Budget 2009: Impact

AUTO: POSITIVE
MEASURE	IMPACT
Cut excise duty on petrol driven trucks to 8% vs 20%	Positive for M&M, Tata Motors
Reduced duty charged on Uvs from 20,000 to 15,000 ie 20% excise+15,000	Positive for M&M, Tata Motors
Benefits to farmers-Subsidies, loan waivers	Positive for Eicher Motors, Escorts, M&M, Hero Honda
Allocation to NHAI increased	Postive for M&M, Tata Motors, Ashok Leyland
JNNURM Allocation raised by 80%	Positive for Ashok Leyland and Tata Motors

IT: POSITIVE
MEASURE	IMPACT
Extension of STPI by one year to March 2011	HCL Tech major beneficiary; Positive for all companies
Provision of Rs 120 crore for unique identity cards project	Positive for CMC, Bartronics, Mindtree,3i Infotech, Tulip Telecom
FBT abolished	Positive for all players ; FY'10 EPS gain by 1%-2% for top 4 players
MAT increased from 10%-15% ( to be set off over 10 years from 7 yrs earlier)	Hit of upto 1% in FY'10 EPS seen
Packaged software to be exempt from excise duty of 12%	Positive for all players, will lead to lower operational costs

OIL & GAS: MIXED BAG
MEASURE	IMPACT
Tax holiday extended for natural gas production	Positive for E&P players
Tax holiday for block under NELP with retrospective effect	like RIL, ONGC, Cairn, GSPC
To set up expert group for petroleum pricing	Negative sentiment impact on Oil marketing companies and upstream companies
Indigenous production of natural gas set to double	Positive for GAIL, RIL, Indraprastha gas, Gujarat Gas, GSPL, Petronet LNG
National gas highway to be set up	Positive for pipe makers: Maharashtra Seamless, India Seamless , Jindal Stainless, Welspun

GEMS & JEWELLERY:MIXED BAG

MEASURE

Branded jewellery excise duty abolished

Basic customs duty on Gold & Silver increased

Tax holiday for exporters extended till 2010

2% interest subvention for exporters till 2010

Procedure for refund of service tax simplified for exporters

Extension of Sunset Clause by another year for exporters

IMPACT

Not positive for Gems & Jewellery

Fundamental increase on customs duty not good for the industry

Abolishment of excise duty on branded jewellery a positive

Extension of Sunset Clause and procedure for refund of service tax positive for exporters

TEXTILES: MIXED BAG

MEASURE

Restoring 4% excise duty on cotton textiles

Keeps 8% central excise duty on Man-made fibre and yarn

Tax holiday for exporters extended till 2010

2% interest subvention for exporters till 2010

IMPACT

It’s an extension of the stimulus package provided for one more year

Liquidity issues for textile cos may improve slightly

Not to drastically effect any textile companies

BANKING: NEGATIVE

MEASURE

Hike interest subvention on farm credit from 2% to 3% in order to boost credit

Now farm loans would be disbursed at 6% by the banks instead of 7%

No mention of cut in small savings - also a negative for banks

Retaining public sector nature of banks seen as an indicator of slow process of consolidation and reforms

COMPANIES TO BE IMPACTED

All PSU banks

CEMENT: POSITIVE

Excise duty on cement unchanged

Service tax on transport is done away with

Service tax on logistics is reduced

EXPORTERS: POSITIVE

Interest subvention on exporters extended to 2010

Current interest subvention at 2%

Exporters wanted interest subvention restored to 4%

FERTILISERS: NEUTRAL

MEASURE

Aiming for direct transfer of subsidy to farmers

To move towards nutrient based subsidy regime

	"I am disappointed with the Budget. The shipping and shipbuilding industry generates a lot of revenues and employment. But it finds no mention of the sector in the Budget." PC Kapoor, Managing Director of Bharati Shipyard
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