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Monday, March 31, 2008

Day traders’ ‘strike’ to hit volumes

COME April 1, many jobbers and arbitrageurs will be taking a break from what they do the best — day trading. The move is intended to express concern over the impact of the proposed withdrawal of securities transaction tax (STT) benefit under Section 88E on their business. It is not a strike, but a section of arbitrageurs plans not to do business that day.
According to arbitrageurs, the withdrawal of the STT benefit will make their business unviable, as it will put further pressure on margins. Given that these players provide liquidity with high intra-day volumes, their absence could make the market shallow and push up impact costs, brokers said.
Stockbrokers are meeting on April 1 in
Mumbai to discuss their future course of action in the wake of the budgetary proposal. “This is an informal get-together. Some like-minded people are meeting to discuss different business options after we thought it is not viable to do arbitrage without Section 88E benefit,” said Rajesh Baheti, MD, Crossseas Capital Services, a Mumbai-based arbitrageur. Day traders’ ‘strike’ to hit volumes
Trading volumes could drop anywhere between 25% and 30% on April 1 in the absence of participation from arbitrageurs. However, the quantum of the fall will also depend on how many players remain out of action. Though Mumbai accounts for a major portion of day trading volumes, there are many players based outside Mumbai who may continue to do business as usual, reducing the impact on volumes, said a broker.
In his budget for 2008-09, the finance minister did away with the Section 88E benefit, disallowing STT as deductible expenditure while computing income from business. Under the current practice, day traders add the STT amount to the total income (including income from trading ac
tivity and other income) and subsequently work out income tax payable. Under Section 88E, they are entitled to get tax rebate and pay only the surplus of total tax over STT towards the end of the year. However, this benefit of setting off income tax against STT would not be available once the new proposal becomes effective.
According to arbitrageurs, disallowing deduction under Section 88E will not only directly affect arbitrageurs, but also hedgers or any other market participants who claim “business income”
from stock market transactions. Even within the delivery business segment, arbitrageurs and frequent traders are subject to “business income” and not eligible to claim “capital gain”. They claim that as STT will be disallowed as a rebate, this section of the market participants will be taxed at almost 80% (based on assessment year 2007-08 data), skewing the risk-reward ratio beyond sustainability. This would drive most of them out of the business of professional trading, i.e., arbitrage and as liquidity providers.
The Association of National Exchanges Members of India (ANMI) has submitted a memorandum to the government, urging it to reconsider its budget proposal and allow the deduction to continue. The memorandum says, “It is our contention and belief that should any tax be levied,
whether direct or indirect, its rates must offer the tax payer a fair and equitable deal. The government’s current intended direct tax rate is at 33.33% of income, while the intended indirect tax rate is at 16% of value added. Against this, the current tax rate for this segment is over 50%, which is more than the combined effect of direct and indirect tax rates.
It says that to strengthen administration of STT, the exchanges may be asked to furnish client-wise STT data. “However, if at all STT has to be treated as an indirect tax and not income tax, STT rates for trading (non-delivery and F&O segments) need to be reduced by 66.66% to bring it to parity with indirect taxation rates applicable generally,” adds the memorandum.
apurv.gupta@timesgroup.com


Hamdard aims at 33% growth



Ruchita Saxena / Mumbai March 31, 2008



Roohafza brand maker Hamdard Laboratories is planning a comeback to post 33 per cent growth and Rs 250 crore turnover this year.
In the past few years its growth slowed down to a single digit. The company, however, kick started a restructuring exercise last year with chief marketing officer Arshad Siddiqui at the helm.
Siddiqui said, �We have four strategic directions: rejuvenation of our power brands, new products to fuel growth, restructuring our SBUs and streamlining distribution network. We feel our power brands such as Roohafza, Saifi, Cinkara have the potential to grow. We have launched a marketing campaign and have roped in Juhi Chawla as brand ambassador for our flagship brand Roohafza. We will also partly sponsor the Femina Miss India contest for the Safi brand.�
Hamdard is often compared with another FMCG major Dabur due to their similar product mix and as they were founded by the promoter families around the year 1900.
While the Burman-family promoted Dabur reached over Rs 2,000 crore turnover, Hamdard, said experts, could not script the same success story due to lack of professionalism. To tide over this, the company has embarked on an investment phase to push up the growth.
The company will be add more products to its portfolio in the over-the-counter (OTC) range this year. It is streamlining its operations by forming separate strategic business units (SBUs) for consumer, over-the-counter and traditional range of products.
The marketing campaign will be prepared by advertising agency JWT for the company. Roohafza was advertised extensively by the company last year to position it as a natural refreshment drink and not just as a �sharbat.� The company aims 26 per cent sales growth for this brand alone.
Joshina, Sualin and Roghan Badam Shirin are the company�s other power brands, which account for 60 per cent of its turnover. Siddiqui was roped in from ITC�s lifestyle retail venture in August 2007.

Friday, March 21, 2008

IFC plans $1bn investment in FY09



BS Reporter / Ahmedabad March 13, 2008



World Bank affiliate International Finance Corporation (IFC) has announced that its corpus for the country in 2008-09 will be $1 billion.

Lance Crist, senior manager (oil, gas and chemicals), IFC, said the cumulative investment commitment in the country so far comes to around $2.5 billion. "We have a cumulative investment portfolio in India of $2.5 billion, and will be adding another $1 billion in the coming year. While the exact share is not yet ascertained, majority of the corpus will be invested in the infrastructure sector," said Crist.

IFC has been investing in India across sectors like infrastructure, chemicals, health, agriculture, and rural finance. IFC recently invested Rs 46.1 crore in pigment and agrochemicals manufacturer Meghmani Finechem (MFL), a subsidiary of Ahmedabad-based Meghmani Organics, for its upcoming chlor-alkali plant project in Dahej.

