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Wal-Mart, Foreign Retailers May Own 51% of India Ventures [November 25, 2011, 8:58 AM EST]

By Bibhudatta Pradhan and Malavika Sharma

(Updates with comment from analyst in 10th paragraph.)

Nov. 25 (Bloomberg) -- India approved allowing overseas companies to own as much as 51 percent of retailers selling more than one brand, paving the way for global companies such as Wal- Mart Stores Inc. and Tesco Plc to own stores.

Overseas companies must invest at least $100 million, half of which has to be spent on developing back-end infrastructure, Commerce Minister Anand Sharma said in a statement presented to parliament today. India's cabinet yesterday eased retail ownership rules, including permitting 100 percent foreign holding in single brand stores.

India's decision to allow overseas ownership in retail will create up to 10 million jobs and give farmers better prices, Sharma said. Wal-Mart, Carrefour SA and Tesco seek to step up their presence in the world's second-most populous nation to tap a market estimated by Business Monitor International to double to $785 billion by 2015 from $396 billion this year.

"This is possibly the most exciting thing that has happened in retail in India," said Hemant Kalbag, who heads the consumer and retail practice for Asia at A.T. Kearney in Mumbai. "This is probably the next big wave of change in organized retail in India."

Overseas retailers will be required to purchase at least 30 percent of goods sold in the ventures from small industries, Sharma said. Stores will be permitted only in 53 cities with a population of 1 million or more, and the government will retain the first right to buy farm products, he said.

'Important First Step'

The government's move is "an important first step," Wal- Mart Asia President Scott Price said in a statement. The retailer looks forward to "playing a key role" in India.

Asia's third-biggest economy permitted foreign retailers to own wholesale stores in 1997. Policy makers have been debating ownership rules in retail for at least seven years.

Wal-Mart has set up 14 such stores through a joint venture with billionaire Sunil Bharti Mittal's Bharti Enterprises to gain a foothold in India, while Metro AG operates six wholesale stores. Carrefour opened its first outlet in December.

"This legal evolution should contribute to modernize Indian food supply chain and to fight against food inflation for the benefit of Indian customers," Carrefour said in an e-mailed statement. The Boulogne-Billancourt, France-based retailer will wait for final regulations, it said.

India's decision may prompt expansion of existing joint ventures and trigger acquisitions, said Bryan Roberts, director of retail research at Kantar Retail in London. Still, the size of the opportunity may be "overstated," he said.

"A lot of retailers have already expanded and found that there's not enough middle-class shoppers around at the moment," said Roberts.

'Win for Consumers'

India's retail industry will get $8 billion to $10 billion in fresh investments over the next five to 10 years, Kishore Biyani, managing director of Pantaloon Retail India Ltd., said in an e-mailed statement yesterday. Pantaloon, which operates more than 150 Big Bazaar supermarkets across 90 cities and towns, also has apparel and consumer-electronics outlets.

"It is a big win for consumers as they will have more choices," said Biyani. "It's a win for small industries as they will have more retailers creating markets for their products" and farmers will benefit from better prices, he said.

Pantaloon climbed 16 percent, the biggest gain since May 2009, to 233.95 rupees at the close in Mumbai trading. Shoppers Stop Ltd. rose 6.2 percent, and Trent Ltd., Tesco's India partner, advanced 8.6 percent, the most since August 2010.

The decision to permit foreign retailers came as Prime Minister Manmohan Singh's parliamentary ally the Trinamool Congress opposed the proposal. The main federal opposition Bharatiya Janata Party was also against the move.

Political Opposition

"Small and medium retailers, which employ a large number of people, will be affected," Arun Jaitley, a BJP leader, said in New Delhi yesterday. "We oppose it completely."

Overseas investment in the retail industry may help slow the pace of price gains, Reserve Bank of India Governor Duvvuri Subbarao said in the northern city of Chandigarh today. "Its important not only for raising overall growth but also important for containing inflation," said Subbarao.

India's food inflation accelerated 9.01 percent in the week ended Nov. 12 from a year earlier, the commerce ministry said yesterday. The rate has stayed above 9 percent for 16 weeks.

'Licking Their Lips'

Raj Jain, president of Wal-Mart India, said in April 2010 the company can help reduce prices by improving supply chain and infrastructure to cut waste. About 40 percent of fruit and vegetables in the country rot before they are sold because of a lack of cold-storage facilities and poor transport infrastructure, according to government estimates.

Bharti-Walmart, the local venture, buys fresh produce directly from about 1,200 farmers in Punjab, in northern India, Jain said in May.

"Foreign retailers must be licking their lips at this opportunity," said Narayanan Ramaswamy, executive director at KPMG India, which advises retail companies. "It has to be one of the biggest opportunities in the world right now."

