BUDGET SPECIAL ISSUE 8TH MARCH [MONDAY]

Special Issue on
THE UNION BUDGET 2010-11
BUDGET TERMINOLOGIES: JARGONS MADE SIMPLER!!
''This year, our Finance Minister Mr. Pranab Mukherjee presented the Union Budget 2010-11 on the 26th
of Feb, and hence, we bring to you a special coverage and analysis of the Union Budget 2010-11''
Before we start analyzing the Budget, let us first have a quick recap of the various terminologies attached
with the Budget.
BUDGET is an estimate of expenditure that may and will be incurred over a period of time, with the means (revenue)
to meet them.
A budget has two sides, Expenditure side and Revenue side. Components of both the sides have been explained in
brief, as follows:

REVENUE:
A) REVENUE RECEIPTS: It consists of items that do not increase the liabilities or decrease the assets.
Tax Revenue: A compulsory and legal levy on a person by the government.
Taxes are of two types: direct tax and indirect tax.
Direct Tax: Like income tax, corporation tax (tax on company profits), property tax, wealth tax, capital gain tax,
etc. are those taxes where the impact and incidence are on the same person. The burden is borne by the same person on
whom it is levied. Hence, the burden of tax cannot be shifted.
Indirect Tax: Like excise duty, sales tax, VAT, custom duties, are those taxes where the impact and the incidence
are not at the same point (or person). The burden is not borne by the person on whom it is levied first. Thus one person
initially pays it but the burden is wholly or partially passed on to some other individual who ultimately bears it. They
are also called taxes on expenditure.

JARGONS 1 SECTOR 5 MARKET 12

TABLE 3 UID 10
COVER 4 DTC 11
JARGONS CONTINUED….
Non-tax revenue: Any income which is not a compulsory levy by the government. Classification of Non-tax revenue
is as follows:

COMMERCIAL REVENUE ADMINISTRATIVE REVENUE INTERESTS AND DIVIDENDS

It is the income of the government
earned by supplying goods and ser-
vices like electricity, railway ser-
vices, etc.
It is earned via performing the ad- Government receives interest on
ministrative functions of the gov- investments made or loans granted
ernment. and also earns dividends on acqui-
FEES: is the payment earned for sition of shares of a company.
rendering services.
e.g. license fees, school and college
fees, etc.
FINES and PENALTIES: im-
posed for the infringement of law.
FORFEITURE: ceasing of prop-
erty as a result of non payment of
taxes, etc.
ESCHEATS: acquisition of prop-
erty of a person who dies without
any legal heir.

B) CAPITAL RECEIPTS: They are those items that either decrease the assets or increase the liabilities.
Recoveries of loans: It means the receipt of loans that the government granted in the past. It decreases the debtors‘
value of the government. Thus it is a decrease in assets.
Disinvestment: It implies selling of stakes in PSU units of the government. It implies selling of assets.
Borrowing and other liabilities: It implies if government takes loans. it increases the liability of the government.

Expenditure:
Revenue expenditure: It implies those expenditures that don‘t affect the assets or liabilities position of the govern-
ment. E.g. interests, payments of salaries, general social economic and defense services, subsidies, grants to states and
U.T. and foreign governments.
Capital expenditure: It implies that expenditures of the government that either increases the assets or decreases the
liabilities of the government. E.g. Loans to state and UT, FG, etc. (increase in assets) and Repayment of loans
(decrease of liabilities).
Some other terms that we hear repeatedly within the Budget are:

Fiscal Deficit: When a government's expenditures exceed its revenues, causing or deepening a deficit; this excess
spending needs to be financed through borrowing.

GDP: The monetary value of all the finished goods and services produced within a country's borders in a specific time
period, though GDP is usually calculated on an annual basis.

Fiscal Consolidation: In simple terms, it is reducing government deficits and the level of borrowings.

