You are on page 1of 24

Sensex at 12.18pm: Disappointment from the Budget led to sell-off.39 points Sensex at 11.54. 19286. 18861.59pm: Fresh bout of selling drifts Sensex to fresh 3-month low Sensex at 11 am: FM begins Budget speech.72. Sensex at 3.How the Sensex moved to major announcements on Budget Day Sensex at open: 19264.43pm: Government to borrow Rs 6. Sensex at 12. up 134. up 112. Sensex at 01.30pm: Highest ever turnover of Rs 4.46am: Extra investment allowance of 15% for corporates investing over Rs 100 crore in plant and machinery.2 percent and FY14 fiscal deficit seen at 4.21pm: Super Rich Tax .39 lakh crore.11pm: Additional tax deduction of Rs 1 lakh for first time buyers of houses valued up to Rs 25 lakh Sensex at 12. down 290 pts Market Commentary: Sensex nosedives 290 pts as Budget 2013 flops Top Gainers I Top Losers I Most Active I Commodities I Global Indices . Sensex at 02.3 lakh crore from the market.30pm: TDS of 1 percent on sale of immovable property valued over Rs 50 lakh.16pm: Fiscal deficit for FY13 at 5.8 percent. Sensex at 12pm: Entry norms for FIIs to be eased further. Sensex at 12.80.31 points.Surcharge of 10 percent on those with a taxable income of over Rs 1 crore Sensex at 12.

FM has delivered a mouse” Key Takeaways Surcharge of 10 percent on those with a taxable income of over Rs 1 crore.4.3 lakh crore from the market. Surcharge on corporates with income over Rs 10 crore raised to 10 percent from 5 percent. motor cycles. Rajiv Gandhi Equity Savings Scheme to be liberalised. while most players were expecting this figure to be around Rs 5. Entry norms for FIIs to be eased further.2 percent and FY14 fiscal deficit seen at 4.2 lakh crore. Additional deduction of interest up to Rs 1 lakh for a person taking first home loan up to Rs 25 lakh during period 1.“Compared to expectations.2013 to 31.3.8 percent.2014 Foreign portfolio investment in excess of 10 percent in an Indian company will be classified as foreign direct investment. Duty on imported luxury goods such as high end motor vehicles. For full article. A tax credit of Rs 2000 to every person with total income in the first bracket of Rs 2 lakhs to Rs 5 lakhs. Government to borrow Rs 6. Click here . Fiscal deficit for FY13 at 5. yachts and similar vessels increased.

000 Extension of Countervailing duty at 6%. Impact Cigarette companies will pass on the increase to the customers. New oil and gas exploration policy will be formulated on revenue sharing.Sector: Auto Expectations Levy of additional duty of Rs 80. Higher allocation to JNNURM positive for all commercial vehicle manufacturers. Shale gas exploration policy to be formulated.500/MT. customs duty 0% Maintain customs duty of 75% on luxury vehicles. Clarity on implementation and timelines of GST will be positive. Sector: Oil & Gas Expectations NELP blocks will be cleared.000 buses augurs well for all commercial vehicle manufacturers. Removal of 5% customs duty on LNG and natural gas. Cess on crude oil production might be increased from current levels of Rs 4. Proposals Specific Excise Duty on cigarettes increased by 18%. Tax on royalty increased from 10% to 25%. Proposals Excise duty on SUVs up from 27% to 30%. Impact Positive for the upstream companies like Reliance. Proposals Import duty on crude oil might be re-imposed. Impact Negative for M&M and Tata Motors. Customs duty on luxury vehicles hiked to 100%. ONGC. . Sector: FMCG Expectations Increase in excise duty on cigarettes. Expect the general excise duty rate to be maintained at 12%. This could marginally impact volume growth. Higher allocation to JNNURM leading to additional demand of 10.

