Union Budget Document 2012-13 _Apr-Mar

8/2/2019 Union Budget Document 2012-13 _Apr-Mar

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Dear Sir/Madam,

It gives us great pleasure to present you ready reckoner of Union Budget for 2012-13 (Apr-M ar)

presented by Finance Minister Pranab M ukherjee in Lok Sabha today.

The l ive coverage of the budget, i ts impact and real-time information on financial markets is

exclusively available to our cl ients through N ewsWire18 Workstation.

Please refer N W18 workstation for news, views and analyses by market experts on the Budget.

Please feel free to call us for any clari fi cations.

Thanks & Best Regards,

C.B.Divahar

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NW18: Highlights of Union Budget for 2012-13

NewsWire18, Friday, M ar 16

NEW DELHI - H ighlights of the Union Budget for 2012-13 (Apr-M ar) presented by Finance Minister Pranab

M ukherjee in Lok Sabha today:

GROWTH, INFLATION

* FY13 GDP seen 7.6%, plus or minus 25 bps

* India GDP seen growing 6.9% in FY12

* Estimates nominal GDP growth for FY13 at 14%

* FY12 services growth seen 9.4%

* FY12 industry grow th seen 3.9%

* FY12 farm growth seen 2.5%

* Grow th moderated, f iscal balance deteriorated FY12

* India is sti ll global frontrunner in econ growth

* FY12 econ performance has been disappoint ing

* Need credible roadmap to meet objectives

* Demand dri ven growth is objective of budget

* Farm, services continued to perform well

* Manufacturing sector on path of recovery

* Need to improve supply side management

* Headline inf lation remained high for most of FY12

* Inflation to be lower in FY13 than in FY12

* Inflation largely structural in nature* Headline inflation seen stable after few mos

* Prolonged period of high inflation tends to get generalised

* Inflation driven by farm supply constraints

* FY12 was a year of recovery interrupted for economy

* Need to accelerate pace of reforms

* FY12 fiscal gap revised to 5.9% of GDP vs 4.6% target

* FY13 interest payment seen 3.20 trln rupees

* Met 99% of total plan outlay FY12

* FY12 reali ty turned dif ferent from anticipation

.

FY13 ESTIM ATES

* Gross market borrow pegged at 5.70 trln rupees

* Net market borrow pegged at 4.79 trln rupees


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* Net short-term borrow seen 90 bln rupees

* Aim 500 bln rupees from PSU dividend* Corporation tax mop-up pegged 3.73 trln rupee

* T-Bil l borrow ing pegged 90 bln rupees

* FY13 service tax mop-up pegged at 1.24 trln rupees

* FY13 mkt stabil isation scheme bond 200 bln r upees

* Drawdown of cash balance nil

* Telecom licence fee, spectrum sale to bring 582 bln rupee

* Receipts from spectrum auction seen 400 bln rupees FY13

* Excise tax mop-up pegged 1.94 tr ln rupees

* Customs tax mop-up pegged 1.87 tr ln r upees

* Revenue gap seen 1.8% of GDP

* Tax proposals move forw ard on DTC, GST

* To fund around 93% of FY13 fisc gap via borrowing

* Fiscal deficit pegged at 5.13590 trln rupees

* Revenue deficit seen 1.85 trln rupees

* Oil subsidy to be paid in cash, not as bonds

* Non plan spend seen up 18.8% vs FY12 budget estimate

* Non plan spend seen up 8.7% vs FY12 revised estimate

* 3.65 trln rupees total transfer to states

* Subsidy has pushed up non-plan spend

* Plan expenditure seen 5.21 trln rupees, up 18%

* Non plan expendi ture seen 9.69 trln rupees

* Total expenditure 14.9 trln rupees

* Non-tax revenue receipts 1.6 trln rupees* Net tax receipt estimated 7.7 tr ln rupees

* A im Gross Tax to GDP ratio at 10.6%

* A im gross tax receipt of 10.77 tr ln rupee, up 15.6%

* Aim to trim revenue deficit FY13

* To implement advance pr icing for foreign investors

* A llocated 1.9 trln rupees for defence

* Expect current acct deficit to be small er than FY12

.

FISCAL HEALTH

* Net gain of 414.40 bln rupees on all tax proposals* Revenue gain from indirect tax proposal seen 459 bln rupee

* Revenue loss of 45 bln rupee on direct tax sops FY13

* Dated securi ties to fund about 93% of fi scal gap in FY13


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* Gross cash mgmt bil ls seen at 950 bln r upees FY13

* FY12 gross market borrow pegged at 5.10 trln rupees* FY12 current account gap seen around 3.6% of GDP