"After infrastructure, it is the chemical industry in India that is set to witness tremendous growth in the coming years. The chemical industry in India, which consists of around 60,000 companies, will grow from $30 billion in 2005 to $60 billion by 2010," added Crist.

Tuesday, March 18, 2008

Broker’s Call

Analyses of selected stocks by broking firms

ALLIED DIGITAL
Broking firm: JP Morgan Price at the time of recommendation: Rs 780 Target price: Rs 1,200

Rationale: We initiate with
OW and a Dec-08 PT of Rs 1,200; potential share price upside of 54%: ALDS is a play on the strong domestic demand for IT services with more than 90% of its revenues coming from India. After the 4x share price jump since its IPO in July-07, we expect the stock to deliver more sedate gains over the next 9-12 months, backed by high growth potential and management’s decent execution track record.
Domestic IT services is a US$5 billion industry, expected to grow at a CAGR of 23% over the next five years to over US$10 billion. We believe domestic IT exposure shields ALDS from a US slowdown, rupee appreciation, and expiry of tax benefits in FY10. Share price drivers: (1) Strong financial performance with an industry-leading 71% revenue CAGR and 78% EPS CAGR over FY08-10E; (2) possible acquisitions for around Rs350 million using a part of the IPO proceeds; and (3) increased capacity utilisation of its remote IT management centers as ALDS demonstrates its capability and the cost and time benefits to clients. Valuation, PT and risks: Our DCF-based Dec-08 PT of Rs 1,200 assumes a 39% revenue CAGR over FY07-17E, a terminal growth rate of 3%, long-term EBIT margin of 18%, and ROIC of 27%. Key risks to our PT and view are: (1) Weakness in the projectbased SI business; (2) supply-side tightness; (3) wage inflation; and (4) muted offtake in remote IT management services.
Closing price on Friday, March 14, 2008: Rs 741

LAKSHMI ENERGY
Broking firm: Parag Parikh
Price at the time of recommendation:
Rs 200
Target price: Rs 280
Rationale: Rice is witnessing a demand growth of 5% against an expected production growth of just 2%. Processed food is experiencing a higher demand growth. These are extremely profitable times for farmers & agro-processors
like LEAF. We like LEAF’s preference for a stable & higher margin business of nonbasmati v/s basmati and to deal with FCI, which ensures high volumes. Post expansion, it will continue to derive 85-90% of its earnings from the non-basmati and FCI sales would remain high.
Revenues grew at 41% CAGR & profits at a rocketing 164% CAGR over FY03-07 period; this growth primarily being led by increasing expansion & increasing integration.
Apart from the expansion led growth (20% CAGR, FY07-11E), the return ratios remain attractive in the range of 25-30%. The scrip attractive at 7.1x FY09E & 5.2x FY10E earnings. The stability in business in terms of volumes & pricing gives LEAF an edge over other listed food processing companies. We recommend BUY based on our DCF calculations with a price objective of Rs. 280 (=7.3x FY10E EPS).
Closing price on Friday, March 14, 2008: Rs 214

RELIANCE CAPITAL
Broking firm: Indiabulls
Price at the time of recommendation: Rs 1,441
Target price: Rs 1,962
Rationale: We are optimistic about the life insurance and asset management businesses. The life insurance business is going to be an important growth driver. Reliance Capital has recorded a 231% yoy increase in new business premium to Rs. 13.9 bn. The asset management company is consistently beating industry growth in assets under management. We see bright prospects for the two new businesses – Microfinance and Portfolio Management Services (PMS). The company is building a strong distribution network.
We used sum-of-the-parts method to value Reliance Capital. The various divisions are valued at P/B, P/E, New Business Achieved Profit (NBAP) multiple, and % of AUM, depending on the particular business. On the basis of our valuation and the recent price correction, we upgrade our rating on the stock from Hold to Buy with a target price of Rs. 1,962 for FY09E
Closing price on Friday, March 14, 2008: Rs 1,327

Sunday, March 16, 2008

Where Sensex is heading ??

Monday : 17-03-2008 ////////////////// WHERE WE ARE HEADING ??

 

: SENSEX Projection

_________________________________________

Many of the investors are tracking SENSEX and they need projections of Sensex along with Nifty. We had given our views time to time on Nifty. I normally track Nifty in short and medium term. In the broader interest of the viewers, we will try to find where we are heading ???????????????????????? Let me talk two possibilities: A-Till 2007 , we have accepted our bull run as a SUPER LONG TERM BULL MARKET , withing the wave counts starting from 2594 and current ongoing internal of final WAVE-5 being 21206-15228. Till this point, we do not have any confusion.And current ongoing correction is termed as a cyclicle correction within super long term bull market. B-INTERMEDIATE BEAR MARKET: There are laid down norms in Fibonacci retracements. If Each leg has its retracement levels like 0.382, 0.500,0.618

Or say 61.8%, 100%,161.8%,261.8%

--------------------------------------------- Now at this point of time our market is in correcting cycle from WAVE-5 21206-15228 ( Ongoing).. and 0.500 level is placed at 15187 while 0.618 ( max permissible)is placed at 14487. In case sensex falling below 14487, it may be contrued that current cyclical correction has rejected the entire WAVE Count placedunder internal of Wave 5 which started from 8799. In such a case, we shall not have any doubt that we shall have to count retracement level fresh from Wave -12594-21206. Now You shall have to term short term bear market and It may last as per the time frame like retracement from 2594-21206. You can count time frame also

. _____________________________

Now let us have retracement in case Sensex rejects this wave count by falling below14487.........................

 A-0.382 retracement level is placed at 14100

B-0.500 retracement level is placed at 11900

C-0.618 retracement level is placed at 9700 approximately.

