Union Budget

2011-12 (Apr-Mar)

- NewsWire18 Ltd.

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Dear Sir/Madam,

It gives us great pleasure to present you ready reckoner of “Union Budget for 2011-12 (Apr-Mar)
presented by Finance Minister Pranab Mukherjee in Lok Sabha today”.
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 NW18: Highlights of Union Budget for 2011-12
NewsWire18, Monday, Feb 28

NEW DELHI - Highlights of the Union Budget for 2011-12 (Apr-Mar) presented by Finance Minister Pranab
Mukherjee in Lok Sabha today:

GROWTH

* Indian economy seen growing 9% in 2011-12, +/- 25 basis points

* See FY11 GDP growth at 8.6%
* FY11 services sector growth seen 9.6%
* FY11 industrial sector growth seen 8.1%
* FY11 farm growth seen 5.4%
* FY11 fiscal consolidation impressive
* Stronger fiscal consolidation needed
* FY11 growth swift, broad-based
* India economy back to pre-crisis growth trajectory
* Services sector continues to grow near double digits
* Do not see resources as a big problem, at least in short term
* Implementation gap a key challenge
* "Much still needs to be done", especially in rural India
* Need to ensure sustained private investment
* Economy resilient to external shocks
* Auto sector growth seen 30% in FY11
* To up manufacturing share in GDP to 25% in 10 years vs 16%
* Apr-Jan imports $273.6 bln, up 17.6%
.
INFLATION

* FY12 average inflation seen at 5%

* Food inflation 9.3% in January but still remains a concern
* Food inflation 20.2% in February 2010
* See average inflation to lower in FY11
* Must address structural concerns on inflation management
* Expect RBI measures to moderate inflation in coming months
* High food prices reveal shortcoming in distribution
* Wholesale and retail price difference not acceptable
* Consumers denied fall in prices usually seen in winter
* Onion, maize, poultry prices high in second half of FY10
* Inflation persists in two distinctive areas
.

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.
FISCAL HEALTH

* FY12 fiscal deficit seen at 4.6% of GDP

* FY12 fiscal deficit seen at 4.12 trln rupees
* FY11 fiscal deficit revised to 5.1% of GDP
* FY12 revenue deficit seen at 1.8% of GDP
* FY11 revenue deficit seen at 2.3% of GDP
* Fiscal deficit target 4.1% of GDP in FY13
* Fiscal deficit target 3.5% of GDP in FY14
* Aim fiscal deficit of 3% of state GDP by FY14
* Current account deficit around FY09 levels is a concern
* Current account gap a concern due to composition of FX flow
* Counter-cyclical fiscal steps best bet versus external shocks
* To borrow 100 bln rupees in March
* FY12 net market borrow target 3.43 trln rupees
* FY12 MSS borrowing 200 bln rupees
* FY12 cash drawdown 200 bln rupees
* FY12 short-term borrowing 150 bln rupees
* FY12 net market borrowing 3.43 trln rupees
* FY12 gross market borrowing 4.17 trln rupees
* FY11 gross market borrowing revised to 4.47 trln rupees
* In addition, 150 bln rupee to be financed via T-bills FY12
* FY12 revenue from telecom licence fee seen 296 bln rupees
* Concession to cellphone equipment manufacturing extended to March 2012
* FY12 dividend from banks, RBI seen 191 bln rupees
* FY12 dividend from PSUs seen 235 bln rupees
* MSS ceiling for FY12 at 500 bln rupees

FY12 OUTLAYS

* Total spend 12.5 trln rupees

* Non-plan spend 8.16 trln rupees, up 10.9%
* Plan spend 4.41 trln rupees, up 18.3%
* 1.47 trln rupees grants in aid
* To provide 10 bln rupees for justice department
* To provide 1.64 trln rupees for defence
* To provide 691.99 bln rupees for defence capex
* To provide 98.9 bln rupee for backward region grant fund
* To provide 1 bln rupee for Jammu, Ladakh projects
* To give 80 bln rupees for J&K development needs
* To provide 80 bln rupee for northeast, special states
* To provide 2 bln rupee for clean energy fund
* To provide 2 bln rupees for cleanup of important lakes, rivers

