ECONOMY- BUDGET ANALYSIS

Sectoral Budget Impact

Sector	Proposal	Impact
Power	Proposal of zero customs duty for electrical plants and machinery To equalise duties on steam and bituminous coal to 2 pct customs duty and 2 pct cvd (countervailing duty) To reintroduce generation based incentive for wind power projects. Rs 800 crore provided for the purpose to Ministry of New & Renewable Energy. 80 IA benefit for power plants extended.	Nonconventional source of power like wind based power generation to get a boost. Continuation of deduction u/s 80IA likely to help the sector.
Banking	Public Sector Banks to get Rs 14000 crore capital support in FY14 and Rs 12517, crore in FY2012-13. All Women's Bank to be set up via public sector with an initial capital of Rs 1000 crore.  4% farm loan scheme extended to private sector banks.	Capital infusion to help maintain bank's minimum tier - I capital of 8% under Basel III. In turn, lenders can expand their loans maintaining the growth in the balance sheet. This move is expected to empower women and is seen as as a move to foster entrepreneurship among women.
Capital  and Debt market	Plans to issue inflation-indexed bonds. Capital allowance of 15% to companies on investments of more than Rs 1 bln. Foreign institutional investors (FIIs) can use investments in corporate, government bonds as collateral to meet margin requirements. Insurance, provident funds can trade directly in debt segments of stock exchanges FIIs can hedge forex exposure through exchange-traded derivatives. Investor with less than 10 pct stake in a company will be regarded as FII, more than 10 pct stake as FDI (foreign direct investment) The stock exchange regulator will simplify know-your-customer norms for foreign portfolio investors. To implement quickly recommendations of financial sector legislative reforms commission STT on equity futures from 0.017% to 0.01%. STT on mutual fund redemption of Exchange Traded Fund (ETF) scheme has been reduced to Re 1 from Rs 250 per lakh, and on mutual fund non-redemption of ETF scheme the STT has reduced to Re 1 from Rs 100 per lakh. CTT of Rs 10 per lakh has been introduced in the Budget for FY 2014 on non-agri commodities.	Can give  a boost to FII investments, simplification of KYC a big positive. STT reduction will increase volumes in Exchange Traded Fund schemes, equity futures  and will reduce overall cost. Will have an adverse impact on the trade of commodity.
Realty	TDS of 1% on property deals above Rs 50 lakh. Additional tax deduction limit by Rs 1 lakh for the first time home buyers up to Rs 25 lakh during the period April 1, 2013 to March 31, 2014. Excise duty on marble slabs increased.	May curb black money generation in property deals but will adversely impact the demand. Likely to promote home ownership and give a fillip to low cost housing and a number of industries including steel, cement, brick, wood, and glass etc.
Infra	Proposal to set up Road Regulatory Authority. Infrastructure Debt Funds will be encouraged. To build roads in North Eastern states and connect them to Myanmar with assistance from WB & ADB.	Road construction companies to gain  Will help boost the economy
Shipping	To add 2 new ports in WB, AP; to add 100 mn tonne capacity. No duty on import of ships, vessels. Proposal for full exemption  of counter vailing duty (CVD) on imported ships and vessels.	Full  CVD exemption on imported ships will help the industry  because most Indian shipping companies purchase their vessels manufactured outside the country.
Electric and Electronics	Electronics chip maker plants to get incentives, zero customs duty for electronic chips. Higher customs duty on set top boxes.	Zero custom duty a negative news for semiconductor industry. Will  boost manufacturing of high tech electronic products in India.
FMCG	Excise duty raised by 18% for cigarettes. Similar increase on cigars, cheroots and cigarillos. Reduced Countervailing duty on dehulled Oat grains.	Mixed for the industry, increase in excise duty will impact all cigarette companies.
IT	Allocation of Rs 532 crore for IT Modernisation project of Post offices which are gearing up to offfer core banking sevices.	An added opportunity for the IT industry at home.
Gems & Jewellary	Imposition of 4% excise duty on silver manufactured from smelting zinc or lead. Baggage rules for bringing the duty-free jewellery limit increased to Rs 50,000 in the case of a male passenger and Rs 100,000 in the case of a female passenger. Reduction in import duty on pre-forms of precious and semi-precious stones from 10% to 2%.	Will bring the rate on par with the excise duty applicable to silver obtained from copper ores and concentrates. Positive for industry, will help the diamond and coloured gemstone industry and will give boost to the exports of precious and semi-precious stones from India.