THOSE WHO ARE INTERESTED IN COUNTING TIME SHALL NOTE TWO DATES A-8799 ( Date :14/06/2006)

 B-21206 ( Date :10/01/2008)

_______________________________

 let us hope that SENSEX follows current wave count 5... then sensex must give close above 17227 to keep hope of testing previous high at least.

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Monday, March 10, 2008

More Ways to Invest in India

Two exchange-traded funds focusing on this fast-growing nation debut this month.

February 21, 2008


By Amy Bickers

India is one of the great economic growth stories of the 21st century. The nation has undergone an astonishing transformation over the past 17 years, as the government has shifted away from socialism and opened and reformed its economy. Today, India (along with China) is one of the fastest-growing countries in the developing world.

India's powerful economic growth, coming from expansion in both services and manufacturing, is a strong indicator of its burgeoning economic clout. According to the government, gross domestic product in India expanded by 9.6% in 2007 and 9.4% in 2006, helping to make the economy the world's 12th largest.

Fueling the expansion has been rapid growth in services, including call centers, software design and back-office out-sourcing. The ability of Indian companies to design and produce well-made goods at a fraction of U.S. costs has also helped India become a major exporter.

The booming economy, hefty corporate profits and an unprecedented flow of foreign investment have propelled a spectacular surge in Indian share prices. Over the past five years through February 20, the Bombay Stock Exchange's 30-stock Sensitive Index, or Sensex, returned an annualized 43% (in dollar terms). Real estate, banking and information-technology stocks have been at the forefront of the boom.

The outlook for the Indian economy remains bright, but the picture for Indian stocks is murkier. Volatility has increased amid concerns about the global credit crunch and the rupee's strength against the dollar, which hurts Indian exporters. Year-to-date through February 20 the Sensex has lost 13%.

Meanwhile, the fund industry is supplying U.S. investors with an expanding range of choices for investing in India. The first of two exchange-traded funds that focus on India is due to launch on February 22, and the second one is expected to follow quickly.

ETFs, which trade just like stocks, are funds that hold pools of securities and are designed to follow a specific index. They include mechanisms designed to keep the funds' share prices close to the value of their underlying assets.

Emerging from the gate first is WisdomTree India Earnings. Relative stock weightings in this ETF, like others from WisdomTree, will be based on a company's earnings rather than market capitalization. The ETF (symbol EPI) will draw from a universe of 150 profitable Indian companies that WisdomTree will reviewed annually.

WidsomTree's research director, Luciano Siracusano, says it's important for investors to consider the fund in the context of their overall investment plan. "People need diversity by having exposure around the world," he says. "But investing in India and other emerging markets should be done in the context of a larger global asset allocation model."

Also due out soon is PowerShares India Portfolio (PIN). This ETF, which is scheduled to start trading before March 1, will track an index of 50 stocks developed by Indus Advisors. The index is designed to represent the overall Indian stock market.

Exchange-traded notes are similar to ETFs. But instead of owning a basket of stocks, as ETFs do, ETNs are a type of debt instrument that's linked to the performance of an underlying index.

The iPath MSCI India ETN (INP), tracks a group of 62 Indian stocks. But because of a decision by Indian securities regulators, this ETN's sponsor, Barclays Bank, cannot issue more shares. As a result, the ETN now trades like a closed-end fund (see more on closed-ends below).

The ETN had a great run in 2007, but '08 has been a stinker. The stock, which closed at $76.38 on Feburary 21, is 35% off the $118 intra-day high it hit on January 14.

For investors who want a traditional open-end fund, all but one of the five choices are unattractive because they levy sales charges. The exception is the no-load Matthews India fund (MINDX). In 2006, its first full year, the fund returned 36%, compared with a 51% gain for the SENSEX (in dollar terms). In 2007, Matthews India soared 64%, trailing the index by three percentage points.

So far, 2008 has been difficult. The fund has lost 17% year-to-date through February 21. Co-manager Sharat Shroff attributes the drop to the fund's heavy weighting in consumer stocks, which have performed poorly recently. "People in India are buying cars and cell phones and taking out mortgages for the first time and we are focused on that domestic consumption," says Shroff.

Key holdings include Infosys Technologies (INFY), a technology outsourcing company; Dabur India, a healthcare company; and wireless-phone service provider. Matthews India requires $2,500 to start. It carries a reasonable annual expense ratio of 1.41%, and charges a 2% redemption fee on shares sold within 90 days of purchase.

The only other open-end fund with a track record of at least a year is Eaton Vance Greater India. Its class A shares (ETGIX), which levy a front-end sales charge of 5.75%, have returned an annualized 45% over the past five years through February 20. Top holdings include industrial materials giant Reliance Industries and HDFC Bank.

Investors can also buy into India through two closed-end funds. Closed-ends issue a set number of shares and then trade just like stocks. Supply and demand determine the price of closed-end shares, which typically trade above or below the underlying value of the funds' assets.

Both India closed-ends earned astronomical returns in 2007. On the basis of its net asset value (NAV) per share, Morgan Stanley India Investment fund (IIF) soared 70% in 2007, while its share price jumped 50%. Over the past five years through February 15, the fund gained 48% annualized on assets and 51% annualized on the basis of its share price.

But the fund's NAV has dropped 16% so far this year, and its share price has fallen 20%. As of February 20, the fund, which closed that day at $43.40, sold at a 5.9% discount to NAV. The fund's annual expense ratio is 1.35%.

The performance of India fund (IFN) has been similar. Over the past five years through February 15, it returned 44% annualized on assets and 46% annualized on its shares. Year-to-date, the fund has dropped 15% and 16% on NAV and share price, respectively.