[Source: bloomberg.com]

11 things to know about Anna Hazare and jan Lok Pal Bill

·         1. Who is Anna Hazare? An ex-army man. Fought 1965 Indo-Pak War 
   
·         2. What's so special about him? He built a village Ralegaon Siddhi in Ahamad Nagar district, Maharashtra 

·         3. So what? This village is a self-sustained model village. Energy is produced in the village itself from solar power, biofuel and wind mills. In 1975, it used to be a poverty clad village. Now it is one of the richest village in India. It has become a model for self-sustained, eco-friendly & harmonic village. 
 
·         4. Ok,...? This guy, Anna Hazare was awarded Padma Bhushan and is a known figure for his social activities. 
 
·         5. Really, what is he fighting for? He is supporting a cause, the amendment of a law to curb corruption in India. 
  
·         6. How that can be possible? He is advocating for a Bill, The Lok Pal Bill (The Citizen Ombudsman Bill), that will form an autonomous authority who will make politicians (ministers), beurocrats (IAS/IPS) accountable for their deeds. 
 
·         7. It's an entirely new thing right..? No, in 1972, the bill was proposed by then Law minister Mr. Shanti Bhushan. Since then it has been neglected by the politicians and some are trying to change the bill to suit thier theft (corruption). 

·         8. Oh.. He is going on a hunger strike for that whole thing of passing a Bill ! How can that be possible in such a short span of time? The first thing he is asking for is: the government should come forward and announce that the bill is going to be passed. Next, they make a joint committee to DRAFT the LOK PAL BILL. 50% goverment participation and 50% public participation. Because you cant trust the government entirely for making such a bill which does not suit them. 

·         9. Fine, What will happen when this bill is passed? A LokPal will be appointed at the centre. He will have an autonomous charge, say like the Election Commission of India. In each and every state, Lokayukta will be appointed. The job is to bring all alleged party to trial in case of corruptions within 1 year. Within 2 years, the guilty will be punished. Not like, Bofors scam or Bhopal Gas Tragedy case, that has been going for last 25 years without any result. 

·         10. Is he alone? Who else is there in the fight with Anna Hazare? Baba Ramdev, Ex. IPS Kiran Bedi, Social Activist Swami Agnivesh, RTI activist Arvind Kejriwal and many more. Prominent personalities like Aamir Khan is supporting his cause. 

·         11. Ok, got it. What can I do? At least we can spread the message. How? Putting status message, links, video, changing profile pics. At least we can support Anna Hazare and the cause for uprooting corruption from India. At least we can hope that his Hunger Strike does not go in vain. At least we can pray for his good health. 

Kinetic sculpture at the BMW Museum (audio swap)

Quick View : A One-Minute Budget

Revenue loss from direct taxes at Rs 11,500 cr, gain from indirect taxes at Rs 11,300 cr  Service tax to boost revenue by Rs 4,000 cr  AC hospitals with more than 25 beds under service tax  Domestic travel to pay Rs 50 service tax, Rs 250 on international travel  Life insurance services in area of investment now in service tax  No excise duty on equipment for Ultra Mega Power projects  Health check-up services now attract service tax  No change in Central Value-added Tax rates  No new tax exemption limits for women  Cut in import duties of raw material for mobile phones  Basic food, fuel exempted from central excise duty  Tax sops of Rs 20,000 on infra bonds extended by a year  1% excise duty on 130 new items  Rs 5 lakh tax exemption limit for individuals above 80 years of age  SEZ to come under MAT  Minimum alternative tax raised 185% vs 18%  Tax exemption limit increased to Rs 2.5 lakh for senior citizens Eligibile age for senior citizens is now 60 years against 65 years earlier  Exemption limit for individual tax payers raised to Rs 1.8 lakh from Rs 1.6 lakh  FY13 fiscal deficit at 43%  FY11 Fiscal Deficit at 51%, FY12 deficit seen at 46%  Revenue deficit pegged at 34%  Plan expenditure at Rs 414 lakh crore  Gross Tax Receipts at Rs 932 lakh crore, up 25%  Non-tax revenue Rs 1,25,000 crore  Tax procedures for small businesses to be simplified  Info exchange treaties signed with 13 tax havens  Banks to cover 20,000 villages for opening accounts in FY12  To allocate Rs 58,000 cr to Bharat Nirman projects  SC/ST scholarship scheme will benefit about 40 lakh students  Scholarships to SC/ST students in Class IX and X  Social projects spending outlay up 17% to Rs 16 lakh crore  Food security bill to be introduced this year  Rural broadband connectivity to be provided in 3 years  Task force will be formed to deal with black money  To allow Rs 30K crore tax-free bonds for railways, NHAI  Metro projects in key cities will get financial aid  Farm credit flow raised to Rs 475 lakh crore  GoM to consider issues related to environmental conflicts  Allocation for farm development raised to Rs 7,860 cr  Subvention of 3% to farmers paying loans before time  Allocation for farm development increased to Rs 7,860 cr  Short term interest to farmers will continue to be at 7%  Agricultural credit limit raised to Rs 4,75,000 crore  New companies bill to be introduced in this session Rs 100 cr equity fund for MFIs  Rs 6,000 cr for some PSU banks to help them maintain Tier-I capital at 8%  To prevent fraud in loan cases, govt has set up Central Electronic Registry  Liberalisation of FDI policy  Govt commited to retain 51% holding in PSUs  FII allowed to invest in MF schemes  FII limit in corporate bonds has been raised by $20 billion  FY12 Divestment target at Rs 40,000 crore  FDI regulations consolidated into one comprehensive document  States to cut down fiscal deficit to 3% of Gross State GDP by 2014  Preparations for GST rollout in final stages, bill in current session  DTC comes in force in April 2012  Economy expected to grow at 9%  Food inflation at 20.2% in February

