Saturday, March 1, 2008

What you dont know about the Budget 2008- The Rs 60 K loan waiver will also finance the 6th pay commission

1. The Rs 60 K loan waiver:- is it going to finance the 6th pay commission outgoing...!
here's why I think so correct me if I am missing anything here:-

- No provision made in budget for the 60K amount. common opinion is that it is going to be financed by bonds and will remain

- what it means is that loan balances being waived off in the books of banks would be replaced by these bonds. so no immediate cash impact there.

- here's the interesting part. if the banks write back this amount that will increase their profits and they would need to pay tax on the amount. this tax will conservatively work out to at least Rs 20 K crore. and this is the amount that the FM is likely to use for financing the incremental impact of the 6th pay commission