Thursday, February 28, 2013

Chidambaram’s boldness well exhibited in Union Budget 2013

Yes, P. Chidambaram did live up to the country’s expectations, as exhibited by his Budget 2013. Problems facing India at the time when he held the finance minister’s portfolio were slow economic growth, downgrade credit rating, growth, high fiscal deficit, high interest rates, stubborn inflation, high budget, and insufficient investment. Union Budget 2013 explicitly focuses on these setbacks; Chidamabaram is resisting fiscal suicide!

Union Budget 2013 Show Ups
·        Limit to govt spending
·        No big expansion in subsidies
·        Limit govt net borrowings to 4.84 trillion rupees
·        Ending of the arresting of household financial savings
·        Levy of 10 percent surcharge for rich taxpayers
·        Focus on in-flow of foreign funds
·        Hopes of 19 percent increase in tax collections next year.

Fiscal consolidation measures of the Union Budget 2013 should certainly improve the nation's overall financial savings. But investors of the stock market are disappointed on the cuts in govt. spending. Thanks to Chidambaram’s tough and bold decision. It is now to wait and watch the implementation and outcomes of Budget 2013!

The above post is based on the expert opinion of Andy Mukherjee. You can read the complete article here:

Tuesday, February 26, 2013

Budget 2013 to boost investor confidence

Yes, it is a poll-year Union budget and P. Chidambaram is all geared up to prop up investor confidence by implementing measures rather than on pre-election spending, recommending his cabinet colleagues to maintain austerity. Stressing on the fact that wasteful expenditure may further downgrade rating of Indian economy to ‘junk’ besides setting off an economic meltdown, the finance minister advocated tackling the bloated fiscal deficit as priority, pointing out that India is on the right track.

Chidambaram’s recent road show has been an attempt to attract in-flow of foreign funds. Only tax revenues cannot be relied upon to meet the growth objectives. Other areas which are expected to be given priorities in the Union Budget are avoiding unnerving investors, slashing public spending, ensuring efficient tax collection, and more.

Few cabinet colleagues are against Chidambaram’s cuts on welfare spending. But if spending is not cut, the fiscal deficit would be further hit; glaring example is Delhi missing its fiscal deficit target due to over-spending on social welfare and subsidies.

The above post on India Budget 2013, You can read the complete article here -

Monday, February 25, 2013

India Budget 2013 – reviewing incentives and exemptions

To reduce budget deficit, it is saving every rupee that P. Chidambaram has committed. This very commitment is expected to be met in the India Budget 2013. One of the measures towards meeting this objective is certainly withdrawing of tax incentives which have outlived their purpose. Incentives are the loss of revenue caused by the difference between prescribed rates in general and effective rates of taxation. Of course, incentives and exemptions are measures implemented to defuse inflation, promote exports, and benefiting backward areas.

Total loss from taxation is estimated at 936 billion rupees including 148 billion rupees from the corporate sector, 284 billion rupees from individual tax payers from savings incentives, 4.35 trillion rupees (major loss) from excise and customs; firms are no exception. Effectiveness of all incentives should be reviewed. Change of non-effective incentives is suggested while those no longer necessary should be withdrawn.

The above post on India Budget 2013 is based on expert opinion by D H Pai Panandiker, President, RPG Foundation. You can read the complete article here - 

Saturday, February 23, 2013

Control on Expenditure for Positive Economic Growth!

P. Chidambaram was well aware of Union Budget 2012 being not up to expectations. With elections round the corner and with the country exhibiting decelerating economic growth, the finance minister is expected this time to present a positive Union Budget 2013 with special emphasis on growth.

Yes, Union Budget 2013 can fuel the economy; P. Chidambaram should give the big push now. Special emphasis should be laid on trimming expenditure. With GDP growth going lower than 5.3 percent and with the urgent need to implement measures to control fiscal deficit, restraint on expenditure is a must. Because if expenditure, which is at 14 percent at present, is not trimmed, taxation will see a rise! And changing income tax rates will not only dampen foreign investor confidence but also affect the industry and common man alike. Though GST can boost revenues, its implementation is unfeasible for roughly another two years.

What the finance minister can do is taxing conspicuous consumption, reduce spending on subsidies, and follow more measures.

