Highlights of Union Budget - Trans Scan Securities

- Global growth slowed to 3.2% vs 3.9% yoy. CSO estimated GDP growth at 5% for FY13. Biggest concern is high current account deficit; we need $75 billion to finance CAD. Current account deficit a bigger worry than Fiscal Deficit. FII, FDI or external commercial borrowing to finance CAD, is the only way forward

- Efforts in the past few months have got down WPI to 7% and CPI to 4.3%

- FY14 plan expenditure to be 30% more than in FY13. Total Budget estimate for FY14 16.44 lakh crore.

- Widows, single women, vulnerable women allocated additional sum of Rs 200 crore to begin work

- New fund for safety for women, will be called Nirbhaya Fund. Allocation: Rs 1,000 cr

- Rs 1,069 cr proposed to be allocated to AYUSH to promote Ayurveda, Homoeopathy, Siddha and Unani

- Rs 65,867 cr to Ministry of human resource dev increase of 17% from revised estimate

- National skill development corporation - target to train Rs 5 cr people, up by 9 mn in 2014-14

- Rs 5,200 to Ministry science and technology. Rs 5,880 cr to space research

- Increase allocation to Defence at 2,30,672 cr

- Plan exp: Rs 5.55 lakh cr, Non plan exp at Rs 11 lakh cr

- Fiscal deficit contained at 5.2% in FY13, pegged at 4.8% in FY14

- Direct benefit transfer scheme to be rolled out during term of UPA govt

Education & Rural Development

- Right to education act firmly in place; 27,250 cr to Sarva Shikhsa Abhiyaan in FY14

- 17% hike in allocation to Education. Rs 65,877 cr allocated to education.

- Rs 3,511 cr to Ministry of Minority Affairs, 12% increase of BE and 16% higher than RE

- 110 cr to Dept of visibility affairs against RE of 75 cr in current year

- Min of Rural Development allocated Rs 80,194 cr in FY14 marking an increase of 46% in spending Health & Hygiene

- Rs 27,330 cr to Min of Health and Family Affairs. Rs 4,727 crore to medical education, training and research.

- Clean drinking water, sanitation: 15,260 cr allocated Ministry of drinking water and sanitation. Allocation for integrated water programme from 3,050 cr to 5,387 cr next year. Higher allocation for water treatment

- 100 districts identified for programme against malnutrition, allocation of Rs 300 cr

- Rs 17,700 cr in FY14 focus to be on early child care

- Reconstruction of Nalanda University as centre of govt excellence

Agriculture and Farm Sector

- Rashtriya Krushi Vikas Yojna allocated Rs 9,954 cr

- Credit guarantee fund for small farmers, with initial corpus of Rs 100 cr. Rs 500 cr to start program of crop diversification to enrich farmers. Farmer who repays loan on time will be given financial assistance at 4%

- Assam, Bihar, Chattisgarh have increased contribution to rice production, Rs 1000 cr as support to east Indian states.

- Rs 27048 cr to agriculture dept, agricultural research to be given Rs 3450 cr. Indian Institute of Agri-Biotechnology to be established at Ranchi, Jharkhand.

- Additional Rs 75 cr allocated in 2013-14 for replanting, rejuvenating coconut farms in Kerala.

- Farm exports in April-December at Rs 1,38,403 cr

- 250 million tonnes food grain produced; MSP increased significantly. Food Security Bill introduced with an allocation of Rs 10,000 crore.

Infrastructure

- 12th plan infrastructure outlay at Rs 55 lakh cr. Announcement of 3,000 km of Road projects. 3,000 km of road projects in Gujarat, Maharashtra, Karnataka in first 6 months of 2013-14. 2 major ports in Bengal and Andhra to add 1 mn tonnes of capacity

- Seek assistance of World bank, Asian Devt Bank to build roads in north east states connect to Myanmar. IIFCL, Asian Devt Bank will give credit enhancement to infra companies to tap bond markets

- 14,000 buses sanctioned between 2009-12 under JNNURM. Rs 14,873 cr for FY14; significant use for purchase of 10,000 buses

- Manufacturing sector needs revival - cabinet authority set up to review stalled projects, guide new projects

- Wind energy sector to get generation based incentives; Rs 800 cr allocated to the dept

- Will encourage states to take up waste energy projects via PPP mode

Manufacturing

- To approve Rs 50,000 crore for tax-free bonds in FY14. Will introduce inflation-indexed instruments. Income limit for RGESS raised to Rs 12 lakh from Rs 10 lakh.

