The Union Budget 2015 proposed several key reforms including: (a) Reducing the corporate tax rate to 25% over the next four years while withdrawing exemptions, (b) Introducing a goods and services tax (GST) planned for April 2016, and (c) Enacting a new bankruptcy code and financial sector reforms such as a public debt management agency. The budget also aimed to boost investment, ease business regulations, and increase spending on infrastructure and social programs through measures like setting up a national investment fund. However, the budget faced some criticism for not providing enough relief for individuals and leaving many still wanting more substantial reforms.

1. WEALTH VISTAS
Wealth Vistas | Budget Special Feb 2015 | www.agroy.com
Think Budget!
Think Rhetoric!
Think Again!
A m i d s t v e r y h i g h
expectations, FM Arun
Jaitley presented his first
full term budget. In my
view, the three salient
features of this budget
are: (a) to attract large
foreign investments, (b)
enable social sector reforms through
health insurance, small enterprise and
productive agriculture, (c) a big shift in
federal structure wherein centre takes
care of revenue collection and public
policy whereas states are entrusted with
thetaskofpublicspending.
AcloserlookattheBudget,makesitlook
extra ordinary and full of some big
reforms. For a Government with a
decisive mandate to rule for 5 years, this
budget aptly lays down a road map for
the next 5 years and not necessarily for
justoneyear.
One tends to look at how one has
individually gained from this budget and
thus may get disappointed... but wait,
this budget was not about you or me, it
was about us, as a country at large. And
Indiawillhopefullystandtogain.
AGROY would like to thank Shri Sudhir
Chandra (Former Chairman CBDT) and
Shri S K Goel (Former Chairman
CBEC) for their invaluable inputs
towards this Budget Special issue of
WealthVistas.
Reforms amidst Rhetoric
The Union Budget 2015 like every year, left most
of us high and dry wanting for more. The initial
reactions were of it being a lame duck budget,
not bad but not good either! Initial downward
movement on stock markets also suggested it to
be a budget yet agin high on rhetoric and low on
reforms. However, as we take a closer look and it
starts to sink in, we come across pleasant
surprises and moves. Someone aptly posted on
facebook - “This budget is like a composition by
A R Rehman, first time you listen and you don't
get head and tail of it, but slowly it picks up and
becomes chart-buster”. Here we try to unravel
the big reforms proposed in this budget which
aimtogiveashapetoModi’ssocalledrhetoric.
BankingReforms
Announcement of setting up of Monetary Policy
Committee and amendment of the RBI Act
though downplayed in the Budget would have a
far reaching impact towards achieving long term
inflation rate stabilisation. Along with this, the
setting up of an autonomous Banks Board
Bureau is a big structural change envisaged in
banking sector. This would take care of search
and selection of bank heads, directors and
outlining business strategy for public sector
banks. Eventually leading to a holding company
structure for all PSU Banks and reducing their
dependanceonCentralGovernment.
Announcement of a comprehensive Bankruptcy
Code and allowing large NBFCs to use Sarfaesi
Act is another step towards reducing credit
defaults and bringing about ease of doing
business.
FinancialSectorReforms
Though Gujarat International Finance Techcity
(GIFT) is being talked about to become one of
Asia’s biggest financial hub, the two big
announcements which would go far to make
India a global financial hub are setting up of
Public Debt Management Agency and the
Financial Redressal Agency (FRA). The Public
Debt Management Agency aims at deepening
the not so popular Indian Bonds and Debt
market. On the other hand FRA aims to protect
financial consumers / investors from all sectors
underoneroof.
Merger of Commodity Markets Regulator FMC
with SEBI is also a big step in right direction.
Stung by the NSELScam, dwindling volumes on
MCX and rising dubba trading menace, this
move aims at transforming the commodities
market and bringing better regulations.
Hopefully, this will also pave way for the merger
of Equity Brokers and Commodity Brokers for a
seamless and hassle free trading experience for
Tushar Agarwal
FCA, MBA (UK)
CEO Agroy
follow me on:
agroyblog.wordpress.com
investors.
