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Economy

Budget 2011: Chat Transcript

What is more important in this budget is what WASN’T said, not what was.  But here’s the transcript of what I wrote at the Yahoo chat through the budget.

  • Welcome to my live chat on Budget 2011. Folks, if you have questions throw it out at http://www.twitter.com/deepakshenoy
  • 400,000 crores net borrowing, they say. Upwards of that is bad for bonds.
  • That means Bank Stocks will hurt beyond that.
  • People in the US don’t largely care about the budget, says Samir Arora. So FII selling may not be affected.
  • 1 minute to go, if Mr. Mukherjee will be on the dot. Please excuse my misunderstanding of Bengali enunciations.
  • GDP numbers = 8.2%
  • Food inflation down to 9.3% in Jan 2011, says FM.
  • Private investment needs to be moved up.
  • We have reached pre-crisis growth momentum.
  • Pranob-da is saying everything in one sentence. Consolidation, inflation, growth.
  • Sensex is up 120 points, Nifty up 37 points
  • "Gap in public accountability". Jeez. It’s a chasm.
  • 2011-12 is a transition to result-oriented and transparent policy
  • The necessary Sonia touching-feet reference has happened. We can now move on.
  • 8.6% growth in 2010-11 in real terms. Agri growth 5.4%, industry 8.1% services 9.6%
  • Food inflation was bad. Cereals, pulses in the beginning of year. Onion, Milk and chicken at later part.
  • Shortcomings in marketing system are there, he says.
  • Different arbitrageable prices are not acceptable says FM
  • RBI measures will moderate inflation, he says. Ah.
  • Exports have grown nearly 30%. $185bn. Imports $276bn, up 18%
  • Expectations: 9% GDP growth. with +/- 0.25%
  • Lower fiscal deficit and lower inflation seen.
  • We have Godly references. Lakshmi and Indra gone. Thank goodness we don’t have the 1000 names of Vishnu.
  • Each state needs 3% GDP deficit by 2014
  • Come on. States to have only 25% of GDP as debt? That’s tough. anyways
  • Direct Tax Code and GST will be huge reform, moderation of rates, simplification etc.
  • Parliament
  • GST convergence is happening: In This Session of
  • DTC: 2012 seems pukka.
  • NSDL to operate IT backbone of GST.Why isn’t NSDL public?
  • Sensex +148, Nifty +46
  • Yay! Subsidy very inefficient admit FM
  • Direct transfers are better, says FM. Nandan Nilekani to do direct transfer of subsidy – kerosene, diesel, fertilizer.
  • 22K cr. raised from public markets.
  • We will maintain that momentum going forward. More public issues next year.
  • Mutual Funds to accept direct investment from foreign investors!!!! WOW!
  • FII investment in bonds goes to $40 bn! Fantastic.
  • Insurance amendment bills will be in.
  • banking act to be passed in parliament
  • About new banking licences: RBI’s proposed changes to the
  • 6,000 cr. to public sector banks for tier 1 equity
  • anyway.
  • CRAR of at least 9%. No big deal. that is there
  • women.
  • Microfin Equity Fund of 100 cr., 500 cr. to empower
  • Lets revive microfinance, says FM.
  • Rural Infra Dev. Fund corpus to 18K cr. From 16K cr.
  • Additional money is for warehousing.
  • SIDBI incremental lending: up to 5000 cr. from 4000 cr. for priority sector lending shortfall funding
  • 3000 cr. for handloom cooperatives. Details need to be worked out by yet another committee.
  • Minority sector lending up to 13.6%. banks to make it 15%.
  • Rural housing fund goes to 3000 cr. from 2000 cr.
  • Interest subventions of 1% to be made for 15 lakh loans
  • Rural housing fund goes to 3000 cr. from 2000 cr.
  • Fin Frauds: Central registration authority to be setup
  • Guarantee housing loans by weaker sections of society ?
  • Green revolution to be moved up
  • Palm oil to be given impetus with more in there
  • 300 cr. for implementation of veggie initiatives.Totally random 300 cr. that was.
  • Ensure food = balanced nutrition. Thank you, FM bhai.
  • 300 cr. to promote higher production of higher nutrition and education. I want more chocolate!
  • 300 cr. Everyone, go to gym now.
  • National mission for protein supplements is being launched:
  • Fodder production acceleration – 300 cr. Number 3 is lucky for Pronob da. Number 420 is lucky for Congress.
  • Are we getting Portugal’s budget?
  • Farmers need access to money.
  • Whoa! That is for bank loans.
  • Credit increased: 3.75 trillion (lakh cr.) to 4.75 lakh cr.
  • Interest subvention, crop loans at 7% to continue.
  • 2%!). Nabard: 3000 cr. equity.
  • Another 3% subvention for prompt repayers. (up from
  • banks.
  • 10,000 cr. to Nabard for prio-sector lending shortfall by
  • Estimated 40% food wasted in India.
  • PPP model is good, it seems.
  • IIFC 25,000 cr. by 2012
  • Infra dev: tax-free bonds of 30K cr.!