--
Posted By Prashant to MALVANIYA PRASHANT at 3/01/2011 11:49:00 PM

Quick View : A One-Minute Budget

Revenue loss from direct taxes at Rs 11,500 cr, gain from indirect taxes at Rs 11,300 cr  Service tax to boost revenue by Rs 4,000 cr  AC hospitals with more than 25 beds under service tax  Domestic travel to pay Rs 50 service tax, Rs 250 on international travel  Life insurance services in area of investment now in service tax  No excise duty on equipment for Ultra Mega Power projects  Health check-up services now attract service tax  No change in Central Value-added Tax rates  No new tax exemption limits for women  Cut in import duties of raw material for mobile phones  Basic food, fuel exempted from central excise duty  Tax sops of Rs 20,000 on infra bonds extended by a year  1% excise duty on 130 new items  Rs 5 lakh tax exemption limit for individuals above 80 years of age  SEZ to come under MAT  Minimum alternative tax raised 185% vs 18%  Tax exemption limit increased to Rs 2.5 lakh for senior citizens Eligibile age for senior citizens is now 60 years against 65 years earlier  Exemption limit for individual tax payers raised to Rs 1.8 lakh from Rs 1.6 lakh  FY13 fiscal deficit at 43%  FY11 Fiscal Deficit at 51%, FY12 deficit seen at 46%  Revenue deficit pegged at 34%  Plan expenditure at Rs 414 lakh crore  Gross Tax Receipts at Rs 932 lakh crore, up 25%  Non-tax revenue Rs 1,25,000 crore  Tax procedures for small businesses to be simplified  Info exchange treaties signed with 13 tax havens  Banks to cover 20,000 villages for opening accounts in FY12  To allocate Rs 58,000 cr to Bharat Nirman projects  SC/ST scholarship scheme will benefit about 40 lakh students  Scholarships to SC/ST students in Class IX and X  Social projects spending outlay up 17% to Rs 16 lakh crore  Food security bill to be introduced this year  Rural broadband connectivity to be provided in 3 years  Task force will be formed to deal with black money  To allow Rs 30K crore tax-free bonds for railways, NHAI  Metro projects in key cities will get financial aid  Farm credit flow raised to Rs 475 lakh crore  GoM to consider issues related to environmental conflicts  Allocation for farm development raised to Rs 7,860 cr  Subvention of 3% to farmers paying loans before time  Allocation for farm development increased to Rs 7,860 cr  Short term interest to farmers will continue to be at 7%  Agricultural credit limit raised to Rs 4,75,000 crore  New companies bill to be introduced in this session Rs 100 cr equity fund for MFIs  Rs 6,000 cr for some PSU banks to help them maintain Tier-I capital at 8%  To prevent fraud in loan cases, govt has set up Central Electronic Registry  Liberalisation of FDI policy  Govt commited to retain 51% holding in PSUs  FII allowed to invest in MF schemes  FII limit in corporate bonds has been raised by $20 billion  FY12 Divestment target at Rs 40,000 crore  FDI regulations consolidated into one comprehensive document  States to cut down fiscal deficit to 3% of Gross State GDP by 2014  Preparations for GST rollout in final stages, bill in current session  DTC comes in force in April 2012  Economy expected to grow at 9%  Food inflation at 20.2% in February

Budget - 2011 : News

Fiscal deficit target of 4.6% achievable: Praanaba

Finance Minister Pranab Mukherjee today exuded confidence that the fiscal deficit target of 4.6% of the GDP for 2011-12 would be achieved.  Read

Iron ore exports to come down by up to 35%: FIMI

As a fallout of the duty hike on iron ore exports in the Budget, India's outbound shipment of the key steel making raw material will come down by up to 35%, miners' body the Federation of Indian Mineral Industries (FIMI) today said.  Read

Consumer goods firms may pass on duty change to customers

Firms like Canon and Philips are mulling to pass on the benefit of the excise duty reduction announced in the Budget to consumers, while FMCG company Britannia may increase the prices of its products due to the 1% hike in excise duty. Read

FDI in retail not essential to control inflation: Montek

The Planning Commission today said the government does not hold the view that FDI in multi-brand retail is necessary to control the price rise.  Read

