Budget focuses on infra, rural development: India Infoline

The report says, "The FM’s budget speech sent strong signals by reporting 6.9% fiscal deficit for FY10 (market expected a much higher figure), targeting 8.5% GDP growth in FY11 and hoping for 10%+ growth in future years. Although delayed implementation of GST was known, what is encouraging is that a deadline of April 2011 has now been set for the same (for the direct tax code as well)."

"We see faster policy momentum in times to come with targeted disinvestments of Rs400bn (beating our expectation of Rs250bn), aim at direct subsidy to farmers (added to partial decontrol done recently) and goal of 20kms of national highway development per day (Railway budget targeted 1,000kms of line addition in a year)," according to India Infoline report.

The report also says, "The major negative from the budget was the increase in MAT rate from 15% to 18% on book profits, which will negatively impact many companies like Reliance, Cairn, Bharti, RCom, Cipla, Dabur, Godrej Consumer, JSPL, Sterlite, Reliance Power, Tata Power, IT companies, to name some. It was expected that at least the infrastructure companies would be spared from the purview, but was not to be. All in all, the positives outweigh the negatives. Focus continued on flagship schemes, infrastructure and rural development. Education, healthcare and defence were also given material allocations as expected. The government has set the tone for four more years with rejuvenated efforts - even finalizing a new symbol for the Rupee."

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