housing and railways. deepening of bond markets. Elimination of hurdles for roads and highways. Increase in royalty fees marginally negative for Ranbaxy .Sector: Banks/Financials Expectations Expects capital infusion of around Rs 20. It will boost infrastructure development in roads. 3000 km of road projects to be awarded in first 6 months of FY14. Reduction in STT Sector: Infra Expectations Higher allocation to infrastructure spending. ports. Impact Positive for the sector. family welfare in FY14. Introduction of commodity transaction tax on non-agri contracts Proposals Constitution of a regulatory authority for road sector. Sector: Pharma Expectations Exempt all life-saving medicines from proposed GST. IDFs will be encouraged to provide long-term low-cost debt Proposals Royalty/technical fees paid to NRIs increased to 25%. Reduction in STT. To allot Rs 37333 crore for healthcare. Introduction of CTT negative for broking companies. Positive for PSU banks. Additional deduction of Rs1 lakh interest on housing loans of up to Rs25 lakh.000 crore. Easing of investment norms. Impact Higher allocation is positive for the sector. Proposals Extension of 4% farm loans to private banks. Impact Negative for private sector banks. Higher allocation to infrastructure tax free bonds. Increase the list of life-saving drugs to 5% concessional duty New oil and gas exploration policy will be formulated on revenue sharing.

MADHU KELA Reliance Capital The Budget is encouraging as FM has not thrown any negative surprises.UDAY KOTAK Kotak Mahindra Bank The Finance Minister has lived up to his promise on fiscal deficit. No direction changing moves announced to revive markets. He did not speak on how the current account deficit will be handled. The Budget 2013-14 is good for capital markets and investments. The market will resume downtrend from now onwards. Fiscal deficit projection of 4. . VIBHAV KAPOOR IL&FS With the limited options FM has done a decent job.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. SAMIR ARORA Helios Capital The Budget 2013-14 turned out to be unexciting for equity markets. VALLABH BHANSHALI Enam Securities FM has done more good than bad.

balanced. ADI GODREJ Godrej Industries FY14 Budget is a growth oriented one and the emphasis remains on inclusiveness. Expenditure and execution is important. and pragmatic Budget. .5/10. We have had one of the worst years in a decade and one cannot expect miracles from him. Diesel tax not being implemented is very good news for the sector. PAWAN GOENKA M&M Don't agree with excise duty hike on SUVs. 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. Our aim is to increase mining with available reserves. CHANDA KOCHHAR ICICI Bank Private sector banks have been given a level-playing field vis-a-vis the public sector banks.DEEPAK PAREKH HDFC It is a very realistic. I would rate budget as 7. KOUSHIK CHATTERJEE Tata Steel The focus would be on how more efficiently coal can be mined.

Negative for ITC. family welfare in FY14: Positive for pharma stocks. ONGC. fertilisers and pesticides.ITC Proposal: SED on cigarettes hiked by 18%.049 crore allocated to Ministry of Agriculture. Positive for Coal India. Tata Motors. ONGC Proposal: To announce policy on Shale gas based on revenue sharing. DLF Proposal: House loans up to Rs 25 lakh will be allowed an additional deduction of interest of Rs 1 lakh. Coal India Proposal: To encourage PPP projects for coal. ICICI Bank Proposal: 4% farm loan scheme extended to private sector banks. Proposal: To provide Rs 14. up 22%. SBI Sun Pharma Jain Irrigation Proposal: Rs 27. Positive for Reliance Inds. Negative for M&M. Monsanto. Positive for realty. . All Women’s Bank to be set up via public sector. Tata Motors Proposal: Excise duty on SUV upped to 30% from 27. Negative for private sector banks. Blocked NELP blocks will be cleared. Positive for public sector banks. Positive for Jain Irrigation.000 crore for public sector banks recapitalisation. Proposal: To allot Rs 37333 crore for healthcare.

