Union Budget 2011: Indian Budget Highlights, Economic Survey, Live Budget News

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FY'12 FERTILISER SUBSIDY SEEN AT Rs. 50,000 CR
GOVERNMENT MAY HIKE PETROL PRICES SOON
DIVESTMENT TARGET MODERATED TO Rs. 22,144 CR IN FY'11
CORP TAX MOP UP FOR FY'12 PEGGED AT Rs. 3.6 LAKH CR
FY'12 SHORT TERM BORROWING SEEN AT Rs. 15,000 CR
SERVICE TAX MOP UP PEGGED AT Rs. 82000 CR IN FY'12
TO BRING DIAGNOSTIC SERVICES UNDER SERVICE TAX NET
FY'12 DRAWDOWN CASH BALANCE ESTIMATED AT Rs. 20,000 CR
FY'12 FOOD SUBSIDY SEEN AT Rs. 60,500 CR VS Rs. 60,600 CR (YOY)
FY'12 PETRO SUBSIDY SEEN AT Rs. 23,600 CR VS Rs. 38,400 CR (YOY)

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Apr-Jan imports at $273.6 bn, up 17.6%
Manufacturing to be 25% of GDP in 10 years
Auto sector growth seen at 30% in FY'11
Economy resilient to external shocks
Need to ensure sustained private investment
Implementation gap a key challenge
Resources not a big problem, at least in short term
Economy back to pre-crisis growth trajectory
FY'11 growth swift and broad-based
Stronger fiscal consolidation needed
FY'11 fiscal consolidation impressive
FY'11 farm sector growth seen at 5.4%
FY'11 industrial sector growth seen at 8.1%
FY'11 services sector growth seen at 9.6%
See FY'11 GDP growth at 8.6%
Indian economy seen growing at 9% in FY'12, +/-25 bps
Would have liked to see more in the Budget
FM did well with the task of fiscal consolidation
FM did well on limiting Govt borrowing
Foreign investments via mutual funds a good move
No price changes expected as excise rate unchanged
Higher duty on iron ore fines a negative for export
Service tax rationalisation a key move
Reduction of surcharge a huge upside
Service tax on education skill development not good
Many positives for financial sector in the Budget
Tax on SEZ developers, cos within SEZs a setback
To pass on service tax impact to end consumers
Need to see implementation of proposals over FY'12
Expectation of infra status for healthcare not met
Concerned about implementation of announcements
Income tax exemption slightly below expectations
Still many challenges to raise long term infra funds
Govt must improve environment for corporates
Budget lacks a 'focus area'
Budget slightly negative for I.T. industry
Govt could have extended STPI benefits for small cos
To allow foreign individuals to invest in MFs
Govt likely to announce petrol price hike soon
Mat levied on SEZ developers and units in SEZ
10% duty plus Rs. 80/tn on upto Rs. 190/50 kg cement
10% duty plus Rs. 160/tn on over Rs. 190/50 kg cement bags
10% duty & Rs. 200/tn on cement bag from clinkers
MSS ceiling for FY'12 at Rs. 50000 cr
To give Rs. 14000 cr more subsidy to oil cos in FY'11
FY'12 petroleum subsidy seen at Rs. 23600 cr
FY'12 food subsidy seen at Rs. 60500 cr
FY'12 fertiliser subsidy seen at Rs. 50000 cr
No change in peak customs duty for FY'12
Service tax retained at 10%
Service tax on intl air travel hiked by Rs. 250
Export duty on iron ore hiked to 20%
Central excise rate retained at 10%
Exemption limit raised to Rs. 1.8 lk from Rs. 1.6 lk
MAT rate hiked to 18.5% vs 18%
Revenue deficit seen at 1.8% in FY'12
FY'12 fiscal deficit seen at 4.6% of GDP
FY'12 non tax revenue seen at Rs. 1.25 lakh cr
Total expenditure up 13.4% at at Rs. 12.57 lakh cr
Gross tax receipts seen at Rs. 9.32 lk cr for FY'12
Allocated Rs. 69199 cr for defense capex in FY'12
Close to finalising food security bill
To extend infra tax breaks for the fertiliser sector
Takeout financing scheme proposed at Rs. 5000 cr
FY'12 planned allocation for healthcare up 20%
Allocation for education sec raised to Rs. 52057 cr
FY'12 Bharat Nirman allocation raised to Rs. 58000 cr
IIFCL's FY'12 disbursement target at Rs. 25,000 cr
Spend on infra sector to be hiked by 23% in FY'12
To raise NABARD's paid up capital to Rs. 5000 cr
To strengthen NABARD's capital in phases
Int subvention scheme for crop loans at 7% to remain
