Budget Highlights

1. Dividend Distribution Tax unchanged at 15%
2. Central Sales Tax cut to 2% from 3% - Positive for Food Processing companies –
3. India to start GST from April 1, 2010
4. No Change in STT Rates
5. To withdraw banking cash transaction tax from April 1, 2009
6. To give 5 Year Tax Holiday for Hotels in some areas
7. Increase in short term capital gain tax from 10% to 15%
8. On an income of Rs5 lakhs - savings amount to Rs45,000
9. To grant 5 year tax holiday for new hospitals to be setup in specified areas - +ve for Apollo Hospital, Fortis etc.
10. Weighted deduction of 125% for R&D – Buy on Ranbaxy Labs and Dr Reddy Labs
11. Major Income tax Changes - to boost consumer spending Buy Marico and GSK Consumer
12. No change in corporate tax rate and no change even in surcharge
13. In case of Women, Exemption limit increased to Rs1,80,000
14. Senior citizen exemption raised from 1,95,000 to 2,25,000
15. Proposes to increase personal income tax exemption limit to Rs1,50,000
16. Minimum relief Rs4000 for every assesse
17. Excise duty on bulk cement imposed at Rs400/tonne or 14% Ad valorem whichever is higher - Neutral for Cement companies
18. Customised software under service tax net
19. Higher excise on packaged software (8% to 12%) - Negative for Software sector
20. To tax Filter and Non Filter Cigarettes on Par - Marginally negative for ITC
21. Fall in duty on wireless data cords from 16% to Nil - Positive for Telecom Sector
22. No change in excise duty structure on Retail Cement
23. To cut excise duty on all goods in Pharma from 16% to 8% - Positive for Pharma Sector
24. To cut excise on some papers, paper products
25. To reduce excise duty on two wheelers from 16% to 12% Buy Bajaj Auto
26. To reduce excise duty on small cars from 16% to 12% Buy Maruti and Tata Motors
27. To reduce General CENVAT rate from 16% to 14%
28. To cut customs duty on crude, unrefined sulphur
29. To cut project import duty to 5% from 7.5%
30. Custom Duty reduced to Nil on Steel melting scrap from 5% - Positive for Non Integrated Steel Players
31. India to cut duty on certan bulk drugs to 5% - Positive for Pharma Sector
32. Proposes No Change in Peak Customs Duty
33. Current Tax-GDP ratio at 12.5
34. Fiscal Deficit to be 2.5% by FY09 - Need only 1 year to eliminate Revenue Deficit
35. Revenue Deficit to be 1.4% and Fiscal Deficit to be 3.1% of GDP
36. Planned Expenditure about 34.2% of total expenditure
37. - India to spend Rs 1.05Trn on Defense sector, up 10% - Positive for Defense Companies
38. Allocation for TUF loan hiked about 20% - +ve for Textile Sector
39. Thrust on Smart Cards Buy on Bartronics India
40. Accelerating bidding process for 5 UMPPs - +ve for PFC
41. Likelky Subvention of agri loans waivers to neutralise impact on banks
42. Government allocates RS16.8bn for IT Sector Buy on 3i Infotech and TCS
43. India to spend more on Textile Sector - Buy on Bombay Dyeing and Alok Ind
44. India to get as much as $8bn from latest Gas, Oil
45. India to allocate Rs129 bn for highways Buy on HCC,IVRCL
46. National Fund for Power Transmission and Distribution
47. To award 4th UMPP shortly - +ve for Power
48. India to achive power expansion target in 11th plan - +ve for Companies like BHEL
49. Waiver of previous loans and fresh loans - Positive for Agriculture/ Fertiliser companies
50. India to spend more on Rural Development and Roads - Positive for Infrastructure sector
51. Manufacturing slowdown due to rising rates and rupee
52. Growht in capital goods still high at 20.2%
53. Savings Rate at 35.6% and Investment Rate at 36.3% by end of 2008
54. Total value of overdue loans including OTS at Rs60,000cr
55. Debt Waiver to be completed by June 30 2008 - Farmers to be eligible for fresh loans post waiver
56. Clarity awaited on details of scheme regarding reimbursement to banks of waiver amounts
57. Waiver Amounts to 4% of Total Bank
58. - Scheme of debt waiver of all agri loans upto March 2007 - Negative for Banking Sector
59. - FM eyeing Elections - Slew of populist measures announced
60. Complete waiver of loans for marginal and small farmers
61. Government introduces scheme for debt waivers for
62. FM says fertiliser subsidy to continue
63. 5 lac hectare increased irrigation potential
64. India to spend Rs200bn on irrigation-Positive for Finolex Ind and Jain Irrigation
65. Government to spend additional Rs120bn on 5-Yr plan programs
66. Government increases thrust on santitation - s Buy Electrosteel Castings
67. Increase in sanitation allocation positive for DI pipe makers such as Electrosteel castings
68. Increased allocation to Rajiv Gandhi Drinking water scheme to Rs7300cr from Rs6500cr, beneficial to companies like IVRCL
69. Increased spending on polio to benefit Panacea Biotech
70. India to spend Rs120bn on National Rural Health Plan
71. Education and Health Sector to be twin pillars of growth
72. 16,534cr allocated for Health Sector an increase of about 15%
73. Additional allocation for education beneficial for Everonn, Educomp, Core Projects, NIIT etc
74. India to increase spending on Bharat Nirman plan
75. Allocation for education to be raised to Rs34,400cr from Rs28,674cr
76. Allocation for education to be increased by 20%
77. India to increase Gross Budgetary support in FY09
78. Agriculture estimates to grow at 2.6% for FY08
79. FM confident of maintaining 8.8% GDP growth average
80. FM says agri growth disappointing