Researched by: Rachel John, Sara Varghese, Nirmal Bhansali & Aarthi Ramnath
Union budget 2023: A very long update
Finance Minister Nirmala Sitharaman unveiled a goodie bag with something for everyone—designed to soothe any ruffled feelings ahead of the national elections next year. Here are the highlights:
Income tax: Until now, those making up to Rs 500,000 (5 lakh) a year had to pay zero taxes. That upper limit has been revised to Rs 700,000 (7 lakhs)—no exemptions required in the form of investments etc. The aim: to encourage people to spend more—strengthening domestic demand. This was also the biggest win for the middle class—which has been mostly ignored by a government intent on securing the votes of rural India and support of India Inc. FYI: the highest tax rate has been reduced from 42.74% to 39%, as well.
Mint has more details on benefits for salaried employees and pensioners. Indian Express looks at whether you should still continue to claim deductions and file under the old taxation rules. Below are the new tax slabs and rates:
Time to spend, spend, spend: Many criticised the government for not spending its way out of the economic doldrums triggered by the pandemic—to no avail. But this year, it committed to a big jump in capital expenditure—which is money invested in the future. Think infrastructure, education, health etc. This year, the government has allocated Rs 10 trillion (10 lakh crore) to capex—a whopping 33% leap. The biggest beneficiary: the Indian Railways which received a bounty of Rs 2.40 trillion (2.40 lakh crore)—the highest ever allocation. Point to note: every Rs 100 spent in capex results in an estimated gain of Rs 250 for the economy.
Staying prudent: For all the big spends, Sitharaman also signalled that the government has no intention of running up the red ink. It plans to limit the fiscal deficit (difference between government revenue and spending) to 5.9%.
News for your wallet: Here’s a quick list of what’s getting cheaper:
- Mobile phones and TV sets manufactured in India
- Denatured ethyl alcohol
- Shrimp feed
- Lab-grown diamonds
- Machinery for manufacturing lithium ion cell to be used in electric vehicles
And here’s what you will have to pay more for:
- Articles made of gold bars
- Kitchen electric chimney
- Compounded rubber
- Fully imported cars, including electric vehicles
The key losers: Rural employment got short shrift from the government. The allocation for the flagship MGNREGA scheme was a modest Rs 600 billion (60,000 crore)—a 33% cut that activists say spells disaster: “Such a low allocation is clearly aimed at killing the law. This allocation does not meet even the minimum threshold.” Also on the chopping block: minority schemes for education and skill development—all of which were slashed by 38%.
The main takeaway: It is widely being described as a growth-oriented plan that balances spending with fiscal prudence. The Indian Express praises the government for not prioritising electoral imperatives over fiscal prudence.
Adani FPO ends in tears
The context: For the past week, the world’s third richest man and a US-based short seller have been engaged in a bitter war of words. In a 32,000-word report, Hindenburg Research accused the Adani Group of stock manipulation and accounting fraud. But the company seemed to have escaped any long-term fallout when its ‘follow-on IPO’ to sell shares worth $2.5 billion was fully subscribed.
What happened now: After the FPO closed, the company issued an unexpected statement scrapping the FPO—promising to return the money to investors. There were two main triggers for the decision.
One: The plummeting stock price of Adani companies across the board. The flagship company Adani Enterprises dropped 28% on Wednesday—while the others fell anywhere between 5-20%. What this meant: investors had grossly overpaid for shares they’d bought at a price band of Rs 3,112 to Rs 3,276. Gautam Adani cited the bloodbath as the reason for the drastic move:
However, today the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the Company’s board felt that going ahead with the issue will not be morally correct. The interest of the investors is paramount and hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO.
Data point to note: Here’s a measure of the damage done by Hindenburg: “The combined market value of the group shares has eroded by more than 35% in just five trading sessions wiping out around Rs 7.4 lakh crore [7.4 trillion] from the combined market capitalisation of the group.”
Two: In an added blow, global brokerage firm Credit Suisse Group stopped accepting bonds of Adani’s group of companies as collateral for loans to its private banking clients. The announcement may have triggered the panicked sell-off of its share—wiping out $23 billion in just one trading session on Wednesday. What’s interesting to note:
Sources in the private banking industry said the total number of Credit Suisse clients and the amount involved is negligible. “But when such news comes out, it adds fuel to fire,” said a London-based bond investor.
The main takeaway: This kind of cancellation may not stem the damage but exacerbate it, according to analysts: “It’s unusual for a secondary offering like this to be canceled. Pulling an offering at the last minute doesn’t inspire a lot of confidence right now.” Also: Adani’s ranking in the world’s richest list has fallen to #15—way behind Mukesh-bhai who is now at #9. As mummy-ji always says, slow and steady wins the race.
