Pharma, auto, FMCG sectors positively impacted

The Finance Minister P Chidambaram unveiled his 5th for the UPA government. The major highlight of the budget was Rs 60,000 crore waiver of loans for small and marginal farmers. There were some positive steps taken in direct taxes front.

There was an increase in income tax exemption threshold limit for individual from Rs 1,10,000 to Rs 1,50,000 , for woman assesses from Rs 1,45,000 to Rs 1,80,000 and for senior citizens from Rs 1,95,000 to Rs 2,25,000. But for people making money in the stock market there some negative news with short term capital gain tax increased to 15% from 10%.

When we look at it sector wise pharma, auto were the major beneficiaries along with FMCG, infrastructure, textiles sector.

Bank, cement, real estate and IT sectors were more or less neutral to this Buget.

For the auto sector the FM cut excise duty on small cars to 12%

from 16%; cut in excise duty on two & three-wheelers to 12% from 16% and excise duty on buses and other transport vehicles reduced to 12% from 16% were the major boosters for the auto sector.

The FM also announced excise duty on hybrid cars reduced to 14% from 24%. The excise duty on electric cars down to zero from 8% along with excise duty on specified electric car parts withdrawn from 16% Tata Motors, Bajaj Auto, M&M, Ashok Lyland and Maruti Udyog will be positively impacted.

For pharma sector the following announcements were made:

• Excise duties are reduced on all goods produced in the pharmaceutical sector from 16% to 8% which comes as a positive move for pharma players.
• Customs duty on certain specified life saving drugs and on the bulk drugs used for the manufacture of said drugs have been slashed from 10% to 5% and will be totally exempt them from excise duty or countervailing duty. 
• A 15% allocation increase has been injected to health sector of Rs 165.3bn for FY2008-09. 
• Allocation of Rs 10bn has been made towards eradication of polio, which would boost players manufacturing vaccinations. 
• Five year tax holiday, u/s 80-IB, has been granted to set up Hospitals across the country except certain specified urban locale, especially in Tier - II and Tier - III towns. 
• The National Aids Control Programme will be provided Rs 9.9bn to encourage its activities which have brought the prevalence rate of HIV/AIDS from 0.9% to 0.4%. 

Host of pharma stocks like Cipla,Ranbaxy, Sun, Zydus, Nicholas, Sun, Glenmark, Panacea, Apollo, Fortis, Wockhardt will be benefited say experts.