The fund, which carries an expense ratio if 1.41%, recently sold for a 5% discount to NAV. The shares closed at $52.47 on February 20.

 

 

 

Wednesday, March 5, 2008

Warren Buffett ‘becomes world’s richest’

image

US investment guru Warren Buffett has ousted his friend and occasional bridge partner Bill Gates as the world’s richest man, Forbes magazine says.

The Microsoft co-founder had topped the Forbes business magazine’s rich-list for the past 13 years.

Mr Buffett’s wealth increased by $10bn (£5bn) last year to $62bn.

Mr Gates’s fortune climbed by $2bn during the same period, dragging him down to third on the list with a fortune of $58bn.

He was narrowly pipped into second place by the Mexican communications magnate Carlos Slim Helu, whose $60bn net worth has doubled in the past two years, Forbes reports.

Some Facts about him :

Nicknamed the “sage of Omaha” because of his phenomenal investment success, Mr Buffett, 77, has stakes in a range of companies, including Coca-Cola, Proctor & Gamble and Tesco.

Forbes says he filed his first tax return at the age of 13, claiming a $35 tax deduction for his bicycle.

After studying economics at New York’s Columbia Business School under investment guru Benjamin Graham, he began purchasing shares in textile firm Berkshire Hathaway in 1962 before buying a controlling stake in 1965.

The company’s stock price surged to a record $150,000 a share in December, just before Forbes formulated its 2008 ultra-rich list.

Two years ago, Mr Buffett pledged most of his Berkshire shares to the Bill & Melinda Gates Foundation.

Some other Top People’s :

Mark Zuckerberg, 23, the founder of the social networking site Facebook, joins the list as the world’s youngest billionaire.

image

Bill Gates was the world’s richest man for 13 years - but no more

His $1.5bn fortune makes him the world’s 785th richest person, Forbes reports.

Patrice Motsepe joins the list as South Africa’s first black billionaire with a net worth of $2.4bn.

The world’s richest woman is the French L’Oreal chief, Liliane Bettencourt, 17th on the Forbes list with a net wealth of $22.9bn.

Other inclusions in the ultra-rich list include US chat-show host Oprah Winfrey, ($2.5bn), property mogul Donald Trump ($3bn), and Harry Potter author JK Rowling ($1bn).

Mr Gates might have secured his place at the top of the wealth-pile had Microsoft not made an unsolicited bid for rival Yahoo! last month: Microsoft shares plunged 15% in the two weeks following the bid.

Here’s list of FORBES TOP richest people’s in the world (in $bn)

  • Warren Buffett (US): 62
  • Carlos Slim (Mexico): 60
  • Bill Gates (US): 58
  • Lakshmi Mittal (India): 45
  • Mukesh Ambani (India): 43
  • Anil Ambani (India): 42
  • Ingvar Kamprad (Sweden): 31
  • KP Singh (US): 30
  • Oleg Deripaska (Russia): 28
  • Karl Albrecht (Germany): 27

Warren Buffett 'becomes world's richest'

US investment guru Warren Buffett has ousted his friend and occasional bridge partner Bill Gates as the world’s richest man, Forbes magazine says.

The Microsoft co-founder had topped the Forbes business magazine’s rich-list for the past 13 years.

Mr Buffett’s wealth increased by $10bn (£5bn) last year to $62bn.

Mr Gates’s fortune climbed by $2bn during the same period, dragging him down to third on the list with a fortune of $58bn.

He was narrowly pipped into second place by the Mexican communications magnate Carlos Slim Helu, whose $60bn net worth has doubled in the past two years, Forbes reports.

Some Facts about him :

Nicknamed the “sage of Omaha” because of his phenomenal investment success, Mr Buffett, 77, has stakes in a range of companies, including Coca-Cola, Proctor & Gamble and Tesco.

Forbes says he filed his first tax return at the age of 13, claiming a $35 tax deduction for his bicycle.

After studying economics at New York’s Columbia Business School under investment guru Benjamin Graham, he began purchasing shares in textile firm Berkshire Hathaway in 1962 before buying a controlling stake in 1965.

The company’s stock price surged to a record $150,000 a share in December, just before Forbes formulated its 2008 ultra-rich list.

Two years ago, Mr Buffett pledged most of his Berkshire shares to the Bill & Melinda Gates Foundation.

Some other Top People’s

Mark Zuckerberg, 23, the founder of the social networking site Facebook, joins the list as the world’s youngest billionaire.

imageBill Gates was the world’s richest man for 13 years - but no more

His $1.5bn fortune makes him the world’s 785th richest person, Forbes reports.

Patrice Motsepe joins the list as South Africa’s first black billionaire with a net worth of $2.4bn.

The world’s richest woman is the French L’Oreal chief, Liliane Bettencourt, 17th on the Forbes list with a net wealth of $22.9bn.

Other inclusions in the ultra-rich list include US chat-show host Oprah Winfrey, ($2.5bn), property mogul Donald Trump ($3bn), and Harry Potter author JK Rowling ($1bn).

Mr Gates might have secured his place at the top of the wealth-pile had Microsoft not made an unsolicited bid for rival Yahoo! last month: Microsoft shares plunged 15% in the two weeks following the bid.