Say goodbye to Netflix password-sharing
The streaming platform has been warning users for months that it plans to crack down on subscribers who merrily share their account details far and wide. It has now revealed exactly how it plans to police such behaviour. Account sharing will now be limited to people sharing a home. Therefore, any device accessing that account will have to log into it using the home wifi at least once in 31 days. If that’s not the case, Netflix will ask you to verify that device before it can be used to watch anything.
FYI: there is no sign of any such change on Netflix India—but the company has made it clear that this will be a global policy. And we don’t know how this would affect folks who use VPNs to switch their Netflix geography. (Sky News)
De-extinct the dodo!
While the rest of the world is busy trying to figure out how to save existing species, Colossal Biosciences has been working hard to bring back creatures that are already dead. We’ve already done Big Stories on their plans to resurrect the woolly mammoth and Tasmanian tiger. The gene-editing company has now added the dodo to its to-do list. The bird became extinct in 1681—less than 200 years after Europeans first encountered it in Mauritius in 1507.
The Colossal method generally involves splicing genetic material from the extinct animal into the embryos of its closest living relative. Example: elephants for the woolly mammoth. In the case of the dodo, it will be the humble pigeon. That may be more humane—if not more viable—since it would involve meddling with eggs. That’s a lot less stressful for a pigeon than an elephant that has to endure multiple failed pregnancies. (The Guardian)
Alec Baldwin charged for movie set death
The context: Back in 2021, Baldwin fired a gun while filming a scene for ‘Rust’. The bullet killed cinematographer Halyna Hutchins and injured director Joel Souza. The gun should not have had live bullets. And nothing in the script required Baldwin to actually pull the trigger of the Colt .45.
What happened now: Baldwin and Hannah Gutierrez-Reed—the film’s weapons specialist—have been charged with involuntary manslaughter. The charges include two different definitions of the crime—and therefore carry different sentences:
One version would require proof of negligence, which is punishable by up to 18 months in jail and a $5,000 fine under New Mexico law. The second alternative is for reckless disregard of safety “without due caution and circumspection.” It carries a higher threshold of wrongdoing and includes a “firearm enhancement” that could result in a mandatory five years in prison because the offence was committed with a gun.
The jury will have to decide which one will apply. Associated Press has lots more on why the prosecutors decided to charge Baldwin.
In other news from Hollywood: The Academy has decided not to strip British actor Andrea Riseborough of her Oscar nomination for the little-known indie film ‘To Leslie’. Riseborough received the nomination after a full-press campaign helmed by some of tinsel town’s biggest names: Kate Winslet, Charlize Theron, Jennifer Aniston, Gwyneth Paltrow, etc. But the problem is that some of their endorsements violated the Academy’s strict rules against comparing one potential nominee against another. For example:
[A]ctress Frances Fisher, who has appeared in Titanic and Gone In 60 Seconds, lobbied for Riseborough while implying Blanchett, Michelle Yeoh, Danielle Deadwyler and Viola Davis did not need more support because they were already "a lock for their outstanding work."
But the Academy found that Riseborough was not directly to blame for these violations—and will hold on to her nomination. (BBC News)
About that radioactive capsule in Oz…
The context: A truck owned by a big mining company in Australia dropped something as it travelled from Newman to Perth. The ‘lost item’ was a tiny sensor—measuring 0.3 inches by 0.2 inches—used to measure the density of iron ore feed. The problem: the ‘capsule’ contained cesium-137 and is dangerously radioactive. Hence, Australian authorities have been combing the 1,400 km route to find the damn thing.
What happened now: Believe it or not, they found it! And no one seems to have been endangered by the accident: “It does not appear the device has moved. It appears to have fallen off the truck and landed by the side of the road. It is remote enough that it is not near any major community.” It will now be transported back in a lead container to shield people from radiation—which makes us wonder why it wasn’t in one to begin with. (The Guardian)
Something to see
The music video for Sam Smith’s latest track ‘I’m Not Here to Make Friends’ has sparked a backlash—with outraged viewers calling it “oversexualised”, “vulgar” and inappropriate for younger audiences. However, many others pointed out that the same people have no problems with similarly risque videos with female stars such as Rihanna and Nicki Minaj. The Independent writes:
“The non-binary English singer was simply embracing the kind of in-your-face, sex- and body-positive sensibility that has become fairly commonplace in the modern music scene.”