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* To provide 520.57 bln rupees for education sector
* Allocation for scheduled tribes hiked to 2.44 bln rupee
* Allocation for Bharat Nirman allocation up at 580 bln rupees
* Allocation for social sector 1.61 trln rupees
* Additional for National Skill Development Fund 5 bln rupee
* To give 210 bln rupee for literacy mission Sarva Shiksha Abhiyan, up 40%
* Allocation for health 267.60 bln rupees, up 20%
* To give PSU banks 201.57 bln rupee for Tier-I capital
* To give 60 bln rupee to help PSU banks' Tier-II capital
* To give 3 bln rupee to states to rollout e-stamping in 3 years
.
INDIRECT TAX

* Peak rate for customs duty unchanged in FY12

* Long-term commitment to cut customs duty to ASEAN levels
* Base rate on excise duty raised to 5% from 4%
* Central excise duty rate unchanged at 10% FY12
* To levy central excise duty of 10% on branded garments
* Basic food, fuel to be exempted from Central excise duty
* 1% central excise duty on 130 new items
* Service tax raised on international air travel by 250 rupees
* Service tax raised on local air travel by 50 rupees
* FY12 service tax standard rate unchanged at 10%
* Service tax mop-up pegged 820 bln rupee FY12
* Central excise duty mop-up pegged 1.64 trln rupee FY12
* Customs duty mop-up pegged 1.51 trln rupee FY12
* Corporation tax mop-up pegged 3.6 trln rupee FY12
* Indirect tax revenue gain seen 113 bln rupees FY12
* To lose 115 bln rupee from direct tax proposals FY12
* Revenue gain from service tax proposals seen 40 bln rupee FY12
* Net revenue gain of 40 bln rupees from service tax changes
* No tax on services by individuals to other individuals
* Service tax to be levied on investment services by insurance cos
* FY12 service Tax levied on diagnostic services
* Air-conditioned restaurants serving liquor to be brought under service tax net
* Excise duty exemption for equipment used in warehouses
* To levy service tax on hotel stay costing over 1,000 rupees/day
* To levy services tax on some air-conditioned hospitals
* 1% excise duty on diapers, sanitary napkins
* Customs duty on raw pistachio cut to 10%
* Some imported film colour rolls exempted from excise duty
* No excise duty on select film rolls
* Ship owners allowed duty-free spare parts import
* Crude palm oil used in soap fully exempt from customs duty

