Indian Economy

Government won't set diesel price free

Indian Government has no plans of freeing diesel prices seeing current inflation. Denying all considerations about government's favor of freeing diesel prices, Indian chief economic advisor Kaushik Basu told reporters that inflation is still in "uncomfortable zone" so freeing the diesel price will risk more to this.

Speaking to reporters at a CII event, Basu said, "I am not of the view that diesel price deregulation is inevitable and that is the position taken by petroleum ministry right now. Given the inflationary situation right now, we don't want to do that".

GST bill to go for cabinet approval

Indians may soon be paying Goods and Service Tax (GST). Finance Minister, Pranab Mukherjee is very keen to get this bill passed. According to reports, finance ministry is on its way to introduce the Goods and Service Tax bill to public.

For this, the government has planned to bring Goods and Service Tax constitutional amendment bill for the Cabinet approval coming Thursday.

Once this bill gets approval from the Cabinet, this will be presented before the assembly. Business news channel CNBC-TV18 reported that a cabinet note has been circulated to all ministries about GST amendment bill.

With globalization, development has become complex

Indian Finance Minister Pranab Mukherjee described loyal taxpayers as engines of economy. Speaking to Indian Revenue Services probationers, he insisted them to treat taxpayer as a client not as enemy.

He said, "The assessee is no longer considered an adversary; committed taxpayers are the engines of our economy and therefore important clients of Revenue Department".

Finance minister was addressing probationers at Parliament House Complex in New Delhi. He deemed that comfort zone of taxpayer should be considerably enhanced, while at the same time punishing serious offenders and evaders.

Inflation an over-riding issue in this year’s budget

inflationThe one concern that has proved to be an over-riding factor in formulating this year’s budget is inflation. Nearly all the things done by the finance minister, and even things not done by him, has an explanation based on that one single concern.

This is the sharpest fiscal correction tried to achieve by any government in the last twenty years. One is advised not to go by the headline numbers of 5.1% fiscal deficit for this 2011 and 4.6% for 2012.

No duty on artwork imported for exhibition

Pranab-MukherjeeThe Union Finance Minister Pranab Mukherjee has assertively announced that he desires to put through a strong message regarding reforms via the Budget covers the Indian art market. One of the announcements made by the FM today made it easier to conduct exhibitions related to art work being imported from abroad.

India Inc. gets a lot in this budget

india-inc-budgetThis Union Budget had a lot to offer to India Inc this time. The first of course was the fact that the companies are not sure that GST (Goods and Services Tax) will be implemented anyhow. But, whether it was because of inflation or for something else, the finance minister continued to keep service tax at 10 per cent.

But what was able to get the highest applaud from the industry was the thing that the surcharge tax has been kept at 5 per cent as against 7.5 per cent previously. This directly means that Indian companies are now going to have more money in their pockets.

Union Budget 2011-12 Analysis by Fairwealth Securities

The Union Budget 2011-12 presented today by the Finance Minister seems balanced and growth oriented. Agriculture, Infrastructure and Social sector have been the focus areas. The budget has sought to promote growth with an inclusive agenda. Consequently, substantial plan outlay has been devoted to social and rural development. The Finance Minister expressed his concern over the problem of generation and circulation of black money in the Budget Session and announced the implementation of a Five Fold Strategy to deal with the problem. Besides this the Budget 2011-12 laid the foundation for the roll out of DTC and GST. Proposed increased exemption limit was in-line with market expectations.

Union Budget 2011-12 Analysis by Fairwealth Securities

The Union Budget 2011-12 presented today by the Finance Minister seems balanced and growth oriented. Agriculture, Infrastructure and Social sector have been the focus areas. The budget has sought to promote growth with an inclusive agenda. Consequently, substantial plan outlay has been devoted to social and rural development. The Finance Minister expressed his concern over the problem of generation and circulation of black money in the Budget Session and announced the implementation of a Five Fold Strategy to deal with the problem. Besides this the Budget 2011-12 laid the foundation for the roll out of DTC and GST. Proposed increased exemption limit was in-line with market expectations.

Post budget quote by Mr. Manish Sharma, Director - Marketing, Panasonic India

Manish-Sharma“The budget 2011 has exceeded expectations in terms of rural development, education and agriculture. It is commendable that the economy has seen a growth rate of over 9%. This budget will provide an impetus to inflation control.

Post Budget Reactions from Mr. Satish Vuppalapati – MD, Prithvi Information Solutions Ltd.

Satish“This financial budget, there is nothing to add to the IT/ Telecom industry. FM also didn’t talk about the IT exemption under STPI, which most of the IT leaders expected. The increase in MAT by 0.5 % is very marginal. This year the prime focus of the budget seems to be controlling fiscal deficit.”

Budget Reactions from Mr. M V Ramana Rao – Chairman & MD, MIC Electronics Ltd.

M-V-Ramana-RaoBeing one of the quickest to save power, LED lighting can reduce dependence on fossil fuels to a large extent. LED lighting is also the fastest way to VIRTUAL POWER GENERATION by saving existing usage. The FISCAL incentives will go a long way in making these high tech systems acceptable by users.