Budget impact: MFI lending expected to pick up

Micro-finance lending by MFIs and banks is set to pick up in the coming months following the announcement of a Rs 100 crore fund for the sector in the Union Budget, a top Micro-Finance Institutions Network (MFIN) official said today.  Read

Semiconductor body welcomes Budget

The India Semiconductor Association has said that the Finance Minister's decision to fully exempt raw materials used in manufacturing specified electronic components from basic customs duty is a good move and would result in higher value addition.  Read

Budget is growth-oriented, says SAIL chairman

Steel Authority of India Limited (SAIL) has said the Union Budget was growth-oriented, and it had various positive proposals for the steel industry.  Read

Fiscal deficit target reachable with $100 oil: Montek

Montek Singh Ahluwalia, deputy chairman of the Planning Commission, said the new budget's target to slash the fiscal deficit to 4.6% of GDP, a goal many economists deride as optimistic, is achievable even if oil averages $100 a barrel for the year.  Read

Pranab's Budget worthy of our praise: Corporate America

Noting that the Budget presented by Finance Minister Pranab Mukherjee sets forth clear parameters to sustain and spur greater investment in India's infrastructure sector, Corporate America on Monday said the confidence-building measures bode well for the country.  Read

Comment: Parkash Singh Badal

Budget 2011-12 is totally directionless and will not give relief to any section of society.  Read

Comment: Mahesh Vyas

Macro-economic stability is back in vogue. The gross fiscal deficit has been reined in at 5.1 per cent of GDP and is expected to go down further to 4.6 per cent in 2011-12. Government expenditure is expected to grow by just 3.3 per cent over the revised estimates of 2010-11. Compared to the budgetary estimates, this will be 13.4 per cent higher. These growth rates are much lower than the trend seen in the past five years when the year-on-year growth rates averaged at over 19 per cent a year. Some numbers do not add up. For example, although the NREGA expenses are now indexed to the Consumer Price Index ,they are the same as last year. Possibly, the expenses will be higher than budgeted.  Read

Comment: Ashima Goyal

The budget shares out the fruits of higher growth and cutting waste: expenditure rises without higher tax mobilisation. The reform vision of growth, inclusion and governance is broader and deeper than just passing the many pending bills. There is a beginning in the use of technology to deliver subsidies and tax reforms, reducing waste and, thus, shifting social spending towards education, health and insurance that creates capacity. Transaction costs are to be lowered by shifting towards self-regulation in manufacturing and self- assessment in customs. An intelligent use of incentives pushes the system towards greater efficiency.  Read

Comment: Siddhartha Roy

An interesting cocktail of growth orientation with inclusiveness and fiscal prudence. When one looks beyond the numbers, at the overall direction, there are distinct trends. There is clear recognition by the polity that a nine-plus per cent growth rate is not sustainable without fiscal consolidation.  Read

More guesswork on disinvestment

With the postponement of public offers (for share sales) of some of its companies, the government expects to miss its Rs 40,000-crore disinvestment target this year by almost half. Finance Minister Pranab Mukherjee said higher than expected revenue from the sale of telecom bandwidth allowed the government to reschedule some of the public issues. Read

Comment: Rajesh Sud

The finance minister has increased the service tax burden on life insurance policies. In ULIP, where service tax was earlier charged only on mortality and fund management charges, it will now be charged on a portion of the premium other than what is allocated for investment. In case of traditional endowment plans, the service tax rate has been increased from 1.03 per cent to 1.545 per cent.  Read

Addressing gaps in financing

The Budget tries to address the financing challenge in infrastructure by deepening the corporate bond market. The limit for investment by foreign institutional investors (FIIs) in corporate bonds with maturity of over five years has been raised from $20 billion to $25 billion. FIIs may also now invest in unlisted bonds with a lock-in period of three years and trade in these among themselves.  Read

Stress on supply-side constraints

A 2.6 per cent increase in Plan outlay, programmes to improve production of palm oil, vegetables, millets, pulses, fodder and tax concessions on cold chains and storage equipment are some measures announced in the Budget as the government's response to address the supply-side constraints contributing to higher food inflation.  Read

Govt tries for an 'aam aadmi' orientation

To promote low-cost housing, this Budget proposes to extend the existing one per cent interest subsidy for a loan up to Rs 10 lakh for a house costing not more than Rs 20 lakh to apply for a housing loan up to Rs 15 lakh for a house costing up to Rs 25 lakh.  Read

Fund squeeze for flagship schemes

The Union Budget goes eloquent about the virtues of the flagship schemes of the UPA government but Finance Minister Pranab Mukherjee has kept a tight fist while allocating funds, whether for the National Rural Employment Guarantee Scheme (NREGS) or those under the umbrella of Bharat Nirman.  Read

'The budget meets the economy's challenges'