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* Pre-tanning chemicals for leather industry to be exempt from customs duty
* Enzyme-based chemicals in tanning to be custom duty exempt
* Bio-waste road making machines to be exempt from custom duty
* No excise duty on equipment for ultra mega power plants
* 5% excise duty on LED, no specified duty
* Some hybrid vehicles parts to get custom duty exemption
* Fuel cells to get concessional excise duty FY12
* Cut customs duty on petcoke, gypsum to 2.5%
* To replace excise with ad valorem duties for cement FY12
* Cash dispensers exempted from basic customs duty
* Withdraws export duty on iron ore pellets
* Cut basic customs duty on farm machinery to 2.5% from 5%
* Levies 20% ad valorem export duty on iron ore
* To cut import duty on inkjet printer parts to 5%
* Cut customs duty on yarn to 5% from 7.5%
* Aim to encourage domestic value addition in manufacturing
* Stainless steel scrap exempt from basic customs duty
* Cut customs duty on micro irrigation equipment to 5%
* Reduce basic customs duty on raw silk to 5%
* Customs duty micro-irrigation equipment cut to 5% FY12 from 7.4%
* Full excise exemption for refrigeration equipment for cold chain companies
* Net revenue gain from indirect tax proposals 73 bln rupees in FY12
* Customs on tunnel-boring machines for highways scrapped
* Bio-asphalt for roads to be exempt from customs duty
* Excise on local power equipment to be in line with customs
* 2.5% customs duty on planes for non-scheduled ops
* Customs duty on mineral gypsum cut to 2.5% from 5%
* Crude palm stearin for soaps exempt from customs duty
* Excise duty on kits to convert to hybrid vehicle cut to 5%
* Customs duty on petroleum coke cut to 2.5% from 5%
* De-oiled rice bran cake exempted from import duty
* 5% import duty on parts for DVD writer combo drive
* Customs duty on carbon black feedstock cut to 2.5% vs 5%
* Import duty of 5% on ink-jet and laser jet printers
* Custom duty on lactose for homeopathic drug cut to 10%
* Customs duty on solar lamps, lanterns cut to 5% from 10%
* Endo-vascular stents fully exempted from customs duty
* Custom duty on specified gems, jewellery machine cut to 5%
* Customs duty on rayon grade wood pulp cut to 2.5% from 5%
* Custom duty on nylon chips, fibre, yarn cut to 7.5% vs 10%
* 300 rupee/10 gm excise on gold bar from copper smelters
* Customs duty on caprolactum cut to 7.5% from 10%
* Custom duty on poly tetra methylene ether glycol cut to 5%
* 1,500 rupee/kg excise on silver made during gold refining

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* Customs duty on acrylonitrile cut to 2.5% from 5%
* Exempts cinematographic films from excise duty
* Levies 1% excise duty on branded jewellery
* Cotton waste exempted from customs duty
* Cuts excise duty on grease-proof paper to 5%
* Some parts of sewing machines fully exempt from excise
* Extends 1% excise concession to water filters
* Pre-assembled engine, gear box excluded from CKD ambit
* Sugar, textile item exempt from Additional excise schedule
* Concessional 10% excise duty on factory-built ambulances
* Extends 10% excise duty on ambulances
* 10% duty plus 200 rupee/tn on cement bags from clinkers
* 10% duty plus 160 rupee/tn on over 190-rupee cement bags
* Concessional 10% excide duty on factory built ambulances
* 10% duty plus 80 rupee/tn on up to 190-rupee cement bags
* New Tax rates applicable to mini cement plants
* 10% duty plus 30 rupee/tn on over 190-rupee cement bag
* Levies 10% duty on cement bags not over 190 rupee/50 kg
* Excise duty on specified textile machinery halved to 5%
* 150 rupee/10 gm CVD on gold dore bars of upto 80% purity
* Customs duty on ferro nickel cut to 2.5% from 5%
* 10% export duty imposed on de-oil rice bran oil cake
.
DIRECT TAX

* Revenue loss from direct tax at 115 bln rupees

* MAT raised to 18.5%
* Special Economic Zones to come under MAT
* Cut surcharge on domestic cos to 5% from 7.5%
* 80 yrs and above individuals tax exempt upto 500,000 rupee
* I-T exemption for senior citizens 250,000 rupees
* Senior citizen tax limit now for 60 year olds
* Up tax exemption to 180,000 rupees FY12
* Non-tax receipts estimated at 1.25 trln rupees in FY12
* Net tax to Centre 6.64 trln rupees in FY12
* FY12 non tax revenue 1.25 trln rupees
* FY12 gross tax receipts 9.32 trln rupees, up 24.9%
* To introduce simpler returns form for presumptive tax
* No Tax returns for some salaried people soon
* Two more Central processing centres for income tax FY12
* Invest-linked deduction for affordable housing projects
* Tax sop for 20,000 rupee invest in infra bond stays
* Low withholding tax of 5% for notified infra funds
* I-T deduction for infra bond invest extended by 1 year

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* Foreign dividend tax rate cut to 15% for Indian cos
TAX REFORMS

