15. Retailers may benefit after
the Finance minister assured
to arrive at a consensus to
open up the Supermarket
sector to foreign giants such
as Wal-Mart and Carrefour,
which would help in tie-ups
and boost Capital inflows.
15
16. Oil Explorers such as ONGC, Oil India and Cairn India
will be hit after the budget proposed to raise Cess on
crude oil to Rs. 4,500 per tonne from Rs. 2,500 per
tonne.
16
17. Gold loans providers such as Muthoot Finance and
Manappuram Finance Ltd may see slower volume growth
after basic Customs duty on gold was doubled. Gold jewelry
makers such as Gitanjali Gems and Titan Industries will also
be hit due to high costs and as expensive jewelry will deter
buyers hurting sales volume.
17
18. Indian Power Equipment makers, who were demanding
imposition of customs duty on imported power gear above
1,000 MW, are left high and dry by the Finance Minister as
there was no mention of this demand in the budget.
18
19. Government-owned Financial Institutions
will get Capital infusion of $3 billion which is
largely seen as insufficient to capitalize
state-run banks such as State Bank of India,
Punjab National Bank, Bank of India and
Bank of Baroda. Indian banks will also be
under pressure to achieve the target of Rs.
5.75 trillion for farm credit, where bad loans
are relatively higher.
19
20. The budget was quiet on any reforms for Indian
engineering exporters, which accounts for about one-
fourth of the country's total Merchandise exports.
Companies such as Larsen & Toubro and Punj-Lloyd, were
expecting measures to boost local manufacturing. Instead,
the budget proposed to raise excise duty to 12 percent
from 10 percent.
20
21. The increase in Excise duty, after the recent hike
in the Rail Freight, would raise Cement prices
which is likely to hurt Construction companies
such as IVRCL Infra, Hindustan Construction (and
can have adverse impact on the infrastructure.
21
22. The increase in the service tax rate
to 12 percent from 10 percent will
raise the cost of production for
developers such as DLF, Oberoi
Realty and Housing Development
Infrastructure Ltd, who are
already reeling under high input
costs. This increased burden may
be passed on to end users.
22
23. Power utilities such as Tata Power, NTPC Ltd, Adani
Power and Reliance Power are likely to benefit after the
budget proposed a 2-year exemption on import duty for
companies importing thermal coal. A proposal to allow
external commercial borrowing to part finance rupee
debt of power projects will also help.
23
24. Low cost housing developers and
financiers such as Sobha
Developers, Housing Development
Finance Corp and LIC Housing Finance
will benefit after the budget proposed
allowing external commercial
borrowings for low-cost housing
projects below Rs 2.5 million.
24
25. Carriers such as Kingfisher Airlines, Jet Airways and
SpiceJet will benefit after the budget proposed to allow
external commercial borrowings of up to $1bn to help
meet immediate funding needs. The finance minister also
said that a proposal to allow foreign direct investment by
airlines is under "active consideration."
25
26. Infrastructure finance companies such as Infrastructure
Development Finance Co, L&T Finance and Rural
Electrification Corp will benefit after the budget proposed to
double the issue of tax-free bonds for financing
infrastructure projects to Rs 600 billion.
26
27. The budget was quiet on tax on diesel cars, as was widely feared by the
market, nor was there a reduction in fuel subsidy. India also announced an
increase in import taxes for assembled SUVs and utility vehicles costing
more than $40,000. The move is seen as positive for car makers such as
Maruti Suzuki, Tata Motors and Mahindra & Mahindra.
27
28. Road developers such as IRB Infrastructure,
Reliance Infrastructure and Hindustan
Construction will see higher orders after the
budget proposed to develop 8,800 kilometres
of national highways under the National
Highways Development Project in 2012/13.
28
29. Cigarette maker ITC Ltd is likely to benefit after
the government raised excise duty on non-
cigarette tobacco products making the market
competitive. Excise hike on cigarettes was
lower than expected.
29
30. Fertiliser makers such as Rashtriya Chemicals & Fertilizers, Chambal Fertilisers,
Coromandel International and Tata Chemicals could see a fall in expenditure
after the budget fully exempted basic customs duty on import of equipment for
3 years.
30
31. CONCLUSION:
Union Budget 2012-13 can be termed as Rasna delivered in a
Mirinda bottle. Functionally there are no problems with the Budget
2012-13, but it certainly didn’t meet the expectations that India Inc had
with it. It simply lacked the expected Fizz!
However, it would appreciate that a single budget speech cannot
solve all our problems nor is the union budget the only instrument to
do so, yet it is an important means to share the vision of the
government.
31
