DEEPAK SINGH 20100108 PGDM 2010-12

GDP growth in FY11 seen at 8.5% (+/-0.25%) Industry growth at 8.2% Exports may turn negative again as demand for imports

increases

Economic Survey favours cuts in excise duty to make exports, industry more competitive

Lower peak customs duty to 7.5% from 10% now Hike in fuel prices will impact inflation

High food prices a risk for general inflation Food, leather, textile, paper sectors failed to revive Slowdown in Indian agriculture sector affecting industry

Need to quicken efforts to remove hurdles in infrastructure

development

Need to liberalise foreign investment in health insurance, higher education

 Encouraging

moves for the promotion of green

technology
Deduction

in excise and custom duty, for

Hybrid and Electric Vehicles

The

reduction of custom duty on raw steel duty remain the same for vehicles parts

Excise

 Encourage

manufacturing and selling of

alternative fuel-based vehicles

Increased

focus on rural and infrastructure

spending would support long term growth of the sector.

 Budgeted

spending in infrastructure estimated at

Rs 2,14,000cr an hike of over 23% from Rs 1,73,000cr during 2010-11

Providing
Target

48.5% of the plan allocation.

for India Infrastructure Finance Company

Limited (IIFCL) has been hiked to Rs 25000cr

from Rs 20000cr

 There

is a marginal increase in allocation

to rural infra fund to Rs 18000cr from Rs 16000cr.

 This

will clear the much longer debate to

speed up Infrastructure development.

Will No

act as highly positive for the Industry

allocation has been made to ramp up

the Transmission and Distribution capacity of power in the country

Rising healthcare costs enough to make you sick

Medical bills to rise 5%

There were also no indications on the extension of the EOU benefit which is available only till FY2011, which could be a negative for the sector.

 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.
The

FM proposed to bring suitable legislative

amendments in the regards of more banking license to private player and NBFCs for the FY 2011-12.

 Added

service tax which was levied on hotel accommodation , liquor and healthcare . Impact..

So now hospitality become more costly

 The

FM has increased allocation for

education by 24% to Rs 52000 crore, which goes well for education sector.

 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 respectively

 The

Finance Minister has proposed to

provide Rs. 3,000 crore to NABARD, which will benefit 15,000 cooperative societies and about 3 lakh handloom weavers