* Direct Taxes Code to be effective Apr 1, 2012

* Rollout of Direct Tax Code to be effective Apr 1, 2012
* Taking steps to simplify tax, tariff procedures
* Rollout of Direct Tax Code, GST to mark a watershed
* Will introduce GST Bill in current session
* Preparations for GST rollout in final stages
* GST rollout to be key factor in econ development
* NSDL chosen tech partner for GST Implementation
* GST dialogue with states has made considerable progress
* Scheme proposed for quicker refund of service Tax
* To introduce self-assessment in customs for fast clearance
* PSUs to issue tax-free bonds worth 300 bln rupee FY12
* Proposals of natl resources pricing panel likely in 3 mos
* To give Rail 100 bln rupee for tax-free infra bonds FY12
* To give IRFC 100 bln rupee for tax-free infra bonds FY12
* To give NHAI 100 bln rupee for tax-free infra bonds FY12
* To allow 300 bln rupees for tax-free infra bonds FY12
* Not to audit individuals with up to 6 mln rupee turnover

FARM, FOOD

* National Food Security Bill to be tabled this year

* Farm credit flow target 4.75 trln rupees FY12
* Propose to promote organic farming methods
* Have to sustain farm productivity in long term
* To give 3 bln rupee to up output of nutri-cereals
* 3 bln rupees for animal-based protein production
* 3 bln rupee to bring 60,000 ha under palm oil plantation
* To launch natl protein mission with 3 bln rupee corpus
* 3 bln rupees for higher production of millets
* To provide 3 bln rupees to raise vegetable production
* 4 bln rupees to eastern states for green revolution
* See 16.5 mln tn pulses output this year
* To give 3 bln rupees to promote pulses production, mkting
* To give 3 bln rupee to 6,000 villages for pulses farming
* To set up 5 bln rupee women self help development fund
* Farm development plan allocation hiked to 78.6 bln rupee
* Removing bottlenecks in fruits, vegetables, poultry supply
* Mulling nutrient-based subsidy policy for urea
* Farm goods storage capacity needs augmentation
* Approval to set up 15 more mega food parks in FY12

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* To create 4 mln tn more food grain storage by Mar 2012
* Food inflation exposes flaw in supply-chain management
* States need to review, revamp farm produce marketing acts
* Cold storage investment to get viability gap funding
* Need to improve supply of agriculture to meet demand
.
RURAL, SOCIAL SECTOR

* To set up Mortgage Risk Guarantee Fund for rural housing

* 5 bln rupees capital infusion for regional rural bks FY12
* 100 bln rupee to NABARD for short-term rural credit fund
* To infuse 30 bln rupees in NABARD in phased manner
* 3% interest subvention to farmers repaying loans on time
* Interest rate subvention for farm loans extended to FY12
* Rural housing fund corpus hiked to 30 bln rupees vs 20 bln
* NABARD to get 30 bln rupees to help handloom weavers FY12
* Over 2,000 population villages to have banks
* Significantly scaled up flow of resources in rural areas
* Rural infra development fund raised to 180 bln rupee FY12
* Rural broadband connectivity to all villages in 3 years
* 2.2 mln Anganwadi workers to benefit from pay hike
* Anganwadi workers wages doubled to 3,000 rupee/mo
* Anganwadi helpers wage doubled to 1,500 rupees/mo
* Banks to cover 20,000 villages for opening accts FY11
* RIDF corpus increased to create warehousing capacity
* RIDF corpus 180 bln rupees FY12 vs 160 bln FY11
* Cut BPL pension scheme qualify age to 60 yrs from 65 yrs
* Pension for over 80-yr-olds hiked to 500 rupees/mo
* To give 1 mln unique IDs/day from Oct
* To set up self help development group fund of 5 bln rupee
* Minorities' loan target up at 15% of priority loan for bks
* Mulling framework to protect interest of small borrowers
* Old age pension plan eligibility age cut to 60 yr vs 65 yr
* NREGA wage rate to be indexed to consumer price index
* Unorganised workers to benefit from health insurance plan
* Scholarship scheme to benefit 4 mln SC, ST students
* Scholarship plan for SC/ST students in Class IX, X
* Govt contribution in old age pension raised to 5 yr from 3
* To enumerate caste in separate census beginning June
.

