Financial Advisor: Union Budget 2015-16

Tuesday, March 3, 2015

Union Budget 2015-16: An Overview

Union Budget 2015-16: An Overview and Analysis

An Overview on Budget 2015-16:

1. GDP growth estimated between 8.0 – 8.5%.

2. Fiscal deficit target relaxed to 3.9% of GDP in FY 2015-16 with increased focused on public investment in infrastructure and also proposed to fiscal deficit target 3% within 3 financial years.

3. Net market borrowing to be Rs 4.56 lakh crores.

4. No change in personal income tax slab and rate of tax for companies in respect of income earned in the financial year 2015-16.

5. Proposal to reduce corporate tax from 30% to 25% over next 4 years, starting from next financial year

6. Wealth tax abolished, additional surcharge 2% imposed on individuals having income more than Rs 1 crores.

7. Excise duty on cigarettes is being increased by 15% to 25%.

8. Service tax is being increased from 12% plus education cess to 14%.

9. Online and mobile advertising, radio taxis or radio cabs, services provided byair-conditioned contract carriages are now under service tax.

10.Total subsidies limited at 1.7% of GDP in FY16 against 2.1% of GDP in FY15 due to fall in fuel subsidies.

Banking and Financial services:

Announcement of autonomous bank Board Bureau and Holding company structure for PSU banks in 2015-16 is positive for PSU banks in long term. Reduce in corporate tax is positive for banking and financial services companies as most of them pay full tax rates. Overall budget impact is positive.

Oil & Gas Sector:

The impact of budget on this sector is neutral. The subsidy for FY16 is 30,000 crore marginally negative for oil companies. Focus on DBT (Direct Benefit Transfer) to curb subsidy leakages is positive for entire sector.

Infrastructure / Capital Goods Sector:

Road development allocation has been increased to 85,565 Cr(this budget) from 37,845 Cr(last budget) in this budget. NHAI target has to complete 8,500 KM road development. It is positive for all road developers. Infra investment trusts to be set up to securitizes infra project assets. Announcement of National Investment and Infrastructure Fund (NIIF) and infuse Rs 20,000 Cr every year in this fund has been positive for all infra companies.

Power Sector:

Announcement of 5 new Ultra Mega Power Projects of 4000 MW, in the plug and pay mode is positive for new investments in this sector. Focus on renewable energy by increasing the capacity is positive for long term.

FMCG Sector:

Increase in service tax and from 12.36% to 14% can hit the consumer demand and will impact negative for this sector.

Retail Sector:

Excise duty on leather footwear having more than Rs 1000 is being reduced to 6% from 12%. It is positive for footwear companies. Gold Monetisation Scheme is positive for jewellers and consumer both.

Travel Sector:

Facility of Visa on arrival to be extended from 43 countries to 150 countries is positive for tourism economy. Development in heritage sites in India is also positive for this sector.

The budget has been positive for agriculture sector, logistic sector, real estate. Housing for all is big positive for housing development companies. For cement and metal sector this budget has been neutral.

While the budget cleared most of the issues related to FII, it failed to meet general expectations about reduction of MAT in SEZ, reduction in STT and CTT and reduction of custom duty on gold. Increase in service tax may discourage the consumption. The revival of investment in near term is limited but the good result will come in next 3-4 years not in immediate future.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Tuesday, February 24, 2015

Expectation from UNION BUDGET 2015-16

Expectation from Coming Union Budget for 2015-16

Everyone in India is waiting for 28 February. Last year in May 2015, modi government came in full majority with great expectation of citizen. People wanted change and that is the main reason behind that spectacular electoral victory. In July 2015 this government had passed the budget but that budget was not reflecting the government’s intention truly. Now after completing 9 months the government is ready with its full budget. Not only the people of India are waiting for this event but also foreign media also looking it very carefully.

Prime minister is very well known for hard working and fully focused man towards goal. Overall feeling across the country since the formation of the government has been that the government is working for only big industries and the expectation of poor and middle class have been ignored by this government. Recently the Delhi election result is showing the emotions of nation. This budget of Modi government is an opportunity for showing the path of “ACHHE DIN” means inclusive growth of overall.

Everyone have some expectation from the budget. I am not an exception and I have also some expectation. Agriculture and rural development should get proper attention. The fact is that our agriculture production has declined and there are need to take some steps for farmers and rural families.

The funding for social sector schemes like public health, education, senior citizens, handicapped people should not be cut. Potable drinking water for all should also get special attention in this budget. Rain water harvesting should be encouraged. With highly pitched ‘Make in India’ program there are need to develop a self-sustaining economy that can fulfill the job thrust of our country. Within high targeted GDP figure there are need to develop SMEs and skill development program. Corruption has been the root cause of all backwardness in this country and there should be scheme implementation should be in more transparent manner. There should be no scope of corruption. It means zero tolerance of corruption cases across the country without any partiality.

Inclusive growth means SABKA VIKAS. 70% rural and village BHARAT should not be ignored in the name of technology, FDI and industrial growth. Without growing agriculture one cannot think about strong India. There are many other sector like police modernization, defense sector, e-governance and to ensure the delivery of public service need proper budgetary allocation. There should be increase in tax-exemptions limit with simple tax structure.

Overall I expect this budget will have good provision for the development of agriculture, job creation, health reform, education, security and infra sector. The budget should be come with intention of inclusive growth as they promised in election SABKA SAATH, SABKA VIKAS.