TaxationReforms
The most awaited of all reforms is the
introduction of GST, and this budget finally
brings it one step closer by announcing the
rolloutby1stApril2016.
Announcement of laws to tackle black
money, benami properties and change in
FEMA with power to attach properties are
seen as renewed focus of Government on

2. Wealth Vistas | Budget Special Feb 2015 | www.agroy.com
Nil.
SocialSectorReforms
FM announced creation of a Universal
System of Social Security. Riding on the
back of the Jan Dhan Scheme andAadhaar
Cards, he could roll out a series of health,
accident insurance and pension schemes
forthepoor.
A big announcement was the setting up of
MUDRA Bank to fund the micro finance
sectorandinturnthesmallestentrepreneur.
Making the New Pension Scheme as an
optional alternative to Employee Provident
Fund and Private Health Insurance as an
alternative to ESI are two big
announcements that will benefit the
salariedclass.
InfrastructureReforms
In terms of infrastructure, there are two
important announcements. First was setting
up of National Investment and Infrastructure
Fund with an outlay of Rs.20000 crore.
Second was the increase of Rs.80000 crore
in CAPEX spending by PSUs. This would
give the much needed infrastructure
developmentpushtotheeconomy.
curtailingblackmoney.
Reduction of corporate tax rate without
touching the individual tax rates is a bold and
highly un-populist measure risking the
Government to be labled as pro-corporates.
But wait, think again. As far as individual tax
slabs are concerned, they have been largely
rationalised in line with the Direct Tax Code
during last 2 years, though corporate tax rates
have remained unchanged amidst recurring
annual demands. The move also aims at
making our tax structure internationally
competitive to bring in foreign investment.
Take a look at the corporate tax rates in some
countries - UK (21%), China (25%), Singapore
(17%). And finally, the staggered reduction in
corporate tax rate to 25% along with removal
of exemptions and the imposition of 2%
surcharge on super rich in lieu of wealth tax
would actually increase the corporate tax
burdentoabout34.6%.
Abolition of Wealth Tax yet again confirms the
resolve of this Government to simplifying
overalltaxregime.
Removal of MAT on FIIs brought some cheer
to markets. Hence the long term capital gain
for FII investments which though was nil but
was still taxed under MAT would now remain
Indirect tax proposals in the
2015Financebillarebased
on Government's avowed
policiesof-
(i) Introduction of GST
w.e.f. April 2016- the FM
clearly stated his intention
of having a state-of-art
GST system. Increase of
rate of Service Tax levy to 14%, and widening of
Service Tax base indicate movement of tax
system in the direction of GST. Measures taken
include: removal of large number of exemptions
in the area of Service Tax- (a) on entry to
amusement parks, concerts, award functions
etc., (b) on services provided by Govt. to
business, (c) on many construction services
received by Govt; levy of Service tax on job-work
manufacture of alcoholic liquors for human
consumption; clarification that Service tax will be
leviableonForeman'scommissionforchitfunds,
and on expenses of providing service
reimbursedbyservicereceiver.
(ii) Ease of doing business policy seems to
have been promoted through: (a) Introduction of
Advance Ruling Authority for all resident firms,
(b) Registration for Central Excise and Service
tax assesses in two days, (c) powers given to
Chief Commissioners/ commissioners to
recover arrears in instalments, (d) reducing
litigation by simplifying/ standardizing
penalty provisions, (e) no retrospective
effect to Service Tax on chit fund,
reimbursementexpenses.
(iii) Make In India policy and consequent
job creation promoted by; (a) Removal of
Inverted Duty for 22 items leading to cost
reduction and higher competitive edge for
domestic manufacture, (b) Exemption from
SAD for inputs for manufacture of ITA
products, (c) Facilitation measures for
Cenvat credit on capital goods and inputs
formanufacture.
(iv) Digital India policy promoted through:
(a) Proposed Single Window for documents
filing, (b) E-invoices allowed with digital
signatures, (c) E-records maintenance
being allowed with digital signatures, (d)
Duty exemption for tablet computers and
parts
(v) Renewable Energy policy promoted
through: (a) Duty exemptions for Solar
water heaters and systems and parts/inputs
thereof, (b) Similar exemptions for wind
energy systems/ parts/ inputs (c) LED lights
andparts/inputs,etc.