Hiked credit flow target for farm sector for FY'12
Planned allocation for farm devp hiked to Rs. 7860 cr
New Companies Bill to be introduced
Interest subvention for home loan hiked to Rs. 25 lk
To set up Microfinance Equity Fund
FII invst limit in infra corp bonds raised to $25 bn
RBI to bring guidelines on new banking licences
Have hiked FII invst limit for corp bonds to $40 bn
Govt to maintain momentum of divestment
Preparation of GST rollout in final stages
NBS scheme extension to cover urea in consideration
To introduce GST bill amendment
Rollout of DTC to be effective from April 1, 2012
Expect RBI's measures to moderate inflation
Expect current account deficit to come down next year
Expect inflation to come down next year
Current account deficit still a concern
Economy resilient to external and local shocks
Agri sector estimated to grow at 5.4% in FY'11
GDP estimated to grow at 8.6% in FY'11 in real terms
Need to tackle supply side issues in agriculture
Revival in private investment should be sustainable
Food inflation remains a a concern
FY'11 fiscal consolidation looks impressive
Industry is regaining its momentum
FY11 brought challenges on fiscal consolidation
To link prices of top two coal grades to imports
Additional rev of Rs. 6200 cr seen in FY'12
To generate additional revenue of Rs. 650 cr in FY'11
Price hike effective from Feb 27
Deposits up to Rs. 51.87 lakh cr vs Rs. 44.51 lakh cr (YoY)
Deposits grew 16.5% for the 1-year period ending February
Credit offtake at Rs. 38.98 lakh cr vs Rs. 31.43 lakh cr (YoY)
Credit offtake grew by 24% for 1-yr period ending February
Possible hike in personal exemption limit to Rs. 1.7-2 lakh
Consumption sector may get a boost in the Budget
Inflation impacting non durable goods
Strong demand for durable goods
SBI, ICICI Bank, PSU banks Tata Steel, Tata Motor
Markets response to budget likely to be muted
Measures to tackle inflation
Roadmap for fiscal consolidation
Ease capital gains tax allowance
Post-crisis excise duty cut in 2009 to be rolled back
3G collections reduced FY'11 fiscal deficit to 5.3%
Close relook towards increased spending
Focus on inflation management & fiscal consolidation
Budget to focus on sustainable growth in India
IRDA, PFRDA, RBI examining infra fund proposal
Proposed fund needs changes in various regulation
Proposed infrastructure debt fund still to take off
12th plan period requirements pegged at Rs. 40 lakh cr
Watching for increase in FDI in telecom, insurance
Want a clear deadline for GST and DTC
Curb on Govt expenditure looks unlikely
Allow banks to raise and guarantee infra bonds
Black money amnesty scheme could be a big boost
Govt's stance on fiscal deficit crucial
Increase in tax deduction on invst in infra bonds
Target for fresh PSU divestment key factor
Measures to develop corporate debt market
Agri reforms could provide boost to the markets
MAT break for initial period of income tax holiday
Inflation management to be crucial in the Budget
Single window clearance for infra projects
Continued increase in allocations
Tier 1 recapitalisation of public sector banks
Concession on lending to State Electricity Boards
Hike refinancing limit from IIFCL for PPP projects
Allow banks to issue infrastructure bonds
Subsidy for no-frills accounts
Tax breaks on longer tenure fixed deposits
Investments in revamping Education sector
Increased investments in I.T. infrastructure
Keep MAT at one-third of the corporate tax rate
Reduction of MAT from the current 18%
Extend STPI benefits till DTC implementation
Raise cenvat credit on capital goods to 100% in a go
Enhance depreciation rate to 25%
Remove import duty on steel and aluminium alloys
Allocate Rs 1,000 cr to TUF in FY'12
Set up Rs. 7,500 cr 5-year Technology Upgradation Fund (TUF)
Excise duty on cars above 1100 cc might be raised to 22%
Excise duty on trucks might be raised to 12% from 10%
Excise on small cars, 2-wheelers might be raised to 12%
Complete withdrawal of the stimulus