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BUDGET TABLE

Now that we are little comfortable with the technical jargons of the Budget, lets analyze the
Budget with its numbers! As we know, a Budget is a statement of projection of the govern-
ment’s expenditures and receipts over the forthcoming fiscal year. Hence, a Budget is like a
Profit & Loss Account, wherein the receipts and payments are put against each other and ex-
tensive planning is done to ensure that the receipts match with the expenses!!

UNION BUDGET- 2010-11

REVENUE EXPENDITURE

1 Revenue Receipts TOTAL 1 Revenue Expenditure TOTAL

(Rs. (Rs.
Crores) Crores)

a Tax Revenue 5,34,094 a Interest 2,48,664

b Non-Tax Reve- 1,48,118 6,82,212 b Non-Interest 7,10,060 9,58,724

nue

2 Capital Receipts 2 Capital Expenditure

a Recoveries of 5,129 a Loan repaid or loans 1,50,025 1,50,025

Loan granted to other
states, etc
b Disinvestments 40,000

c Borrowings and 3,81,408 4,26,537

other liabilities

TOTAL 11,08,749 TOTAL 11,08,749

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COVER ARTICLE
PROLOGUE:- "In the previous year, by the time the American consumption party came to an end, had
someone asked an expert to comment on the Indian growth story, he might have said something on the
lines of the fact that countries like India were able to achieve these magical growth rates, only because of
the phenomenal consumption rate of America.. or would he?” Lets find out.

Mr. Pranab Mukherjee presented the Union Budget for FY 2010-11 on 26 February, and a rare thing happened. The stock markets
rose! (In the last 19 years, markets fell for 16 times post budget ceremony). And this was despite the fact that oil, cars, gold, exer-
cise duty is up. We shall come back to this in a while.
FM increased the income tax slabs, thereby giving a good Rs. 50,000 bonus for a person earning Rs 8 lakhs a year. But perhaps
the real message was that from next year onwards the DTC will be implemented, which will change the tax structure once and for
all. He assured the GST implementation from next year! These are moves which can be said to be a ‗Mini 1991‘. They are big!!
Private enterprises are always preferred over government ones, and Mr. Mukherjee with his Rs. 40,000 Crores Disinvestment, will
not only fulfill this want of ours, but it will also have the chicken and egg effect. For disinvestment of this scale to be successful,
the government has to ensure that the stock markets remain healthy and the markets tend to be in good shape when these things
are on offer. Both ways this is good for retail investors like you and me!
Allocations for Infrastructure and Power are significantly up, with no further tax holidays for the IT sector. This conveys two
messages. First, the government fully realizes the importance of these two sectors for the Indian growth story, and is trying to im-
prove them at both urban and rural fronts (Bharat Nirman allocation at Rs. 48,000 Crores). Second, the IT sector has now grown
up to the point where it does not need daddy‘s support to sustain itself (anyways, SEZ‘s will still provide for tax holidays).
Another move towards privatization was the announcement to grant new banking licenses, which is good. But again what can be
bad here is the fact that these licenses can again be given only to business houses like Reliance. This is a matter of concern be-
cause by privatization one does not mean one private house controlling everything, and dialing-‗R‘, time and again, for reforms.
Allocation for the education sector is again up, but one might point out to the fact that this is of no help as the quality of education
is very poor. To this we have two points to make, 1) Budget is not the place from where this can be achieved and 2) We have a
very capable minister, Kapil Sibal, in place for this, who has already sprung onto action!
The Nandan Nilekani chaired Unique Identifaction Authority of India, is truly unique in itself. If and when they are able to come
out with these tamper proof I-cards, the money meant for the poor will actually reach to poor. Not only the poor but all of us also
wish that this becomes a reality, and perhaps some people are working hard to make this a reality.

Now let‘s come back to rise in oil, cars, gold etc.

