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BUDGET 2015

BUDGET 2015

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            FINANCE MINISTER

            It is that time of the year when everybody is hoping that the Finance Minister has some good news for them in the Budget. Read moneycontrol users' letters to the Finance Minister.

            • Posted by

              UG5

              Dear Sir, Please Change PSU Bank Working Style Like Pvt Bank, Then Market Capital of PSU Bank Will Increase ...

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            • Posted by

              SAGA1

              Please increase the limit under 80C to 2.5 Lacs.

              more »

            • Posted by

              Shailesh Kawra

              Whether the FM would consider Social Security for senior citizens in this budget or else will follow same poli...

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            • Posted by

              chethan271984

              Please Make Income TAX free limit 2L to 3.5L and make some changes in tax present 3.5L to 6L -10% and 6L to 1...

              more »

            poll
            Will Modi government`s first full year Budget deliver on market expectations?

            52 comments

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            Budget Expectations

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            Fiscal consolidation

            The fiscal deficit is arguably Arun Jaitley’s toughest battle as he prepares to present the Union Budget in late February. Defined as the difference between government expenditure and revenues, has already reached its full-year target well ahead of the year’s closing (Rs 5.24 lakh crore, or 4.1 percent of gross domestic product), thanks particularly to weak tax collection.

            Not wanting to irk rating agencies or earn the tag of being a profligate spender, the FM has re-iterated his commitment in meeting the target, but the only way it can be achieved is slashing plan expenditure (the more productive form of s ...

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            EXPERT OPINION

            What’s the projected fiscal deficit for FY16 likely to be?

            52.0% of them say 4-4.5%

            Divestment

            Part of the reason why the government is struggling to meet its deficit target is also because of its struggle in pushing through its divestment program.

            The government had intended to raise about Rs 58,000 crore through the fiscal (Rs 43,000 through stake dilution in state-run companies and another Rs 15,000 crore by stake sale in in private companies where government has a stake) but at the time of this writing, it has raised only about Rs 1,500 crore.

            The development is surprising considering the buoyant market conditions of late and with Jaitley, the original divestment minister under NDA 1, bein ...

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            EXPERT OPINION

            What do you think will be the divestment target for FY16?

            45.5% of them say Rs 40,000-50,000 cr

            Ease of doing business

            Much has been said and done about this in the past several months the Narendra Modi government has been in power.

            But Budget 2015 could further the cause that has clearly been very high on the PM’s priority. Towards that end, Jaitley could announce a host of measures such as related to tax reform (of which more below), or announce providing more teeth to bodies such as the Project Monitoring Group or set up online, single-window clearances for sectors such as real estate, or even allow automatic FDI in others.

            Beyond this, investors will also look for details on NITI Aayog, the announced replacemen ...

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            EXPERT OPINION

            Do you think the government will be able to reduce red tapeism?

            57.6% of them say Yes

            Jobs

            As of one statistic, the economy needs to create 12 million every year only to keep up with the youth that are entering the workforce – when the record over the seven years to 2012 (where data is available) has been about 1 million per year.

            A broader issue that cannot be tackled with one specific push or initiative, higher job creation would result from steps the government will take to boost manufacturing, create infrastructure and augment overall economic growth.

            But even more important is the need to announce a comprehensive policy for skill development, which would also call for higher spendin ...

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            EXPERT OPINION

            Do you see hiring by companies picking up in FY16?

            50.0% of them say Yes

            Infrastructure

            A sustainable higher growth path cannot be achieved without taking steps to boost the country’s creaky infrastructure.

            Towards that, not only does the government need to increase spending on infrastructure, it also needs to announce steps to fast-track decision making in the sector, lowering cost of capital and encourage private-sector investments by streamlining rules and providing a definite framework for PPPs.

            In the last Budget, Jaitley had set aside Rs 500 crore towards setting up an institution to specifically look after PPPs but nothing concrete has been announced on it yet. Any details on i ...

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            EXPERT OPINION

            Do you see the government making any game changing announcement for infrastructure?

            57.6% of them say Yes

            Tax reform

            The government has made definite progress on the goods and services tax (GST) in the last few months and it will almost certainly be rolled out from April 1, 2016. Now the market would look for details on it: with respect to goods that will come under it (or be exempted) and importantly, what the crucial revenue-neutral rate -- which has the potential to make or mar the tax reform -- would be.