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INFRASTRUCTURE

* Infra sector FII cap for bonds with 5 yr residual maturity

* FII cap in infra corp bonds hiked to $25 bln; total corp bond limit $40 bln
* Fertiliser sector investment to be given infra status
* 50 bln rupees for takeout financing scheme
* Takeout financing plan implemented in 7 infra projects
* To give comprehensive pvt-public partner policy for infra
* IIFCL FY12 disbursement aim 250 bln rupee vs 200 bln FY11
* PPP model for creating public infrastructure successful
* Allocation of 2.14 trln rupees for infra sector FY12
* Farm sector cos to get invest deduction for capex
* Invest-linked deductions for fertiliser cos
.
SUBSIDY

* To move to direct transfer of fertiliser subsidy in phased way

* To move to direct transfer of cash subsidy on kerosene
* To move to direct transfer of oil subsidy in phased manner
* Aim direct cash subsidy for fertiliser, kerosene by Mar 2012
* There is large-scale diversion of subsidised kerosene oil
* Direct transfer of cash subsidy for poor
* To give 140 bln rupees more subsidy to oil cos
* FY11 fertiliser subsidy seen 550 bln rupees
* FY11 food subsidy seen 606 bln rupees
* FY11 petroleum subsidy seen 384 bln rupees
* FY12 petroleum subsidy seen 236 bln rupees
* FY12 food subsidy seen 605 bln rupees
* FY12 fertiliser subsidy seen 500 bln rupees
.
DIVESTMENT

* Govt to raise 400 bln rupees from divestment in FY12

* Intend to maintain divest momentum in FY12
* Broadbasing of central PSU ownership highly successful
* Rescheduled some divest plans this FY
.
MISCELLANEOUS

* To introduce public debt management Bill in FY11

* To bring bill to enable RBI to grant more banking licenses
* New companies Bill to be introduced in current session
* 1% interest subvention on home loan up to 1.5 mln rupee

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* Upped priority home loan limit to 2.5 mln rupee vs 2 mln
* See FY11 Budget transition for more transparent India
* To set up India microfin equity fund of 1 bln rupees
* To set up 7 new mega projects for leather FY12
* Implementing 5-point plan to tackle black money menace
* Finance ministry began study of unaccounted income
* Enforcement Directorate strength increased three-fold
* Aligarh Muslim University Murshidabad centre to get 500 mln rupees
* Aligarh Muslim University Kerala centre to get 500 mln rupees
* 2 bln rupee one time grant to IIT Kharagpur FY12
* Allocated 100 mln rupees to Delhi School of Economics
* National Knowledge Network to link 1,500 institutes by Mar 2012
* Some challenges need urgent attention in short term
* Corruption is a problem we have to fight collectively
* Hope states will reform their FRBM policy
* Need to seize opportunity to boost regulatory standards
* Reaching the end of a remarkable fiscal year
* To move insurance, pension, banking bills in Parliament
* 50 bln rupees to SIDBI for refinancing small firms FY12
* Need to revisit exact definition for financial budget concepts
* Central electronic registry to prevent loan scams
* New series of coins with Indian rupee symbol soon
* To amend the Indian Stamp Act

End

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 First Views on Union Budget 2011-12

NW18: First View: DBS Bank economist Suryanarayanan on FY12 Budget

MUMBAI - Ramya Suryanarayanan, economist, DBS Bank, on the Union Budget for 2011-12 (Apr-Mar), presented
in Lok Sabha by Finance Minister Pranab Mukherjee today.