* See 250 bln rupee receipts from spectrum auction FY15

* See 250 bln rupee receipts from spectrum auction FY14

* Share of states in small savings to be cut to 50%

* To raise 300 bln rupees via divestment FY13

* Raised around 140 bln rupee via divest FY12

* External sector developm ent encouraging in H 1 FY12

* Tight monetary pol icy impacted investment in FY12

* FRBM implementation now back on track

* To make some amendments to FRBM Act

* To provide for medium term expenditure target

* FY12 fiscal balance worsened on direct tax mop-up slippage

* FY12 average crude price seen $115/bbl vs $90 estimated

* H igh interest r ates hurt corporate taxes FY12

* FY12 fiscal balance deteriorated due to subsidies

* External trade in FY12 first half was encouraging

* Ind ia successful ly diversif ied export, impor t markets

* Signs of recovery in coal, fert il izer, cement sectors

* Concept of effective revenue deficit to be fisc parameter

* Slowdown can almost totally be ascribed to industry

* See FY15 fiscal gap at 3.9% of GDP

* See FY14 fiscal gap at 4.5% of GDP

* FY15 revenue gap seen 2.0% of GDP* FY14 revenue gap seen 2.8% of GDP

* FY15 effective revenue gap seen nil

* FY14 effective revenue gap seen at 1.0% of GDP

.

IN DI RECT TAX

* Standard excise rate hiked to 12% vs 10%

* Gains from excise, customs changes 272.8 bln r upees FY13

* Corporate tax rate left unchanged

* Secur it ies transaction tax cut 20% to 0.1%

* New STT rates to be effective Jul 1, 2012* Revenue gain from excise, customs duty seen 272 bln rupee

* No change in peak rate of customs duty

* Duty free baggage allowance up at 35,000 rupee from 25,000


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* Higher 4,500 rupees/tn duty on crude produced in India

* Ships, dredgers exempt f rom CVD with retrospective effect* No excise duty on branded silver jewellery

* Non-branded gold jewellery to attract 1% excise duty

* Duty on refined gold hiked to 3.0% from 1.5%

* 99% purity standard gold bar basic customs duty up at 4%

* Branded silver jewellery exempt from excise duty

* 1% excise duty on non-branded precious metal jewellery

* 2% customs duty on precious stones to cut round-shipping

* Raise customs duty on some vehicle imports to 75% from 50%

* Concessions on hybrid vehicle extended

* Raised customs duty on bicycles to 30% vs 10%

* Ad valorem duty of 3% on CV chassis

* Standard excise duty on big cars hiked to 24% from 22%

* Customs duty on cars of over $40,000 hiked to 75%

* To levy 10% ad valorem duty on some cigarettes

* 15% tax on di vidends from foreign arms extended 1 more yr

* Withholding tax on ECB interest cut to 5% for power cos

* To reopen tax assessment for 15 yrs for overseas assets

* 20% addit ional depreciation on assets bought by power cos

* Weighted cut of 200% extended to 5 yrs for i n-house R&D

* Excise duty on pr ocessed food products cut to 6%

* Excise duty on all raw food products cut to 6% merit rate

* Tax collection at source for coal, l ignite, iron ore

* To cut customs duty to 2.5% on cane harvest machines* Platinum basic customs duty hiked to 4% from 2%

* Fully exempt from basic customs duty mobile phone parts

* Fully exempt from basic customs duty LCD, LED panels parts

* Excise duty on LED lamps cut to 6%

* Solar power equipment, CFL exempt from CVD

* 6 speciali sed li fe saving drugs exempt from excise duty

* Customs duty cut on some parts for low cost medical device

* 10% excise duty on branded retail garments

* Cut basic customs duty on ti tanium dioxide to 7.5%

* Tunnel boring machine import duty free, no end use lim it

* Cut import duty on equipment used in iron ore pellet unit* Customs duty cut on plant, machinery for iron ore, pellets

* Customs duty on iron ore mine machine cut to 2.5% vs 7.5%

* Ful l import duty exempt ion for r oad construction machinery


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* Some aircraft parts exempt from customs duty

* Cut customs duty on mining machinery to 7.5% from 10.0%* To cut customs duty on rail equipment to 7.5% vs 10%

* Full exempt coal mining projects from basic customs duty

* Coal for thermal power cos exempted from customs duty

* Customs duty on surveying, mining equipment cut

* Ful l customs duty exemption on coal for thermal plants

* Ful l customs exemption for imports to set up fert units

* Water soluble fert il isers customs duty cut to 5% vs 7.5%

* Basic customs duty 5% on coffee plantations equipment

* Svc tax hike to yield 186.6 bln rupee extra revenue FY13

* Panel to study svcs tax, central excise for common code

* Common return form for service tax, excise duty

* Service tax exemption for some svcs related to cinema

* Only 17 items in negative list for serv ice tax

* To tax all services except those in negative list

* Service tax needs to be aligned with excise duty

* No customs duty on machines for aircraft maintenance

* Concessional excise on non-petroleum pdts raised to 6%

* Sil ver coins of 99.9% puri ty exempt from excise

* Gold coins of 99.5% puri ty exempt from excise

* To introduce bill on debt mgmt office this session

* Footwear above 500 rupees/pair to attract 12% excise

* Excise exempt l imit on footwear raised to 500 rupees/pair

* Excise duty on iodine cut to 6% from 10%* Exempt customs duty on pellet, natural form uranium concentrate