Govt has no miracle up
its sleeve should come
as no surprise to
anyone.
Every year budget gets
talked about a lot. Its
analyses however are
difficult to synthesize for invariably people
seem to talk about it in such varying ways that
the reader has the choice of picking what he
wantstohear.
Till some years ago, middle class interest in
budget was limited to the price of diesel,
petrol; test was what was more expensive,
what was cheaper; did the IT slab move up,
but today economy is no longer an abstract
idea, it has become a tangible, living
presence & nothing demonstrates it better
thanthebudget.
What the present budget tells us is that the
broad political & economic logic that has
drawn successive regimes will continue. It
doesn't reject the system of governance that
it has inherited, but aims to make it work
better. It seeks to build momentum by
creating the conditions for change. For the
present Govt, every day comes with a job list.
Temperamentally PM can make this kind of
approach work - his management style is
hands on & detail oriented enough, but the
political & administrative machinery in this
country is unused to such rigour. Things must
move on the ground and for that what needs
to change lies outside the syllabus of the
budget.
There is not much change on Direct taxes
front, except the withdrawal of WealthTaxAct
and declaring that DTC is no longer
considered necessary. Minor changes in the
monetary limits of sections 80D, 80DDB,
80DD, 80U & 80CCD are definitely going to
help the medium and small tax payers.
Introduction of Explanations 6 and 7 in
section 9 (1)(i) would raise investor's
sentiments.
Shri S K Goel
Former Chairman CBEC
Shri Sudhir Chandra
Former Chairman CBDT

3. Wealth Vistas | Budget Special Feb 2015 | www.agroy.com
DirectTaxes:
Ÿ Corporate Tax Rate reduced to 25% for
over next four years, simultaneously
exemptions to corporates to be
withdrawn.
Ÿ No change in income tax slabs for
Individuals. Exemptions For Individual
Tax Players To Continue. Overall tax
deduction benefits to individual
investorsat4.44lacs.
Ÿ Wealth Tax abolished. But 2%
surchargeonincometaxforsuperrich.
Ÿ To Enact New Law For Black Money.
Concealment of foreign income and
assets will attract 10 yrs of rigorous
imprisonmentandpenaltyof300%
Ÿ Benami Property Transaction Bill to
tackle black money transaction in real
estatesoon
Ÿ Foreign Exchange Management Act to
be ammended suitably to allow for
seizure of equivalent assets in India in
case of Foreign Assets created using
blackmoney.
Ÿ To Tighten Reporting Of Cash
transactions. Quoting PAN a must for
allpurchasesaboveOneLakh.
Ÿ Tax pass through to be allowed in
alternative investment funds to boost
smallfirms,startups
Ÿ Proposes to rationalise capital gains
tax regime for real estate investment
trusts. Rental Income from REITS to
havepassthroughfacility.
Ÿ 100% deduction allowed for all
contributions in Swachh Bharat
Abhiyan[exceptcontributioninCSR].
Ÿ To defer GAAR by 2 years.
Retrospecive tax provisions will be
avoided.
Ÿ Income Tax On Royalty Fees For
Technical Reduced To 10%. Reduced
taxes on Technical Services to 10%
from25%
Ÿ Deduction on Health insurance u/s 80D
increased from 15000 to 25000. For
senior citizens to 30000. Additional
deduction of Rs.50000 u/s 80CCD
towards New Pension Scheme. No
changeinlimitsu/s80C.
Ÿ Transport Allowance exemption
increasedfrom800pmto1600pm
Ÿ Domestic Transfer Pricing limit
increasedfrom5croresto20crores
Ÿ Introduction of Tax Free Infra Bonds for
road,railandirrigationprojects
Ÿ No MAT for FPIs and FIIs. This comes as
a big boon for Foreign Investors in Indian
Equities market who were being taxed
under MAT despite Nil tax on Long Term
CapitalGains.
