2012 budget


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2012 budget

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  2. 2. Presented By:- Rahul Kumar Jha Deepak Verma Sandeep Vijay Pahadiya 2
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  15. 15. Retailers may benefit afterthe Finance minister assuredto arrive at a consensus toopen up the Supermarketsector to foreign giants suchas Wal-Mart and Carrefour,which would help in tie-upsand boost Capital inflows. 15
  16. 16. Oil Explorers such as ONGC, Oil India and Cairn Indiawill be hit after the budget proposed to raise Cess oncrude oil to Rs. 4,500 per tonne from Rs. 2,500 pertonne. 16
  17. 17. Gold loans providers such as Muthoot Finance andManappuram Finance Ltd may see slower volume growthafter basic Customs duty on gold was doubled. Gold jewelrymakers such as Gitanjali Gems and Titan Industries will alsobe hit due to high costs and as expensive jewelry will deterbuyers hurting sales volume. 17
  18. 18. Indian Power Equipment makers, who were demandingimposition of customs duty on imported power gear above1,000 MW, are left high and dry by the Finance Minister asthere was no mention of this demand in the budget. 18
  19. 19. Government-owned Financial Institutionswill get Capital infusion of $3 billion which islargely seen as insufficient to capitalizestate-run banks such as State Bank of India,Punjab National Bank, Bank of India andBank of Baroda. Indian banks will also beunder pressure to achieve the target of Rs.5.75 trillion for farm credit, where bad loansare relatively higher. 19
  20. 20. The budget was quiet on any reforms for Indianengineering exporters, which accounts for about one-fourth of the countrys total Merchandise exports.Companies such as Larsen & Toubro and Punj-Lloyd, wereexpecting measures to boost local manufacturing. Instead,the budget proposed to raise excise duty to 12 percentfrom 10 percent. 20
  21. 21. The increase in Excise duty, after the recent hikein the Rail Freight, would raise Cement priceswhich is likely to hurt Construction companiessuch as IVRCL Infra, Hindustan Construction (andcan have adverse impact on the infrastructure. 21
  22. 22. The increase in the service tax rateto 12 percent from 10 percent willraise the cost of production fordevelopers such as DLF, OberoiRealty and Housing DevelopmentInfrastructure Ltd, who arealready reeling under high inputcosts. This increased burden maybe passed on to end users. 22
  23. 23. Power utilities such as Tata Power, NTPC Ltd, AdaniPower and Reliance Power are likely to benefit after thebudget proposed a 2-year exemption on import duty forcompanies importing thermal coal. A proposal to allowexternal commercial borrowing to part finance rupeedebt of power projects will also help. 23
  24. 24. Low cost housing developers andfinanciers such as SobhaDevelopers, Housing DevelopmentFinance Corp and LIC Housing Financewill benefit after the budget proposedallowing external commercialborrowings for low-cost housingprojects below Rs 2.5 million. 24
  25. 25. Carriers such as Kingfisher Airlines, Jet Airways andSpiceJet will benefit after the budget proposed to allowexternal commercial borrowings of up to $1bn to helpmeet immediate funding needs. The finance minister alsosaid that a proposal to allow foreign direct investment byairlines is under "active consideration." 25
  26. 26. Infrastructure finance companies such as InfrastructureDevelopment Finance Co, L&T Finance and RuralElectrification Corp will benefit after the budget proposed todouble the issue of tax-free bonds for financinginfrastructure projects to Rs 600 billion. 26
  27. 27. The budget was quiet on tax on diesel cars, as was widely feared by themarket, nor was there a reduction in fuel subsidy. India also announced anincrease in import taxes for assembled SUVs and utility vehicles costingmore than $40,000. The move is seen as positive for car makers such asMaruti Suzuki, Tata Motors and Mahindra & Mahindra. 27
  28. 28. Road developers such as IRB Infrastructure,Reliance Infrastructure and HindustanConstruction will see higher orders after thebudget proposed to develop 8,800 kilometresof national highways under the NationalHighways Development Project in 2012/13. 28
  29. 29. Cigarette maker ITC Ltd is likely to benefit afterthe government raised excise duty on non-cigarette tobacco products making the marketcompetitive. Excise hike on cigarettes waslower than expected. 29
  30. 30. Fertiliser makers such as Rashtriya Chemicals & Fertilizers, Chambal Fertilisers,Coromandel International and Tata Chemicals could see a fall in expenditureafter the budget fully exempted basic customs duty on import of equipment for3 years. 30
  31. 31. CONCLUSION: Union Budget 2012-13 can be termed as Rasna delivered in aMirinda bottle. Functionally there are no problems with the Budget2012-13, but it certainly didn’t meet the expectations that India Inc hadwith it. It simply lacked the expected Fizz! However, it would appreciate that a single budget speech cannotsolve all our problems nor is the union budget the only instrument todo so, yet it is an important means to share the vision of thegovernment. 31
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