Here’s list of FORBES TOP richest people’s in the world (in $bn)

  • Warren Buffett (US): 62
  • Carlos Slim (Mexico): 60
  • Bill Gates (US): 58
  • Lakshmi Mittal (India): 45
  • Mukesh Ambani (India): 43
  • Anil Ambani (India): 42
  • Ingvar Kamprad (Sweden): 31
  • KP Singh (US): 30
  • Oleg Deripaska (Russia): 28
  • Karl Albrecht (Germany): 27

 

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Tuesday, March 4, 2008

Infy eyes buyouts in Europe, Japan

HERE & THERE: Eyes on you

Search Mode: Infy eyes buyouts in Europe, Japan

To Target Cos In $200 M-$300 M Range, Energise Non-Linear Business Strategy

Sreekala G HYDERABAD



INFOSYS Technologies is scanning the markets of Europe and Japan for acquisitions in the price band of $200-$300 million to energise its non-linear business strategy as well as to expand its geographic reach.
“We are looking at acquiring companies in Germany, France and Japan. These markets have started opening up and we are targeting companies engaged in consulting, BPO, packaged implementation services or IP-based firms as it will help us move up the value-chain considerably,” said Infosys CFO V Balakrishnan.
The deal size will be in the range of $200 million to $300 million. “It will be difficult to give a time frame for an acquisition as it is an on-going process. The effort is to find the strategic fit that is in line
with our non-linear growth strategy,” he told ET. India’s second largest software exporter has already churned out a roadmap for non-linear growth. Unlike the traditional linear business model, where the revenue is effort-based (more the number of people working, more the revenue), the non-linear business model is based on outcome. So, with high-value services, the companies can demand a premium from its clients.
“It is not feasible for companies like us with
about 88,000 employees to continue to bet on linear business model. Shortage of talent and rising cost of labour are other adverse effects of this kind of a business model. Currently, we focus on packaged implementation related to SAP and Oracle, where the margins are higher. Besides, consulting and IP-based services are other areas, where the services can be offered at a premium. An acquisition in these areas will help us achieve higher growth momentum,” said Mr Balakrishnan.
At present, consulting contributes about 5% of the company’s revenue while package implementation accounts for about 25%. “Application, de
velopment and maintenance (ADM) is still our largest services segment. However, efforts are on to move up the value chain and decrease our dependence on headcount. We believe adoption of non-linear growth model is a long term strategy,” he said.
According to an analyst, many companies are adopting inorganic growth strategy to move up the value chain. “With $2 billion cash and cash equivalents, funding an acquisition is not an issue for Infosys. Considering that an Indian IT services company spends about 50% of its revenue on employees, it will not be feasible for them to add head count in the wake of a rising rupee and an expected slowdown in the US. Consulting, package implementation and IP can help a company to go up the value-chain independent of people addition,” he said.
Last year, Infosys had taken over Philips’ finance and administration business process outsourcing (BPO) centres spread across India, Poland and Thailand for $28 million. In 2003, it had acquired Expert Information Services in Australia for $22.9 million.