- Natural Gas pricing policy to be reviewed. Shale Gas projects to be encouraged.

- Coal import in April-December at 100 mn tonnes, to rise to 185 mn tonnes . To encourage PPP projects along with Coal India

- Non-tax benefits for MSMEs up to 3 years after they graduate to higher category

- Focus on TUFF scheme, textile parks, handloom sector. 1,50,000 weavers, 1,800 co-op societies to benefit on allocation of additional sum of Rs 96 cr to ministry of textiles for internal subvention

- Funding by companies for tech research in colleges and educational institutions to be treated as part of mandatory CSR under Companies Act

- Investment allowance of 15 per cent announced for high-value investments of above Rs 1,000 crore.

Banking, Finance & Investments

- To provide Rs 14,000 cr for Public Sector Bank recap

- To constitute panel on transaction costs, finance policies

- Will ensure PSU Banks always meet Basel III norms

- All women's bank to be set up via PSU route

- Banks to be permitted to act as insurance brokers. KYC of banks sufficient for buying insurance policies.

- Loans for rural housing: last Budget Rs 4,000 cr, this time Rs 6000 cr to rural housing fund in 2013-14

- FM seeks opposition support on Insurance, PFRDA bills

- Investment allowance of 15 per cent announced for high-value investments of above Rs 1,000 crore

Capital Markets

- Sebi Act to be amended to strengthen the market regulator

- Insurance, pension companies can directly trade in debt market

- Mutual fund distributors allowed to become members of stock exchanges

- Stock exchanges to have dedicated debt segments

Media & Broadcasting

- Cities having population of more than one lakh to have one private FM radio.

- Auction of new FM licences in 2013-14, so that all towns and cities of up to 1 lakh population are covered is another attempt to raise non-tax revenue. 294 more cities to have FM radio

Foreign Investors

- Will follow global policy on determining whether investment is FII or FDI: Where it is less than 10% by one entity, it will be FII, more than 10% will be FDI

- FIIs allowed to participate in currency derivatives segment

- Cebi to simplify procedures for FII, unify categories

- FII participation in forex segment subject to FX exposure

- Modified provisions under GAAR effective April 1, 2016

Taxation

- Tax credit of Rs 2,000 to every tax payer in the 2,00,000-5,00,000 bracket. Leaves tax slabs and rates untouched

- 2011-12: Tax GDP ratio at 5.5% for direct taxes and 4.4% of GDP for indirect taxes

- Only 42,000 people who have been known to have income of more than Rs 1 cr a year. Tax surcharge of 10% on such income

- Tax surcharge raised from 5% to 10% on companies with annual income of more than Rs 10 crore

- Additional tax surcharge on taxes only for one year

- Will continue with Educational cess at 3%

- Dividend distribution tax surcharge raised from 5% to 10%. Indian company not to pay dividend distribution tax for income coming from foreign subsidiary

- Extends Section 80IA by one year

- TDS at 1% on the transfer of immoveable properties worth more than Rs 50 lakh

- Tax holiday for power plants extended to FY14.

- Commodities Transaction tax on non-agricultural commodity derivatives.

- STT reduced from 0.17% to 0.1%

- Import duty on set-top boxes raised from 5% to 10%

- No change in standard rate of Excise duty

- Excise on leather goods to be reduced from 7.5% to 5%

- To introduce DTC Bill in Budget session of Parliament

- 20% final withholding tax on unlisted companies' share buyback

- Customs duty on imported cars hiked from 75% to 100%

- Excise duty to be hiked from 27% to 30% on SUVs; those registered as Taxis to escape hike

- SED on cigarettes hiked by 18%.

- 4% excise duty on silver for manufacturing zinc or lead

- To include 2 services in negative list of service tax.

- Sops for low-cost housing to continue. To reduce abatement rates on luxury apartments.

- Will impose service tax on all AC restaurants, not just those serving alcohol

- Scheme to encourage truthful declaration of dues from 1-10-2007. Penalty to be waived for people declaring I-T dues; can pay in two installments

- Gold: To raise duty free limit to Rs 50000 for male passenger and Rs 1 lakh for female passenger

- Set aside Rs 9,000 cr as compensation to states on account of CST

- Infra Development Funds to be encouraged

Source : Equity Bulls

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