True to our expectations, we did not see any major announcements in the budget for the IT segment. However, I would say that the budget has largely been positive for the IT sector. The biggest disappointment for the IT sector has been the lack of a decision on extending the tax holiday for STPI and EOU units. However, there is still a year's time before the sops expire and I expect it to be favourably sorted out in the days to come. Domestic IT can expect a large investment due to the announcement of the usage of Smart Cards in the Public Distribution System, investment support for State WANS and Data Centers. Further concessions, to the broadband services and equipment players in the form of lowering of levies and service taxes on the convergent networks roll out, are a positive. Support to education in the form of the new IITs, 6000 high caliber learning centers will also add to the knowledge economy that India is fast moving towards becoming. The levies on software is the only sour note, whose impact on domestic players and on piracy will have to be seen in the days to come

Rating : Not Rated

This is by far an extremely farmer friendly budget. The following proposals will positively impact the agricultural inputs sector (specifically the plant nutrition segment): 1. Doubling of agricultural credit will improve purchasing power of farmers to purchase agricultural inputs. 2. Increased allocations to the National Horticulture Mission, Food Security Mission and the National Policy for farmers would certainly contribute positively to the sector. 3. Allocations to set up mobile soil testing labs is a welcome move. This will help in accurate soil health assessment and identification of nutrient deficiencies, including micronutrients and secondary nutrients, in addition to primary NPK fertilizers. This will form the basis of a balanced nutrition programme. 4. Record yields of Rice, Maize, Soyabean and Cotton are encouraging and show the signs of a renewal in the growth prospects of this sector. However, productivity concerns are still very real and very worrying. Nutrient Management programmes to increase yield per unit of land area to world standards is absolutely essential. 5. Crop insurance schemes being extended to include plantation crops like tea, ginger, rubber, cardamom, tobacco, etc. is a welcome move to insulate farmers against highly volatile commodity prices. It will also provide the required assurance to spend as required on nutrient and other agricultural inputs. 6. Targeting 4,00,000 hectares in addition to the 5,48,000 hectares already under drip and sprinkler irrigation will have a direct positive impact on the specialty plant nutrition industry. These micro-irrigation systems will reduce rain dependence and reduce the need for water and scarce, expensive agricultural labour, lowering cost of production while simultaneously increasing farming efficiency. Specifically for Aries, these drip irrigation systems are incompatible with traditional, non water soluble fertilizers and farmers necessarily have to shift to water soluble, specialty crop nutrients that are ideally suited to these irrigation systems. The specialty nutrients are required in much smaller quantities, reducing the usage of chemicals on the farm and also provide a cost benefit advantage. 7. Lowering of customs duty on sulphur, which is a secondary nutrient and is highly deficient in Indian soils, will lower costs of this essential element to the farming community. Sulphur prices worldwide are also at an all-time high and this reduction will help to a certain extent to cushion the rising price of this nutrient. 8. Permitting fiscal incentives on Research and Development in the agricultural inputs sector will be a great motivation to invest in innovation and new product development in line with rapidly changing and evolving agricultural trends. 9. Reduction of excise duties from 16% to 14% would be beneficial to reduce prices of farm inputs. Reduction in these duties on two wheelers and three wheelers would also be a significant saving to farmers who are major consumers of such vehicles. What is missing in the Budget proposals? 1. Debt waivers are great news to farmers. However, there are no specific incentives to companies who invest in extension services, rural knowledge dissemination and awareness building programmes. Unless awareness is grown systematically, productivity levels will remain abysmally low and farmers will again get caught in a debt trap. 2. No incentives have been provided for the promotion of organic farming and for the spread of environmentally safe agricultural inputs, like Chelates which are inert, cost effective, organo-metallic complexes. Several other environmentally safe technologies could have been provided with tax breaks or concessions. 3. No major outlays specifically to promote Agricultural Research, Agri Universities and related lab-to-land programmes. 4. Bringing commodities trading under the transaction tax net could lead to a higher cost of trading agricultural output on the commodities exchanges.

