Professional Documents
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Sensex at open: 19264.80, up 112.39 points Sensex at 11.46am: Extra investment allowance of 15% for corporates investing over Rs 100 crore in plant and machinery. Sensex at 12.11pm: Additional tax deduction of Rs 1 lakh for first time buyers of houses valued up to Rs 25 lakh Sensex at 12.21pm: Super Rich Tax - Surcharge of 10 percent on those with a taxable income of over Rs 1 crore Sensex at 12.43pm: Government to borrow Rs 6.3 lakh crore from the market. Sensex at 02.59pm: Fresh bout of selling drifts Sensex to fresh 3-month low
Sensex at 11 am: FM begins Budget speech. 19286.72, up 134.31 points. Sensex at 12pm: Entry norms for FIIs to be eased further. Sensex at 12.16pm: Fiscal deficit for FY13 at 5.2 percent and FY14 fiscal deficit seen at 4.8 percent. Sensex at 12.30pm: TDS of 1 percent on sale of immovable property valued over Rs 50 lakh. Sensex at 01.18pm: Disappointment from the Budget led to sell-off. Sensex at 3.30pm: Highest ever turnover of Rs 4.39 lakh crore, 18861.54, down 290 pts
Proposals
Excise duty on SUVs up from 27% to 30%. Customs duty on luxury vehicles hiked to 100%. Higher allocation to JNNURM leading to additional demand of 10,000 buses augurs well for all commercial vehicle manufacturers.
Proposals
Specific Excise Duty on cigarettes increased by 18%. Tax on royalty increased from 10% to 25%.
Proposals
Import duty on crude oil might be re-imposed. Cess on crude oil production might be increased from current levels of Rs 4,500/MT. Removal of 5% customs duty on LNG and natural gas.
Impact
Negative for M&M and Tata Motors. Higher allocation to JNNURM positive for all commercial vehicle manufacturers.
Impact
Cigarette companies will pass on the increase to the customers. This could marginally impact volume growth.
Impact
Positive for the upstream companies like Reliance, ONGC.
Proposals
Extension of 4% farm loans to private banks. Additional deduction of Rs1 lakh interest on housing loans of up to Rs25 lakh. Reduction in STT. Introduction of commodity transaction tax on non-agri contracts
Proposals
Constitution of a regulatory authority for road sector. 3000 km of road projects to be awarded in first 6 months of FY14. IDFs will be encouraged to provide long-term low-cost debt
Proposals
Royalty/technical fees paid to NRIs increased to 25%. To allot Rs 37333 crore for healthcare, family welfare in FY14.
Impact
Negative for private sector banks. Positive for PSU banks. Introduction of CTT negative for broking companies.
Impact
Positive for the sector. It will boost infrastructure development in roads, ports, housing and railways.
Impact
Higher allocation is positive for the sector. Increase in royalty fees marginally negative for Ranbaxy
UDAY KOTAK
Kotak Mahindra Bank
The Finance Minister has lived up to his promise on fiscal deficit. The Budget 2013-14 is good for capital markets and investments.
SAMIR ARORA
Helios Capital
The Budget 2013-14 turned out to be unexciting for equity markets. No direction changing moves announced to revive markets.
MADHU KELA
Reliance Capital
The Budget is encouraging as FM has not thrown any negative surprises. Fiscal deficit projection of 4.8% looks credible.
NILESH SHAH
Axis Direct
The RBI's next step potentially could be towards rate cut because now they have been given a space on the fiscal deficit side.
VALLABH BHANSHALI
Enam Securities
FM has done more good than bad. He did not speak on how the current account deficit will be handled.
VIBHAV KAPOOR
IL&FS
With the limited options FM has done a decent job. The market will resume downtrend from now onwards.
DEEPAK PAREKH
HDFC
It is a very realistic, balanced, and pragmatic Budget. We have had one of the worst years in a decade and one cannot expect miracles from him.
CHANDA KOCHHAR
ICICI Bank
Private sector banks have been given a level-playing field vis-a-vis the public sector banks.
R SHANKAR RAMAN
L&T
The challenge always has been to convert some of these targets like 3000 kms of new roads into implemental plans.
PAWAN GOENKA
M&M
Don't agree with excise duty hike on SUVs. Diesel tax not being implemented is very good news for the sector. I would rate budget as 7.5/10.
KOUSHIK CHATTERJEE
Tata Steel
The focus would be on how more efficiently coal can be mined. Our aim is to increase mining with available reserves.
ADI GODREJ
Godrej Industries
FY14 Budget is a growth oriented one and the emphasis remains on inclusiveness. Expenditure and execution is important.