The fiscal deficit and borrowing numbers are too optimistic. Chances are, these numbers may be higher than what
is being projected. The growth target also looks difficult to achieve.
The only good thing in the budget is the direct cash subsidy, but it is not very sure as to when it will be
implemented.

NW18: First View: SKS Microfinance CFO Dilli Raj on FY12 Budget

HYDERABAD - Dilli Raj, chief financial officer, SKS Microfinance Ltd, on the Union Budget for 2011-12 (Apr-
Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

In general, the Budget has recognised the need for improving rural credit by proposing to create a 1-bln-rupee
equity fund especially for microfinance sector and creating another 5-bln-rupee fund for rural and micro credit
groups.
Another major boost would be increasing the agriculture credit target to 4.75 trln rupees. This will enhance the
credit flow to the rural economy. Banks may use microfinance companies for part of this credit delivery.
The measures to control the fiscal deficit will boost the economy.
Overall, it is a growth-oriented budget.

NW18: First View: Emmsons International Advisor Narang on FY12 Budget

NEW DELHI - T.P.S. Narang, Advisor, Emmsons International Ltd on the Union Budget for 2011-12 (Apr-Mar),
presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

The government's aim to create 4 mln tn more food grain storage by Mar 2012 is a good development, but the
country is still substantially short of what is required.
The 4 mln tn foodgrain storage addition is grossly inadequate, as the Food Corp of India alone procures more than
4 mln tn foodgrain annually. To that extent the increase in grain storage isn't adequate.

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NW18: First View: FIMI's Secretary General R.K. Sharma on FY12 Budget

NEW DELHI - R.K. Sharma, secretary general of the Federation of Indian Mineral Industries on the Union Budget
for 2011-12 (Apr-Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

Hiking ad-valorem export duty to 20% on iron ore across categories will result in a fall in exports, which in turn
will cause a decline in domestic output. As fines and lumps are mined together, there will be lower availability of
the commodity, leading to a rise in prices in the domestic market.

NW18: First View: IVRCL Infrastructures CMD Sudhir Reddy on FY12 Budget

HYDERABAD - E. Sudhir Reddy, chairman and managing director, IVRCL Infrastructures & Projects Ltd, on the
Union Budget for 2011-12 (Apr-Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

Budget allocation of 2.14 trln rupees to infrastructure sector for 2011-12 is encouraging and increasing the
disbursement target of India Infrastructure Finance Co Ltd to 250 bln rupees from 200 bln rupees will
boost sector growth.
The finance minister should have given more focus on the public-private partnership model for creating public
infrastructure projects, since there are achievements and failures in that model in the last 4-5 years. Water is
an important area, and the budget has not said much on that.

NW18: First View: Goa mineral ore body secy Kalvampara on FY12 Budget

MUMBAI - Glenn Kalvampara, secretary, Goa Mineral Ore Exporters' Association, on the Union Budget for 2011-
12 (Apr-Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

Hike in iron ore export duty to 20% is the highest so far, since the time the duty was levied in 2007.
This move is going to slow down mining activity of iron ore fines in Goa, which may result in reduction in state
royalty, in turn dragging Goa's revenue.
The government has made no distinction between high grade and low grade iron ore and due to this, Goa, which
mainly produces and exports low grade iron ore, is definitely going to take a hit.

NW18: First View: India rice body President Setia on FY12 Budget

NEW DELHI - Vijay Setia, President, All India Rice Exporters' Association on the Union Budget for 2011-12 (Apr-
Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.
.
The most encouraging part of the Budget is that the government is going to implement Goods and Services Tax.
This will help eradicate the menace of black money from the agriculture sector and create a level-playing field for
agriculture industries.
The announcement to create more foodgrain storage is also welcome, looking at the loss of grains due to
insufficient storage. I think the traditional godowns should also be upgraded because heat and humidity in many
areas have an adverse impact on the quality.

