Budget 2016 may implement 7th Pay Commission, Indian rupee at 30-month low, Gold prices slips below 29,000 on weak global cues, more
Union Budget 2016: A $16 billion pay rise courtesy the 7th Pay Commission on pay and pension for public servants and costly food and farm programmes could force Finance Minister Arun Jaitley to cut capital spending in the Union Budget 2016-17 that will be presented on February 29th, officials and economists say. It could also eat into capital spending needed for railways, roads, ports and power projects, seen as vital to India's integration into the global economy. "It is not going to be a revolutionary or inspirational (budget) ... given the spending pressures," said Shilan Shah at Capital Economics. "It is most likely to lead to a sell-off in the bond market if the salary increase is implemented."
The rupee today dropped by 15 paise to end at a fresh 30-month low of 68.61 per dollar on renewed demand for the American currency from banks and importers on the back of higher greenback overseas amidst sustained foreign capital outflows.