Oil & Gas	Proposal to move to revenue-sharing from profit-sharing policy in oil and gas sector. A policy to encourage exploration and production of shale gas will be announced. Natural gas pricing policy will be reviewed and stalled NELP blocks will be cleared.	Negatively impact the industry and increase in risk profile for exploration and production companies.
Fertilizer  Sector	No any direct announcements. Rs. 200 crore pilot scheme announced for introducing micro-nutrients new crop varieties. Credit Guarantee Fund for Small Farmers' Agri Business Corporation with an initial corpus of Rs 100 crore.	Positive for the industry as it will increase the demand of the ferlizers.
Telecom -Equipment	Hike in the duty on mobile phones costing more than Rs 2000 from 1% to 6%.	Move is likely to marginally impact the smart phone demand.
Cement	No any direct announcements for the sector A person taking a loan for his first home from a bank or a housing finance corporation upto Rs 25,00,000 during the period 1.4.2013 to 31.3.2014 will be entitled to an additional deduction of interest of upto Rs 100,000. 3000 kms of road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh will be awarded in the first six months of 2013-14.	Demand for Cement will increase.
Education	Education remained the highest priority in FY13-14 budget as FM proposed to allocate Rs 65,867 crore to the Ministry of Human Resource Development, which is an increase of 17 percent over the RE of the previous year.  Proposal to provide Rs 27,258 crore for Sarva Shiksha Abhiyan in 2013-14.  A grant of Rs 100 crore each to Aligarh Muslim University, Banaras Hindu University, Tata Institute of Social Sciences and Indian National Trust for Art and Cultural Heritage.	With the help of higher allocation of fund educational  infrastructure can improve.
Healthcare	Proposal to allocate Rs 37,330 crore to the Ministry of Health and Family Welfare .  Of this, the new National Health Mission that combines the rural mission and the proposed urban mission will get Rs 21,239 crore, an increase of 24.3 percent over the RE.  Proposal to provide Rs  4,727 crore for medical education, training and research.  Proposal to allocate Rs 1,069 crore to the Department of AYUSH.	Increasing expenditure on healthcare and healthcare infrastructure will boost the industry and help in its growth.
Media and Entertainment	Proposal to expand private FM radio services to 294 more cities.  About 839 new FM radio channels will be auctioned in 2013-14 and, after the auction, all cities having a population of more than 100,000 will be covered by private FM radio services. Import duty on Set Top Boxes increased from 5 to 10 percent. Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls.	This is positive for media companies as expansion of FM radio services in smaller areas provide huge opportunities. This will encourage domestic production.
Textile	Technology Upgradation Fund Scheme (TUFS) to continue in the 12th Plan with an investment target of Rs 1,51,000 crore. To set up textile parks under the Scheme for Integrated Textile Parks (SITP). Working capital and term loans at a concessional interest of 6 per cent to handloom sector. Excise Duty on ready-made garments exempted.	Mostly positive for the sector. With TUFS extension more focus will be on modernisation of the powerloom sector.
Auto	Increase of duty on imported luxury goods such as high end motor vehicles, motorcycles, yachts and similar vessels from 75% to 100%. Increase in the excise duty on SUVs from 27% to 30%. However, the increase will not apply to SUVs registered as taxis. Extension of concession period now available for specified parts of electric and hybrid vehicles up to 31.3.2015. Increase to Rs 14,873 crore in 2013-14 from Rs.7,383 crore in the current year proposed in the allocation for the JNNURM programme.	Negative for the car makers as           SUV manufacturers will be impacted. This will also increase the unqualitative competition in SUV's and other vehicles.    This will encourage manufacturing and selling of environment-friendly vehicles.  Bus manufacturers to benefit as the fund will be used to support the purchase of up to 10,000 buses, specially by the hill states.
Agriculture	To allocate Rs 80194 crore for rural development in 2013-14. Plan to allocate Rs 27,049 crore  for agriculture in 2013-14.	Hike in budgetary allocation to boost agriculture and allied industries.