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.

Trading stayed in the positive zone for the better part of the day. The Sensex ended higher by 79.64 points, 0.34 per cent, at over a two-week high of 23,788.79.

The 30-share Sensex had gained over 517.18 points in the past three sessions. At the close, the NSE Nifty was up 23.80 points, or 0.33 per cent, at 7,234.55.

Gold prices fell by Rs 280 to crack below the Rs 29,000 mark to Rs 28,970 per ten grams at the bullion market today, tracking a weak trend overseas amid subdued demand from jewellers at domestic spot market. Silver followed suit and dropped by Rs 325 to Rs 37,100 per kg due to reduced off take by industrial units and coin makers.

Mobile number portability requests by consumers and market share of Bharti Airtel, Vodafone, Idea, Reliance, BSNL, MTNL and other telecom firms.