Firstly, Oil. The excise duty which was raised in this budget, was actually (technically speaking) restored and not raised. When
the oil had hit levels north of $125 a barrel, the government has cut the excise duty. So when the oil prices are no longer prevail-
ing at those levels, the government certainly can restore it. Moreover, if the Parikh Committee recommendations are to be fol-
lowed (which is the need of the hour), the oil prices will be de-regulated, and then they will move in tandem with the global
prices. And if one looks at the coming years, it only means that they will be going northwards. So, when this happens, then who
will we blame?
Now coming to cars. It is a lesser hyped fact that one month before the Budget, all the car makers have themselves increased their
prices by 1-2 %, and the sales were not at all impacted. So, when that neither created a hype nor adverse affect, then how will a 2
percentage point increase in duty will?
For Gold/Platinum etc., the duty has been raised by just Rs. 100 (from previously Rs. 200 to Rs. 300 now for gold and platinum),
which are probably are too minuscule to bother about given the prices of these commodities!
Talking about Excise duty, Thank God nobody is debating over this modest restoration of the duties, so we also should not bother
about it (up 2%).
All in all this is a budget which has a medium to long term vision in place, whether it is about the Fiscal consolidation or new tax
reforms or trying to include the poor in the growth story. Current inflation levels are not that high so as to take away the credit for
these wholesome efforts (unless you are working for the Opposition)!

EPILOGUE:- Next year and in years that follow, when India is able to attain around 8.5 % to double digit
GDP growth rates, while we see the American economy still struggling to recover, then perhaps we will not
be needing answers from any expert to come to the opinion that: OUR INDIA IS DEFINITELY GOING
FORWARD… TO BECOME A GLOBAL POWER HOUSE IN ITSELF!!!

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SECTOR ANALYSIS
SECTORS IMPACT BUDGET PROPOSAL IMPACT COMPANIES
Excise duties increased by 2% As per expectation Bajaj Auto, Hero
AUTOMOBILES Honda, Maruti,
Favorable change in personal income tax Higher disposable Income will lead M&M
slabs to increased demand for commer-
cial vehicles

Higher allocation for rural development and Will increase rural disposable in-
NREGA Schemes come leading to increased demand

Weighted deduction increased in in-house Will lead to savings in tax thereby

research and development (R&D) from aiding EPS growth
150% to 200%

Restoring basic duty of 7.5% and levy of Profit of fleet operators will be af- Bajaj Auto, Hero
central excise duty of Re 1/litre on diesel fected, so will affect demand for Honda, Maruti,
and petrol commercial vehicles and will also M&M
lead to increased cost

Favorable change in personal income tax Higher disposable Income will lead Nestle, Marico,
FMCG slabs to increased demand for consumer ITC
goods

Increase in MAT rate from 15% to 18% Companies that are under MAT may Dabur, GCPL
see an adverse earning impact ITC

Increase in excise for cigarettes and tobacco
products
Roads – allocation hiked by 13.5%
INFRASTRUCTURE Railways – allocation hiked by 6%
Power – allocation hiked by 130%
Bharat Nirman – allocation hiked 17.4%
Urban development – allocation up 80%
Slab-wise increase in various cate-
gories of cigarettes will lead to
overall 15% hike in excise
Will increase the demand and hence All Infrastructure
earning of the companies Companies
BEML, Titagarh
Wagons (Rail)

Deduction u/s 80C specifically for invest-

ments in infrastructure bonds, in addition
to the existing Rs 100,000 limit

Hike in IIFCL disbursement targets by Rs. HCC, Nagarjuna

250 cr over next 3 years Constrcutions
(IIFCL)
Higher defence sector allocation (including Will facilitate the availability of
Rs 600bn for capital expenditure) long term capital L & T (Defence)

Project import status to ‗Monorail projects

for urban transport‘ at a concessional basic
duty of 5% granted
Increase in MAT rate from 15% to 18%
Will impact the earnings, effective IRB, GVK, GMR
tax rate, cash flows and profitabil-
ity (IRR) of infra developers

