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28th February 20

Union Budget 2013-2014

Eastern Financiers Ltd.



2

astern Financiers Ltd.

EF- Uni on Budget 2013-14 28th February

Index

Particulars Page No.Introduction 3Tax Proposals 4Direct Tax 4-5Indirect Tax 5-6Service Tax 6

Data

Budget at a glance 7

Key Indicators 7

Sector-wise Impact 8Infrastructure 9Capital Goods 9

Automobile 9Banking and Financial Services 10Real Estate 10Micro-Finance 11Broadcasting 11

FMCG & Consumer Durables 11Oil & Gas 11Metals & Mining 11Healthcare 12Power 12Education 12Textiles 12

Agriculture 13Miscellaneous 13

Capital Market 14Other proposals 14-15



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ntroduct ion

Finance Minister, Shri P. Chidambaram opted for austerity over free-spending populism in his Budget statemefor the FY13-14, despite of general elections due early next year and a sagging domestic as well as global econom

cenario. Mr. Finance Minister tabled a statement that reflected minor hiccups on one hand and sanguinity oertain fronts on the other which may lead the Budget to be called as a realistically balanced Budget.

Shri Chidambaram, presenting the eighth budget of his career pegged the fiscal deficit at 5.2% for the currefinancial year and 4.8% for FY14, reflecting his commitment to fiscal prudence. Revenue deficit for the curreyear has been estimated at 3.9% and for FY14 at 3.3%. By FY17 fiscal deficit is estimated to be brought down to 3%evenue deficit to 1.5% and the effective revenue deficit to zero percent. He highlighted the need to curb tountry’s current account deficit, and said that he believes it to be a higher worry than the fiscal deficit. He sahat growing imports of oil, coal and the country’s passion for gold shall weigh on the CAD, due to which Ind

does not have choice between welcoming and spurning foreign investment.

Walking the tight rope ahead of next year's elections, the Finance Minister offered minor sops to income tax payebut slapped a 10% surcharge on 'super-rich' individuals and corporates, levied an inheritance tax and raise

duties on mobile phones, cigarettes and luxury vehicles. Implementing the much-talked about super-rich taChidambaram proposed to levy 10% surcharge on income of Rs 1 crore and above and increase in surcharge fro5% to 10% on domestic corporates whose income exceeds Rs 10 crore a year. In his tax proposals in the Budget f2013-14 to raise an additional Rs 18,000 crore, he announced a benefit of Rs 2,000 to individual tax payers wiaxable income of up to Rs 5 lakh but made no change in either slabs or rates of personal income tax which wontinue at 10, 20 and 30%. However, reforms on the Goods & Services Tax are still in the future.

n an attempt to encourage investment in capital markets, the Finance Minister curtailed securities transaction tSTT) on equities futures and mutual fund units. The government also introduced a tax on transaction of no

agricultural commodities futures contracts on exchanges as Commodity transaction tax (CTT) so as to facilitatemore open and transparent trading process, especially in gold contracts at 0.01%. CTT that was originalproposed in the Union Budget 2008 but abolished in the Budget of 2009 based on the recommendation of tPrime Minister’s Economic Advisory Council.

Mr. Minister promoted manufacturing industry by proposing an Investment Allowance which was a lontanding demand of the Industry. Companies investing Rs. 100 crore or more in plant and machinery during th

period 1-4-2013 to 31-3-2015 will be entitled to deduct an investment allowance of 15% of the investment. Hought to promote investment in infrastructure by issue of tax free bonds, freeing up NELP blocks and increasinax holiday period for power sector. Emphasizing that Food Security Bill is a promise of the UPA governmen

Finance Minister P Chidambaram allotted Rs 10,000 crore as incremental cost to implement the bill. He addhat food subsidy is seen at Rs 90,000 crore in FY14.

The veteran minister in the UPA government who has been attempting a course correction since being reappointo the finance portfolio in mid-2012 proposed a hike of 29.4% in Budget expenditure for FY14 at Rs. 16,65,297 cro

and plan expenditure of Rs.5,55,322 crore and non-plan expenditure of Rs. 1109975 crores.

Ensuring dignity and safety of women, Shri Chidambaram announced setting up of a special Nirbhaya fund f

women's safety with a corpus of Rs.1,000 crore. He moved on to announce setting up of India's first women pubector bank with an initial fund of Rs.1,000 crore.

Over a l l , t h e U n i o n B u d g et n e i t h er h a d s u r p r i ses n o r a n y b i g a n n o u n c em en t s b u t h a d t h

n e cessa r y c au t i o n a n d i n t e n t t o r ev i v e g r ow t h i n t h e ec on om y . H ow ev er , a t a t i m e w h en t h

g o v er nm en t i s w a l k i n g o n a t h i n r o p e o f st a y i n g i n p ow er o r l o si n g i t a l l—t h i s p r o b a b l y i s t h e b e

ha t t h e FM cou l d ha v e del i v e r e d !! !