Saturday, March 1, 2008

highlights of the Union Budget for 2008-09

Following are the highlights of the Union Budget for 2008-09
2 Apr-Mar) presented by Finance Minister P. Chidambaram in Lok Sabha today:
3
4 GROWTH, INFLATION LOAN WAIVER
5 GLOBAL IMPACT SOCIAL SECTOR
6 FISC FARM, RURAL SECTOR
7 DIRECT TAXES NON-FARM COMMODITIES
8 INDIRECT TAXES SUBSIDY
9 SPENDING INDUSTRY
10 TRADE FINANCIAL SECTOR
11 CORE SECTOR HEALTH
12 INVESTMENT, SAVINGS MISCELLANEOUS
13 EDUCATION
14
15
16
17 GROWTH, INFLATION LOAN WAIVER
18 India growth story interesting, inspiring Farmers' debt worth 500 bln rupees to be waived off
19 Manufacturing, services to grow 10.7%, 9.4% respectively 40 mln farmers to benefit from loan waiver scheme
20 Confident of 8.8% GDP growth in FY08 Complete waiver of all loans for marginal, small farmers
21 FY08 H1 GDP growth was 9.1% Loan waiver for marginal farmers holding up to 1 ha
22 FY08 most challenging of last 4 years 11 bln rupees for National Horticulture Mission FY09
23 12 successive quarters of over 8% GDP growth until December Farm loans by bank, RRBs, co-op bks until Mar 07 covered
24 8.7% GDP growth seen FY08 as per CSO estimates Farm loan waiver scheme to be completed Jun 30
25 Second year of plan extremely critical Farmers can get fresh loans after debt reschedule
26 Farm growth seen 2.6% FY08 Farm loan waiver to cover 600 bln rupees of loans
27 FY09 year of consolidation, implementation, monitoring Debt waiver scheme implementation to be completed by Jun
28 Must be vigilant, swift for growth with price stability Loan waiver scheme to be completed by June
29 Keeping inflation in check remains cornerstone of policy Waiver also for farm loans recast by banks since 2005, 2006
30 Rescheduled farm loans will also be eligible for waiver
31 GLOBAL IMPACT One-time settlement scheme for "other farmers"
32 Capital inflows in excess of economic deficit Farm loan waiver scheme liability 600 bln rupees
33 Capital inflows need to be managed more actively Loans worth 500 bln rupees to be waived under scheme
34 To take steps on foreign inflows to ensure stable markets 10 mln other farmers to also gain from loan waiver
35 Downside risks have increased worldwide 30 mln small, marginal farmers to benefit from waiver
36 Global markets weak since August, impact on local market not clear 30 mln small, medium farmer to gain from loan waiver
37 Govt will monitor foreign fund inflows
38 Chidambaram says need to be vigilant on global risks SOCIAL SECTOR
39 Impact of US slowdown on emerging mkts not clear yet India midday meal scheme is world's largest
40 Outlook for global econ benign early FY08 182,000 girls in residential schools under Kasturba plan
41 114 mln children covered by midday meal scheme
42 FISC FY09 2nd year of plan should be year of consolidation
43 Govt targets FY09 fiscal deficit at 2.5% of GDP 52 villages per day get phone connections under Bharat Nirman
44 Govt targets FY09 fiscal deficit 1.33 trln rupees 4,113 rural villages computerised everyday.
45 FY09 non-plan expenditure seen 5.70 trln rupees 42 villages/day get power connections under Bharat Nirman
46 FY09 plan expenditure seen 2.43 trln rupees "Can do better" on ensuring more inclusive growth
47 One more year needed to remove revenue deficit Noon meal scheme to be extended to upper primary schools
48 Fiscal deficit not only achieved but also some headroom Mid-day meal plan to be extended to all blocks in country
49 FY09 revenue deficit 551.84 bln rupees, 1% of GDP Midday meal scheme extended to all govt schools
50 FY09 revenue expenditure projected at 6.58 trln rupees Mid-day meal plan extension to help 25 mln children
51 Govt targets FY09 fiscal deficit at 3.1% of GDP vs 3.3% Cleanliness drive allocation upped to 12 bln rupees FY09
52 More equity to Commissions for minorities, SC/ST
53 DIRECT TAXES SC, ST, minorities to continue getting special attention
54 Income Tax slabs changed Northeast, especially Arunachal, face "special problem"
55 Income tax threshold up to 150,000 rupees for all assesses Plan to give potable water to schools in scarcity areas
56 On course to achieve budget estimate of direct taxes FY09 plan for districts with minorities 37.8 bln rupees
57 Agriculture income exempt from income tax 288 more bank branches by Mar in mainly minority districts
58 Demat corp debt instruments exempt from TDS 2 bln rupees for new potable water plan for schools FY09
59 Reverse mortgage income won't be considered income for tax Paramilitary forces to have more SC, ST candidates
60 10% income tax for 150,000-300,000 rupees income Initial grant for potable water in schools 2 bln rupee
61 Stock, commodity bourses under service tax net Potable water in schools cost 15,000-30,000 rupee/system
62 All income tax payers get minimum relief of 4,000 rupee/yr Non-profit cooperation fund for national skill development
63 30% income tax for income above 500,000 rupees Need to set up world class skill development programme
64 I-T threshold for women 180,000 rupees vs 145,000 rupees Smart card based PDS food delivery in Haryana, Chandigarh
65 No change in corporate income tax, surcharge 3 social security schemes for unorganised workers FY09
66 Direct tax proposals revenue neutral National Handicapped Corporation to get 90 mln rupees
67 Withdraws banking cash transaction tax
68 No change in securities transaction tax FARM, RURAL SECTOR
69 Short-term capital gains tax 15% vs 10% Food grain adequacy will be a challenge in FY09.
70 Introduces STT for commodity futures trades Farm credit seen 2.4 trln rupees by March end.
71 Dividend distribution tax to be 15% Promises new initiatives for agriculture.
72 Deduction of STT paid allowed Cotton output seen at 23.38 mln bales FY08.
73 Can setoff dividend income from arms vs dividend tax Cotton output estimated 24.38 mln bales.
74 Exemption limit for small service providers 1 mln rupee/yr Maize output seen at 65.78 mln tn FY08.
75 Services contribute 55% of GDP 88% rise in wheat prices, 15% rise in rice prices.
76 Svc sector to get amortisation benefit Soybean output estimated 9.45 mln tn.
77 5 yr tax holiday for hospitals set up to serve rural areas Rice output seen at 94.08 mln tn FY08.
78 To up short-term capital gains tax to 15% in some cases Maize output estimated 16.7 mln tn.
79 High growth rates helped boost tax revenue collection FY08 food grains output at record high of 219.32 mln tn.
80 Senior citizen I-T threshold 225,000 rupees vs 195,000 Rice output estimated 94 mln tn.