NTPC Century Textiles Proposal: Propose technology upgrade scheme for textile sector to Rs 2400 crore in FY14. Va Tech Wabag. SKS Micro Sadbhav Engineering Proposal: 3000 km of road projects will be awarded in first 6 months of FY14. Alok. Triveni Engineering Proposal: Allocation of Rs 15. construction companies. Negative for Speciality Restaurants. SPEL.Educomp Solutions Proposal: Rs 65. machinery for semiconductors. Suzlon Energy Proposal: Higher allocation for wind energy. . Positive for Century Textiles. Proposal: Bank correspondents can sell micro finance products. Positive for education stocks. Positive for SKS Micro. Positive for Sadbhav Engineering. up 17% from FY13. Arvind. Moschip Speciality Restaurants Proposal: Finance Minister to impose service tax on all AC restaurants. Proposal: Extension of sunset clause for profit-linked incentive by one year: Positive for the power sector.877 Cr has been allocated to education. Proposal: No custom duty for plant. Positive for Triveni Engineering. Positive for Suzlon.260 crore towards clean drinking water & sanitation. Positive for Moschip.

TAX RATE Nil 10% 20% 30% NOW 2 lakh 2-5 lakh 5-10 lakh Above 10 lakh POST BUDGET 2 lakh 2-5 lakh 5-10 lakh Above 10 lakh SENIOR CITIZEN: No change in tax slabs.5-5 lakh 5-10 lakh Above 10 lakh POST BUDGET 2. TAX RATE Nil 20% 30% NOW 5 lakh 5-10 lakh Above 10 lakh POST BUDGET 5 lakh 5-10 lakh Above 10 lakh Click here to use our tax calculator to find out your new tax structure. TAX RATE Nil 10% 20% 30% NOW 2 lakh 2-5 Lakh 5-10 lakh Above 10 lakh POST BUDGET 2 lakh 2-5 Lakh 5-10 lakh Above 10 lakh FEMALE: No change in tax slabs.5-5 lakh 5-10 lakh Above 10 lakh VERY SENIOR CITIZEN: No change in tax slabs.5 lakh 2.5 lakh 2. TAX RATE Nil 10% 20% 30% NOW 2.Super Rich Tax: 10% Surcharge on income above Rs 1 crore. MALE: No change in tax slabs. . Tax credit of Rs 2000 for income between Rs 2-5 lakh.

Cigarettes Set Top Boxes Yachts MP3 Players Silk SUVs Mobile phones (GSM) Marble Passenger cars MUVS Diamonds Leather Goods Readymade Garments Imported Jewellery Electrical plants Handmade carpets .

Wholesale price inflation is seen between 6. .GDP Trend & Forecast 12.0% 9.7 percent range next year.0% 9.6% 9.3% 2.0% 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Key Takeaways The government expects GDP to grow in 6.0% 0.0% GDP Growth Rate% 10.6% 8.7% 6.1-6. Revival of investment in infrastructure is one of the key challenges before the government.0% 6.0% 6.6 percent by March this year.3% 8.2% 5.0% 4. The Survey based on developments of FY13.2-6. emphasizing the continued need for reforms in the coming months with an outlook for the next fiscal pointing towards gradual improvements. draws out a rather cautious picture of the year gone by.

3% Key Takeaways The Government will be able to achieve its fiscal deficit target of 5. and that the government needs to raise diesel and LPG prices in line with global rates.5% 4.3% 2.0% 3.0% 5.8% 6. The Survey sees oil subsidies as a key fiscal risk. There is limited room to grow exports.0% 4. 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.5% 5. .0% 6.Fiscal Deficit Fiscal Deficit as % of GDP 7.0% 1.7% 5.0% 0.0% 6.0% 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 3. Revenue collection target for FY13 is likely to be significantly below target.0% 2.3 percent for the current year.