* Ad valorem excise duty on more than 65mm cigarette stick

* Excise on matches made by semi-mechanised unit cut to 6%

* Retreaded, new aircraft tyre exempt from basic custom duty

* Excise duty on processed soy food pdts cut to 6% vs 10%

* Coal mining projects to be exempted from customs duty

* Excise duty on silver produced f rom copper cut to 4% vs 6%

* Levies 2% customs duty on pol ished gem stones

* Excise duty on gold produced from copper up at 3% vs 2%

* Cuts customs duty on mining, surveying equipment to 7.5%

* Customs duty on marine sea water pumps cut to 5%* Excise duty on refined gold at 3% from 1.5%

* No customs duty on steam coal ti ll March 2014

* Excise duty on cement clinker r evised to 12%


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* Natural gas, LNG exempted fr om basic customs duty

* Basic customs duty waiver for some pow er generation fuels* Excise duty on non-packaged cement revised to 12%

* Export duty on chromium ore earlier 3,000 rupees/tn

* Excise on cement from non-mi ni uni ts 12% plus 120 rupee/tn

* Export duty on chromium ore to be 30% ad valorem

* Excise on cement from mini uni ts at 6% plus 120 rupee/tn

* Ups customs duty on non-alloy, flat-rolled steel to 7.5%

* Excise duty on hand-rol led bidi s hiked to 10 rupees/1,000

* Waste paper ful ly exempted from customs duty

* Abatement rates on branded garments raised to 70%

* To cut customs duty to 2.5% on coffee plantation machines

* Locals arms' div idend pay to MNCs to be taxed 15%

* To remove cascade impact of dividend distribution tax

.

DI RECT TAX

* FY13 income tax mop-up pegged 1.96 tr ln rupee

* FY13 general tax exemption l im it hiked to 200,000 rupees

* 10% tax on 200,000-500,000 rupees personal income

* 20% tax on 0.5-1.0 mln rupees personal income

* 30% tax on personal income above 1 mln rupees

* 5,000 rupees exempti on for preventi ve health check up

* 10,000 rupees tax deduction on savings bank interest

* Tax on undeclared income 30% irrespective of income slabsTAX REFORM S

* To examine Parl iament panel r eport on Di rect Taxes Code

* GST network to get operational fr om Aug

* GST under progress, talks with states on for draft law

* 82 double tax pacts finalised FY12

* Advanced pricing agreement in DTC to be in Finance Bil l

* To allow 100 bln r upees power sector tax free bonds FY13

* To allow 50 bln rupees SIDBI tax free bonds FY13

* To allow 50 bln rupees HUDCO tax free bonds FY13

* To allow 100 bln rupees IRFC tax free bonds FY13* To allow 100 bln rupees NHAI tax free bonds FY13

* To allow 600 bln rupees tax free bonds FY13

* To OK 50 bln rupee National Housing Bk tax free bonds


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* 1% loan sop plan for home loans up to 2.5 mln rupees

* Interest subvent ion on low cost homes extended by 1 yr* Only 2.5% customs duty on iodine

* To table white paper on black money in current session

.

FARM , FOOD

* FY13 farm outlay 202 bln rupees, up 18% on yr

* More 3% rate subvention for farmers repaying loans on time

* To raise target for farm credit to 5.75 trln rupees FY13

* 5.75 trln rupees farm credit FY13

* Allocated 2 bln rupees for R&D of seeds

* Allot 5 bln rupees for aquaculture FY13

* A llocation to farm dev plan RKVY hiked to 92.17 bln rupee

* Allotted 4 bln rupee to up kharif output in northeast FY12

* A llot 10 bln r upees to up khari f output in northeast FY13

* Allocated 3 bln rupees for FY13 irrigation plan

* 5-bln-rupee pi lot p lan in 12th Plan for geo textil es in N E

* Green Revoluti on in east has boosted paddy output

* East Indian states produced 7 mln tn more of paddy

* To set up govt-owned ir rigation promotion company

* Need to bridge gap in food storage, transportation

* To add 5 mln tn more grain storage capacity by FY13

* To start national food p rocessing mission FY13

* A llocates 2 bln rupee for farm research* Micro-irrigation allotment up 13% to 142.42 bln rupees.

* Agriculture continues to be govt's priori ty

* To set up 3 technical assistance centres for textiles

* India to be self suff icient i n urea production in 5 yrs

* Announces 2 new handloom mega clusters

* 1 bln rupees to N G Ranga farm university in Hyderabad

* 1 bln rupees allotted for Kerala Agriculture University

.