81 Production of seeds added to VAT list FY09 farm credit aim 2.8 trln rupees
82 30% income tax on over 500,000 rupees per year Farm credit growth impressive
83 FBT exemption to creche facility, guest houses Gross capital formation in farm 12.5% of GDP FY07
84 125% weighted deduction for research co on R&D outsourcing Aims to up farm contribution to GDP to 1.6% in 11th plan
85 Crucial to manage inflow of food supply
86 INDIRECT TAXES FY09 agri credit target 2.8 trln rupees
87 Indirect tax proposals revenue loss 59 bln rupees 16 bln rupee interest subvention for short-term crop loan
88 Not surprised with buoyancy in tax revenues 900,000 ha to be developed under World Bank aid
89 Excise duty on 2 wheelers, 3-wheelers cut to 12% vs 16% Irrigation Resources Finance to have 1 bln rupee capital
90 Excise on small cars cut to 12% vs 16% More pacts with World Bank likely for Orissa, W Bengal
91 Customs duty on vitamin food, mineral food cut to 20% To set up Irrigation, Water Resources Finance Corp
92 Customs duty on phosphoric acid 5% vs 7.5% 548,000 ha brought under irrigation in last 2 years
93 Some cuts in customs to protect industry To give 2.8 trln rupees of loans to farm sector FY09
94 On course to exceed budget estimate of indirect taxes Funds for rain-fed area 3.48 bln rupees FY09
95 Customs duty on some bulk drugs cut to 5% vs 10% 24 major, 750 minor irrigation projects in FY09
96 Customs duty on project imports cut to 5% vs 7.5% Education plan to up retention, upgrade learning quality
97 Customs duty steel scrap cut to 0% vs 5% To cover 400,000 ha more in micro, dip irrigation
98 No change in peak rate of customs duty Irrigation outlay 200 bln rupees FY09 vs 110 bln yr ago
99 Customs duty on crude sulphur 2% vs 5% IWRFC to be incorporated as company before Mar
100 Fully exempt rough cut stones from import duty Rubber Fund to get 190 mln rupees FY09
101 Raw material for sports goods exempt from customs duty Coconut, cashew, pepper to get priority for crop revival
102 Customs duty on unrefined sulphur cut to 2% vs 5% Special purpose Tea Fund to get 400 mln rupees FY09
103 Customs duty exemption for set top boxes in IT hardware 56,000 old plantations revived under horticulture mission
104 Customs duty on sports goods cut to 5% vs 7.5% To stress on revival of coconut, cashew, pepper crops
105 To give 34.43 bln rupees to social security scheme FY09 To set up 500 soil testing labs as PPP in 11th plan
106 Customs duty on specialised machinery cut to 5% vs 7.5% 276,000 ha brought under horticulture
107 Customs on steel melting, aluminium melting scrap 0% vs 5% To incorporate new water commission before Mar 31
108 Some IT, hardware components exempted from Customs duty Have planned crop insurance scheme for spices next yr
109 Excise on hybrid cars cut to 14% vs 25% 180 mln rupees allocation for coffee in FY09
110 Excise duty on paper cut to 8% vs 12% 50-mln-rupee one-time fund to Trivandrum plantation unit
111 Customs duty on edible oils left unchanged 400 bln rupees allocation for special purpose tea fund
112 General CENVAT rate on all goods cut to 14% from 16% 200 mln rupee grant for Tea Research Association
113 Excise duty on pharma goods cut to 8% vs 16% 750 mln rupees for farm ministry for mobile soil testing
114 FY08 tax to GDP ratio 12.5% vs 9.2% inherited by UPA govt Perpetual fund for Rubber, Cardamom, few others FY09
115 Customs duty on rough coral 5% vs 10% Have planned crop insurance scheme for spices next year
116 Customs duty on crude/unrefined sulphur cut to 2% vs 5% Determined to be self-sufficient in foodgrain output
117 Customs exempt to continue only for naptha for fertiliser 200 mln rupees for tea research
118 Excise duty on water purifiers cut to 8% vs 16% To set up mobile soil testing labs in 230 districts
119 Excise cut on all pharmaceutical goods to 8% from 16% 40 bln rupees for rural roads in FY09
120 Excise duty on bus chassis 12% vs 16% RIDF corpus up 140 bln rupees in FY09
121 No excise duty on anti-AIDS drugs
122 Excise duty on some paper types cut to 10% vs 12% NON-FARM COMMODITIES
123 Wireless data card exempt from excise duty Global crude oil prices sharply up.
124 Excise duty on some writing, printing paper 8% vs 12% Crude oil, iron ore, copper, lead, tin prices elevated.
125 Excise duty of 1% on polyester filament yarn removed
126 Cement Excise: Higher of 14% advolorem or 400 rupees/tn SUBSIDY
127 Filter, non-filter cigarettes to be taxed at par To give 326.67 bln rupees for food subsidy under PDS FY09
128 Abolish ad valorem component on unbranded petrol, diesel Fertiliser subsidy to continue
129 Excise on refrigeration units above 2 tn cut Mulling new structure for fertiliser subsidy scheme
130 Filter, non-filter cigarettes to be taxed at higher rate To continue providing fertilisers at subsidised rate
131 Excise duty on packaged software 12% vs 8% National Agri Insurance Plan to get 6.4 bln rupees FY09
132 Excise duty on bulk cement 400 rupees/tonne Looking at moving to nutrient-based fertiliser subsidies
133 Excise on packaged software hiked to 12% from 8%
134 Excise duty on packaging software upped to 12% INDUSTRY
135 Money changers, tour operators to come under svc tax net Policy is to list PSUs to unlock their true value
136 Excise duty also exempted on packaged coconut water Aiming to take manufacturing growth rate to double digits
137 Excise duty exemption for coffee mixes, puffed rice Manufacturing industries, apparel, paper growing slower
138 Svc tax net to include svc by shr, commodity exchanges Manufacturing sector growing more slowly
139 Excise duty exempted on wireless data cards 20% growth in capital goods
140 Svc tax net to include asset management svc of ULIPs IIP for consumer goods, durables down in FY08
141 Excise duty on unbranded diesel to be 4.6 rupees/litre Govt to list more arms to unlock value
142 Some fiscal steps to be taken to boost industrial growth
143 SPENDING 55 bln rupees for Rajiv electrification plan in FY09
144 Additional 100 bln rupees plan capital expenditure this yr National fund for power transmission, distribution
145 FY09 defence allocation 1.056 trln rupees vs 960 bln Double-digit manufacturing growth in coal, power, steel
146 Defence allocation up by 10% 8 bln rupees for accelerated power reform plan FY09
147 Sets aside 5 bln rupee for Arunachal, border develop plan Power generation capacity target in 11th plan 78,577MW
148 73 bln rupee for Rajiv drinking water plan FY09 vs 65 bln Tilaiya ultra mega power project to be awarded shortly