44 Inflation Rate Inflation% 12 9 6 3 0 3.6 FDI & FII Flows FDI 32.Current Account Deficit % to GDP 0 -1 -2 -3 -4 -5 -4.8 15 10 5 0 FII (USD Bn) 8.7 32.2 -4.1 17.8 47.92 45.6 22.4 35 30.8 9.9 11.56 Savings Rate as % of GDP Savings Rate % 35 34 33 32 31 30 29 34.0 33.6 -2.4 295.8 .1 304.0 30.9 7.8 -2.2 12.8 5.8 Foreign Exchange Reserves Reserves (in USD Bn) 310 300 290 280 270 260 279.47 47.5 Average Exchange Rate USDINR 57 54 51 48 45 42 39 54.3 30 25 20 17.8 294.

tatkal charge.600 crore versus Rs 22.000 now. Railways to introduce AC coaches for Mumbai suburban network in FY14. Freight charges on diesel. Railways to launch 67 new express trains. urea up by 5. New system to enable booking of 7.“No hike in passenger fares. Rail Budget – Full Speech I Analysis I Rail Budget Highlights – Full article .500 crore year ago. cement. iron ore.8%. steel.200 tickets per minute versus 2. FY13 railway losses seen at Rs 24. Railways propose no hike in Reservation fee. Railways to raise Rs 95. LPG.000 crore for the next 4 years. 26 new passenger trains. freight revenues eyed” Key Takeaways No hike in passenger fares.

Titagarh. L&T.Coal India Proposal: Rs 4. NCC. Proposal: Railways to complete electrification of 1. Texmaco Rail saw a huge sell-off in trade. iron ore and urea companies.000 crore has been allocated for port and mine connectivity. Positive for Titagrah Wagons. Verdict Railway Budget turned out to be a non-event. Bhel Proposal: Railways to set up electromotive unit in Rajasthan in joint venture with BHEL. Titagarh Wagons Proposal: To introduce AC coaches for Mumbai suburban coaches. Texmaco Rail. Positive for Texmaco. steel. Railway Minister P K Bansal failed to deliver some big ticket announcements. Kernex. BEML. Siemens Proposal: Railways to set up 75 MW windmill plants. Texmaco Rail Gammon Infra Proposal: Rs 9. Proposal: Railways to set up coach manufacturing facility at Haryana. Positive for Gammon Infra. Suzlon KEC International Proposal: Railways to set up equipment signaling plant at Chandigarh via PPP. Major railway stocks like Kalindee Rail.8%. Titagarh Wagons.200 km.000 crore has been allotted for coal mine connectivity projects. ACC Proposal: Freight rates to go up by 5. . Negative for cement.

This will ensure that the interest rates earned by the investor moves along with the changes in the overall interest rates and hence there is protection in times when inflation rises in the economy. For a first time buyer if the value of the property is Rs 40 lakh or less and if the housing loan is Rs 25 lakh or lower then an additional deduction of Rs 1 lakh would be available over and above the existing Rs 1. On the house property front there is an attempt to encourage first time investors through a higher deduction that will be available for repayment of interest on housing loans. The individual can choose this as a long term option for parking their funds for 10 to 15 years and this will not have an adverse tax impact because of the fact that the income will be tax free in their hands. The choice of instruments in the scheme has also been increased as equity oriented funds have been included in the eligible list of investments which will help the investor to choose a fund as per their liking.Arnav Pandya. This would increase the burden on the individual in terms of compliance and effort in deducting and depositing the tax with the government. These will not mean a major deviation from their existing plans though they will be able to make use of some additional options in their investment mix. One bit of good news is that the investors will have a choice of tax free infrastructure bonds for one more year as there has been a permission given for the issuance of these bonds.Investors to face some small changes following Budget . There will also be a better option available for those who want to protect their real rate of return because there will be the introduction of inflation linked bonds and inflation linked National Savings Certificates. Financial Planner Investors will witness some incremental changes as far as their investment plans are concerned in the coming financial year following the announcement of the Union Budget 2013-14. At the same time the benefit can be claimed over a period of three years as compared to the one year time period that exists currently which means that the investor can actually phase out their investments to suit their requirements. Conservative investors as well as senior citizens can make use of this opportunity when it becomes available. The Rajiv Gandhi Equity Savings Scheme (RGESS) has also witnessed some small changes wherein the income limit for being eligible for the scheme has been raised to Rs 12 lakh. However the provision for a tax deducted at source at the time of sale of the house property if the value of this is Rs 50 lakh or higher would be a negative.5 lakh deduction. . Once again this can be easily claimed because of the fact that is can be taken over a two year time period.