Rating : Not Rated

The Budget has highlighted the big opportunity for IT in the domestic market with the decision to allocate additional funds towards the state wide area networks, common service centers, data centers as well as smart cards for benefits management like PDS scheme at the state level and initiatives like the central plan monitoring system for outlays and outcome measurement for the Planning Commission. For domestic customized software market, there have been small changes with the sector being brought under the service tax net. This will increase the cost of technology for users and push up the cost of automation, not just in the private sector but also in public sector and government departments. Another factor that could push up costs for deploying technology is that customs duty for importing packaged software has been increased from 8% to 12%. This would increase the input cost across industries, not just the IT industry. The good news for IT and the people-intensive industries is the incentives to education with 20% more outlay. Announcement of three new IITs, IIScs and 6000 high caliber schools and shows commitment to quality education which augurs well for our supply chain and human capital. The Rs. 85 crore scholarship scheme for students pursuing science education is good news for IT and especially for TCS, which has been tapping into the science streams through our own from science to software transformation program for students. The Rs 14,000 crore Rural Infrastructure Development Fund, emphasis on rural roads,etc, would strengthen the much needed tertiary backbone of the economy and create greater confidence in global business that looks forward to partnering India. It would also go a long way in ensuring inclusive growth to spread the benefits of prosperity to wider sections of the society. What also bodes well for the export-oriented IT industry is the focus on the speed of the currency’s appreciation in the light of continuing foreign exchange inflows. The impact of capital inflows, has been identified as a key threat in the coming year and the FM has put in place various mechanisms including more than a two-fold increase in the market stabilization fund to help the RBI manage forex inflows in a calibrated manner.

Rating : Not Rated

This is clearly a growth-oriented Budget with significant additional outlays proposed for social sector, education and healthcare, amongst others. With rationalization of income tax, there will be more money in the hands of consumers. This will lead to improved demand and in turn higher level of production, leading to growth. Further, with reduction in Cenvat across the board, there will be further growth in demand and consumption. The Budget is friendly to the infrastructure sector, specifically electricity generation. The emphasis on power generation, reduction of customs duty on project equipment and across the board reduction in CENVAT by 2% will help in reducing capital cost. Quick ramp up of power generation capacity will ensure faster growth of other sectors of economy as this bottleneck will get cleared.

Rating : Not Rated

This is an out-and-out Congress Budget. It has election prep written all over it. It also demonstrates economic prudence and caution. By focusing on relief and development to the agriculture sector, a clear message is being sent that the year of the farmer is back. Also, if a cross section of the Budget were to be analyzed, the clear beneficiary is the common man. It is interesting to see pharmaceutical and healthcare receive impetus in the form of excise duty relief and incentive to research. Overall, I am personally pleased to see a Budget assuming accountability towards the manufacturing sector. We have spent a decade bolstering the service sector and rightly so. It has yielded rich dividends in contributing to the GDP and increasing employment opportunities. However, the manufacturing sector is the foundation of our economy, as much as agriculture. It deserves to get renewed incentive to grow to competitive levels. While I expect the suggested subsidies to increase employment, I would have expected the education Budget to be aimed towards cultivating talent for this sector to be more vocalized, than is the case. Creation of jobs needs to be balanced with development of talent. On income tax, there is no path-breaking change. On indirect and corporate tax, I am relieved that there hasn’t been incremental ambitions. On fringe-benefits, I maintain that the Finance Minister needs to reflect on what tools he equips employers to retain workforces, which will aid medium and long-term value and wealth creation for the economy. FBT is a contrary action that deters employers for disbursing traditionally lock-in benefits for fear of impact.

Rating : Not Rated

This Budget is clearly investor friendly and should improve the quality of the business environment in India, with the duty cuts and investments in infrastructure that have been announced. Consequently, we can only see an increase in global interest in India, that will lead to more foreign direct investment and its collateral benefits to the economy.

