INFRASTRUCTURE: ROADS State of the Industry Close to Rs 7 lakh crore investment is expected in roads and highways from 2011-12

to 201516 - more than double the amount pumped into the projects in the previous five-year period. Projects under National Highway Development Programme (NHDP) Phase I and II have largely been completed while awarding of projects under Phase III, IV and V is progressing at a brisk pace. Overall, approximately 40% of the total length under the NHDP is yet to be awarded. Budget Impact The overall impact is expected to be positive. National Highway Authority of India has been allowed to issue tax-free bonds totalling Rs 10,000 crore after last year's issue of Rs 10,000 crore was fully subscribed. This is expected to further support NHAI in its implementation of highway projects. At the corporate level, there has been a reduction in the withholding tax on interest payments of external commercial borrowings from 20% to 5%. This is expected to only marginally reduce the cost of borrowings of road developers since these companies' exposure to ECBs is limited.

ADVANTAGE OF BUDGET
1. While the focus has been on infrastructure and rural development, education has also retained its importance this year. An increase in allocation by 21.7% for Right to Education - Sarva Shiksha Abhiyan to Rs 25,555 crore and by 29% for Rashtriya Madhyamik Shiksha Abhiyan to Rs 3,124 crore reiterates the government's commitment towards education. The FM proposed to set up a Credit Guarantee Fund to ensure better flow of funds to students. Over 70% of Indians will be of working age in 2025. In this context, universalising access to secondary education, increasing the percentage of our scholars in higher education and providing skill training is necessary. The government has articulated several initiatives to give a boost to public-private partnership in this sector. PPP schemes for 2,500 schools and credit guarantee fund for education loans to students is likely to pave the way for more private investments in higher education, especially foreign direct investment (FDI). The increase in budgetary allocations for school education and adult literacy is also a welcome step. Emphasis on education for girl children, which is proposed to be enhanced from Rs 1,265 to Rs 3,000 per child in 2012-13 is a step forward. The government's move to increase the exemption limit for children's education allowance from Rs 100 per month to Rs 1,000 per month per child is also a good move.

2. He also announced a list of services which are exempted from service tax. This include
health care, services provided by charities, religious persons, performing artists in folk, sportspersons and classical arts. Also individual advocates providing services to non-business entities, independent journalists, and services by way of animal care or car parking will be exempt from tax. Further, Mukherjee also proposed to exempt the film industry from service tax on copy rights, relating to recording of cinematographic films.

3.Positive effect on expanding healthcare sector

The new hospital with at least hundred beds was earlier eligible for the 100 per cent deduction for capital expenditure. At present a deduction is allowed in respect of premium paid towards a health insurance policy for insurance of self, spouse and dependant children or any contribution made to the Central Government Health Scheme up to a maximum of Rs 15000 in aggregate. Interestingly, a further deduction of Rs 15000 is also allowed for buying a health insurance policy in respect of parents. This also includes any payment made by an assesse on account of preventive health check-up of self, spouse, dependant children or parents not exceeding in the aggregate of Rs 5000. Also, The Government is modernizing the existing units and setting up a new integrated vaccine near Chennai and plan to achieve vaccine security and keep the pressure on disease eradication and prevention.

4. Senior citizens not having income from business proposed to be exempted from payment of advance tax. 5. 6. Proposal School to allow deduction to of up to Rs to 5,000 be for preventive from health check up. tax.

education

continue

exempted

service

7. Housing loan up to Rs 15 lakh to continue to get an interest rate subvention of 1% for houses priced up to Rs 25 lakh. 8. The decision to allow external commercial borrowings (ECB) for low cost affordable housing projects is expected to give a much needed boost to the affordable housing segment. This will further help in bridging the demand supply gap in the affordable housing segment. 9. Setting up of the Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loans will have a great impact on the prospective customers going for affordable homes. 10. Education loan to become more accessible with the proposed setting up of the Credit Guarantee Fund.

DISADVATAGES OF BUDGET

1. Finance Minister Pranab Mukherjee Friday proposed increasing the service tax rate to 12 percent from 10 percent . 2. IT and manufacturing sectors - the largest contributors to the exchequer - are disappointed. with the budgetAnalysts say that the 2% hike in both excise duty and service tax might be implemented this year and this will negatively impact the industry, leading to higher input costs and a slump in demand. 3. The budget proposals to increase tax rates will hit consumers as early as this week with a host of
products and services set to cost 2%-5% more. Makers of cars, consumer electronics, home appliances, digital cameras, soft drinks and milk, wellness service providers and restaurateurs told ET that they will increase prices despite fears that it will impact demand. 4. Godrej plans to increase prices of refrigerators, washing machines, air-conditioners and televisions by minimum 2% from next week. "It will definitely have an impact on demand since the industry was already going through a bad phase," Nandi said. Finance Minister Pranab Mukherjee in his budget proposals increased excise duty and service tax to 12% from 10% and widened the service tax net to include all barring 27 types of services mentioned in a negative list. Those who plan to pass on part of this to consumers include Panasonic, Godrej, Canon, Coca-Cola, Amul, Specialty Restaurants and VLCC besides all major carmakers. The country's largest milk products brand Amul plans to increase prices of ice cream and flavoured milk by about 5%, said RS Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation Ltd, makers of Amul products. Top beverages maker Coca-Cola plans to increase prices of 1.5- and 2-litre PET bottles of its drinks such as Coca-Cola, Thums Up and Sprite by about 4%-5% in a month