Air India likely to get Rs. 1,200 cr equity infusion
Civil Aviation Ministry expected to get Rs. 1,700 cr support
Address issues of environmental clearances
Address land acquisition issues
Structure to attract foreign funds
Roadmap to attract long term capital
Separate policies for basic infra like ports, highways
Define contours of Rs. 50,000 cr infra debt fund
NHAI expected to get over Rs. 7,500 cr
Roads likely to be allocated Rs. 20,000-23,000 cr
Clarity on levy of duty on imports of power equipment
Withhold tax exemption on interest on foreign loans
Extend sunset clause for 10-yr tax holiday
Excise duty on automobiles could be raised to 12%
Reforms may include FDI in retail
Reduce excise duty on diesel from Rs. 4.6/l
Move to ease fertiliser subsidies
Lower excise duty on petrol from Rs. 14.3/l
Food subsidy bill may be increased
Reduce or abolish 5% custom duty on crude oil
Substantial increase in outlay on NREGA
May hike export duty on iron ore and tobacco
May raise tax exemption limit from Rs. 1.6 lakh
Tax relief to compensate for inflation
Income tax relief likely to lower income brackets
Increased market borrowing at $80 bn
CARE Ratings: 9.1% D&B: 8.4%
Surcharge, cess for corporates unlikely to change
Rollback of MAT rate from 18% to 15% unlikely
CLSA: 8.7% Barclays: 8.5% ANZ: 10.3%
Keep Corporate tax, MAT rate at current levels
Change in income tax rates or slabs unlikely
Tax benefit for infra bonds may move to Rs. 30,000
Infrastructure bonds likely to be further favoured
80% of DTC currently accrued from 20% tax payers
Deutsche Bank: 8% DBS Group: 8.9% Credit Suisse: 8.6%
Increase in tax exemption for senior citizens
Tax exemption limit likely to go up to Rs. 1.70 lakh
Rs. 10-15,000 addition to basic tax exemption limit
Q3FY'11 GDP seen at 8.6% vs 8.9% (QoQ)
Likely announcement of banking licences in Budget
Price target of Rs. 56/share, stop loss at Rs. 46
Markets weighed down by governance issues
Buy IFCI at current market price
Markets weighed down by high oil prices
Likely announcement of FDI in retail in Budget
2% excise hike will be a dampener for stock mkt
Price target of Rs. Rs 320-33/share, stop loss at Rs. 250
Declared funds could be directed into Infra
Buy Pantaloon Retail at current market price
VDIS could ease the Govt's funding gap
Market sentiment down on high oil prices
Education sector likely to get a boost during Budget
Price target of Rs. 550/share, stop loss at Rs. 493
Market condition fragile, no signs of reversal
Buy Educomp above Rs. 510
Tough to replicate divestment record of FY'11
Clarity regarding rights issue likely
Divestment success depends on state of the market
Positive announcement likely for banking sector
Answer lies in opening up credit market to FIIs
Target 10% upside from current mkt price in 1 month
Private sector may be crowded out of credit market
Stop loss at 4-5% lower than the current market price
Higher govt borrowing inevitable
Buy SBI at current market price
Likely announcements in infrastructure space
May bring more services into the tax net
Could increase excise by 1%
Target 10% upside from the current mkt price in 1 month
Social sector expenses, subsidies to rise
Stop loss at 4-5% lower than the current market price
Tough to replicate 3G windfall in FY'12
Buy GMR Infra at current market price
High fixed expenses like defence, interest
Expect increase in FDI in insurance
FM has little room to maneuver
Buy Bajaj Finserv with price target of Rs. 525/share
Focus on infrastructure spending
Expecting announcement on Mumbai-Delhi corridor
Buy Mundra Port with target price of Rs. 155/share
5100 Nifty Put adds 9.13 lakh shares in Open Int
Advice to buy ITC after expected post-Budget fall
5500 Nifty Call adds 6.69 lakh shares in Open Int
Maximum Put OI at 5300 suggesting strength
Excise duty on cigarettes likely to be increased
Buy on ITC
Nifty VIX Index still high at 27%
Looking to revise target after Budget
Nifty Open Interest PCR at 1.35 vs 1.28
