Budget Highlights: Indian Union Budget 2012-13, an opportunity missed

LKP has come out with its report on Indian UnionBudget 2012-13.
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Mar 17, 2012, 04.06 PM | Source: Moneycontrol.com

Budget Highlights: Indian Union Budget 2012-13, an opportunity missed

LKP has come out with its report on "Indian UnionBudget 2012-13".

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Budget Highlights: Indian Union Budget 2012-13, an opportunity missed

LKP has come out with its report on "Indian UnionBudget 2012-13".

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Kunal Bothra (more)

Head of Advisory, LKP | Capital Expertise: Equity - Technical

LKP has come out with its report on "Indian UnionBudget 2012-13".

Budget Proposals

Fiscal Deficit pegged at 5.1%
Net market borrowings of Rs4.8lac crs
Divestment target set at Rs300bn
Raise agricultural credit target to Rs5,75,000crs
Infusion of close to Rs160bn to capitalise nationalised banks
200bps increase in service tax and excise duty from 10% to 12%
Issue of Tax Free Bonds of Rs600bn for financing infrastructure projects

Opportunity Missed

Absence of roadmap on implementing DTC and GST
Fuel Subsidy at Rs450bn seems to assume an impending oil price hike
Lacks concrete measures to kickstart the investment cycle
Diesel Decentralisation not taken up in the budget
Minor Rejig of personal taxation slabs unlikely to put more money in the hands of the consumer
Higher taxation likely to fuel inflation

Budget Provisions

20% reduction in STT on delivery transactions

New Equity Scheme which allows 50% deduction for retail investors earning less than Rs10lacs annually and investing Rs50,000 with a lock-in period of 3 years.

Two way fungibility of IDR permitted

Allowing QFI to access the Indian Corporate Bond Markets

Tax free bonds doubled to Rs600 bn

Allocation of Rs200 bn for rural infrastructure development fund

Allocation of Rs240bn for rural roads planned for FY 13

NHDP allocation increased by 14% to Rs254bn in FY13 and award of projects worth 8800km in FY13

ECB loan to part finance capex and withholding tax on ECB is reduced from 20% to 5%

Irrigation projects now qualify for viability funding

Extension of 80IA tax benefits

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click here

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