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SECTOR ANALYSIS
SECTORS IMPACT BUDGET PROPOSAL IMPACT COMPANIES

Favorable change in personal income tax It will lead to higher disposable Rcom, Bha r t i
TELECOM slabs incomes and hence higher spend- Airtel, others and
ing on mobile phone usage/data mobil e phone
and VAS manufacturers

Higher allocation for rural development and Will lead to increased subscriber in
NREGA Schemes rural areas

Exemptions from basic, CVD and special This would translate into reduced
additional duties are now being extended to cost.
parts of battery chargers and hands-free
headphones (till March 31st, 2011)

Increase in MAT rate from 15% to 18% Cash flow and earnings will be Bharti, Idea,
impacted Rcom, others

Increase in Diesel Charges Increase network operating ex-

penses for all telecom players

5% hike in customs duty on crude oil, 7.5% Lead to increase in the import duty ONGC and OIL
OIL & GAS on petrol & diesel, and 10% on other re- differential for the refineries,
fined products which will enable them to enjoy
marginally higher refining margin

Payment of subsidy in cash to the OMCs Help the PSU‘s

rather than by way of oil bonds

5% hike in customs duty on crude oil, 7.5% Gross Under Recoveries will in- RIL, Essar Oil,
on petrol & diesel, and 10% on other re- crease on account of increase in MRPL
fined products Refinery Transfer Price and
higher excise imposition.
Levy of central excise duty of Re 1/litre on
diesel and petrol. RIL and Cairn
Project Internal Rate of Return will India
Increase in MAT rate from 15% to 18% be affected
Planned allocation for Power sector in- Will help to fund the equity re- KEC, Jyoti Struc-
POWER creased by 152% quirements tures, Crompton
Greaves
Proposed set up of a Coal Regulator Lead to transparency and increased
participation from private players Suzlon Energy,
Moser Baer, Tata
BP Solar
Plan outlay for Ministry of New and Renew- Increased demand for equipment
able Energy increased by 61% manufacturers Suzlon Energy

Exemption of excise duty on key compo- Reduces cost and increases earn-
nents for manufacture of rotor blades for ings NHPC, JP Hydro
wind power
Full exemption from central excise duty Will reduce the cost of the project
extended to goods supplied to mega power
projects awarded through tariff-based com-
petitive bidding
Clean energy cess of Rs 50/MT on coal Increase cost Tata power, GVK,
(domestic and imported) L a nc o, Ada ni
Power
Competitive bidding for coal mines Increase cost

Increase in MAT rate from 15% to 18% Will negatively impact profitability
of merchant power plants

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SECTOR ANALYSIS
SECTORS IMPACT BUDGET PROPOSAL IMPACT COMPANIES
States will have access to Rs.3,675 crores for Increases earnings of Companies in Educomp, Everon
INFORMATION elementary education under the Thirteenth Education and IT & NIIT
TECHNOLOGY Finance Commission grants for 2010-11

Process of service tax refund of accumulated Benefits the entire Sector All players
credit to exporters, especially in the area of
Information Technology and Business Proc-
ess Outsourcing simplified

Prepackaged IT software to be exempt from Will increase the earnings of sellers

service tax subject to conditions and users of prepackaged software

Increase in MAT rate from 15% to 18% Negatively affect the cash flows and Infosys, TCS, Tech
would increase tax out of IT com- Mahindra and
panies especially smaller and mid Mahindra Satyam
tier companies

Exemption from excise duty withdrawn on Increase cost of computers

Microprocessors and duty of 4% levied

PHARMACEUTICALS
Higher weighted average R&D deduction (in Can claim more decuction, Tax Ranbaxy, Dr
-house) 200% outgo declines and net earnings Reddy‘s, Biocon,
increases, will continue to support Cadila, Lupin,
R&D Piramal Life
Higher weighted average R&D deduction Can claim more decuction, Tax
(specified institutions) 175% outgo declines and net earnings
increases