Rating : Not Rated

Petrol prices are slated to go up. Therefore, a reduction in excise duty is a welcome relief to the customer. It will also boost demand for 2-wheelers and improve mobility. Dealers have stocks that they have purchased at higher rate of excise duty. When the dealer stocks are exhausted, there would be a reduction in prices. As the price of raw material is going up, the exact reduction in price would get clarified only after a while. One had expected a number of sops, since it is an election year Budget. These sops are well-designed and well-targeted. Welcome features are loan waivers for long suffering marginal farmers, reduction in personal income tax and reduction in cenvat in auto sector. The not so welcome features are that revenue deficit continues to exist and that non-plan expenditure is double of plan expenditure. As a result, infrastructure may continue to languish and power sector may not get the desired boost. It is now upto the private sector to rise to the occasion on these fronts. The Budget will help maintain the GDP growth thanks to the additional demand that will be created by the Budget. However, supply side bottlenecks are not being removed and that may lead to inflation.

Rating : 8 / 10

The budget presented is a populist budget aimed at pleasing all. The manufacturing segment has been benefited well with the reduction in CENVAT from 16% to 14%. This will definitely bring down our input costs affecting the auto components and auto industry as a whole. The additional reductions given to the bus, small cars and bikes segments will also boost the auto and auto components segment. This should have also been extended to the CVs for a complete boost to the sector. The FM could have eliminated the tax surcharge on the manufacturing segment since it has been contributing well thus far and needs to now be more globally competitive. Also, the duty waiver on the import of steel scraps will have a minor impact on our products, which in turn will give fair amount of boost to the auto component industry.

Rating : Not Rated

The budget presented by the FM is balanced and neutral. It lays more emphasis on education, health and rural upliftment. There is no impact on the corporate sector except reduction in excise duties on certain products, which is likely to give boost to manufacturing sector. With regards to the security industry, the budget is neutral as there is no reduction in peak custom duty of 10%. There is a reduction in peak custom duty on certain IT conversion products, which may have some impact on reduction in the prices of certain electronic products which goes into security solution.

Rating : Not Rated

The waiver of loans to small and marginal farmers would certainly help the beleaguered agriculturalist. But the impact on banks is unclear and needs to be understood further. On the indirect tax front, the trend in reduction in excise rates continued with the twin objectives of rationalizing taxes as well as supporting growth in certain areas. In that vein, the reduction in CENVAT and specific taxes is certainly welcome and positive for overall growth. On the direct tax front, the Finance Minister has done a balancing act. On the one hand, he has raised the minimum tax slabs in turn encouraging consumption. On the other hand, he has left corporate taxes and the surcharge untouched, which some had expected him to reduce. However, if you look at the bigger picture the overall buoyancy in tax collection and the increase in the tax-to-GDP ratio are very encouraging signs. The increase in short term capital gains tax was taken negatively by investors. However, despite the increase in the short-term capital gains tax, the rate is in line with that seen globally. Furthermore, the Finance Minister has left the long-term capital gains tax unchanged. The mutual fund industry has been encouraging investors to take a long-term perspective and this step further boosts the case for long-term investment orientation. He also announced a slew of measures aimed at strengthening the debt market.

Rating : Not Rated

In the short term, the reduction in excise duty will make small cars more attractive for customers and offset the negative impact of higher interest rates. This is an encouragement for companies like us, which are making major investments in capacity, research and exports. Overall, the Budget has some benefits for all sections of people while keeping the government’s finances healthy.