Excise and customs remain more or less the same. But these will not be more than sideshows to the main avenues currently available for savings. A lo-calorie budget is not meant to energise anybody. but he could not oblige.000 crore additional provision for Sonia Gandhi’s Food Security Bill. Click here . It is meant to get the fat down. it is worth summarising the core proposals made in the budget. which is what his predecessor managed to do. Budget 2013-14 has taken the middle path of low ambition and low risk. That was not on. and an additional deduction of Rs 1 lakh for interest paid on first home loans (over and above existing Rs 1. Before we rush to condole those left out of accessing the meagre basket of goodies. with no changes in base rates.Why Chidu's Lo-Cal budget is a flop-show -R. A lo-calorie budget is not meant to energise anybody. Plus there are promises on new savings instruments sold through post offices that will be inflation-indexed. For full article. And unlike his own 2008 budget. which the markets misunderstood to mean something that will send the adrenalin pumping. some very small personal income tax reliefs. both to populism and the middle classes.5 lakh). Chidambaram has raised Rs 18. Firstpost at Network 18 If Palaniappan Chidambaram’s eighth Budget has not set the markets on fire. which set the stage for the economy’s long-term slide and made inflation intractable. The markets wanted more of the same. the former mostly by taxing companies more. not even his own party. It is meant to get the fat down. and the FM restrained himself from any dose of excess populism. If the markets are moping right now.000 crore of additional revenue through direct and indirect taxes. Jagannathan Editor. are minor: there is a token Rs 10. The concessions. it’s because Chidambaram has already given them enough room for optimism before the budget. He has delivered on his promise of providing a “responsible” budget. with the Sensex and Nifty heading south. it can be easily explained: his first goal was to avoid doing damage to investor confidence. There is thus nothing in it to excite anybody.

market disappointed -Santosh Nair Editor. There has been a sharp increase (46 percent) in allocation to the Rural Development ministry. For full article. Moneycontrol at Network 18 Much was expected of Finance Minister P Chidambaram in Budget 2013 considering that he had marketed it aggressively to foreign institutional investors in the last few ways. At a time when private investments have dried up. While he has promised on a fiscal deficit target of 4. the FM has not slashed Plan Expenditure for FY14 in a big way as many had feared. The current year’s target was achieved by trimming Plan Expenditure by around Rs 1 lakh crore. But the Budget did not have anything specific on how oil and gold imports will be curbed.31 lakh crore. and that was only to be expected considering that general elections are due in barely a year. The FM said that current account deficit was a bigger problem than fiscal deficit. the status quo on key tax rates should come as a relief even if was only to be expected. lower than the revised subsidy bill of Rs 2. But market may take the subsidy estimate for FY14 with a pinch of salt. But what the market was hoping from the architect of the Dream Budget was some kind of a road map on how growth and the investment cycle could be revived in the near future.5 lakh crore is about 29 percent higher than the revised estimate of Rs 4. Also. The FMCG industry must be hoping that a pickup in rural consumption should add to their bottomlines. Additional provision for the Food Security Bill at Rs 10.Budget: Chidambaram plays safe. considering that the revised estimate for FY13 was about 35 percent higher than the initial estimate. he has delivered on two key parameters: fiscal consolidation and a stable tax regime. The estimate of Rs 5. It was never easy going to be raise taxes in a slowing economy. On the positive side. how he achieves that will be the key. and to that extent. which has been doing aggressively over the past few months. But investors and the industry are questioning the wisdom of achieving fiscal targets through cost-cutting.57 lakh crore for FY13.8 percent for next year. The only other way out for the Finance Minister has been to cut back on expenditure. on how subsidies could be meaningfully lowered. The subsidy bill for fuel.29 lakh crore for FY13. Click here . a cutback in government spending could further crimp growth near term. fertiliser and food together for FY14 is estimated at Rs 2. And that is where he appears to have fallen short. To be fair.000 crore was much lower than what the market had feared.