ITC
Proposal: SED on cigarettes hiked by 18%. Negative for ITC.
Coal India
Proposal: To encourage PPP projects for coal. Positive for Coal India.
ONGC
Proposal: To announce policy on Shale gas based on revenue sharing, Blocked NELP blocks will be cleared. Positive for Reliance Inds, ONGC.
ICICI Bank
Proposal: 4% farm loan scheme extended to private sector banks. Negative for private sector banks.
Tata Motors
Proposal: Excise duty on SUV upped to 30% from 27. Negative for M&M, Tata Motors.
DLF
Proposal: House loans up to Rs 25 lakh will be allowed an additional deduction of interest of Rs 1 lakh. Positive for realty.
SBI
Sun Pharma
Jain Irrigation
Proposal: Rs 27,049 crore allocated to Ministry of Agriculture, up 22%. Positive for Jain Irrigation, Monsanto, fertilisers and pesticides.
Proposal: To provide Rs 14,000 crore for public sector banks recapitalisation. All Womens Bank to be set up via public sector. Positive for public sector banks.
Proposal: To allot Rs 37333 crore for healthcare, family welfare in FY14: Positive for pharma stocks.
Educomp Solutions
Proposal: Rs 65,877 Cr has been allocated to education, up 17% from FY13. Positive for education stocks.
NTPC
Century Textiles
Proposal: Propose technology upgrade scheme for textile sector to Rs 2400 crore in FY14. Positive for Century Textiles, Alok, Arvind.
Proposal: Extension of sunset clause for profit-linked incentive by one year: Positive for the power sector.
Suzlon Energy
Proposal: Higher allocation for wind energy. Positive for Suzlon.
SKS Micro
Sadbhav Engineering
Proposal: 3000 km of road projects will be awarded in first 6 months of FY14. Positive for Sadbhav Engineering, construction companies.
Proposal: Bank correspondents can sell micro finance products. Positive for SKS Micro.
Triveni Engineering
Proposal: Allocation of Rs 15,260 crore towards clean drinking water & sanitation. Positive for Triveni Engineering, Va Tech Wabag.
Moschip
Speciality Restaurants
Proposal: Finance Minister to impose service tax on all AC restaurants. Negative for Speciality Restaurants.
Proposal: No custom duty for plant, machinery for semiconductors. Positive for Moschip, SPEL.
Click here to use our tax calculator to find out your new tax structure.
Key Takeaways
The government expects GDP to grow in 6.1-6.7 percent range next year. Wholesale price inflation is seen between 6.2-6.6 percent by March this year. Revival of investment in infrastructure is one of the key challenges before the government. The Survey based on developments of FY13, draws out a rather cautious picture of the year gone by, emphasizing the continued need for reforms in the coming months with an outlook for the next fiscal pointing towards gradual improvements.
Fiscal Deficit
Fiscal Deficit as % of GDP 7.0% 6.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 3.3% 2.5% 4.8% 6.5% 5.7% 5.3%
Key Takeaways
The Government will be able to achieve its fiscal deficit target of 5.3 percent for the current year. Revenue collection target for FY13 is likely to be significantly below target. The Survey sees oil subsidies as a key fiscal risk, and that the government needs to raise diesel and LPG prices in line with global rates. There is limited room to grow exports, given adverse local and global factors The only way current account deficit can be kept in check is by reducing imports of gold and oil.
47.44
Inflation Rate
Inflation% 12 9 6 3 0 3.8 9.6
8.9 7.6
Rail Budget Full Speech I Analysis I Rail Budget Highlights Full article
Coal India
Proposal: Rs 4,000 crore has been allotted for coal mine connectivity projects.
Bhel
Proposal: Railways to set up electromotive unit in Rajasthan in joint venture with BHEL.
ACC
Proposal: Freight rates to go up by 5.8%, Negative for cement, steel, iron ore and urea companies.
Titagarh Wagons
Proposal: To introduce AC coaches for Mumbai suburban coaches. Positive for Titagrah Wagons, Texmaco Rail.
Texmaco Rail
Gammon Infra
Proposal: Rs 9,000 crore has been allocated for port and mine connectivity. Positive for Gammon Infra, L&T, NCC.
Proposal: Railways to set up coach manufacturing facility at Haryana; Positive for Texmaco, Titagarh, BEML.
Suzlon
KEC International
Proposal: Railways to set up equipment signaling plant at Chandigarh via PPP.
Siemens
Verdict
Railway Budget turned out to be a non-event. Railway Minister P K Bansal failed to deliver some big ticket announcements. Major railway stocks like Kalindee Rail, Kernex, Titagarh Wagons, Texmaco Rail saw a huge sell-off in trade.
