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Budget 2011: Chat Transcript

Deepak Shenoy8 min read
Quick Facts
What is "Budget 2011: Chat Transcript" about?
What category is this article in?
Economy
Who wrote this article?
Deepak Shenoy, Capitalmind's research team.
When was this article published?
Published 28 February 2011.
How long does this article take to read?
8 min read

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.