Reduction in corporate tax surcharge 7.5% Positively impact earnings

Increase in MAT rate from 15% to 18% Will impact bottomline of most Sun, Cadila, Bio-
Pharma Cos con, Glenmark,
Lupin
Hike in excise duty on APIs API manufacturers may pass on the
rise to formulation manufacturers

MEDIA & ENTERTAIN- Project import status to initial set up of
MENT ―Digital Head End‖ by MSOs with conces-
sional customs duty of 5% and full exemp-
tion from special additional duty
Will reduce operational and set-up Multi-service op-
cost and increase the earnings. It erators
will provide stimulus to the fast
growing digital cable industry
through increase in investments by
the MSOs

Online news agencies exempt from service Increase the penetration of online
tax news medium

------------------------------------------- ----------------------------------- -------------------

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SECTOR ANALYSIS
SECTORS IMPACT BUDGET PROPOSAL IMPACT COMPANIES

AVIATION
------------------------------------------- ----------------------------------- -------------------

Levy of service tax on passenger fares Will increase passenger travel cost All players –
and thus negatively impact passen- Air India, King-
ger traffic and load factors for air- fisher, Spise Jet
line companies and others
Increase in customs duty on Fuels

Will increase the operating cost

BANKING AND FINAN- RBI to issue new branch license to private Increase the market share of Private Private and NBFC
CIAL SERVICES players and NBFC‘s and NBFC players. players

Commitment to recapitalise the pub- Dena Bank, Vijaya

Increase in allocated amount for capital infu- lic sector banks is likely to help Bank, Bank of
sion in state-owned banks in order to main- around 1/3 rd of these banks which Maharashtra, IDBI
tain Tier I capital of at least 8% have a current Tier I capital ade-
quacy of less than 8% as on Dec-09

BOB, PNB, OBC

6-month extension for repayment of loans More provisions for write backs and
under Agri-debt relief scheme NPA‘s Dewan Housing

Extension of 1% interest subvention by one Will increase demand of Home loans

year for home loans up to Rs 1mn and home and prompt repayment by farmers
cost of up to Rs 2mn will improve the credit culture

6-month extension for repayment of loans More loan repayment delays from BOB, PNB, OBC
under Agri-debt relief scheme farmers

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SECTOR ANALYSIS

SECTORS IMPACT BUDGET PROPOSAL IMPACT COMPANIES

RETAIL Favorable change in personal income tax Higher disposable Income will lead All retail cos –
slabs to increased demand Westside, Panta-
loon, Shopper;s
Stop and others

Customs duty cut on raw material Would reduce the cost Titan & Gitanjali
(Rhodium) for jewellery polishing -2%

Removal of special additional duty on Would reduce the cost of the retail
watches, garment imports (pre-packed) companies

Customs duty hike on gold bars, coins- Rs Will increase the cost of the com- Titan & Gitanjali
300/10gm pany

Customs duty hike on other forms of gold-

Rs 750/10gm

Excise duty levied on sunglasses (those not

used for corrective vision)

REALTY Rajiv Awas Yojana (RAY) for slum dwell- Will increase the demand for Hous- HDIL
ers and urban poor to extend support to ing Projects in Urban areas
states that are willing to provide property
rights to slum dwellers, increase of 700%

Allocation for housing and urban poverty Will increase the demand for hous- All Real Estate
alleviation raised-Rs 100 cr ing Players – Emaar,
DLF, Sobha

Pending projects given another year for Big players earnings will increase
claiming deduction on profits u/s 80IB(10)

FDI regime for ownership and control rec- Will increase FDI in real estate
ognised as central to the FDI policy

Sec 65(105) made mandatory which signi- Will affect the annuity business All Real Estate
fies imposition of service tax on rental model Players – Emaar,
complexes DLF, Sobha

Sec 25(d) of service tax amended such that Earnings will be impacted
construction of new buildings intended for
sale are deemed to be service provided by
the builder to buyer

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UNIQUE IDENTIFICATION PROJECT(UID)

It is a multipurpose national ID card (not smart card) initiated by the UPA Government.
Under this, a unique ID number will be allotted to each citizen of India that will identify
him/her, as against a dozen of I- Cards issued by different authorities.