RURAL, SOCIAL SECTOR

* PDS network created via UID platform to start Dec* A llocated 250 mln rupees for insti tute of rural mgmt FY13

* 84.47 bln rupees for natl social assistance plan FY13

* To set up credi t guarantee fund for skil l development


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* A llocates 12.76 bln rupee for micro-enterpr ises, up 23%

* To set up credi t guarantee fund for poor students* 12.76 bln r upee FY13 for PM employment generation p lan

* A llotted 10 bln rupees for skil l development plan FY13

* Women self-help group sops on loans up to 300,000 rupees

* 39.15 bln rupee FY13 for Rural L ivelihood M ission, up 34%

* 3% more interest subvention to women self help groups

* Allocated 255.55 bln rupee under Right to Education

* Allotted 208.22 bln rupees for r ural health plan FY13

* No new case of polio reported in last one year

* Credi t guarantee fund proposed for poor students

* Voluntary Savings for Pension plan has 500,000 subscriber

* To up pension to d isabled to 300 rupees/mo

* To give 100 bln rupees to NABARD to refinance rural bks

* A llocated 31.24 bln rupees for secondary education FY13

* To set up credit guarantee fund for education

* A llot 120.4 bln rupees for backward region growth FY13

* Allocated 50 bln rupee for warehousing expansion

* Allotted 200 bln rupees for rural infr a dev fund FY13

* 140 bln rupees for rural dr inking water plan FY13

* A llotted 240 bln rupees for rural road p lan FY13

* FY13 mid-day meal allocation 119.4 bln rupee vs 103.8 bln

* A llotted 158.50 bln rupees for chi ld development FY13

* A llotted 371 bln rupees for SC, ST inclusive grow th FY13

* Computeri sation of PDS to be completed by Dec* Divest funds for social sector extended for 1 more yr

* 150 mln rupees for Natl Centre for Applied Econ Research

* To allocate funds for 400 mln more UID registration FY13

.

FINANCIAL SECTOR, BANKS

* To launch Rajiv Gandhi Equi ty Savings Scheme

* Rajiv plan to give 50% tax exemption on direct shr buy by retail investor

* Rajiv equity scheme investment to have 3 yr lock-in period

* Maximum 50,000 rupees can be invested under Rajiv equi ty pl an/yr

* Tax break under Rajiv plan only for sub-1 mln rupee income people* Allocated 158.88 bln rupees for capitalisation of PSU banks FY13

* IPOs of over 100 mln rupees have to be in electronic form

* India Opportunity Venture Fund v ia SIDBI


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* SIBDI to start 50 bln r upee Ind ia Opportuni ty Venture Fund

* To issue revised norms for banks' priority sector lending* To move National Housing Bank A mendment bi ll

* To move Regional Rural Bank Amendment bill

* To create financial holding co to help banks raise funds

* To set up fincl holding co for recapi talisation of bks

* To move bil ls for Public Debt M gmt, NA BARD Act amendment

* Propose electronic voting to up shareholder involvement

* 2-way fungibil ity allowed in IDRs, subject to a ceil ing

* To introduce new law for micro f inance cos

.

INFRASTRUCTURE

* 12th Plan invest for infra at 50 trln rupees

* Power cos all owed ECBs to part finance rupee debt

* Inter-ministerial panel to monitor allocated coal m ines

* Coal India told to sign coal supply pacts with power cos

* Viabil ity gap funding for oil , gas pipelines, storage

* Telecom towers to get Viability gap funding FY13

* Irr igation, fertil iser, terminal mkt under v iabili ty gap fund ing

* Irrigation including dams under viability gap funding FY13

* Lack of adequate infr astructure major constraint to growth

* Extend plan to capi talize regional rural banks by 2 yrs

* Lack of adequate infra major constraint to growth

* To set up 2 handloom mega clusters* A llot 700 mln rupees for Maharashtra power loom cluster

* Gives 40 bln rupees FY13 for rural housing vs 30 bln FY12

* Realtors can borrow overseas for low-cost home projects

* To allow External Commercial loans for affordable housing

* Airlines can borrow overseas to meet working capital needs

* To allow 1 yr ECBs of $1 bln for airl ine cos

* To allow 49% FDI in airlines under active consideration

* Foreign borrow for capex to maintain, operate toll roads

* Mul ling 49% FDI by foreign airli nes in local carr iers

* Up NHDP allocation 14% to 253.6 bln rupees FY13

* Al lowed direct import of ATF by Airl ines* Targeting 8,800 km projects under N HDP FY13

.


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SUBSIDY

* FY13 subsidy bi ll pegged 1.79 trln rupee

* FY13 fuel subsidy bil l pegged 436 bln rupee

* FY13 food subsidy bi ll pegged 750 bln rupee

* FY13 fert subsidy bi ll pegged 609 bln rupee

* FY12 oil subsidy revised to 685 bln rupees vs 236 bln

* FY12 fert subsidy revised to 672 bln rupees vs 500 bln

* FY12 food subsidy revised to 728 bln rupees vs 606 bln

* Subsidy for food securit y law to be ful ly p rovided for

* Some subsidi es are inevi table in a growing econ

* Fiscal policy had to absorb subsidy payments

* A im i s to directly tr ansfer kerosene subsidy to individual

* Testing kerosene subsidy transfer to beneficiaries in Rajasthan

* A im to directly t ransfer subsidy on LPG to consumers

* Direct kerosene subsidy transfer pilot for 50 districts

* Direct transfer of fertiliser subsidy to retailer, farmers soon

* To bring subsidies to 1.7% of GDP next 3 years

* Direct transfer of subsidy to be gradually rol led out

* To try to restr ict subsidies to 2% of GDP in FY13

* Subsidies inevi table but not good i f they hit macro econ

.