Prime Minister, I would like to begin by asking how this Budget addresses current economic conditions, specifically inflation and sustaining rapid growth.  Read

Comment: Roopa Kudva

The Union Budget 2011-12 attempts to ride on India's rapid recent economic growth while controlling the inflation that has flared up in the past few months. The Budget assumes a high GDP growth of nine per cent and attempts to better last year's fiscal targets.  Read

Akash Prakash: Good packaging

The finance minister (FM) has done, for once, a good job of giving a positive spin to the Budget and its arithmetic.  Read

Abheek Barua: The devil's in the detail

To be fair to the finance minister (FM), one can't complain of a "reforms" deficit in the Budget. Take tax reforms. Even as the current avatar of the Direct Taxes Code (DTC) might be quite different from the form in which it was conceived, it is now certain that it will be in operation from 2012. Ditto for the Goods and Services Tax (GST), which is the more controversial of the two tax codes.  Read

With steep rise in export duty, miners will have to depend on home market

The government has increased the ad valorem export duty on iron ore to 20 per cent — from five per cent for fines and 15 per cent for lumps. This has come as a major blow to the miners.  Read

Budget Nuts & Bolts

Recapitalising Rural Banks Support for Regional Rural Banks has been increased from Rs 350 crore to Rs 500 crore in 2011-12, to enable them maintain a CRAR of at least 9 per cent as on March 31, 2012. New equity fund for small MFIs The Budget proposes to create a dedicated equity fund of Rs 100 crore with the Small Industries Development Bank of India for providing equity to smaller microfinance institutions, to help them maintain growth and achieve scale and efficiency in  Read

Prices to rise by Rs 400-500/tn

Domestic waste paper-based newsprint and writing and printing paper industry will get relief from the halving of import duty on waste paper to 2.5 per cent proposed in the Budget. The increase in excise duty from four to five per cent is expected to result in an increase of Rs 450-500 a tonne in writing and printing paper prices.  Read

No push to higher education

While Pranabda's budget is not a spectacularly reformist one, we should note that it does nothing to topple the economic apple cart. It is both balanced and growth oriented, although it falls short on some key dimensions. The positives were clearly the much-needed increase in public spending in the infrastructure sector and the FII limit to $25 billion.  Read

Comment: Digambar Kamat

The Union budget 2011-12 is a growth oriented exercise with focus on the social sector. I am grateful for the jubilee package of Rs 200 crore to Goa for the maintenance of its greenery and beaches. Once the money arrives, we will decide how best to use it.  Read

CPI-IW inflation drops to 9.3%

Inflation based on consumer prices of items consumed by industrial workers (CPI-IW) dropped marginally in January 2011 to 9.3 per cent as compared to 9.47 per cent in December 2010. However, inflation based on food items consumed by these workers rose to 10.22 per cent in January 2011 as compared to 7.98 per cent in December 2010. Read

Comment: Nitish Kumar

The budget for 2011-12 has sops only for election-bound states. We in Bihar are especially disappointed.  Read

A directionless Budget

The budget presented by the UPA is directionless as it has failed to provide any relief to the common man affected by severe inflation and sky-rocketing prices.  Read

My Budget: Vijender Singh, Boxer

There's nothing much from my point of view that looks good about the budget.  Read

Pranab plays party tune

In his budget speech, when Finance Minister Pranab Mukherjee proposed the creation of a women's SHG Development Fund with a corpus of Rs 500 crore, the first one to thump the desk in appreciation was Sonia Gandhi.  Read

State finance ministers on Union Budget 2011-12

The budget is progressive. The provision of Rs 200 crore for cleaning river bodies (other than the Ganges) is a good step. Haryana is looking to gain from the project as the state proposes to restore the health of the Kotla lake under this project.  Read

Comment: Deepak Kapoor

Budget 2011 has clearly set the stage for the coming financial year with a growth expectation of 9% and projected gross fiscal deficit of 4.6 per cent. A closer look at the Budget financials reveal that gross tax revenue is projected to rise by over 18% on a year-on-year basis on back of FM's confidence in sustaining growth in the economy.  Read

Budget raises hope for common man

Finance Minister Pranab Mukherjee has not paid much heed to most of the demands of the real estate sector. Instead, he has taken steps to make it easier for the aam aadmi to own a house. While not much has been offered to the mid-market segment, he has kept in mind the weaker sections of the society.  Read

Lower fiscal deficit gives us comfort: RBI

Better fiscal balance on back of revenues from 3G auctions.  Read

'Effective revenue deficit not jugglery'

Finance Secretary Sushma Nath told Indivjal Dhasmana and Vrishti Beniwal that fiscal deficit could have been reduced to 4.8 per cent of GDP, but that would have meant more pressure next financial year on the fiscal deficit front.  Read

FM offers Rs 100-crore fund for microlenders

Faced with an acute liquidity crunch, the Union Budget has brought little cheer to microfinance institutions (MFIs). However, MFIs have welcomed the recognition of their role in financial inclusion by Finance Minister Pranab Mukherjee. Read

