammed the Congress for its primary claim of enabling “7.6 per cent growth”, pointing out that this was effectuated by the global economic boom between 2004-08 and conceals the decline to 5.6 per cent in 2012-13, caused by corruption and fiscal mismanagement.
The BJP’s factsheet highlights that the average growth rate during the 10 years of UPA (2004-2014) was restricted to 6.8 per cent compared to NDA’s 8.4 per cent average (2014-2024).
The UPA relied on reckless borrowing, leading to a ballooning current account deficit and 9.3 per cent inflation. On the other hand, despite the Covid pandemic and the Russia-Ukraine conflict, India’s GDP growth for 2024-25 is projected at 6.4 per cent, the highest among major economies, the factsheet states.
It cites the Economic Survey 2024-25 projection of a 6.3-6.8 per cent growth rate for FY25-26, in line with other financial bodies such as the IMF.
The rise in digital transactions from 2.2 billion in 2013-14 to over 208.5 billion in 2024, driven by Digital India, and the opening of 500 million bank accounts under PMJDY showcase inclusive economic growth, according to the BJP factsheet
It also mentions the JAM Trinity (Jan Dhan, Aadhaar, Mobile Network) ensured DBT payments of Rs 27,442.08 crore were made between March 24 and April 17, 2020 (24 days) during peak Covid-19 to 11.42 crore beneficiaries.
It also cites the Economic Survey 2024-25 for showing Financial Inclusion Index rose from 53.9 in 2021 to 64.2 in 2024 as an indicator of growth with equity.
The factsheet states that in “a resurgent India under Prime Minister Narendra Modi-led government, as many as 24.82 crore people have risen out of multidimensional poverty between 2014-15 and 2022-23”.
In contrast, the UPA government triggered one of India’s worst non-performing asset (NPA) crises in the banking sector. The ‘phone-a-loan’ scam under UPA led to a surge in bad loans, crippling businesses and financial institutions, the factsheet states.
By 2018, NPAs reached a staggering 11.6 per cent of gross advances, with the root cause traced back to bad lending decisions made between 2008-2014. High-profile defaulters like Nirav Modi, Vijay Mallya, and Mehul Choksi flourished under the lax regulatory environment of the UPA era, it observes.
Besides, the lack of a robust bankruptcy framework left struggling businesses with no structured exit mechanism, which was only brought in in 2016 with Insolvency and Bankruptcy Code (IBC) 2016, the BJP factsheet added.
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