M ISCELLANEOUS

* Need to address the issue of black money, corrupt ion

* Cos to fi le compulsory report on assets held abroad

* Effort on for consensus on FDI in multi -brand retail

* To complete national population register in 2 years

* Govt to retain 51% control in central PSUs

* To allow qualifi ed foreign investors in corp bond mkt

* Have to address problem of malnutr it ion

* To extend Swabhimaan scheme to some NE areas FY13


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First Views on Union Budget 2012-13NW18: First View: Canara Bank Chief Economist Sharma on FY13 Budget

NEW DELHI - M anoranjan Sharma, chief economist and deputy general manager, Canara Bank, on the Union

Budget for 2012-13 (Apr-M ar), presented in the Lok Sabha by Finance Minister Pranab Mukherjee today.

Given the compulsions and the macroeconomic condit ions, the Budget has managed to reconcile di fferent

objectives. The finance minister has also laid out a credible roadmap for f iscal consolidation. The net market

borrowing amount is high at 4.8 trln rupees, but this year too it was around 5 trln rupees.

The move to cap subsidies at 2% of gross domestic product is also good as there was concern that the food

securit y bi ll may lead to government overshooting its expenditure target.

NW18: First View: CREDAI President Jain on FY13 Budget

MUMBAI - Lalit Kumar Jain, president, Confederation of Real Estate Developers' Associations of India, on the

Union Budget for 2012-13 (Apr -Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

Today's budget shows a fail ure of the real estate industry to convince the finance mi nister that housing can play

an important role in the growth of the economy.

The move to allow external commercial borrowing for affordable housing is merely an eyewash.

It is a huge disappointment, as we were expecting some sops for housing, at l east in the affordable segment.

It is surprising that affordable housing has not been given the status of pr ior ity or i nfrastructure sector. The

finance minister has also overlooked our demands for rental houses that would have provided much relief tothe common man.

NW18: First View: SKS Microfinance CFO Raj on FY13 Budget

HYDERABAD - Dilli Raj, chief financial officer, SKS Microfinance Ltd, on the Union Budget for 2012-13 (Apr-

Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

.

That the Micro Finance Bil l wi ll be introduced in the budget session is hugely posit ive for the microfinance

sector and SKS Microf inance in particular.

The MFI Bill, upon passage, will override the Andhra Pradesh Microfinance (Money-lending) Regulation Act

and help us resume lending and recovery operations in the state.Also, the bil l may bring in permanent regulatory clarity.


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Overall, the budget seems to be rural focussed wi th thrust on financial inclusion, given that allocation for rural

and social expenditures is up.The targeted market borrowing of 4.79 tr ln rupees is less than what the market xpected and therefore the worry

of government crowding out the private sector in the wholesale debt segment is assuaged.

Increase in excise duty and serv ice tax underlines the government's commitment to fiscal consolidation and

alignment in rates augurs well for introduction of goods and serv ice tax.

NW18: First View: Bank of India Treasurer Bajaj on FY13 Budget

MUM BAI - Pawan Bajaj, general manager - t reasury branch, Bank of India, on the Union Budget for 2012-13

(Apr -Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

.

It is a flat Budget. There is nothing about f iscal reforms.

The borrow ing is above market expectations, and the Budget as a whole is negative for the bond market.

There will be a demand supply gap because the increase in statutory l iquidi ty ratio demand is not seen as much

as the increase in borrowing. Because of this, the 10-year yield should rise to 8.45-8.50%. If the RBI delivers a 25

basis point rate cut in April, then the yield may improve to 8.30-8.35%.

Looking at the fiscal situation, a rate cut in Apri l seems doubtful. But, it is very much needed to boost growth.

So, a rate cut is necessitated in Apr il ir respective of the Budget.

NW18: First View: Bheema Cements M D Rameshchandro on FY13 Budget

HYDERABAD - S.R.B. Rameshchandro, managing director, Bheema Cements Ltd,

on the Uni on Budget for 2012-13 (Apr -Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee

today.

The finance minister wants to send a strong signal to the world on the government's commi tment for growth. It

seems he wants to show confidence on macroeconomic fundamentals. Keeping the debt to GDP ratio at 45% is

good effort in the present circumstances.

Reiteration of our commitment towards spending 50 trln rupees for the infrastructure sector in the 12th Plan is

commendable.

Push for infra bonds, increased exemptions for serv ices to infrastructure sector is also a welcome move.

Need for increased all ocation for warehousing and efforts to create 50 mln tn capacity is addressed in the

budget.

A llowing foreign investment in l ow cost housing wil l create demand in housing and cement sectors.

However, increase in excise duty on certain goods, and in serv ice tax is painful .


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NW18: First View: Hubtown Chief Financial Off icer M ody on FY13 Budget

MUM BAI - Bharat Mody, chief financial officer, Hubtown Ltd, on the Union Budget for 2012-13 (Apr-Mar),

presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

We welcome the government's intent for consensus on mult i-brand retail and hope that it wi ll be translated into

action soon.