IndirectTaxes:
Ÿ GSTrolloutby1stApril2016
Ÿ ServiceTaxincreasedto14%
Ÿ ToreduceCustomDutyon22items
Ÿ Excise reduced to 6% for footwear above
1kperpair
Otherhighlights:
Ÿ Merger of Commodity Regulator FMC
withSEBI
Ÿ Infrastructure investment push by 70000
croreonpubliccapexexpenditure
Ÿ Subsidy rationalisation by cutting
leakages through Jan Dhan-Aadhaar-
Mobile
Ÿ States get almost 62% of total resources
allocation
Ÿ Employee’s contribution to EPF below an
income threshold will be optional without
reducingemployer’scontribution.
Ÿ Contribution to ESI to be made optional
againstprivatehealthinsurance
Ÿ Ammendment to RBIAct and constitution
ofaMonetaryPolicyCommittee
Ÿ Bankruptcy law reform has been
identified as a key to ease of doing
business. Bring comprehensive
Bankruptcycodein2015-16.
Ÿ Visa on Arrival scheme extended to 150
countries
Ÿ Introduction of Gold Bonds and Indian
GoldCoinswithAshokaemblem
Ÿ FM proposes to do away with different
types of foreign investment and replace
themwithcompositecaps.
Ÿ Proposed a “plug and play” model, where
all clearances will be put in place before a
project is auctioned. 5 new ulta mega
power plants at investment of approx. 1
laccroreinplugandplaymode
Ÿ SettingupaFinancialRedressalAgency
Ÿ Setting up of Atal Innovation Mission
(AIM) to nurture innovation culture, R&D
andScientificResearch
Ÿ Setting up of National Skill Mission to
consolidate all skill development
initiatives
Ÿ Benefits for MSME sector – setting up of
Mudhra Bank, electronic bill discounting
systemandfundfortechnologystartups.
BUDGET 2015 - HIGHLIGHTS
Warren Buffet
WoWwords of wisdom
“If you buy things you
do not need, soon
you will have to sell
things you need.”
Key Indices CMP
Sensex 29220.12 -461.65 -1.6%
Nifty 8844.60 -107.75 -1.2%
DJIA 18132.70 715.85 4.1%
NASDAQ 4963.53 280.12 6.0%
Nikkei 18797.94 1191.72 6.8%
Hang Seng 24823.29 227.44 0.9%
Gold ($/oz) 1213.28 -72.62 -5.6%
Silver ($/oz) 16.59 -0.36 -2.1%
Brent Crude ($) 62.21 13.18 26.9%
USD / INR 61.67 -0.28 -0.5%
EUR / INR 69.04 -1.02 -1.5%
CMP Change
27.50 69.7%
72.90 48.5%
1128.60 47.8%
158.80 39.3%
1649.50 36.7%
Monthly Change
Rs. In Crore
11476
12919
1036
99254
Net FII Investment
Monthly Gainers (A Grp)
Suzlon Energy
Piavav Defence
79708
Feb-2015
Jan-2015
Dec-2014
Fin Year to Month
Last Fin Year
Tata Elxsi
Fortis Healthcare
Wockhardt
-10.0 -5.0 0.0 5.0 10.0
Nifty
Auto
Bank
Energy
Finance
FMCG
IT
Media
Metal
Pharma
Realty
Sectoral Performance - Feb 2015
(Source: IISL sectoral indices)
% Change from previous month
MARKET INDICATORS AS ON 27-FEB-2015

4. FOR PRIVATE CIRCULATION ONLY. This document has been prepared by AGROY Finance & Investment Ltd (AGROY). This
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and/or privileged material and is not for any type of circulation. Kindly note that this document does not constitute an offer or solicitation for the purchase
or sale of any financial instrument or as an official confirmation of any transaction. The information contained herein has been compiled from publicly
available data or other sources believed to be reliable, Though all effort will be made to keep the above information updated, AGROY or any of its
Directors or employees are under no obligation to keep the information current or to keep providing this document on regular basis to anyone. This
document is prepared for information only and is not intended to be and must not alone be taken as the basis of an investment decision. The user
assumes the entire risk of any use made of this information.
Wealth Vistas | Budget Special Feb 2015 | www.agroy.com