UIDAI (UID Authority of India) was established in February 2009. Nandan Nilenkeni,
who now holds a cabinet rank, was appointed the first Chairman of the agency. It is gear-
ing up to roll out the first batch of numbers by August 2010 and the second batch by Feb-
ruary 2011. In the next five years, the pro-
gram is expected to cover 600 million people.

Pranab Mukherjee allocated Rs. 1900 crore in

Budget 2010, to give a boost to the project.
Last fiscal, only about Rs. 120 crore of budg-
etary support was provided. Such a signifi-
cant hike shows the seriousness of the Gov-
ernment for its flagship project.

The ID will not only help the government

track down individuals as is highlighted by
the media, but will also make life far easier
for citizens as they will not have to submit so many documents each time they want to
avail a new service — private or government. This ID can be verified and authenticated
in an online, cost-effective manner. It will also be robust enough to eliminate duplicate
and fake IDs. It is an equivalent to the Social Security Number (SSN) in the US. If used
rightly, it will allow Government‘s subsidies to be channelized to the right recipients.
Currently, each department/agency of the government has its own system of identifica-
tion such as PAN Card, Ration Card, and Electoral Photo ID Card etc. With UID, this
will be eliminated.

But there are two issues worthy of thought. First, these cards will be carrying so much of
one‘s personal data (they say even your family genealogy can be traced) that any misuse
of any kind can be detrimental. Second, these cards can be used properly only with the
use of extensive technology. Does India have latest technology for the implementation of
the same? Well, only time will tell!

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DIRECT TAX CODE (DTC)
‘The Income Tax Act of 1961’ is perhaps the most important act in the prevailing income tax system in India. This is
outdated and cumbersome and there are distortions in the tax structure. It needs a revamp. A need is felt to introduce
moderate levels of taxation, expand tax base, improve tax compliance, simplify the language and lower tax litigations.
The idea is to keep the provisions simple so even an average taxpayer can understand the language. One should under-
stand that with a growing economy such as ours, number of taxpayers is expected to increase. So, former Finance Minis-
ter P. Chidambaram initiated work on a new Direct Tax Code in 2009. This is expected to be a vast improvement over
The IT Act, 1961.

Current Finance Minister P. Mukherjee introduced a draft of the Direct Tax Code in Budget ‘10. This is now open to
public debate and will be introduced as a Bill in Parliament‘s winter session. If passed, it will become the new Income
Tax Act coming into force from April 1, 2011.

Some of the important salient features of the code are:

1. It seeks to consolidate and amend all laws relating to direct taxes such as income tax, dividend distribution tax, fringe
benefit tax and wealth tax.

2. It will seek to lower income tax (which currently is one of the highest in the world) by disallowing all tax-free perks.

3. It proposes to increase the tax slabs. 10% tax for an income of Rs. 1.6L-10L; 20% tax for Rs. 10L-Rs. 25L; and 30%
tax for income beyond 25L.

4. Contributions to fixed deposits, interest and principal payment on housing loans, educational expenses of dependents,
and other forms of savings will not qualify as eligible for tax savings. Hence, it will try to induce long term savings for
future needs.

5. All perquisites will be added to income (i.e. medical, conveyance, etc. will be added)

6. A real dampener is that money saved in PF or PPF for getting tax exemptions will now become taxable.

7. The threshold limit for wealth tax will be raised to Rs 50 crores from the present Rs 30 lakhs and the tax rate will be
reduced from 1% to 0.25%.

8. But, so as to increase the scope of taxation, financial assets such as shares, bonds, FDs, etc. will be included in wealth
tax calculation.