A committee will be constituted to examine the application of the principle and to work out the details expeditiously. sectoral. where an investor has a stake of more than 10 percent. For full article.. Indian budgets are high profile events.only to wipe it off an hour later.” .." . High profile events are not the place to showcase meagrely worded ideas. foreign investment is an imperative. I just wish this had been eased in via a separate discussion paper. If I may be frank. foreign investment caps and confusing tax treatments for different classes of foreign investors. Till here the speech was going fairly well. being introduced for the first time.” . I propose to follow the international practice and lay down a broad principle that. In a country home to complex.8% fiscal deficit target. 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. does not have the choice between welcoming and spurning foreign investment. spoke of capital market reform and then suddenly threw in this half baked idea. Finance Minister That’s how Finance Minister P Chidambaram opened his Budget speech on Thursday. I could say the same about his next proposal.P Chidambaram. it will be treated as FDI.P Chidambaram. Click here .. put in an aggressive 4.. Half baked because there are no details forthcoming. He announced bits and bobs of infrastructure investments. it will be treated as FII and. where an investor has a stake of 10 percent or less in a company..February 28th: History repeats itself? Menaka Doshi Corporate Editor. "In order to remove the ambiguity that prevails on what is Foreign Direct Investment (FDI) and what is Foreign Institutional Investment (FII). is not a good idea. CNBC-TV18 "I have been at pains to state over and over again that India. to suddenly tell a foreign investor his category might change without his will. Some unlisted companies have avoided dividend distribution tax by arrangements involving buyback of shares. at the present juncture. Finance Minister That was the first surprise. 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.P Chidambaram. "Some tax avoidance arrangements have come to notice.think again. He must have put a smile on the faces of foreign investors. and I propose to plug the loopholes. put through several rounds of debate and then proposed! But if think this is bad. striking the right note in a country starved of investments and faced with declining growth..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.

But we want to open a bank for women. one has to fight harder to succeed in one's own country" # @Trendulkar “Keeping money in the blouse is the original women's bank. Sad. Singling out SUV's destroys a level field. As if women can’t use normal banks!” # Amitabh Bachchan @SrBachchan “Ama yaar.” # @kunalrao “Women's bank? Will they be closed once a month for 4 days?” .” # Kiran Mazumdar Shaw @kiranshaw “Women have certainly occupied center stage in Budget 2013. crimes against women. jise apne ghar ke Budget ke bare mein pata nahin. I welcome all the women oriented schemes announced by the FM.The Twitterati gloss over Chidambaram’s Budget # Dr Manmohan Singh @PMOIndia “Given the challenges facing our economy.” # Pritish Nandy "Wonderful. the Finance Minister has done a commendable job. woh desh ke Budget pe kya bolega!” # Anand Mahindra "No quarrel if ALL large cars taxed.” # Narendra Modi @narendramodi “Budget 2013-14 showcases UPA's disconnect with the people! Unemployment & inflation will continue to bother common man. We can’t stop rapes.

USEFUL LINKS Budget Archives Documents Budget Speech Economic Survey Rail Budget 2013 2012 2011 2010 2009 2008 2007 2006 Broker Reports Motilal Oswal Sharekhan Karvy Nirmal Bang AB Money Magnum Angel Broking IIFL Emkay Microsec Prabhudas Lilladher CARE GEPL Capital D&B Dolat Capital E-BOOKS BUDGET 2012 F&O TRADING STRATEGIES .

com Ltd. All rights reserved.Designed by Riken Mehta & Antony Jose Copyright © e-Eighteen. photos. pdf or any other content in whole or in part in any form or medium without express written permission of moneycontrol. . videos. Reproduction of news is prohibited.