149 3 bln rupees for desalination plant in Chennai in FY09 Sharp fall in consumer goods growth in Apr-Dec
150 2 bln rupee initial outlay for drinking water in schools Micro, small enterprises to continue to get govt aid
151 Allocation for northeast 164.47 bln rupees vs 143.65 bln
152 FY09 ministry of minority allocation at 10 bln rupees FINANCIAL SECTOR
153 Nehru Urban Renewal Mission outlay up at 68.66 bln rupee To extend sr citizens pension plan to all above 65 yrs
154 68.66 bln rupees for Jawaharlal Urban plan vs 54.82 bln To give 10 bln rupees to LIC for Aam Admi Bima Yojana
155 FY09 Integrated Child Development Plan sum 63 bln rupees Govt to ask bks to meet credit needs of self-help groups
156 Scheduled Tribe Fin Corp gets 500 mln rupees allocation Home loans for poor brought under banks' DRI scheme
157 National Agri Insurance Plan to get 6.4 bln rupees FY09 LIC to cover 10mln landless farmer in social security plan
158 Food security scheme allocation 48.82 bln rupees Aam Aadmi Bima Yojna to cover 10 mln households by Sep 30
159 IT department allocation 16.80 bln rupees vs 15 bln 20-bln-rupee SIDBI fund for risk financing
160 44% of backward regions' grant to UP, Bihar, Orissa 50-bln-rupee fund in NABARD to up short-term loans
161 To launch exchange traded FX, rate derivative mkt
162 To expand market for corporate bonds
163 TRADE 50 bln rupee NABARD fund for short-term co-ops' lending
164 Rupee up 9.8% from Apr 2007 Banks to embrace total financial inclusion concept
165 Relief to exporters in FY09 to continue as required 288 PSU bank branches to be opened in backward areas by Mar
166 To develop handloom cluster at Varanasi, Shivsagar Will work with RBI for temporary steps to moderate inflow
167 Apr-Dec merchandise export growth 21.8% 256 new bank branches opened in minority districts
168 Merchandise exports to fall short of target 75-79% of farm lending has come from rural, small banks
169 3.40 bln rupees for weavers insurance scheme in FY09 75% of farm credit by scheduled commercial banks
170 Interest spend on MSS is subsidy to export sector 256 PSU bank branches opened in 2007
171 Govt sensitive to needs of merchandise export sector 288 more PSU bank branches to be set up by Mar
172 To create risk capital fund in SIDBI
173 CORE SECTOR Micro, small, medium cos continue to be priority
174 To give 129.66 bln rupee to National highway plan FY09 Fund for TUFS up to 10.9 bln rupees vs 9 bln rupees
175 NHDP outlay upped to 129.66 bln rupees from 108.67 bln Banks, RRBs to add 250 accounts/yr per rural branch
176 96.4% roads completed in Golden Quadrilateral "Measured steps" to continue in financial sector reforms
177 NELP-7 to attract $3.5 bln-$8.0 bln investments SIDBI cuts SSIs annual services fees to 0.5% from 0.75%
178 $3.5 bln-$8.0 bln needed for oil exploration blocks Risk capital fund for micro, small, medium cos under SIDBI
179 To introduce more reform in coal, electricity sectors To ask states to help develop national securities mkt
180 Coal regulator to be established PAN requirement extended to all financial mkts
181 300 km roads to be completed FY09 under national plan PAN sole identification number in securities market
182 Plans national fund for power transmission, distribution There is no seamless national market for securities
183 4.5 bln rupees allocated for textile parks FY09 Differences in duties, levies hampering securities mkt
184 All 30 integrated textile parks approved PSU bks to give DRI scheme home loans at 4% interest rate
185 Integrated textile park scheme to continue in 11th Plan
186 750 mln rupees for common service centres HEALTH
187 180-km roads completed in FY08, 300 km target FY09 Health allocation up 20%
188 250 clusters for handloom being developed FY09 allocation for AIDS programme 9.9 bln rupees
189 Provision for integrated textile parks 4.5 bln rupees FY09 polio eradication drive allocation 10.42 bln rupees
190 1.57 mln houses to be built by March Rural health plan budget aid upped to 120.50 bln rupees
191 4.1 mln houses built until Dec under rural housing plan 323 district hospitals taken up for upgrade in FY09
192 Sop for housing for poor 35,000 rupees/head from Apr Trained 462,000 personnel in National Rural Health plan
193 165.34 bln rupees allocation for health sector in FY09
194 INVESTMENT, SAVINGS
195 FDI inflow seen at $12.7 bln in FY08 MISCELLANEOUS
196 FII inflow seen at $18 bln in FY08 6th pay commission to submit report by Mar 31
197 Policy is to encourage all investment - local, foreign Concerned about rate of attrition in defence services
198 FY08 investment rate estimated 36.3% of GDP Permanent institutional mechanism to study climate change
199 "Unmistakeable boom of investment" since FY06 Fund worth 6.24 bln rupees in FY09 for Commonwealth Games
200 FY08 savings rate estimated 35.8% of GDP 750 mln rupees to Indian Council of Cultural Relations
201 FY08 savings estimated 35.8% of GDP Allocates funds for special tiger protection force
202 500 mln rupees for national tiger conservation project
203 EDUCATION
204 Education allocation up 20%
205 India has opportunity to become "knowledge society"
206 To set up 2 architecture schools at Bhopal, Vijaywada FY09
207 New IIT in Andhra, Bihar, Rajasthan
208 New central universities in each of uncovered states
209 16 central universities to be set up in FY09
210 16 new central universities in FY09
211 800 mln rupees for Balika Vidyalaya hostels upgrade
212 FY09 allocation for secondary education 45.54 bln rupees
213 1 bln rupees to IT ministry to link knowledge institutes
214 Deccan college in Pune to get 50 mln rupees grant
215 850 mln rupees to new scholarship for scientific research
216 454.5 mln rupees for Madrasa education FY09
217 600 mln rupees to up corpus of Maulana Azad Foundation
218 1 bln rupees for IT ministry to set up knowledge bank
219 Student reservation to continue for SC, ST, minorities
220 Spend on children's schemes FY09 over 330 bln rupees
221 72 bln rupees for ministry for woman, child development
222 162.02 bln rupees allotted for 30% women-specific plans
223 114.60 bln rupees for 100% women specific programme
224 To allot 72 bln rupee for ministry of women, children FY09
225 7.5 bln rupees for upgrade of ITIs in FY09
226 440 mln rupees for Sainik School infrastructure
227 1 bln rupees each for DU, University of Mysore
228 1 bln rupees for Mahatma Phule Vidyapeth

 

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