Doubling the tax-free bond is a welcome move and will give a much needed impetus to creation and

improvement of infrastructure.

Permission of external commercial borrowing for low-cost affordable housing is also welcome.

NW18: First View: IVRCL Chairman Reddy on FY13 Budget

HYDERABAD - E. Sudhir Reddy, chairman, IVRCL Ltd, on the Union Budget for 2012-13 (Apr-M ar), presented

in Lok Sabha by Finance Minister Pranab Mukherjee today.

The finance minister has done a lot to the power sector, but it seems he has ignored the concerns of other

infrastructure segments such as construction and road development.

The external commercial borrow ings facili ty should have been extended to other infrastructure segments rather

than givi ng it only to the power sector.

It is good that some issues relating to the power sector were addressed in the budget. But, the budget should

have been beneficial to the ent ire infrastructure sector, and not just limi ted to the power sector.

Infrastructure companies, which had invested in road projects particularly, are under pressure. ECB facilityshould have been extended to such sectors.

Other than that, the allocation of 140 bln rupees to the rural d rinking water, and higher allocations to various

rural infrastructure development schemes will be beneficial to the sector.

NW18: First V iew: McLeod Russel CFO Baheti on FY13 Budget

KOLKATA - Kamal K. Baheti, chief financial officer of McLeod Russel India Ltd, on the Union Budget for 2012-

13 (Apr-M ar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

The Budget was a non-event. The hike in serv ice tax and excise duty was expected.

The 5.1% fiscal deficit target announced is achievable.A good job has been done but more subsidy on petroleum would have been welcome.

Not a hugely posit ive Budget but not a negative one either. I doubt it wi ll have any major impact on the

corporate sector.


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NW18: First View: YES Bank Chief Economist Shubhada Rao on FY13 Budget

NEW DELH I - Shubhada Rao, chief economist, YES Bank, on the Union Budget for 2012-13 (Apr-M ar),


.

Overall , the Budget is in line wi th expectations. Some of the posit ives were the proposals on infrastructure and

External Commercial Borrowings, but there are serious concerns on the subsidy side, especiall y fuel subsidy.

According to us, the fuel subsidy remains underestimated.

The Budget i s slightly negative for the bond markets due to r ise in borrowing numbers. This, combined w ith

the Reserve Bank of India's pol icy statements, the situation on rate cut l ooks grim.

On the tax side, although raising service tax could be helpful in garnering revenues, it could be slightly

inflationary.

NW18: First View: Credit Suisse's Prior-Wandesforde on FY13 Budget

NEW DELH I - Robert Pri or-Wandesforde, head of India and South East A sia Economics at Credi t Suisse, on the

Union Budget for 2012-13 (Apr -Mar), presented in the Lok Sabha by Finance Mini ster Pranab Mukherjee today.

.

The Budget was disappointingly predictable because it focussed on 'tax-spending'. That is numerous spending

increases were announced and they w ere largely funded by the serv ice tax rate widening and increases. The

Budget offered v ery li tt le in radical economic reforms.

The fiscal consolidation shows an improvement but there are questions surrounding its credibility because the

target is based on a very high growth assumpt ion and high divestment receipts. The government also seems tobe planning ambitious target for bringing back black money, but this is easier said than done.

We expect fiscal deficit in 2012-13 to exceed 5.8% again from the budgeted 5.1% target. Given the high fiscal

defici t expectations, we expect the government to exceed their borrow ing targets for next year as well .

NW18: First View: Eveready Industries ED Khaitan on FY13 Budget

KOLKA TA - Amri tanshu Khaitan, executive dir ector, Eveready Industries India Ltd, on the Union Budget for

2012-13 (Apr -Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

A total non-event. There is nothing that was not expected. Excise duty and serv ice tax increases were expected.

No major impetus for the corporate sector, be it in the form of policies or reforms. Raw material cost forcompact fluorescent lamps should go down as a result of the reduction in excise duty on lighting products,

which should benefit the lighting industry in the long run.


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NW18: First View: Bombay Bull ion Association's Kothari on FY13 Budget

MUM BAI - Pri thv iraj Kothari, president, Bombay Bull ion Association, on the Union Budget for 2012-13 (Apr -


The hike in import duty on gold (to 4% from 2%) is definitely going to curb demand. Due to the hike in duty, I

am expecting demand (for gold) to drop around 50% this year. We are still studying how the excise duty on

jewellery w il l impact the market.

NW18: First View: Gem body vice chairman Kothari on FY13 Budget

MUMBAI - Sanjay Kothari, vice chairman, Gem & Jewellery Export Promotion Council, on the Union Budget

for 2012-13 (Apr-M ar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

.

I think the decision to again hike basic customs duty on gold wi thin three months of doing so is too early. The

finance minister should have waited for a few more months after imposing the 2% duty on gold imports in

January to see the impact of the decision. Frequent duty hikes of this kind will encourage entry of gold into the

countr y through il legal channels.

