BUDGET 2016 MAY IMPLEMENT 7TH PAY COMMISSION
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.
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