Budget 2013: Budget expenditure may exceed limits: GEPL Capital
GEPL Capital has come out with its post Budget analysis for 2013-14. According to the research firm, budgeted expenditures for FY2014 may get exceeded due to time consumption to direct transfer to poor and GST (Goods and Services Tax) still largely remains on paper.
March 01, 2013 / 17:39 IST
GEPL Capital has come out with its post Budget analysis for 2013-14. According to the research firm, budgeted expenditures for FY2014 may get exceeded due to time consumption to direct transfer to poor and GST (Goods and Services Tax) still largely remains on paper.
Finance Minister Chidambaram presented the budget after a gap of almost three years. There was lot of excitement and expectation on the street from the FM to deliver a growth oriented budget. Budget 2013-14 seems to be a weak balancing act as the political requirements were taken care of due to a pre-election-year Budget and the economic compulsions of fiscal consolidation and investment revival. To address the election related issue he has given sops to lower income groups and taxed a bit more to (significantly) higher income groups, which we believe is reasonable enough. However, what looks rather interesting is the unsaid part in the speech which is management of the fiscal deficit. He has significantly reduced expenditure this year to keep the deficit within 5.2% of GDP. He has slashed everything, from plan spending to defense spending. Without such firm steps, the deficit would have crossed 6%. FM has kept ambitious revenue targets to reduce Fiscal Deficit to 4.8% which may not be achievable, but we believe if we start moving in that direction will also be considered positive. All in all it was a good balancing act by the FM.The budget shows government's resolve in reducing the swelling Fiscal Deficit and Current Account Deficit though one would have liked to hear a bit more on managing them. However, the concern over stress in the banking sector was assuaged by approving capital infusion into PSU banks. Manufacturing was promoted by proposing an Investment Allowance which is a long standing demand of the Industry. The budget contains measures aimed at encouraging infrastructure projects such as tax-free bond issuance-but their effectiveness in attracting much-needed investment is uncertain at this stage and introduction of new Industrial corridors such as Chennai-Bengaluru and Mumbai-Bengaluru along with fast implementation of Delhi-Mumbai industrial corridor.There are few reasons to believe that budgeted expenditures for FY2014 may get exceeded due to time consumption to direct transfer to poor and GST (Goods and Services Tax) still largely remains on paper. Even the slightest of increase in budgeted expenditure may spoil the entire math of FM.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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