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NW18: First View: Kotak Mahindra Mutual Fund CEO Kirkire on FY12 Budget
.
MUMBAI - Sandesh Kirkire, chief executive officer, Kotak Mahindra Mutual Fund, on the Union Budget for 2011-
12 (Apr-Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.
.
Foreign individual investors earlier could buy units of equity fund schemes through foreign institutional investors
route only. Now, they will be able to invest directly in equity fund schemes, which is very positive for
mutual fund industry.
Fiscal deficit target has also been cut to 4.6% of gross domestic product, which was lower-than-expectation. The
net government borrowings of 3.43 trln rupees is also very positive for the markets. I expect government bond
yields to stabilise at the current levels as the net government borrowing is also lower-than-expected.

NW18: First View: Tata Consultancy CFO Mahalingam on FY12 Budget

MUMBAI - S Mahalingam, Chief Financial Officer, Tata Consultancy Services Ltd on the Union Budget for 2011-12
(Apr-Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.
.
For the information technology sector, nothing much was expected and the finance minister's decision on not
extending STPI (Software Technology Park of India) tax incentive has already been taken care of by creating
infrastructure in SEZs.
Increasing MAT (minimum alternate tax) to 19.30%, including surcharge, is not worrisome for TCS but we thought
that it (MAT) would come down.
We are more interested in infrastructure spending increasing.
Tax on dividend from overseas subsidiaries being lowered to 15% is good for multinational companies.

NW18: First View: JSL Stainless Director Arvind Parakh on FY12 Budget

MUMBAI - Arvind Parakh, director (strategy & business development), JSL Stainless Ltd on the Union Budget for
2011-12 (Apr-Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.

The Budget announced key positive measures for the stainless steel sector which were much awaited. Completely
exempting stainless steel scrap from customs duty was a pleasant surprise.
Also, cut in customs duty on ferro-nickel to 2.5% from 5% is a welcome move as nickel prices have more than
doubled in the last one year, and are likely to remain volatile in the medium term.
These two measures will directly result in cost reduction of $50-$70 per tn for the company in the coming quarters.

NW18: First View: Cement dealers' body President Ladiwala on FY12 Budget

HYDERABAD - Sanjay Ladiwala, president, Cement Stockists & Dealers Association of Bombay, on the Union
Budget for 2011-12 (Apr-Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.
Cement companies may increase prices in the coming days due to the additional duty levied on the commodity.

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There is scope for increasing prices because demand is strong. The positive for cement companies is that customs
duty on petcoke and gypsum has been cut but that will not be sufficient to negate the impact of higher duty
payouts.
NW18: First View: Sesa Goa MD Mukherjee on FY12 Budget
.
MUMBAI - P.K. Mukherjee, managing director, Sesa Goa, on the Union Budget for 2011-12 (Apr-Mar), presented
in Lok Sabha by Finance Minister Pranab Mukherjee today.
We are still digesting the news of hike in iron ore export duty to 20%. We definitely do not welcome this move by
the government. However, we also have no plans to enter iron ore lump mining. But it is too early to state
what we plan to do next.

NW18: First View: SBI MF Chief Investment Officer Munot on FY12 Budget

MUMBAI - Navneet Munot, chief investment officer, SBI Mutual Fund on the Union Budget for 2011-12 (Apr-
Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.
The budget was balanced. It was neither populist nor reformist. Allowing foreign individual investors to directly
invest in equity fund schemes is very positive for the mutual fund industry.
There will be capital inflows and foreign individual investors will now be comfortable in investing in equity fund
schemes. However, detailed guidelines are awaited to draw final conclusions on the move.
Government market borrowing for 2011-12 is below expectation, which will keep the 10-year government bond
yields around 8% in the near-term.

NW18: First View: Future Capital Holdings MD Vaidyanathan on FY12 Budget

MUMBAI - V. Vaidyanathan, managing director and vice-chairman, Future Capital, on the Union Budget for 2011-
12 (Apr-Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.
.
Maintaining government borrowing at 3.4 trln rupees is a big relief, and achieving it despite not touching excise
rates is a great job.
The government has invited foreign capital for funding India's growth, through infrastructure and corporate
bonds. The finance minister has spelled reforms in FDI in insurance, banking, infrastructure, despite not being
very explicit about it, probably deliberately.