Investors to face some small changes following Budget - Arnav Pandya, Financial Planner
Why Chidu's Lo-Cal budget is a flop-show -R. Jagannathan Editor, Firstpost at Network 18
If Palaniappan Chidambarams eighth Budget has not set the markets on fire, it can be easily explained: his first goal was to avoid doing damage to investor confidence, which is what his predecessor managed to do. And unlike his own 2008 budget, which set the stage for the economys long-term slide and made inflation intractable, Budget 2013-14 has taken the middle path of low ambition and low risk. There is thus nothing in it to excite anybody, not even his own party. He has delivered on his promise of providing a responsible budget, which the markets misunderstood to mean something that will send the adrenalin pumping. That was not on, and the FM restrained himself from any dose of excess populism. A lo-calorie budget is not meant to energise anybody. It is meant to get the fat down. If the markets are moping right now, with the Sensex and Nifty heading south, its because Chidambaram has already given them enough room for optimism before the budget. The markets wanted more of the same, but he could not oblige. A lo-calorie budget is not meant to energise anybody. It is meant to get the fat down. Before we rush to condole those left out of accessing the meagre basket of goodies, it is worth summarising the core proposals made in the budget. Chidambaram has raised Rs 18,000 crore of additional revenue through direct and indirect taxes, the former mostly by taxing companies more. Excise and customs remain more or less the same, with no changes in base rates. The concessions, both to populism and the middle classes, are minor: there is a token Rs 10,000 crore additional provision for Sonia Gandhis Food Security Bill, some very small personal income tax reliefs, and an additional deduction of Rs 1 lakh for interest paid on first home loans (over and above existing Rs 1.5 lakh). Plus there are promises on new savings instruments sold through post offices that will be inflation-indexed. But these will not be more than sideshows to the main avenues currently available for savings.
Budget: Chidambaram plays safe; market disappointed -Santosh Nair Editor, Moneycontrol at Network 18
February 28th: History repeats itself? Menaka Doshi Corporate Editor, CNBC-TV18
"I have been at pains to state over and over again that India, at the
present juncture, does not have the choice between welcoming and spurning foreign investment. If I may be frank, foreign investment is an imperative." - P Chidambaram, Finance Minister Thats how Finance Minister P Chidambaram opened his Budget speech on Thursday, striking the right note in a country starved of investments and faced with declining growth. He must have put a smile on the faces of foreign investors...only to wipe it off an hour later. "In order to remove the ambiguity that prevails on what is Foreign Direct Investment (FDI) and what is Foreign Institutional Investment (FII), I propose to follow the international practice and lay down a broad principle that, where an investor has a stake of 10 percent or less in a company, it will be treated as FII and, where an investor has a stake of more than 10 percent, it will be treated as FDI. A committee will be constituted to examine the application of the principle and to work out the details expeditiously. - P Chidambaram, Finance Minister That was the first surprise. Till here the speech was going fairly well. He announced bits and bobs of infrastructure investments, put in an aggressive 4.8% fiscal deficit target, spoke of capital market reform and then suddenly threw in this half baked idea. Half baked because there are no details forthcoming. Indian budgets are high profile events...this one watched even more closely as it comes in an environment of declining growth and follows an epoch-making budget that include 24 retroactive amendments. High profile events are not the place to showcase meagrely worded ideas, being introduced for the first time. In a country home to complex, sectoral, foreign investment caps and confusing tax treatments for different classes of foreign investors, to suddenly tell a foreign investor his category might change without his will, is not a good idea. I just wish this had been eased in via a separate discussion paper, put through several rounds of debate and then proposed! But if think this is bad...think again. "Some tax avoidance arrangements have come to notice, and I propose to plug the loopholes. Some unlisted companies have avoided dividend distribution tax by arrangements involving buyback of shares. I propose to levy a final withholding tax at the rate of 20 percent on profits distributed by unlisted companies to shareholders through buyback of shares. - P Chidambaram, Finance Minister There's no denying that some MNC structures have used this loophole so the FM's misgivings are justified as is his desire to plug the loophole. I could say the same about his next proposal.
# Pritish Nandy
"Wonderful. We cant stop rapes, crimes against women. But we want to open a bank for women. As if women cant use normal banks!
# Anand Mahindra
"No quarrel if ALL large cars taxed. Singling out SUV's destroys a level field. Sad, one has to fight harder to succeed in one's own country"
# @Trendulkar
Keeping money in the blouse is the original women's bank.
# @kunalrao
Women's bank? Will they be closed once a month for 4 days?
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