Rating : Not Rated

As an airline operator, I am quite disappointed as we have not been given any tax breaks. The sales tax on ATF at 29% on average still remains the same for airlines using large aircrafts. All the low cost airlines in India use large aircrafts to service the common man. However, the ATF for smaller aircraft has remained a declared goods at 4%. It should be noted that these smaller aircrafts are used to service the upper class passengers by full service airlines. Moreover, custom duties and excise tax still remains prevalent on ATF. Withholding tax on leases remains between 11-92% while witholding tax on interest remains between 5-20%. Fringe Benefit Tax on hotel expenses, transportation, uniforms, travel and meals for the staff of airlines remains high at 6.80% while service tax on loading, navigation and other airport charges have been retained at 12.36%. On the brighter side, the proposed increased spending on agriculture and rural areas will help low cost airlines in India gain a larger customer base. This is primarily because as disposable income at grassroots level increases, the population will follow the general trend of upgrading their travel habits from bus to rail to air. As working population grows to 950 million, the potential size of the customer base for the low cost airlines in India will multiply substantially from current levels. However, we feel that all of us in the Indian aviation sector need to continue our efforts to make the government realize the urgent need to bring the cost of operations in the Indian aviation sector at par with international standards. The biggest enabler to achieve this is the reductions in taxes.

Rating : Not Rated

While we welcome the emphasis on education and health given by the Finance Minister, the long awaited demand for industry status for real estate would have gone a long way in providing the desired impetus to the growth of the sector, which is highly capital intensive. A tax benefit under Sec 80 I (B) for hospitals is a paradigm change. We expect a new generation health technology, entering into tier II and III cities. Also, tax holidays for UNESCO sites hotel would definitely give a boost to heritage tourism and are steps in the right direction. We however expected that the benefits would be extended to the other verticals as well. The sops given to infrastructure and housing sector in rural areas is a welcome move. However, the reduction in duties and service tax benefits directly to consumers would have propelled the demand for realty across the country. The reduction in input cost of cement, steel etc will definitely benefit the sector.

Rating : Not Rated

At a macro economy level, the general fiscal discipline evidenced in containing fiscal deficit and revenue deficit lends stability to the 'India growth story' and benefits all its constituents. At the sector level, the impetus given to the 'rural economy' is a positive development. By implementing some of the recommendations of the Rangarajan Committee report will ensure opening of more bank accounts in rural branches. The additional funds to SIDBI and NABARD will ensure additional fund flow into the sector. By increasing the corpus of rural Infrastructure Fund to Rs 14,000 crore, rural infrastructure will improve reducing our operational costs. The huge waiver of agricultural loans will improve money supply in rural pockets. The corpus to subsidise LIC cover for SHG-women with permanent disability is also welcome. The Budget has, however, not addressed the MFI sector's demands for withdrawal of service tax on all micro finance & micro insurance products and Dr.Rangarajan Panel recommendation for 40% exemption of the taxable profits of MFI-NBFCs. We reiterate the demands. The biggest benefit for companies like SKS Microfinance is the withdrawal of 'Banking Cash Transaction Tax'. This will greatly reduce 'transaction costs'. The budget also augments credit flow to companies like SKS which can access the additional funds allocated to SIDBI. The increase in agriculture credit target to Rs 2,80,000 cr will also encourage banks to leverage SKS' 'credit delivery skills' in the rural areas. This sort of Pooling of Resources (i.e. amalgam of the 'funding capability' of PSBs and the 'credit delivery skills' of SKS) results in optimal use of national resources. Following the huge waiver of agriculture loans, PSBs may also choose to reduce direct lending and use units like SKS to funnel down credit to ensure better recovery.

Rating : Not Rated

This the right time to stimulate the economy further to continue our growth path, and that’s exactly what the Finance Minister has attempted. The measures on income tax revision, reduction in the general CENVAT rate on all goods from 16 per cent to 14 per cent to stimulate the manufacturing sector, reduction in duty on convergence products from 10 per cent to 5 per cent and full exemption from duty specified parts of set top boxes and specified raw materials for use in the IT/electronic hardware industry are all welcome steps. However, it is disappointing that corporate taxes have not been reduced to stimulate growth even further. It is also unfortunate that the service tax on cyber café and broadband services have not been removed, nor has the duty on PCs and laptops been brought down further. These would have been positive measures to spur the growth of PC and Internet penetration and use in the country at a time when we are faring very poorly compared to even other developing countries.

Rating : Not Rated