m




  
m Rs 6,000 crore to be provided during 2011-12 to enable
public sector banks to maintain a minimum of Tier I
CRAR of 8 per cent.
m To enhance credit worthiness of economically weaker
sections and households, a Mortgage Risk Guarantee
Fund to be created under Rajiv Awas Yojana
m Credit flow for farmers raised from ` 3,75,000 crore to `
4,75,000 crore in 2011-12.
m Service Tax on air travel both domestic and
international raised.
„

m Gross Tax receipts are estimated at ` 9,32,440 crore.
m Non-tax revenue receipts estimated at ` 1,25,435
m Total expenditure proposed at ` 12,57,729 crore.
m Increase of 18.3 per cent in total Plan allocation.
m Increase of 10.9 per cent in the Non-plan expenditure.
m Fiscal Deficit kept at 4.6 per cent of GDP for 2011-12.
„    


  

m INFRASTRUCTURE- POSITIVE: The budget has
proposed to provide the much needed foreign
investment in Indian infrastructure by hiking their
venturing limit to $40bn from $20bn earlier. The total
disbursement target for India Infrastructure Finance
Company Limited (IIFCL) has been hiked to Rs
25000cr from Rs 20000cr. However, there is a marginal
increase in allocation to rural infra fund to Rs 18000cr
from Rs 16000cr.
m STEEL INDUSTRY- POSITIVE: The budget provided for
enhancing infrastructure spending to Rs 2, 14,000cr which
will boost the demand for steel products. However, hike in
Iron Ore export duty to 20% came in as a surprise, which
will provide the much needed respite to domestic
producers, as their margins were under pressure on
grounds of high raw material prices.

AUTOMOBILE INDUSTRY-POSITIVE: FM announced

from several incentives in the form of deduction in excise
and custom duty, for Hybrid and Electric Vehicles to
encourage manufacturing and selling of alternative fuel-
based vehicles. . Moreover, broader measures like increased
focus on rural and infrastructure spending would support
long term growth of the sector.
m IT INDUSTRY-NEGATIVE: the IT companies in the form
of higher taxes after the proposed higher (MAT) rate of
18.5% for units operating in SEZ and on developers of the
SEZs. IT companies have been migrating to special
economic zones as tax breaks under the Software
Technology Parks of Indian (STPI) scheme will come to
end this year under which companies operating in these
units had been given a 10-year tax break that was to end in
2010. In the FY 10 Budget, however, this was extended to
March 31, 2011.
m AVIATION INDUSTRY-NEGATIVE: Overall the Union
budget has been NEGATIVE for the aviation industry as the
domestic air travel will cost more from the next financial
year with the government raising service tax on it by Rs 50
and Rs 250 for domestic and international journeys
m OIL & GAS INDUSTRY ȂNEGATIVE: the LPG and
Kerosene, which would be provided as a direct cash subsidy
to people under poverty line and no concern for the rising
Crude Oil prices, the budget is NEGATIVE for the entire
sector including companies HPCL, BPCL and IOC. As we
expected the issue of Diesel Deregulation was not taken in
the budget and no proposal was provided to deregulate it
on the backing of rising inflation.
m PHARMA INDUSTRY-NEUTRAL: In Budget 2011-12,
Government didnǯt focus to reduce healthcare cost as they
made no proposals on reducing excise duty, tax holiday on
healthcare infrastructure and weighted deduction for
expenses incurred outside R&D facility like consulting &
legal fees on healthcare and pharmaceutical sector
m BANKING INDUSTRY-POSITIVE: The Finance
Minister proposed to provide capital infusion of Rs.
6000cr in public sector banks (PSBs) to maintain Tier-
I capital to CRAR at 8%. The finance minister
proposed to raise the target of credit flow to farmers to
Rs. 475000cr in FY2011-12 as against of Rs. 375000cr in
FY2010-11. This move will be increase the NPAs of the
PSBs
m HOSPITALITY INDUSTRY-NEGATIVE: The
Hospitality industry contributes more than 8.6% to
our countryǯs GDP, despite that our FM did not came
out with any positives for the sector, instead there was
an added service tax which was levied on hotel
accommodation , liquor and healthcare and making it
costlier.
 

   
m As on 31 Dec 2010 the indices were at 20,561 and 6134.5
for Sensex and nifty respectively. With a couple of days
to go for the union budget, the stock market is
relentlessly moving down.

m Going by the trends in the past, the stock market has

always been highly volatile on budget days. This is
primarily due to the fact that there are high
positive/negative expectations prior to the budget
days.
m if invested in sectors like Consumer durables, FMCG,
healthcare, Banking, Auto and IT then we would have
easily earned healthy returns. This can be primarily
attributed to the rise in consumer demand, rise in
purchasing power driven by higher disposable income,
government initiatives like tax cuts, higher rural
spending etc. However going current account deficit
(which is more than 3% currently) and rising inflation
has dampened the bullish move of the market and so
the stock prices have nosedived. A part from that a
string of scams and stock rigging issues have jolted the
confidence of the investors. This resulted in resorting
to bookings which brought down the stock prices .