Budget 2010 and The Indian Stock Market Expections

Budget 2010 Expectations

When Finance Minister Pranab Mukherjee presents the Union Budget 2010 on February 26, a lot of expectations would be met and some of them would be left unattended.

So, what is India Inc. expecting from Budget 2010?


Budget 2010 and The Auto Sector

Auto industry wants govt to continue stimulus measures for 1 more year

Cos. believe demand would go unfulfilled if stimulus measures are rolled back

Govt may increase excise duty by 2-4%; although impact would be negative for all cos.

Govt may increase allocation under JNNURM for buses leading to positive impact on cos. like Tata Motors and Ashok Leyland..


Budget 2010 and Infrastructure

Infrastructure cos. want investments in brown field projects in Budget 2010

Extension of tax incentives to projects for improving social infrastructure

Reinstating the 10 (23G) benefit to address issues related to cost of capital

Promotion of private participation and increase in capital liquidity and availability

Cos. also want the government to give township projects incentives on par with infrastructure


Budget 2010 and The Jewellery Industry

Jewellery industry wishes for a continuation of credit limit; hopes for an increase in liquidity by continuing existing credit limits to exporters

Rationalisation of interest rate at par with international rates; urges RBI to make dollar finance available at LIBOR + 1% vs the current charge of LIBOR + 3.5% plus commission


Budget 2010 and The Indian Stock Market

Budget 2010 is unlikely to unfold anything that would lead to a drastic positive change in the stock markets

Infrastructure, construction, engineering & banks to benefit on higher spending

Unlikely to represent a major shift in policy

Lower deficit on cyclical rather than structural factors

Govt likely to project 5.5% fiscal deficit