Interim Budget 2014- Analysis

With the sliding growth percentage of world as well as our economy coupled with high inflation, falling rupee, widening external deficit and diminishing business confidence the last few years have been painful for the Indian economy.
Finance Minister P. Chidambaram presented his first-ever interim budget, for the fiscal year 2014-15, to cover expenditure until a new government is formed after elections in May.
The Harvard educated Chettiar was optimistic on the Indian Economy pointing out that resurgence in exports, global economic revival and moderation in inflation point to better outlook for the economy in 2014-15.
While industry expectations were limited from the interim budget, the emphasis laid on turning around the growth trajectory and reviving the manufacturing sector in particular were well received.
Going forward the government has to focus on fighting inflation, strengthening fiscal balances, boosting infrastructure and improving agricultural growth.

Following are the key highlights:-

Economic Indicators
The fiscal deficit for 2013-14 contained at 4.6 percent of GDP
Foreign exchange reserve to grow by USD 15 billion in this Financial Year
WPI inflation down to 5.05 percent and core inflation down to 3.0 percent in January 2014
Growth in GDP for the whole year has been estimated at 4.9 percent
Mixed performance- agriculture improved, industry and services recorded jaded growth
Political uncertainty, policy paralysis and high interest cost have adversely impacted investment and consumption
 
Direct Tax
With the domestic economic constraints, taxation slabs and rates have been kept unchanged.

 

Indirect Tax

Reduction in excise duty rates up to 30^th June 2014 ranging from 2 percent to 6 percent across automobiles, television sets, refrigerators, washing machines, personal computers & mobile handsets.While the period of relief is small, this move could provide some reprieve to the industries.
To conclude, positive developments during last two quarters indicate an improved economic performance going forward, with reduced inflation and deficits (trade, current and fiscal) and improved GDP growth. Some measures, such as reduction in excise duties, have been announced to boost selected industries. Besides, several infrastructure projects are also underway, which are likely to provide stimulus to the economy.
Globally, things are encouraging and a stable government at the centre will lift business confidence among investors and also boost external demand for India.

BAND BAJA & BANSAL KA BUDGET

With a lot of mantris within & outside UPA, slamming the Government, the maiden budget of P.K.Bansal was surrounded by a lot of band bajaa!!!

 "A bird sitting on the tree has no fear of falling ... not because the branch is solid but because it has faith in its wings."

Mantri ji at his poetic best, speaks as if India has become THE GOLDEN EAGLE from THE GOLDEN SPARROW (SONE KI CHIDIYA).

Rail Budget 2013 has been a soft budget and has failed to make a positive impact. All that one can see is promises…and…PROMISES ARE MEANT TO BE BROKEN.

As @PMOIndia tweets, it’s a “Reformist & Realistic” budget….reforms are promised and realistic it is, as it’s been framed keeping in mind the 2014 elections.

With passenger fares been increased last month only, Mantri ji has been kind in not increasing them again in the budget.

Impact on Junta Janardan

The rail minister has promised to introduce customer friendly technological initiatives:-

·         Free Wi-Fi to be provided on some trains

·         E-ticketing through mobile phones

·         SMS alerts for passengers providing updates on reservation status

·         Next generation e-ticketing system by end of 2013 to be rolled out capable of handling 7200 tickets per minute against 2000 now & 1.20 lakh users simultaneously against 40,000 now.

·         Passengers will now be able to book ticket from midnight 12.30am to 11.30pm.

Some other initiatives are:-

·         As many as 106 new trains introduced

·         179 escalators and 400 lifts at A 1 and other select stations

·         Provision of announcement facility and electronic display boards in trains

·         Third party audit and tie up with food testing laboratories for food quality control; ISO certified state-of-the-art base kitchens to be set up in railway premises.

·         Anubhiti coaches to be introduced with excellent tech-driven amenities.

·         Railways plan Rs.2,000 crore fund for land and station development.

·         Executive lounges planned in Bilaspur and Nagpur.

·         Rail and bus tickets to be tied up with Mata Vaishno Devi Shrine Board.

·         72 new local trains in Mumbai, 18 in Kolkata.

·         More coaches for women, better security.

But where the passengers will have to shell out more will be in services such as tatkal, clerk charges and cancellation charges. The enhanced reservation fee has been scrapped.

Industry Impact
The budget proposes to hike freight rates for 12 commodities, including steel, iron ore and coal, in the range of 5.78-5.81 per cent from April.  Another added feature will be the twice a year review of freight rates which now will be linked to changes in fuel cost.

Increase in freight rates would add on to the burden on price rise at a time when there is a general slow-down in the economy and the common man is already suffering.

STEEL: Freight rates on both, domestic movement of iron ore and on finished steel, have been raised by 5.8% which will push the steel rates upwards.

The Minister has promised to invest Rs.800 crore for improving iron ore mines connectivity providing some hope to the industry.

COAL: The proposed increase in coal freight rate by 5.7 per cent will have no effect on the coal sector as the increase will borne by power generating, cement & steel companies,  which may lead to a marginal increase respective tariffs & prices.

Nobel Initiatives

·         Winners of Rajiv Gandhi Khel Ratna and Dhyan Chand awards to get free first class passes

·         Complementary passes of freedom fighters to be renewed every three years instead of annually

Green Initiatives

·         Railway energy management company to be set up to harness solar and wind energy

·         1,000 crossings to be energised by solar power

·         Progressive extension of bio-toilets on trains.

International paw marks

Railways set to enter 1 billion ton freight club of China, Russia and US.

Ultimately it was a choice between tightening the belt or loosening the pants and Mantri ji has decided to tighten the belt.

All I can say is JAHAAPANA TUSSI GREAT HO TOFU . . . . . . . .

Dream without limits, think without limits

ELATED

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Fuzzwords

Fuzzwords

2012 has been an action-packed year for the business cosmos. Here’s a look at the most trendy Finance words in 2012.

Fiscal Cliff- Coined by the US Federal Reserve Chairman Ben Bernanke, fiscal cliff refers to the economic scenario that the world's largest economy faces at the start of 2013 due to proposed spending cuts and tax hikes.

LIBOR- hogged the limelight after a scandal broke out about manipulation of the London Interbank Offered Rate (a benchmark reference rate used international financial markets) by traders and brokers.

GAAR(General Anti Avoidance Rules)- terrorized the foreign investors and was widely criticized by Industry bodies and associations.

100 crore club- With 9 movies crossing the monstrous mark at the box office, this was the year of profits for Bollywood.

Companies bill 2012- Was passed in the Lok Sabha, which aims to revise & modify the archaic Companies Act.

Direct Cash Transfer- would help millions of students, the elderly and women community workers in villages to receive their monthly honoraria in time. The cash transfer scheme is an initiative to cut down leakages and corruption in the implementation of various social sector schemes.

FDI in multi brand retail-51% FDI in multi brand retail in all products was permitted thus facilitating entry of global biggies like Walmart, IKEA etc.

Coal Gate- No this one is not the “Number 1 recommended by dentists” but it’s the “number 1 scam” with the official loss pegged at Rs 1.86 lakh crore by C&AG.