9. Corporate tax will reduce to 25% from the prevailing 30%.

10. It proposes to do away with all profit linked incentives for area-based investments like setting up plants in backward
area.

11. MAT (Minimum Alternate Tax) will now be levied at 2% of the value of gross assets as against book profits earlier.

12. It prescribes stiff penalties and prosecution for non-compliance with the tax laws. Every tax offense under the Code
will be punishable by both imprisonment and fine. Consultants who aid in tax evasion shall also be punished.

For more details, one can visit the following link: http://finmin.nic.in/DTCode/Direct%20Taxes%20Code%20Bill%
202009.pdf

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MARKET WATCH
Markets become edge of the seat excitement whenever the Budget is around the corner. These are opportunities where, if one is
able to correctly predict the upcoming Budget policies (even to a small extent), he stands a good chance to make some handsome
returns. Although this is not an easy task, but if one follows the market mood and the macro economic factors, it would not be
hard either.

For the week before the Budget:

There was hardly any movement in the Sensex in the first four sessions, before the Budget session, as the index oscillated in a
very narrow range between 16,200 and 16,300 and Nifty between 4,850 and 4,900.The Railway Budget, announced on February
24, failed to take the market either ways. This was followed by Economic Survey on Thursday and expiry of February derivative
contracts. Low expectations of market participants from the Finance Minster this year helped ward a steep decline in stock prices,
with the volumes being very low in the cash segment implying that many on the street were perched on the fence. Derivative vol-
umes, however, spiked higher especially towards the latter half of the week.
FIIs were buying enthusiastically in the first three sessions of the week but they turned cautious towards the weekend. Domestic
institutional investors, who were net buyers in most sessions in 2010 turned sellers last week. India VIX closed at its highest point
this year at 31.9 implying that traders too expect volatility to spike next week.
Global Cues
Despite the Federal Reserve's sudden hike in discount rate by 25 basis points, US equities rallied from lower levels on Friday to
end the week on a high. The Dow has closed in the positive on all the four sessions of last week to end 303 points higher. This
index has also powered past the short-term resistances at 10,200 to end the week at key short-term trend deciding level of 10,400.
European and Latin American markets too had a strong week and benchmarks in these countries closed 4 to 6 per cent higher.

For the Budget and Post - Budget sessions:

Mr. Pranab, in a very subtle way, pleased market participants by giving them what they wanted the most – a clear plan to revert
back to fiscal prudence. Friday's surge led the index to the intra-week peak of 16,669 but it could not sustain there for long and
ended the week below 16,500. FIIs were net buyers on Friday though they have net sold almost Rs 2,000 crores so far this month.
Volumes remained buoyant throughout the week and spiked sharply higher in the budget session. Expiry of the February contracts
has resulted in the open interest coming down to a more sedate Rs 88,000 crores.

The medium term trend is down in all the global indices since the mid-January peak. Interestingly, all global equity markets are
moving in tandem and the fate of Indian equities are strongly interwoven with that of the other markets. But since the Union
Budget has not been able to alter the medium term trend, it will be back to watch Greece, US, China, et al to decipher where we
are headed.
However, the short-term trend in the SENSEX and NIFTY is up. The following chart will vouch safe that:

Global Cues
Globally equities had a tough weak as worse than expected
economic readings from the US and resurfacing of the
Greece sovereign debt issue dragged stock prices lower.
European and Latin American indices end the week 1 to 3
per cent lower. Asian benchmarks were relatively stronger
and many of them such as KLSE Composite, Nikkei, Philip-
pines Composite, Shanghai Composite and so on ended the
week marginally in the green.

That’s all from our side. Hope you found this

Special Budget Issue useful and informative!

EDITORIAL TEAM— NIKHIL SARAWGI, SONABH BUBNA & VIVEK KR. BHUKANIA
PUBLISHED BY– KHYATI PARIKH

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