NW18: First V iew: Srei I nfrastructure Finance CM D Kanoria on FY13 Budget

KOLKA TA - Hemant Kanoria, chairman and managing d irector, Srei Inf rastructure Finance Ltd, on the Union

Budget for 2012-13 (Apr-M ar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

.

It covered a lot of points in the power sector but not in infrastructure. There was nothing about access to long-term funding for infrastructure. Under present circumstances, we were expecting it to be more growth-

oriented, which was not taken care of. Points that would actually help and give an impetus to the industry w ere

not mentioned.

A further boost was needed for the infrastructure sector. What was announced for the infrastructure sector was

generic.

NW18: First V iew: Srei I nfrastructure Finance CM D Kanoria on FY13 Budget

KOLKA TA - Hemant Kanoria, chairman and managing d irector, Srei Inf rastructure Finance Ltd, on the Union


It covered a lot of points in the power sector but not in infrastructure. There was nothing about access to long-

term funding for infrastructure.


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Under present circumstances, we were expecting it to be more grow th-oriented, which was not taken care of.Points that would actually help and give an impetus to the industry were not mentioned.

A further boost was needed for the infrastructure sector. What was announced for the infrastructure sector was

generic.

NW18: First View: Cummins Generators M D Bhargava on FY13 Budget

MUMBAI - Pradeep Bhargava, managing director, Cummins Generator Technology India Ltd, on the Union


.

This is a fairly balanced budget given the realities of the country.

The priorit ies identi fied--governance and inclusive growth--are justi fied.Support to cri tical sectors--air line,

power, l ow cost housing, healthcareare in the right d irection.

Excise duty and serv ice tax hike are the price we have to pay for containing fi scal deficit.

The budget has given the road map for r ecovery. Focus on research and skil l development is in the right

direction.

NW18: First View: CARE Ratings Chief Economist Sabnavis on FY13 Budget

NEW DELHI - M adan Sabnavis, chief economist, CARE Ratings, on the Union Budget for 2012-13 (Apr-M ar),


The Budget seems fairly reasonable but a lot depends on the government's revenue gathering efforts dur ing the

year. The market borrowing remains higher than market expectations and oil subsidy w il l have to be kept

under control. FY13 growth target at 7.6% seems qui te reasonable as there is no reason to believe that things

wil l get worse than th is. Similarly, sli ppage of around 100 bps was expected in this year's fiscal deficit . I feel

liquidit y w ill remain tight during next year also.

Going forward, in the Apr il monetary pol icy review the RBI w il l have to deeply work into it as the hike in some

duty rates have increased inflation potential.

NW18: First View: GM R Infrastructure group CFO Rao on FY13 Budget

HYDERABAD - A. Subba Rao, group chief f inancial of ficer of GMR Inf rastructure Ltd, on the Union Budget for


.


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The Budget has done what it could have done for the power sector. But I can say these measures cannot alone

solve all the problems of the power sector. There are so many other issues to be addressed outside Budget.Proposals on external commercial borrow ings wil l gi ve the power sector access to funds at more competit ive

rates.

Proposals like 20% addit ional depreciation on assets bought by power companies are helpful.

However, these steps are just painkillers. There are many systemic issues that need to be addressed beyond

Budget.

The Budget has also set a target of developing 8,800 km roads under the National H ighways Development

Project. It is a lovely number...If i t i s implemented practicall y...(it's) good for the sector and companies.

NW18: First V iew: Canara Bank CM D Raman on FY13 Budget

MUM BAI - S. Raman, chairman and managing d irector, Canara Bank, on the Union Budget for 2012-13 (Apr -


.

This is a reasonable budget for the banking sector, with a few minor positives in the way of education credit

guarantee schemes and also interest subvent ion for t imely loan repayment.

The key positive for state-owned banks like us is the government commitment to continue capitalising our

operations. The government i s also looking at a holding company structure to streamline the process of

recapitalisation.

Some positive cues for various elements of the infrastructure sector through the budget are likely to help the

sector and also benefit the banking system, which has considerable exposure to the sector.

Continuation of interest subvention of 1% on housing loans and 3% more for timely repayment of agriculture

loans wil l banks.

Women self-help groups have been doing well already, but today's move to provide 3% interest subvention onloans up to 300,000 rupees, and additional 3% sop for payment on time, will boost productive borrowing by

these groups.

The fiscal deficit target of 5.1% is reasonable as government expects some proceeds from telecom spectrum

auctions again next year.

NW18: First View: GVK Power & Infrastructure CMD Reddy on FY13 Budget

MUM BAI - G.V.K. Reddy, chairman and managing director, GVK Power & Infrastructure Ltd, on the Union


.

I congratulate the government for a balanced budget during a challenging time. It is positive, broad-based andan inclusive budget that endeavours to address crucial reforms for development.


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Overall, the budget is growth-oriented and aimed at sustaining the growth impetus seen in 2011, while giv ing

main emphasis to sectors such as agricul ture and industry.This, according to me is integral to support India's development ambit ions in the long term.