Impact on India Inc

No extension of tax holiday available to STP units.  Read

Local refineries to be hit, soap firms to benefit

While the government tried to synchronise the duty structure of by-products of edible oil refining with imported products, it is the domestic edible oil refineries that will be hit.  Read

Budget has a strong green leaning

From an allocation of over Rs 600 crore towards forest regeneration and environmental remediation programmes, to exemptions given to hybrid automobile makers and solar lanterns, the 2011-12 Budget, though low on financial commitments, shows a strong green leaning.  Read

Industry doubts impact of import duty cut

The domestic cement industry, which has been raising prices continuously since the beginning of this year, has not been able to comprehend whether the Budget was a relief or brought extra burden. Industry experts, however, said the measures would have neutral impact on the industry.  Read

No damage is good news for India Inc

The key takeaway for India Inc from the finance minister's Budget speech was not what was in it, but what wasn't. The general pre-Budget worry of an excise duty increase for auto and cigarettes companies turned out to be misplaced. Read

SEZs suffer MAT body blow

Special economic zones (SEZ) have been given a body blow in the form of 18.5 per cent minimum alternate tax (MAT). The effective tax rate would be 20 per cent, including the surcharge and education cess.  Read

Silent majority

There's less security than at your local five-star hotel and, for all its reform, the loos are still leaky and unwashed. But there's no doubt that yesterday in Parliament when Pranab Mukherjee presented Budget 2011-2012, even the Opposition benches caught a bit of the 'pleased-with-ourselves' air of the Treasury benches.  Read

Good news for anganwadis

Budget 2011-12 has increased the allocation to the social sector by 17 per cent to Rs 1,60,887 crore. It has brought good news for the anganwadi workers and helpers under the Integrated Child Development Services (ICDS) scheme by doubling their salaries to Rs 3,000 and Rs 1,500, respectively.  Read

FM fast-tracks pension laws

Finance Minister Pranab Mukherjee on Monday said a slew of financial sector legislation to be introduced in financial year 2011-12 will pave the way for growth in foreign direct investments (FDI) in insurance, pension and banking sectors. Read

Huge rally and then the U-turn

Stock markets witnessed a highly volatile trading session on Monday. The key equity indices fell from their intra-day highs to close with marginal gains on the back of profit-booking. While there were no negative cues from the Union Budget, investors lacked the confidence for buying due to poor global sentiments in the backdrop of the ongoing West Asia crises.  Read

