Budget 2012-13: A miss on reforms, but realistic nonetheless by KRChoksey
KRChoksey has come out with its report on Budget 2012-13. Higher fiscal deficit and government borrowings continues to act major macro headwinds.
KRChoksey has come out with its report on budget 2012- 13.
In our budget preview note, we had expected that Finance Minister would announce policy prescription towards acceleration in pace of economic reforms as well as layout clear cut road map for reduction in subsidiaries; however FM has disappointed us on both the fronts. Despite the need of hour, the government has not spell out plans regarding timing of implementation of DTC. Moreover, they missed the opportunity to increase investment thrust by further increasing FDI limit in aviation as well as insurance. Further, the government failed to spell out clearly how they are planning to rein in ballooning subsidies especially in case of fuel bill and fertilizer sector in coming financial year. We believe the lack of credit plan by government to control fiscal deficit will adversely impact timing as well as quantum of rate cut by RBI in the coming 12 months. This in turn will adversely impact investment sentiment in the country as well as overall corporate performance in near term.
Corporate tax rates