Budget expectations from brokerages
A snapshot of market and industry expectations from the union budget, compiled from brokerage reports.india Updated: Feb 23, 2006 19:11 IST
Following is a snapshot of market and industry expectations from the union budget, compiled from brokerage reports. The Congress party-led alliance will present on Tuesday the budget for the fiscal year starting on April 1.
Broad market expectations
* Focus on infrastructure, especially power, agriculture and food processing industries to aid annual GDP growth of 8 per cent.
* Fiscal deficit target of less than 4 per cent of GDP.
* Peak customs duty to be reduced to 10 per cent from 15 per cent now.
* Sugar, textiles and tobacco to be brought under value-added tax regime.
* Service tax rate to be raised to 12 per cent from 10 percent.
* More services to be brought under the service tax ambit.
* Corporate tax surcharge of 10 per cent to be removed.
* Fringe benefit tax to be simplified.
* Securities transaction tax to be raised and expanded to include off-market deals.
* Mutual funds to be allowed to set off gains from derivatives against general losses suffered during the year.
* Lahiri Committee recommendations on easing norms for foreign institutional investments to be implemented.
* Excise duty on autos to be cut to 16 per cent from 24 per cent.
Banking and Insurance
* Foreign direct investment limit in insurance firms to go up to 49 per cent from 26 per cent.
* Cap on voting rights at 10 per cent for each shareholder in banks to be reviewed.
* Tax concessions to encourage long-term fixed deposits.
* Tax concessions for housing loans to continue.
Oil and Gas
* Subsidy burden on oil companies to be eased.
* Customs duty on petrol and diesel to be lowered to help oil marketing companies reduce their losses.
* Excise duty to be lowered to Rs 350 per tonne from Rs 400.
* Customs duty on several metals to be reduced to 5 percent from 10 percent.
* Excise duty on zinc to be halved to 8 percent to control rising zinc prices.
* Excise duty to go down to 8 per cent from 16 per cent.
* Peak customs duty to be reduced to 10 per cent.
* Tax structure to be simplified to make the shipping sector globally competitive.
* Subsidy of 30 per cent on ship building to be extended for 10 to 15 years.
* Excise duty on ethanol-blended petrol and molasses to be eased.
* Licence fee (percentage of revenue share) for operators to be reduced.
* Import duty to be cut on textile machinery and components.
* Customs duty on synthetic fibres and their raw materials, such as purified terephthalic acid and monoethylene glycol, to be reduced.
* Labour laws to be simplified to allow for use of contract workers.
The expectations are gathered from the reports of following brokerages: BRICS Securities, DSP Merrill Lynch, India Infoline, JP Morgan, Kotak Securities, Khandwala Securities, Sharekhan, and Sushil Finance.