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A quick sum-up of the budget “Budget 2010-11 at a

Glance” to give you an insight into the measures


undertaken by the Finance Minister both at micro as well
as macro level and its immediate repercussion on the
stock market.

INCOME TAX
Individual Positive
Existing Proposed
From Rs.1,60,001 to Rs 3,00,000 -10% From Rs.1,60,001 to Rs 5,00,000 -10%
From Rs.3,00,001 to Rs 5,00,000 -20% From Rs.5,00,001 to Rs 8,00,000 -20%
Above Rs.5,00,000 -30% Above Rs.8,00,000 -30%

• Additional investment of Rs 20,000 in infra bonds over and above Rs 1 lakh in 80C.
• Enhance tax audit limits for professionals to Rs 15 lakh

Corporate Positive
• Reduces current surcharge of 10% on domestic comp to 7.5%
• Peak excise duty hiked from 8% to 10%
• Weighted deduction from 150% to 200% for in-house R&D
• Limits for turnover for purpose of presumptive taxation of small business enhanced to Rs 60
Lakhs

TAX - OTHERS
Goods and Service Tax (GST) and Direct Tax Code (DTC) Positive

• Implementation of GST and DTC by April 2011

MAT Negative
• Minimum Alternate Tax up from 15% to 18% on book profits

AGRICULTURE Positive
• Will reduce fertilizer subsidy
• Focus to improve food security
• To provide Rs 400 cr to extend green revolution to eastern India
• Sets aside Rs 200 cr for a new agricultural initiative
• Repayment tenure for farmer loans extended by 6 months to June 30th 2011
• To provide 2% loan subsidy to farmers
• Proposes to increase subvention to 5% in repayment of farmer loans
• Allocates Rs 1,200 cr for drought mitigation
• Agri credit flow target for this year increased to Rs 3,75,000 cr from Rs 3,25,000 cr last year
• To set up 5 more mega food park projects
• Rs 300 cr for Rashtriya Krishi Yojna
• Rs 100 cr allocated for women farmers
• External commercial borrowing will be available for food storage industries

INDUSTRIES
Automobile and Ancillaries Positive
• Excise duty on large cars, SUVs, multi utility vehicles raised to 22% from 20%
• Full excise cut on electric cars

Banking & Financial Companies Positive


• Sets aside Rs 16,500 cr for PSU banks to get minimum 8% tier 1 capital by March 2011
• RBI to release additional licenses to pvt sector banks and non-banking financial institutions
• Repayment tenure for farmer loans extended by 6 months to June 30th 2011
• Agri credit flow target for this year increased to Rs 3,75,000 cr from Rs 3,25,000 cr last year
• To provide 2% loan subsidy to farmers
• Proposes to increase subvention to 5% in repayment of farmer loans
• IIFCL disbursements at Rs 9,000 cr by March 2010
• Housing loan: 1% interest subvention scheme extended, allocation Rs 700 cr
• Allocates Rs 100 cr for new pension scheme, to benefit 100,000 low income citizens
• All villages with 2000+ population to get banking facilities by 2012

Cement Positive
• Partial rollback of excise duty on cement

Infrastructure & Engineering Positive


• 44% of total plan outlay allocated to infrastructure
• Budget allocates Rs 1.73 lakh cr for infrastructure
• IIFCL disbursements at Rs 9,000 cr by March 2010
• Delhi-Mumbai industrial corridor taken up for development
• Road transportation kitty increased 13% to Rs 19,894 cr
• Govt allocates Rs 16,500 cr for railways
• Rs 66,1000 cr allocated for rural development in FY11
• 35% of development funds to be invested in rural India
• Urban development allocation up more than 75% to Rs 5,400 cr
• Rs 100 cr for financial inclusion fund; Allocation for Bharat Nirman at Rs 48,000 cr
• Additional Rs 20,000 deduction available for investment in infra bonds
• Government committed to SEZs to promote exports
• No import duty on some equipment in road projects
Fertilizer Positive
• To provide govt subsidy in cash instead of bonds for fertilizer
• Will reduce fertilizer subsidy
• Rs 300 cr for Rashtriya Krishi Yojna

FMCG Positive
• To set up 5 more mega food park projects
• External commercial borrowing will be available for food storage industries
• 35% of development funds to be invested in rural India
• Rs 66,100 cr allocated for rural development in FY11
• Duties on smoking and non-smoking tobacco products up

Gems & Jewellery Negative


• Import duty on silver raised to Rs 1,500 per kg

Healthcare Positive
• Focus to improve healthcare systems
• Govt allocates Rs 22,300 cr to healthcare
• Weighted deduction from 150% to 200% for in-house R&D

IT/ITES Neutral
• UID authority given Rs 1,900 cr
• Government committed to SEZs to promote exports

Oil & Gas Positive


• To discuss Kirit Parikh report in due course
• Petroleum products: basic duty of 5% crude , 7.5% on diesel & petrol; 10% on refined products
• Rs 1 per litre excise on petrol, diesel
• To provide govt subsidy in cash instead of bonds for oil

Power Positive
• Govt to facilitate 20,000 MW of solar power by 2022
• Govt to have a coal regulator for allocation of coal blocks
• To levy clean energy cess on imported coal
• Funds for power allocation raised from Rs 2,232 cr to Rs 5,132 cr
• Propose to hike allotment for renewable energy by 61%
• For solar mission, solar power generating units rates are to be reduced by 5%
• Cut in duty for photovoltaic units

PSU Positive
• Divestment proceeds budgeted higher in FY11 vs FY10
• Govt to raise Rs 25,000 cr through disinvestment

Real Estate Positive


• Indira Awas Yojana: allocation up by Rs 10,000 cr
• Sops for real estate, housing projects extended by a year
• Housing loan: 1% interest subvention scheme extended to March 2011, allocation Rs 700 cr
• Delhi-Mumbai industrial corridor taken up for development

Telecommunication Neutral
• Allocation for Bharat Nirman at Rs 48,000 cr
• Mobile accessories market to get tax breaks

Textile Positive
• FM extends interest subvention of 2% for exports of handlooms, handicrafts and SMEs for 1
year
• Exclusive skill development programme in textile and garment sector
• Khadi institutes get Rs 400 cr
• GOI sign USD 150 mn deal with ADB for implementing Khadi programme
• One time grant of Rs 200 cr to Tamil Nadu for textiles
• Government committed to SEZs to promote exports

Tourism Positive
• To boost tourism investment, offers investment linked tax deductions
• Rs 200 cr for Goa to restore beaches
MARKET REACTION
Indices Open At 1:00 PM Change
Sensex 16,255.33 16,651.66 2.44%
Nifty 4,858.50 4,969.90 2.29%
BSE Midcap Index 6,307.66 6,447.66 2.22%
BSE Small Cap Index 7,987.75 8,118.65 1.64%
BSE AUTO 6,848.06 7,164.82 4.63%
BSE REALTY 3,204.99 3,330.80 3.93%
BSE METAL 16,005.72 16,573.39 3.55%
BSE BANKEX 9,620.78 9,952.23 3.45%
BSE OIL&GAS 9,522.13 9,711.39 1.99%
BSE PSU 9,139.43 9,305.40 1.82%
BSE CG 13,358.47 13,606.59 1.86%
BSE POWER 2,959.28 3,002.65 1.47%
BSE CD 3,962.49 4,026.30 1.61%
BSE HC 4,830.05 4,909.69 1.65%
BSE TECk 3,180.89 3,211.36 0.96%
BSE FMCG 2,726.01 2,751.64 0.94%
BSE IT 5,189.03 5,229.08 0.77%