FM shows his hand: Squeeze spend, focus on reform

Riding on growth to help his revenues remain buoyant, Finance Minister Pranab Mukherjee on Monday presented the 2011-12 Budget that sought to cut the fiscal deficit to 4.6 per cent of gross domestic product, or GDP, by a combination of measures: A squeeze on expenditure and a small net tax give-away of only Rs 200 crore.  Read Banking Bill to be tabled this session The Reserve Bank of India (RBI) has proposed amendments to the Banking Regulation Act, 1949, Finance Minister Pranab Mukherjee said in his Budget speech on Monday. The government has decided to table the Bill during the Budget session of Parliament.  Read Govt to infuse Rs 6,000 cr into PSU banks The government would provide an additional Rs 6,000 crore capital to state-owned banks in financial year 2011-12 to help them maintain at least eight per cent capital adequacy ratio in Tier-I level, Finance Minister Pranab Mukherjee said on Monday while presenting the Union Budget for 2011-12 (April-March) at the lower house of the Parliament.  Read T N Ninan: An anti-inflation Budget If there is a single issue which has proved to be an over-riding factor in the formation of this year's budget, it is inflation. Almost everything that the finance minister has done, and not done, can be explained by that one issue. Consider the following.  Read On a wing and a prayer Apart from his invocation to Lord Indra and Goddess Lakshmi, Union finance minister Pranab Mukherjee should also have prayed to Lord Vinayaka, for good luck and Godspeed! His fiscal strategy is based on brave assumptions about robust economic growth, better tax compliance, stricter expenditure management and the world continuing to view India favourably.  Read Firms see cheaper stainless steel Stainless steel products, including utensils, white goods for use in kitchen, pipes, tubes and fittings are likely to become cheaper due to the cut in tax on raw materials.  Read Comment: Bhargav Dasgupta The Budget is growth oriented and aims to ride the positive momentum in the Indian economy. It continues to focus on the areas of financial inclusion, rural growth, education and infrastructure investment. While inflation continues to remain a concern and increased government spending envisaged in the Budget may continue to put demand-led pressure on prices, the thrust on addressing supply-side bottlenecks is a positive.  Read Comment: Sanjay Nayar It's a pragmatic Budget with a bias to steady and consolidate last year's gains. Overall, it's non-populist, unless we see surprises during the year, and non-reformist, with no policy announcements on insurance, banking or retail. The importance of creating capacity in the key thrust areas has got due recognition.  Read All unit-linked insurance plan charges to attract service tax If you use life insurance as an investment instrument, be prepared for slightly lower yields because of increased taxation.  Read 'We're showing reforms are continuing' The main worry a lot of people have is prices next year, oil prices in particular.  Read Market reactions For the last couple of months, the market and governance have both been reeling under a negative sentiment. Although most of the gains were reversed on Budget day, I still feel this Budget will go a long way in turning the India sentiment positive.  Read After Saral, it's time for Sugam Filing income tax returns in the coming assessment year should be a much simpler task for small taxpayers. Introducing a form similar to the 'Saral' form, Finance Minister Pranab Mukherjee introduced 'Sugam' in his Budget speech on Monday.  Read More education spend welcome The Budget has significantly increased spending on education and introduced a number of schemes to increase employment and employability. A number of subsidies for SC/ST students, funds for Maoist-affected areas and banking facilities for habitations with population less than 200 are measures for uniform wealth distribution. Infrastructure building in all forms has been given acute attention.  Read Good life will come at a higher price SPENDING: Extra tax on airfare, hotel room and drinking at an air-conditioned restaurant.  Read More money to keep investors happy As the finance minister increased the education outlay by 24 per cent, the stocks of education services companies cheered the move, with a few touching an intra-day high by rising between 2.5 per cent and 5 per cent.  Read No push to higher education While Pranabda's budget is not a spectacularly reformist one, we should note that it does nothing to topple the economic apple cart. It is both balanced and growth oriented, although it falls short on some key dimensions. The positives were clearly the much-needed increase in public spending in the infrastructure sector and the FII limit to $25 billion.  Read My Budget: Ramdev, Yoga Guru Organic farming has been given a boost. Almost 40 per cent of food that rotted because of inadequate storage will get saved to some extent. The Rs 300-crore for neutra-cereals is a positive step. Direct subsidies to the poor is also good. Read The jury is unanimous: good, but... The Budget continues in the direction set by the past few Budgets, with its orientation towards sustaining GDP growth at near double-digit levels, containing inflation and narrowing the fiscal gap. Superimposed on these multiple objectives is the overriding need to promote bring about greater economic and social justice. The Budget has a slew of positives. The fiscal stimulus package remains in place with the excise duty at 10 per cent.  Read Comment: Shikha Sharma Multiple concerns have, of late, raised questions about India's continuing growth story. Persisting high inflation threatened a hard landing for India's economy. Potentially volatile portfolio capital flows were perceived to be financing a high current account deficit. An emerging infrastructure financing gap threatened the pace of investment.  Read Healthcare to become costlier Health treatment, air travel and hotel accommodation are set to become expensive with the widening of the service tax net, though the rate has been kept unchanged. While some viewed it as a step towards introduction of the Goods and Services Tax (GST), industry leaders unanimously gave a thumbs-down to it.  Read Comment: Sanjiv Goenka At the end of a remarkable fiscal year, the finance minister has done an excellent job that tries to remove the bottleneck that had caused inflation and are coming in the way of faster development. The realistic Budget focuses on high growth and making the growth inclusive. This will pave the way of building a resilient economy.  Read My Budget: Jaspal Bhatti, Actor-Satirist Budget has a direct connection with worry, not happiness.  Read Eye on GST, govt prunes exemption list INDIRECT TAX: Proposals related to excise and Customs would result in a net revenue gain of Rs 7,300 crore.  Read Comment: Rana Kapoor In the Union Budget tabled today, the government succeeded splendidly in retaining its focus on agriculture, infrastructure and social spending; to set the pace for sustainability of growth, not only in the near-term but also uncompromisingly in the long-term, while simultaneously maintaining focus on fiscal discipline.  