Stock may fall over 10-15% in near term
Nifty sheds 22.8 lakh shares in Open Interest
Nifty Futures end at a premium of 10.2 pt vs 16.6 pt
Expect increase in excise duty
Sell Tata Motors
Worried accounting gimmicks to manage deficit
Don't expect divestment tgt to be higher than $10 bn
Govt seems to largely be on the path of divesting
Expect more benefits for an average tax payer
Do not expect rise in taxes except for auto sector
Expect some rise in taxes for auto industry
Expect fiscal deficit to be around 6.5% this year
Need to boost overall employment
Should reduce subsidy to lower lower than GDP growth
Should not focus on comparing fiscal deficit numbers
Corruption finally being tackled after 50 years
Environmental clearances seem more flexible and fair
Need a roadmap for retail in FDI
Full FDI in retail will not be allowed in one go
Need encouraging policy on on infra FDI, invst
Cannot do much about food subsidies
Government is serious about investments
'Make or break time for India'
Govt inaction will change thinking about India
'Bullish' going into the Budget
Government not just 'sitting and waiting' any more
See a change in government management & policies
Time for action from govt, not just words
Need investment in infra, more FDI
Government cannot rely on past policies, must deliver
Expect govt to tackle issues like corruption
Settlement related issues also could have led to sell
Middle East issues also led to last week's sell off
Last week's sell off due to rising oil prices
Good to go in to a budget with low expectations
To complete 1075 km new rail line in FY'12
To complete dedicated freight corridor by Dec 2016
To procure 18,000 wagons in FY’12
To add 1,000 km of new rail lines in FY'12
Freight loading target of 993 MT in FY'12
Ordinary work expenses seen at Rs. 73650 cr
Railway earning set to exceed Rs. 1 lakh cr in FY’12
Loading target of 924 MT of freight this fiscal
FY’12 operating ratio pegged at 91.1%
Set aside Rs. 6735 cr dividend for FY'12
FY’12 working expenses seen at Rs. 96400 cr
FY’12 gross traffic receipt seen at Rs. 1.06 lakh cr
Doubling spend on gauge conversion to Rs. 2470 cr
Frequency of 17 trains to be increased
To extend run of 33 trains
To launch 56 new express trains
To launch 3 new Shatabdi trains
To launch 15 new suburban trains in Kolkata
To launch 9 Duronto trains
Freight loading target for FY’12 at 993 MT
To set up coach factory at Palakkad
Multi-purpose ‘Go India’ smart card to be test-launched
To launch smart card for metro and long distance trains
Work on east, west DFCs progressing well
To give 12,000 acres for dedicated freight corridor
To do away with all unmanned rail crossings in FY’12
To construct 172 rail overbridges in FY’12
3 railway zones to implement anti collision devices
To have anti collision devices in 8 of 17 rail zones
To create fund for socially desirable plans
To build over 10,000 shelters near suburban railways
Annual gross budgetary support at Rs. 20000 cr
To spend Rs. 13824 cr for acquisition of rolling stock
To set up a bridge factory in Jammu & Kashmir
Railways to borrow Rs. 20594 cr in FY'12
IRFC to borrow Rs. 10000 cr via tax free bonds in FY’12
FY'12 annual plan spend at Rs. 57630 cr
To set up track machine unit in West Bengal
Working on 1000 MW captive power plant in Bihar
Aiming for 700 km of annual rail line addition
2,000 shelters to be established
To set up metro coach factory in Singur
To set up 1300 MW thermal power plant in Andhra
To set up diesel locomotive centre in Manipur
Aims to add 700 kms of railway lines this year
To begin work on Orissa unit on land identification
To set up industrial park in Nandigram
To set up 2 more wagon units under JV mode
To set up 700 MW gas based power plant in Maharashtra
To set up railway industrial park
New coach factory at Kolar via PPP
To set up single window clearance for PPP projects
To set up rail based industries

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