สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 1 มีนาคม 2556

Indian Budget 2013-2014 : Budget’s Safe & Realistic : No Major Shocks, No Major Benefits

Finance Minister P Chidambaram on 28 February 2013 presented a realistic budget that was neither populist for an election eve exercise nor majorly growth oriented but one that spared the people of major taxes but went low on reliefs. The budget neither pulled off punches as corporate sector feared nor provided them significant any tax breaks to scale up production or incentives or reliefs for individuals by raising exemption limits so as to raise consumption.

The core of the budget is No Major Taxes or Tax breaks for either the individual or the corporate sector but government prioritized measures to contain fiscal deficit, tackle inflation, reduce impediments for growth , attract foreign investments, and mobilize funds for development works.

(Source: Sarkaritel)

India's budget disappoints, confuses foreign investors

The Budget for 2013-14 disappointed foreign investors on Thursday by failing to deliver a much anticipated cut in withholding taxes for debt investments and creating confusion with a proposal that appeared to target tax treaties.

Several measures for foreign investors were unveiled for fiscal year 2013-14 starting in April, including simplifying a cumbersome registration process and allowing investments in corporate bonds and government securities to be used as collateral to meet margin requirements.

However, the measures on their own were seen as unlikely to significantly boost foreign inflows at a time when India needs capital flows to plug a current account deficit that hit a record high in the quarter ended in September.

(Source: NDTV, Deccan Chronicle)

Reviving the manufacturing sector

Getting the industrial sector, especially manufacturing, back on track is crucial for reviving growth. Since the key to that is boosting investment in the sector, the finance minister announced several incentives:

• A company investing Rs. 1,000,000,000 or more in plant and machinery over the next two fiscal years will be entitled to deduct an investment allowance of 15% .
• The Govt. aims to create 100 million jobs and increase share of manufacturing in the country’s GDP to 25% by 2020 from 16% now.
• Incentives for semiconductor manufacturing facilities, including zero custom duty for plant and machinery to promote domestic manufacturing of electronic goods, much of which is currently imported
• Tax incentives for manufacturing hybrid and electric cars, aircraft manufacture, repair and overhaul units and the ship building industry.

(Source: Live Mint)

Budget 2013: Govt eyes more investments in energy sector

Electricity generated from imported coal will become costlier by around Rs 0.35 a unit after finance minister P. Chidambaram on Thursday removed duty concessions granted in last year’s budget. Instead, he imposed an equal duty on different types of coal imported for electricity generation in the budget for 2013-14. This follows an increase in railway freight rates for coal announced on Tuesday.

However, to attract investments to energy projects that are capital-intensive, such as power generation plants and hydrocarbon blocks, the budget allowed for deduction of investment allowance of 15% on investments of Rs.1,000,000,000 or more in plant and machinery during the next two fiscal years of 2013-14 and 2014-15. This is in addition to depreciation benefits. Currently, no such investment allowance deduction is available.

(Source: Live Mint)

Reversing the jobless growth tide

Govt announced steps that may spur employment among youth, after having been attacked for more than five years of jobless growth. With its sight set on an employment-generation push aimed at the youth, the government announced several measures that are likely to spur this, after having been attacked for more than five years of jobless growth:

• Measures to boost Manufacturing, which employs the third highest number of people in India.
• Home loans incentives will boost construction sector.
• Impetus for micro, small and medium enterprises ,technology startups, and extension of various schemes under Ministry of Rural Development such as rural job programs and rural road scheme expected to provide job opportunities to 12 million people.

(Source: Live Mint)

Markets react adversely to Budget 2013

Indian markets were down following the budget with little to cheer investors.The Union Budget for the next fiscal left the markets struggling as finance minister P. Chidambaram tried to balance political compulsions with fiscal consolidation. While the government increased spending for next year, it is betting on growth, tax on rich and reduced subsidies to get its math right.

Lastly, the Indian budget seemed to be a ladies special with the announcement of women’s-only bank to create employment opportunities and facilitate funding for women.

(Source: Live Mint)