The LED lantern is the only lighting system which is affordable to people denied access to GRID power. Any small incentive from Govt will make their affordability and penetration levels better.

Budget Reactions from Mr. Manish Mandhana – Jt. Managing Director, Mandhana Industries Ltd.

Manish-MandhanaDuring his budget speech, Mr Pranab Mukherji pleaded for help from Lord Indra and Goddess Laxmi. It leaves me to reckon that with his budget also, he expects the Industry and the corporates also to look up to the almighty heavenly Gods rather than to expect any help from government!! Though his task of delivering a growth oriented budget was made tougher by the rising inflation concerns, but he could have definitely restrained from pleasing the individual tax payers at the expense of the growing and promising industry, especially sectors like textiles.

Budget Reactions from Mr. Adi Godrej – Chairman, Godrej Group

adi-godrejExpressing satisfaction over the various proposals of the Budget, Godrej Group Chairman Adi Godrej said: "I think it was a very well balanced Budget and growth oriented. It will be very good for the economy. The decision to formally introduce the constitutional amendment for GST is a very good one."

He said increase in limit for income tax exemption for tax payers will add to consumption "which is desirable".

Union Budget Sectoral Impact Analysis by Fairwealth Securities Ltd

Social-SectorINFRASTRUCTURE- POSITIVE

The development of world level Infrastructure remains the key focal area in the Union Budget 2011-12, with budgeted spending in infrastructure estimated at Rs2,14,000cr an hike of over 23% from Rs 1,73,000cr during 2010-11, providing 48.5% of the plan allocation.

The budget has proposed to provide the much needed foreign investment in Indian infrastructure by mountaineering their venturing limit to $40bn from $20bn earlier.

Highlights of Union Budget Analysis by Fairwealth Securities Ltd

Pranab-MukherjeeFISCAL

The Gross Tax Receipts estimated at Rs. 9,32,440 cr in FY12.

The Non Tax Revenue Receipts estimated at Rs. 1,25,435 cr.

Total expenditure at Rs. 12,57,729cr in the BE 2010-11, an increase of 13.4% over last year.

Plan and Non Plan expenditures in BE 2010-11 estimated at Rs. 4,41,547cr and Rs. 8,16,182cr respectively.

Targets for fiscal deficit pegged at 4.1% for 2012-13 and 3.5% for 2013-14 respectively.

Union Budget Foreign Investment Analysis by Fairwealth Securities Ltd

foreign-investmentApart from exciting fiscal deficit guidence, another big positive came in from of FM's efforts towards inviting more funds for investment, especially into infrastructure. In this direction, FIIs limit to invest in corporate bonds have been increased by a significant US$ 20 bn taking the limit to US$ 25 billion. Besides, the withholding tax will now attract a lower tax rate of 5% against 20%. This will raise the total limit available to the FIIs for investment in corporate bonds to US$ 40bn.

Union Budget Fiscal Consolidation Analysis by Fairwealth Securities Ltd

fiscal-defciitThe biggest surprise in the budget has been the fiscal defciit target for FY12 set by the Government which is encouraging for global investors. Fiscal deficit is expected to come down to an impressive 4.6% of GDP in FY12 as compared to 5.1% in FY11. The rolling targets for fiscal deficit are placed at 4.1% for 2012-13, and 3.5% for 2013-14. The targets do look ambitious, but a roadmap to achieve these targets is still to be watch out.

Union Budget Social Sector Analysis by Fairwealth Securities Ltd

Social-SectorSocial sector has been one of the focus areas in this budget too. The Finance Minister hiked the allocation for social sector in the Union Budget 2011-12 to Rs. 160887 cr. an increase of 17% over the allocation in previous budget. Allocation for Bharat Nirman is proposed to be increased by Rs. 10,000 crore over the current fiscal at Rs. 58000 cr. Bharat Nirman includes the government’s flagship programmes such as Pradhan mantra Gram Sadak Yojna, Accelerated Irrigation benefit programme, Indira Awas Yojna, Rajiv Gandhi Grameen Vidyutikaran Yojna.

Union Budget Infrastructure Analysis by Fairwealth Securities Ltd

InfrastructureA strong emphasis on infrastructure is clearly visible in the budget. Allocation for infrastructure stands at 48.5% of Gross Budgetary Support to plan expenditure. The focus has been two pronged especially increasing refinancing through Indian Infrastructure Financial Corporation (IIFCL) while focussing on current national level infrastructure projects. IIFCL is expected to achieve a cumulative disbursement target of Rs 20000cr by March 31, 2011 and Rs 25000cr by March 31, 2012. In addition, FM proposed to allow tax free bonds of Rs. 30000cr to boost infrastructure development in railways, ports, housing and highways.

Union Budget Agriculture Analysis by Fairwealth Securities Ltd

AgricultureSoaring food prices that are denting the disposable income have been a major cause of concern for the government lately. Consequently the Agriculture sector acquired utmost importance in the Union Budget 2011-12. The Finance Minister said that production and distribution bottlenecks for items such as fruits and vegetables, milk, meat, poultry and fish would be the focus area in FY12. Various Agro Schemes such as Rashtriya Krishi Vikas Yojana, Accelerated Fodder Development Programme have witnessed considerable hike in allocations.




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