Budget 2011 Highlights5

• Gross tax receipts seen up 24% yoy to Rs9.32lakh crores
• Non-tax revenue seen at Rs1.25lakh cr in FY2012
• Fiscal deficit down from 5.5% to 5.1%. Target of 4.6% for FY2012 - positive for markets
• FY2013 fiscal deficit target of 4.1%
• Increase in income-tax exemption limit from Rs1,60,000 to Rs1,80,000
• Senior citizen age decreased from 65 to 60. Exemption limit increased to Rs2,50,000 from Rs2,40,000
• Surcharge on companies reduced from 7.5% to 5% - positive for tax-paying companies
• Investment link deduction for fertiliser companies, Positive for all fertiliser companies
• Branded Jewellery to attract additional 1% excise duty, Negative for Titan
• Micro-irrigation equipment to have lower excise of 5% from 7.4%, Positive for Jain Irrigation
• Central excise duty retained at 10%, Positive for Automobile sector
• Export duty on iron ore, Current - 15% on lumps and 5% on fines, Proposed - 20% on both lumps and fines, Negative for exporting miners - Sesa Goa and NMDC
• Change in excise with AD valorem duty, Negative for South based cement players - India Cement and Madras Cement
• Excise duty exemption on equipments for UMPP - Positive for capital goods sector
• No excise duty on equipment (UMPP), Positive for private players

Budget 2011 Highlights4

• Higher production land allocated for Palm oil production - positive for HUL & Godrej Consumer; nutri seeds and fodder production - positive to bring down raw material inflation for FMCG companies
• Fertilizer capex given status of infrastructure - positive for existing fertilizer companies
• Plan to introduce Food Security Bill in FY2012
• Allocation to Bharat Nirman increased to Rs58,000cr, an increase of 20.8% over FY2011
• Increased Infrastructure fund to Rs214,000cr up by 23.3%, Positive for Cement Sector
• Increase in wages under NREGA - positive for FMCG companies as it results in higher spending power for rural consumers
• Increased allocation for Accelerated Irrigation Programme - positive for companies providing irrigation solution viz. Jain Irrigation, EPC
• Education sector allocated Rs 52,057cr for FY2012 - to boost business opportunities for IT-education companies

Budget 2011 Highlights3

• To give 3% interest subsidy to farmers in FY2012 from 2% in FY2011
• Rashtriya Kisan Vikas Yojana allocation increased from Rs6,755cr to Rs7,860cr. Allocation to green revolution in Eastern India increased by Rs400cr. Additional Rs300cr to promote pulses, oilseed and vegetable cultiation each respectively.
• Positive for agri input companies like United Phosphorus.
• Rs2.14 lakh crore allocation for Infra sector - increase of 23.3% over FY2011
• NABARD to receive additional Rs10,000cr for rural credit
• Cold storage now eligible for viability gap funding and receives infrastructure status
• Rs2.14lakh cr provided for infra development which accounts for 48.5% of the total plan expenditure, an increase of 23.3% over last year. Higher than expectation of Rs2.04lakh cr. Positive for infra sector
• Infra status given for cold storage chains. Positive for companies like Gateway Distriparks and Container Corp.

Budget 2011 Highlights2

• Rs6000cr allocation for improving tier-I CAR of PSU banks - positive for PSU banks
• Increase in Rural Infrastructure fund from Rs16,000cr to Rs18,000cr
• SIDBI to receive additional Rs5,000cr shortfall from banks
• SIDBI to receive additional Rs5,000cr shortfall from banks that missed priority sector lending norms, Positive for irrigation companies and farmers
• Housing sector - 1% on housing loan subvention, +ve for cement sector
• Priority sector home loan limit hiked to Rs25lakhs from Rs20lakhs
• Increased housing finance for rural areas, Positive for cement sector
• Interest subvention of 1% on housing loan increased from Rs10lakh to Rs15lakh - postive for mid-income housing - benefit to developers like HDIL, Godrej Properties
• Increased investment in Infra Corporate Bonds to FII - postive for infra, cement and banks
• Credit flow to farmer increased from Rs3.75lakh crores to Rs4.75lakh crores for FY2012. Positive for agri-input companies (United Phosphorus)

Budget 2011 Highlights

• See FY2011 farm growth at 5.4%, GDP growth at 8.6%-FM
• FY2011 industrial growth seen at 8.1% and Services at 9.6%
• GDP growth seen at 8.75-9.25% in FY2012
• Preparation for GST rollout in final stages-FM
• Mulling nutrient-based subsidy policy for urea-FM
• Domestic Mutal Funds to have access to foreign investors, positive for ICICI Bank and HDFC Bank
• Govt plans to move towards direct cash transfer of subsidies to people. Expect systems to be ready by Mar 12
• Expect to introduce constitutional bill for introduction of GST Bill. Positive for retail sector, top pick- Pantaloon Retail
• FY2012 divestment target at Rs40,000cr
• FII investment in corporate bonds hiked to US $ 40Bn - Positive for Banks