The above post is based on expert opinion by D H Pai Panandiker, President, RPG Foundation.
You can read the complete article here -

Friday, February 15, 2013

Budget 2013 - Creating the Lost Interest!

The same routine measures, policy paralysis, non-innovative and non-inventive inclusions – for over a decade these are what the budget delved on, thus losing its wow factor. But Union Budget 2013 is generating some interest!

Besides dealing with fiscal and current account, P. Chidambaram has to make the citizens happy (thanks to the approaching elections!). For bringing down deficit to 3 percent of GDP in five years, as projected, Union Budget 2013 should focus on the following:

· Cut down on plan expenditure sensibly
· Reduce subsidy using Aadhaar
· Introduce welfare schemes for the poor
· Bring more service sunder tax net
· Rationalize the indirect tax structure
· Border-less movement of products within India (via GST implementation)
· Implement tax measures to raise the tax-to-GDP ratio
· Encourage household savings
· Effectively implement Rajiv Gandhi Equity Savings Scheme
· Accelerate momentum of exports
· Ease credit norms
· Remove infrastructure bottlenecks
· Encourage FII and FDI fund flows
· Limit borrowing and wasteful expenditure
· Control of inflation, and more.
The above post is based on expert opinion by Rajagopal is the Head Advisory and a member of the investment committee at Kotak Mahindra (UK) Ltd. You can read the complete article here -

Monday, February 11, 2013

Breaking News of Indian stock market!

Yes, it is a war of the bourses now, with the country’s new stock exchange MCX-SX commencing trading of shares today. The volume was thin, though the challenge was building liquidity and winning market share against the two bourses, NSE and BSE.

While NSE saw its value of shares traded at 34.3 billion rupees, MCX-SX was at 1.5 million rupees. It is to wait and watch. Only time will tell!

What is breaking news in the Indian market, especially related to quarterly results, is Tata Power Company Ltd shares registering a third quarter loss, surprising investors and analysts at large. Yes, analysts expected a net profit of 2.7 billion rupees.

Cause of the loss was a blend of foreign exchange losses and higher finance and depreciation costs. Compared to profit generated at Rs. 2.98 billion rupees in December 2011, a net loss of 3.29 billion rupees in December 2012 is posted.

Thursday, February 7, 2013

What the IT sector wants from Union Budget 2013?

What NASSCOM has portrayed about IT as a booming industry despite global economic volatility is well attested by the positive performance of the many IT companies. IT contributes 7.5 percent of India’s GDP besides sustaining the livelihoods of 11.7 million plus Indians.

So, what does the IT industry want from the Union Budget 2013? Here are key expectations:
·        Resolving of existing hassles over tax (direct and indirect) issues
·        Implementation of fair amendments in GAAR
·        Discontinuation or reduction of Minimum Alternate Tax (MAT) levied on SEZs
·        Clarity on transfer pricing, removing confusion regarding taxation of multiple companies of the same group.

The spate of reforms introduced by the government since September has moderately contributed towards economic boost. The IT industry likewise expects Union Budget 2013 to focus on reformative measures the big way. It is then that this sector will earn global acclaim – the evolution from BPO (business process outsourcing) to BPM (business process management).

The above post is based on expert opinion by Keshav R. Murugesh,CEO and member Board of Directors of WNS Global Services. You can read the complete article here -

Tuesday, February 5, 2013

NTPC stake sale and HDFC’s reduction of floating interest rates!

Good news is an indication of further good news! With the government selling stake in NTPC, inflow of foreign funds saw a rise. The sale was executed, towards raising about $2 billion, in an effort to raise funds. The raised amount would be used to meet its fiscal deficit target. This event saw the rupee strengthening to its highest closing level in three-and-a-half months.

With the NTPC stake sale, the rupee would have gained further had not domestic shares weakened and oil importers had not demanded for the greenback.

Another event worth mentioning is India's biggest housing finance company, Housing Development Finance Corporation (HDFC), announcing its move to reduce its prime lending rate by 10 basis points.

The bank’s floating interest rates are high and this move would reduce the same:
· For loans of up to 3 million rupees - 10.15 percent reduction
· For loans of more than 3 million rupees - 10.40 percent reduction.