            There are other issues that corporates are looking forward to: such as more clarity on MAT on special economic zones while foreign investors would look for a word on the postponement of controversial GAAR (which for now i ...

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            EXPERT OPINION

            How much do to you see the FM raising the current Income Tax exemption limit of Rs 2.5 lakh to?

            50.0% of them say Rs 3.0 lakh

            PSU Bank reform

            In early January, the PM and the FM met honchos of state-run banks in a summit to brainstorm how India’s staid public-sector banks can be brought on par with their private banking peers but beyond word of greater autonomy, not many definite details were announced.

            The Budget would serve as the perfect place to announce any steps that were discussed at the meet: be it letting banks overhaul their hiring policies, infusing greater capital or reining in wilful defaults and NPAs.

            A number of expert committees appointed by the Reserve Bank of India have suggested steps to improve governance of bank boar ...

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            EXPERT OPINION

            How much funds do you see the government allocating for PSU Bank recapitalization?

            76.0% of them say Rs 15,000-20,000 cr

            Capital market reforms

            A deep, well-functioning capital market serves as a solid base upon which businesses can thrive and towards this, the FM can take several steps to boost both the stock and the bond market.

            For the stock market, the government could look at providing the regulator, Sebi, with more teeth to prevent and take action against market frauds, take steps to boost retail participation into equities (by allowing long-term PF/pension funds to invest more) and provide for a viable fund-raising option for SMEs – as also provide short-term gains by tweaking tax structures in favour of the asset class.

            The bond ma ...

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            EXPERT OPINION

            Do you see the government announcing any policy to encourage detail savings into Equities?

            66.7% of them say Yes

            Subsidies

            The halving of crude prices (and the subsequent deregulation of diesel pricing) in recent months has afforded the government some breathing space with respect to subsidies but it still has a lot of ground to cover before it can claim it has solved the riddle.

            By aiming to restart the direct benefit transfer (the Jan Dhan Yojana and Aadhaar push should help in this regard), the government will hope to cut down on some wasteful LPG subsidies by reorienting it more efficiently towards the poor.

            But it has not made any progress on the issue of fertilizer subsidy while it has only chosen to expand the UPA ...

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            EXPERT OPINION

            Do you the government being able to reduce its subsidy bill in FY16?

            66.0% of them say No

            Inflation

            High prices, the Achilles’ Heel of the Indian economy for the past many years, have finally appeared to come down under control -- thanks largely in part to the collapse in international commodity prices and the high base effect.

            But economists would like to see more structural steps being taken to counter India’s chronic inflation problem: such as streamlining of agriculture procurement laws, an overhaul of the Food Corporation, stable MSPs as well plowing of more public and private investments in supply chain and logistics.

            It must also be remembered that the RBI expects prices to bounce back t ...

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            EXPERT OPINION

            Do you see inflation falling below 4%, because of sliding commodity prices?

            41.7% of them say No

            Experts Expectation from Budget

            All

            Sectoral Report

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            Top Gainers / Losers

            View % gainers & losers from one budget day to the next

            Bharat Forge 634.10 196.65
            Eicher Motors 8128.05 194.92
            Motherson Sumi 359.55 173.53
            Apollo Tyres 176.00 112.18
            MRF 22397.00 94.90
            Maruti Suzuki 2533.05 86.71
            Tata Motors 452.85 57.57
            Bosch 13036.15 48.63
            Hero Motocorp 2435.55 46.03
            Exide Ind 151.15 21.07
            Bajaj Auto 2151.55 9.13

            Budget & the Market

            Market Outlook

            Jim O'Neill

            Former Chairman | Goldman Sachs

            Jai Bala

            1857 Advisors

            Kunal Bothra

            Sr Technical Analyst | LKP

            Chandan Taparia

            Derivatives Analyst | Anand Rathi Financial Services
            Budget Bets
            What to buy / sell before this budget
            company priceaction
            Larsen 1766.908.35 Buy
            UltraTechCement 3137.4016.20 Buy
            ITC 361.25-32.55 Buy
            Essel Propack 116.60-1.40 Buy
            Goodyear 593.00-6.75 Buy
            Capital Trust 129.80-1.00 Buy
            J Kumar Infra 558.5020.25 Buy
            UltraTechCement 3137.4016.20 Buy
            Jain Irrigation 72.250.35 Buy
            BHEL 262.15-8.70 Buy

            Flashback

            Budget Classroom

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