Read My Budget: Prasad Bidappa, Fashion Designer Nothing really. He's weighed and balanced to keep the money coming in.  Read My Budget: Shubha Mudgal Its focus on senior citizens.  Read Comment: Kiran Mazumdar Shaw Striving to augment growth in the face of rising inflation and falling investor confidence, India needed Finance Minister Pranab Mukherjee to deliver a 2G Union Budget — a bold statement from the UPA government that addressed Growth and Governance. Unfortunately, all he has is delivered is a 'play-it-safe' budget by balancing his books, containing the deficit, averting subsidies and creaking open the door to foreign investment in Indian mutual funds.  Read Comment: Neeraj Swaroop This was an important Budget as the Indian economy was grappling with important issues. The finance minister has touched upon many of these key issues, including growth, infrastructure development, social sector reforms, and government finances.  Read The extra gold may not fill govt's coffer The rapidly growing domestic branded jewellery has received a body blow with the re-imposition of the excise duty. Read Comment: Gautam Adani The budget is a pragmatic and forward looking balanced effort across the social spectrum. While the urban middle class gets some relief by way of an increase in income-tax exemption level, a slew of initiatives have also been announced to strengthen agri infrastructure and help people in rural areas.  Read Comment: Sajjan Jindal The finance minister has struck a fine balance between growth and inflation and has also given a strong indication of continuing on the reform path.  Read Comment: D K Joshi Despite the strong performance of the economy in 2010-11, the outlook for 2011-12 is clouded by persistently high inflation and rising external risks. The Budget assumes a GDP growth target of 9 per cent, which is on the optimistic side, as we expect GDP growth to moderate to 8.3 per cent in 2011-12. By lowering the fiscal deficit target to 4.6 per cent in 2011-12, from 5.1 per cent in 2010-11, the Budget reiterates its commitment towards medium-term fiscal consolidation.  Read Comment: O P Bhatt The finance minister has announced wide-ranging measures to ensure that economic growth remains robust in the medium term, with a thrust to infrastructure, social sector, boosting investment in agriculture, and expanding productivity in industry as well as attracting foreign investment in the country.  Read Untouched excise brings relief Industries with a focus on consumers predictably had reasons to cheer after the finance minister decided not to roll back the excise duty by two per cent as expected.  Read Comment: Vinita Bali The finance minister has presented a balanced budget with projected fiscal deficit at 4.6 per cent in 2011-12 as against 5.1 per cent in 2010-11, which is going to be challenging to achieve.  Read Comment: Suman Bery Today's Budget, last week's Economic Survey and the coming Approach Paper to the Twelfth Plan will provide the compass to help India navigate the uncertainties of the post-crisis world. The Budget speech provided an intelligent and thoughtful response to a number of the underlying issues.  Read Expensive breakfast, cheaper medicines HOUSEWIVES' BUDGET: By adding 130 items such as, coffee, tea, ready-to-eat packaged foods and ketchups, the Budget has hiked expenses further.  Read Pay more for the label you wear Prices of readymade garments may go up following the finance minister's proposal to make excise duty of 10 per cent mandatory on readymade garments, dresses bearing a brand name or sold under a brand name.  Read FM's tax menu upsets hoteliers Get ready to shell out more for your hotel accommodation. With the finance minister bringing hotel accommodation under the service tax net, unhappy hoteliers say room rents will go up which may impact demand.  Read My Budget: Prahlad Kakkar There are quite a few good things in the budget. The fact that the age for senior citizens has been lowered from 65 to 60 and that a new tax slab has been created for the very senior citizens.  Read Cold chains to bask in infra status The Budget has recognised post-harvest storage, including cold chains, as an infrastructure sub-sector. Further, capital investment in creation of modern storage capacity will be eligible for viability gap funding from the finance ministry. This was aimed at attracting investments into the sector, said Pranab Mukherjee. Investments in cold storage projects are gaining momentum.  Read Funding well for that later dividend Finance Minister Pranab Mukherjee referred to the 'demographic dividend' of a young population, while raising allocation for the education sector by 24 per cent from the previous year, from Rs 31,036 crore to Rs 52,057 crore.  Read Right time to buy cars, bikes Car and two-wheeler manufacturers have heaved a sigh of relief after Finance Minister Pranab Mukherjee proposed to maintain the excise duty at present levels while inviting companies to step up investments in the sector.  Read More power to equipment makers As of now power projects above the size of 1,000 megawatts also called mega power projects, which import their equipment like boilers, turbines and generators, enjoy a concessional basic customs duty of 2.5 per cent and full exemption from counterveiling duty (CVD).  Read Market cheers lower borrowings In his Budget, Finance Minister Pranab Mukherjee on Monday pegged the net government borrowings at Rs 3.43 lakh crore, lower than the Rs 3.45 lakh crore budgeted last year.  Read Lower penalty, higher interest for late payment of service tax If you are providing any taxable service, you are in for some changes in penalties on late payment of service tax. The penal provisions of Sections 76, 77 and 78 of the Finance Act, 1994, have been changed a bit. Section 76 for penalty on late payment of service tax will charge an additional one per cent a month or Rs 100 a day, whichever is higher.  Read Comment: Meher Pudumjee Overall, I would rate it as an inclusive rather than a populist corporate budget. The finance minister has maintained continuity of the reform agenda—like improved investments in infrastructure and social sector, promotion of in-house R&D, continuing with the support for green energy as well as indicated the roll out of the DTC and GST.  Read Shippers see fall in repair costs Increase in FII investment limit in infrastructure sector will also help the sector.  Read Budget 2011: A missed opportunity? SANJAYA BARU: Welcome to the discussion on the Union Budget. The initial reaction of the capital market was very enthusiastic but subsequently there's been a certain moderation.  Read Health plan has a rural touch Service tax on all services provided by centrally air-conditioned hospitals with 25 or more beds.  Read Govt mulls direct subsidy transfer from March '12 SUBSIDIES: Roadmap laid out for proper utilisation of oil, food and fertiliser subsidies.  Read Source: Business Standard