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AAGANAN Budget Analysis 2010
AAGANAN Budget Analysis 2010
AAGANAN Budget Analysis 2010
Adhvith Dhuddu
Saturday, 13th March, 2010
Bangalore, India
www.AdhvithDhuddu.com
QUESTION 1
WINNER GETS: THREE BILLION NEW CAPITALISTS
WHAT IS THE
FRBM ACT?
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THE UNION BUDGET
“A budget is judged – wrongly in my view – on the
day it is presented. It should be marked only after
the financial year is over.”
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THE BUDGET: WHAT IS A BUDGET?
NO EXACT OR CORRECT DEFINITION.
Perceived and analyzed differently by various stakeholders
1. For many, personal tax policy is the most important factor.
2. How fiscally prudent and well balanced the budget is matters
to another set of budget-watchers.
3. How well agriculture and social spending schemes are handled
are important for the rural masses.
4. How well infrastructure, growth and inflation is tackled is
important for the urban masses.
5. Industry watchers are more inclined to keep their eyes and ears
open for policy changes in their sector.
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THE BUDGET: WHAT IS A BUDGET?
A SIMPLE & UNCLUTTERED DEFINITION OF THE BUDGET
Statement of accounts of the Govt. of India (MACRO VIEW)
GOVT. OF INDIA: REVENUES
1. Taxes and Duties (ALL TYPES OF TAXES)
2. Income from PSU’s (Dividends and profits)
3. Interest receipts
GOVT. OF INDIA: EXPENDITURE (Planned + Non-Planned)
1. Social Sector spending
2. Defense spending
3. Urban and Rural development in general
4. ALL SUBSIDIES: Agriculture, Fuel, etc.
FEW NEGATIVES
1. Fuel prices up marginally in the short term.
2. It’ll be hard to accept the truth but more price increases are
needed and is inevitable.
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BUDGET & INFRASTRUCTURE
IMPORTANT ISSUES.
1. Long term financing, long gestation periods for infra projects
2. Land and environment clearance
3. Implementation and Execution: VERY IMPORTANT
4. The PPP Model
5. Infra Giants are also going through a learning process
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BUDGET & THE CAPITAL MARKETS
The Budget was pretty well received by the stock markets.
POSITIVES
1. Capital Gains tax remained unchanged
2. No change in STT or Securities Transaction Tax
3. Many PSU disinvestments lined up, and the outlook appears
sanguine. (This in turn bridges the fiscal deficit)
4. Higher disposable income (due to changes in tax slabs). Some of
these excess funds could find their way into the capital markets.
NEGATIVES
1. Changes in transaction costs may be introduced
as new Direct Tax Code gets implemented in April 2011.
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BUDGET & BANKING SECTOR
The Budget was extremely well received
by the banking and finance sector.
MANY POSITIVES!!
1. RBI considering giving banking license's to private players and
to Non-Banking Finance Companies (NBFC’s)
2. Extremely good move….more players in banking, more
competition, customer will benefit with more choices.
1993: ICICI Bank, HDFC Bank, UTI Bank (now AXIS Bank), IndusInd
Bank, etc.
2004: YES Bank, Kotak Mahindra Finance
2010: Potential entrants – Reliance Capital, Aditya Birla Financial
Sercives, IndiaBulls Financial Services, Tata Capital, IDFC,
L&T Finance, Bajaj Auto Finance, etc.
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THE US ECONOMY
THE US ECONOMY
THANK YOU!
ADHVITH DHUDDU
Website: www.AdhvithDhuddu.com
www.AliveNow.in
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