Union Budget 2013 - 14: Budget pins consolidation hopes on revenue-boost: Emkay
Emkay Global Financial Services has come out with its preview on Budget 2013-14.
March 01, 2013 / 17:49 IST
Emkay Global Financial Services has come out with its preview on Budget 2013-14.
Get full Budget coverageUnion Budget FY14: Fiscal prudence & credibility remain uncertain Key Budget ProjectionsFiscal deficit of Rs 5.4tn or 4.8% of GDP (in line with our estimate) Net tax revenues for FY14BE to grow at 19.1% vs 17.8% in FY13RE Expenditure Budget estimated to grow by 16.4% at Rs 16.65tn (vs our estimate of 11.5%) Net market borrowing pegged at Rs4840bn, Gross G-Sec borrowing at 6.29tln Receipts: Optimistic, more so on the Indirect tax collection front Buoyant receipts growth seems to suppress the stress apparent on Tax Revenue, non-tax revenue and non-debt capital receipts front The robust revenue receipts at 21.2%YoY hinge on an optimistic Tax revenue growth (19.1%) despite no major measures announced to enhance tax receipts Expenditure: Robust Plan expenditure growth, cushion for election spendingTotal expenditure growth pegged at 16.4% accounts for a subdued 10.8% non-plan expenditure growth and an accommodative 29.4% plan expenditure growth Capital expenditure growth at 36.6%YoY reflects an expansionary stance vs 5.8% growth for FY13RE Plan expenditure growth remains accommodative (29.4%YoY vs 4.1%FY13RE) Our Analysis: Higher FD/GDP or Curtail Spending FY13 witnessed lower receipts and higher non-plan expenditure resulting in fiscal adjustment via sharp curtailment in plan & capital spending. FY14 could witness similar adjustments however catering to populism ahead of an election year. We believe, there might be a slippage of around Rs658bn on the Receipts front primarily on account of Rs251bn shortfall in tax revenue & Rs362bn shortfall in non-tax revenue. Assuming that the Govt sticks to its budgeted expenditure, the overall slippage in receipts would imply a FD/GDP ratio at 5.3% of GDP In a bid to attain 4.8%, sharp curtailment could be seen in both Plan (lower by Rs667bn) and Capital (lower by Rs341bn) expenditure 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 on the attachment 
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