  • IRFC 10 k cr, NHAI 10k cr. HUDCO 5 k cr Ports 5k cr.
  • Auto market 2nd fastest growing in world.30% this year
  • Hybrid and Electric cars: National mission to be launched.
  • JNNURM buses and metro projects are on. Okay, we know that.
  • Nifty up 75, Sensex +239
  • Self assessment in customs duties. What does that mean? I like the sound of it though.
  • Black money: Global Crusade against BM. Hajaar work in progress. Yeah, right!
  • We have joined global task force for integrity. We will get thrown out soon. Okay, he didn’t say the second bit.
  • NREGA wages enhanced for inflation."Significant" – what number?
  • from 750 pm-> 1500 pm
  • Anganwadi workers salary doubled: 1500->3000 pm. Helpers
  • Demographic dividend needs education.
  • UID access to secondary edu, providing skill: 52,057 cr. (up 24%)
  • Sarva Shiksha abhiyaan 21,000 cr. (40% higher) WHOA!
  • Innovation: I like that they want to prepare roadmap for innovation in India.
  • 100 cr. grant to Kerala Animal science univ. (Yeah, elections are there this year, we know)
  • Rs 400 cr. to IIT KGP. Rs 20 cr. IIM Cal.
  • 200 cr. to some random univ.These are BIG amounts to totaly weird universities. And small amounts to stuff I know
  • 500 cr. to national skill dev. fund.
  • Currently: Infra public sector units should do well
  • 80 yrs and above: pension amts will increase from Rs. 200 to Rs. 500 per month.(thank you, they say. It pays the cable bill for watching this budget.)
  • Watch out folks. What is important is what is NOT said. Watch REC – there are no tax free bonds for it.
  • Sensex+88, Nifty +33
  • Rs 9 lakh for 100% disability for defence/paramilitary
  • UID mission has taken off. 20 lakh aadhaar nos given.
  • E-filing and e-payment of taxes have happened
  • Need to review stamp act
  • deducted simplified return form for presumptive taxed people
  • Salaried employees may not need to file returns – if TDS is already
  • e-stamping in all states.
  • Total plan and non plan transfers up 23%
  • 4.6% deficit for next year target that is
  • 3.4% for 13-14 target
  • Tax proposals coming now
  • Exemption limit on tax from 1.6 lakh to 1.8 lakh Yay!
  • Senior citizens age reduced from 65 to 60 – fabulous!
  • another category 80 years +, 5 lakhs
  • MAT increased to 18.5%.This is BAD for power sector and IT
  • Bad for anyone that is low tax
  • 20k per year infra bonds 2010-11 to continue one more ye
    ar
  • Foreign companies dividends payable to Indian residents taxed at only 15%
  • NO major tax incentives in direct tax.
  • Direct tax proposals to lose 11K cr.- that never happens. They always make money
  • Debt to Gdp = 44.2% in 2010-11.
  • another 15 k cr. in t-bills.
  • Fiscal deficit is 4.12 lakh cr. Other financing items, net market borrowing was 3.43 lakh cr.
  • Very positive for Auto
  • Central excise duty not to be changed!!!
  • Indirect taxes are on now.
  • Tatamotors, maruti, M&M
  • Certain exemptions will be removed, but most will only come into GST
  • Central excise duty in certain cases is going up – we need the full speech
  • Nifty +50 Sensex +150
  • This is a non-budget as it was expected to be.
  • Fiscal borrowing is less – banks should be doing well.
  • Travel service tax will increase? Some part of that was inaudible.
  • Rice cakes for fodder: no customs duty; exports duty of 10%.
  • Service tax stays at 10%
  • Raw silk duty from 30% to 5% customs duty.(buy saris?)
  • Export duty for iron ore is up to 20%
  • Laserjet and Inkjet printer customs duty down to 5% from 10%
  • Hydrogen fuel cell cars – 10% excise
  • A/cs will get cheaper. Watch Voltas.
  • LED excise duty down to 5% from 14%.Check out TV manufacturers
  • Solar cell duties go to nil.
  • Would you touch Mirc then? Interesting there
  • Heritage work of Indian art – imports for exhibition to general public exempt
  • High speed printing equipment duties at 5% stays.
  • Excise duty exemptions for film for movies. Currently imported.
  • Diapers go down to 1% duty! Wow!
  • Hospitals that are central a/c go into service tax
  • Hospitals that are central a/c go into service tax but only at 5pc.
  • Life insurances apart from ULIPs also will get Service Tax?
  • Diagnostic tests = 5pc as well. Except for govt. hospitals.
  • Life insurances apart from ULIPs also will get Service Tax?
  • Airline companies are falling.
  • Service tax = better served with negative list rather than positive list. GST will address that.
  • Indirect taxes = Net Rev. Gain of 11300 cr.
  • Hotels will lose some – Service tax increased. Watch Indian Hotels, EIH and so on.
  • Nifty +70 Sensex +227
  • RelCapital, HDFC are beneficiaries
  • Foreign nationals to invest DIRECTLY on MFs is a big big thing.
  • FMCG should overall benefit. HUL and ITC should be positive.