NW18: First View: IDBI Gilts CEO, MD Tadas on FY12 Budget

MUMBAI - G.A. Tadas, chief executive officer and managing director, IDBI Gilts on the Union Budget for 2011-12
(Apr-Mar), presented in Lok Sabha by Finance Minister Pranab Mukherjee today.
.
The net borrowing number is slightly lower than what the market had expected, and is good from point of view of
the market. The market had expected net borrowing at around 3.5 trln rupees.
But, we don't know whether the fiscal deficit of 4.6% is doable. An increase in FII investment limit for government
bonds does not seem likely, because the government may want to keep the volatility under check,
as it may be bad for the government's borrowing (programme).
On the other hand, the hike in FII limit for corporate bonds will help out corporates, which are in need for funds.

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The 100-bln-rupee auction in March was not expected at all, because of which, prices have come off.
The 11-year bond yield, which is currently near 8.08%, is likely to be around 8.10% by March-end. This month, it is
seen in the 8.05%-8.15 range because of the unscheduled auction.
NW18: First View: CRISIL Chief Economist DK Joshi on FY12 Budget
.
NEW DELHI - D.K. Joshi, chief economist, CRISIL Ltd, on the Union Budget for 2011-12 (Apr-Mar), presented in
Lok Sabha by Finance Minister Pranab Mukherjee today.
I think it (the Budget) tries to address all key issues facing the economy, but not sufficiently. Like, given the
severity of the problem in agriculture, more allocation is needed.
Fiscal targets are optimistic, contingent on achieving high growth and keeping expenditure within the budgetary
target.
A very significant move has been the opening up of the infrastructure bond market to foreign investors. It will
help remove infrastructure financing constraints, and will also ensure sustained foreign inflows in the long run.

NW18: First View: Tata Capital CFO Sankaranarayanan on FY12 Budget

.
MUMBAI - Govind Sankaranarayanan, chief financial officer and chief operating officer--corporate affairs, Tata
Capital Ltd, on the Union Budget for 2011-12 (Apr-Mar), presented in Lok Sabha by Finance Minister Pranab
Mukherjee today.
It (Budget) is a reasonably good mix of politics and economics.
Like last year, the finance minister has come up with the mix that won't hurt industry and at the same time, will
insure enough investment in social infrastructure.
There is a discussion on fiscal responsibility, commitment to bring various financial acts in Parliament, a desire to
bring GST (goods and services tax) (implementation process) to closure soon.
There is some comment on infrastructure and very strong commitment to food security, which are very good.
There was a reference to a new manufacturing policy.
I would have liked to hear more on that.

NW18: First View: IDBI Bank CFO Sitaram on FY12 Budget

.
MUMBAI - P. Sitaram, chief financial officer, IDBI Bank, on the Union Budget for 2011-12 (Apr-Mar), presented in
Lok Sabha by Finance Minister Pranab Mukherjee today.
.
Overall, it is a slightly positive Budget as the 60-bln-rupee further fund infusion (into banks) has been announced,
although there is no clarity on whether State Bank of India's rights issue is included in this infusion
allocation.
However, banks' demand to be allowed to issue infrastructure bonds has not been accepted.
The decision to extend priority sector classification to home loans up to 2.5 mln rupees will help banks improve
their priority sector numbers.
The additional 1% interest subvention on home loans up to 1.5 mln rupees does not make any major difference to
banks as it just brings down the effective cost for the borrower. If this results in better repayment, only
then, will it benefit banks.
I don't think the Budget indicates that private sector credit demand will be impacted by government borrowing in
the next financial year. However, the liquidity position remains unclear and yields may have a downward bias.

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End

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