NW18: First View: National Collateral M anagement M D Kaul on FY13 Budget

MUMBAI - Sanjay Kaul, managing director and chief executive officer, National Collateral Management

Serv ices Ltd, on the Union Budget for 2012-13 (Apr -Mar), presented in Lok Sabha by Finance Minister Pranab

Mukherjee today.

The announcement to boost investment in agricul ture by including viabil ity gap fund ing in respect of terminal

markets, agriculture marketing infrastructure, and testing laboratories will encourage private sector investment

to cover the huge deficit i n the agriculture marketing infrastructure.

It will also facilitate the modernisation of fruits and vegetable supply chain where there are over 25% storage

and handling losses. The announcement will also step up griculture grading and testing facilities which are

present ly non-existent across the country.

The increase in the agricul ture plan outlay to 202.1 bln rupees is most inadequate if the country is to reach the

stated 4% growth target.

The announcement of an interest rate subvent ion for post harvest storage by small and marginal farmers is

impracticable and wi ll not giv e tangible relief to the farmer community as it is mainly the medium and large

farmers which have agricultural surp luses.

The scheme has also been unnecessarily restricted to negotiable warehouse receipts that are yet to take off in thecountry. The scheme is further limited to only public sector banks, even though private sector bank lending to

the agriculture sector is quite high.

NW18: First V iew: M elstar Chief Executive Officer D'souza on FY13 Budget

MUMBAI - Richard D'souza, chief executive officer, Melstar Information Technologies Ltd, on the Union


The increase in service tax rate is definitely a mood dampener for the information technology industry.

However, it may not have a significant business impact, as such serv ices are increasingly being used in mission

critical app lications by the users of IT serv ices.


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NW18:First View: Bombay Iron Merchants' Association M ehta on FY13 Budget

MUM BAI - A shok M ehta, vice president of the Bombay I ron Merchants' Association, on the Union Budget for


The market wil l be okay with the hike in customs duty on flat-rolled steel and non-alloys to 7.5%.

It was necessary as standard excise duty has been hiked to 12.0%. No hike in customs duty would have made

imports cheaper, reducing demand for products made in the domestic market. This would cripple the domestic

market.

NW18: First View: Tata Capital's Sankaranarayanan on FY13 Budget

MUMBAI - Govind Sankaranarayanan, chief finance officer and chief operating officer of corporate affairs at

Tata Capital Ltd, on the Union Budget for 2012-13 (Apr-Mar), presented in Lok Sabha by Finance Minister

Pranab Mukherjee today.

The Budget was qui te reali stic, given the current constraints in the economy.

Hopefully, Ind ia's fiscal deficit would decline to 4.0%-4.2% of gross domestic product but that looks unlikely for

the next three years.

No di rect sops were given to the capi tal goods industry. Ind irectly, power and infr astructure sectors should

benefit from this Budget.

NW18: First View: Peerless M utual Fund CEO Gupta on FY13 Budget

MUM BAI - Akshay Gupta, chief executive off icer, Peerless Mutual Fund, on the Union Budget for 2012-13(Apr -Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

The budget trajectory is in the right d irection. Despi te baby steps, the fiscal consolidation exercise is positive for

country's finances. The announcement on power, infrastructure, agriculture, and cap on subsid ies is positive.

Increase in excise and serv ice taxes and lower than expected disinvestment target wi ll lead to high inflationary

and higher interest r ate regime. There is no indication on GST (Goods and Services Tax) and DTC (Direct Tax

Code) rollout, which was largely expected.

NW18: First View: HDFC Bank Economist Jyotinder Kaur on FY13 Budget

NEW DELHI - Jyotinder Kaur, economist, HDFC Bank, on the Union Budget for 2012-13 (Apr -Mar), presentedin the Lok Sabha by Finance Minister Pranab Mukherjee today.


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This is the best that the finance minister could have done in maintaining a balance given the requirements of

coalition parties and corporate India in terms of fiscal consolidation.

The fiscal deficit for next year is in l ine wi th expectations, whi le the government borrowing is slightly higher

than expected. This is likely to keep government bond yields elevated. However, starting April, there may be a

softening of yields given interest rate cut expectations and easier supply of bonds.

Some slippage in the fiscal deficit is likely but not to the extent i t was this year mainly because of petroleum

subsidy and excise duty prospects.

NW18: First View: Oil India D irector-Finance Ananth Kumar on FY13 Budget

NEW DELHI - T.K. Ananth Kumar, dir ector-finance, Oil India, on the Union Budget for 2012-13 (Apr -Mar),


The hike in cess on crude oil wil l have an impact of around Rs 750-800 crore (7.5-8.0 bln rupees) on our annual

profitabil ity as we do (produce) around 3.9 mtpa of crude. So, that i s a major decision. Apart from that we

will have to wait and watch for the final subsidy sharing mechanism. However, I think because of the cess hike,

the under-recovery burden may come down. But again i t w il l depend on how the government decides the

mechanism.

End

Union Budget Document 2012-13 _Apr-Mar

Documents

Transcript of Union Budget Document 2012-13 _Apr-Mar