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Tax Pr oposals

Dir ect Taxes

Relief for Tax Payers in the first bracket of Rs. 2 lakhs to Rs.5 lakhs. A tax credit of Rs. 2000 to every person wit

total income upto Rs.5 lakhs.

Surcharge of 10% on persons (other than companies) whose taxable income exceed Rs.1 crore to augment

revenues.

Increase in surcharge from 5 to 10percent on domestic companies whose taxable income exceed Rs.10 crore.

In case of foreign companies who pay a higher rate of corporate tax, surcharge to increase from 2 to 5 percent, i

the taxable income exceeds Rs.10 crore.

In all other cases such as dividend distribution tax or tax on distributed income, current surcharge increasedfrom 5 to 10%.

Additional surcharges to be in force for only one year.

Education cess to continue at 3 percent.

Permissible premium rate increased from 10 percent to 15 percent of the sum assured by relaxing eligibility

conditions of life insurance policies for persons suffering from disability and certain ailments.

Contributions made to schemes of Central and State Governments similar to Central Government Health Schem

eligible for section 80D of the Income tax Act.

Donations made to National Children Fund eligible for 100 percent deduction.

Investment allowance at the rate of 15 percent to manufacturing companies that invest more than Rs. 100 crore

in plant and machinery during the period 1.4.2013 to 31.3.2015.

‘Eligible date’ for projects in the power sector to avail benefit under Sec 80-IA extended from 31st Mar 13 - 31st

Mar 14.

Concessional rate of tax of 15 percent on dividend received by an Indian company from its foreign subsidiary

proposed to continue for one more year.

Securitisation Trust to be exempted from Income Tax. Tax to be levied at specified rates only at the time

distribution of income for companies, individual or HUF etc. No further tax on income received by investors fro

the Trust.

Investor Protection Fund of depositories exempt from Income-tax in some cases.

Parity in taxation between IDF-Mutual Fund and IDF-NBFC.

A Category I AIF set up as Venture capital fund allowed pass through status under Income-tax Act.



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TDS at the rate of 1 percent on the value of the transfer of immovable properties where consideration exceeds

Rs. 50 lakhs. Agricultural land to be exempted.

A final withholding tax at the rate of 20 percent on profits distributed by unlisted companies to shareholders

through buyback of shares.

Proposal to increase the rate of tax on payments by way of royalty and fees for technical services to non-

residents from 10 percent to 25 percent.

Reductions made in rates of Securities Transaction Tax in respect of certain transaction.

Proposal to introduce CTT in a limited way. Agricultural commodities will be exempted.

Modified provisions of GAAR will come into effect from 1.4.2016.

Rules on Safe Harbour will be issued after examining the reports of the Rangachary Committee appointed to loo

into tax matters relating to Development Centres & IT Sector and Safe Harbour rules for a number of sectors.

Fifth large tax payer unit to open at Kolkata shortly.

A number of administrative measures such as extension of refund banker system to refund more than Rs. 50,00

technology based processing, extension of e-payment through more banks and expansion in the scope of annua

information returns by Income-tax Department.

Tax p r oposa l s on t he d i r ec t t a xes si de a r e es t im a t ed t o y i e l d Rs . 13 , 300 c r o r e .

Indir ect Taxes

No change in the normal rates of 12% for excise duty and service tax.

No change in the peak rate of basic customs duty of 10% for non-agricultural products.Customs Duty

Period of concession available for specified part of electric and hybrid vehicles extended upto 31 March 2015.

Duty on specified machinery for manufacture of leather and leather goods including footwear reduced from 7.5

to 5%.

Duty on pre-forms precious and semi-precious stones reduced from 10 to 2 percent.

Export duty on de-oiled rice bran oil cake withdrawn.

Duty of 10 percent on export of unprocessed ilmenite and 5 percent on export on ungraded ilmenite.

Concessions to air craft maintenaince, repair and overhaul (MRO) industry.

Duty on Set Top Boxes increased from 5 to10 percent.

Duty on raw silk increased from 5 to 15 percent.

Duties on Steam Coal and Bituminous Coal equalized and 2% custom duty and 2% CVD levied on both kinds coa

Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vesse

increased.



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Duty free gold limit increased to Rs. 50,000 in case of male passenger and Rs.1,00,000 in case of a fema

passenger subject to conditions.

Excise du ty

Relief to readymade garment industry. In case of cotton, zero excise duty at fibre stage also. In case of spun ya

made of man-made fibre, duty of 12% at the fibre stage.

Handmade carpets and textile floor coverings of coir and jute totally exempted from excise duty.

To provide relief to ship building industry, ships & vessels exempted from excise duty. No CVD on imported shi

and vessels.

Specific excise duty on cigarettes increased by about 18%. Similar increase on cigars, cheroots and cigarillos.

Excise duty on SUVs increased from 27 to 30 percent. Not applicable for SUVs registered as taxies.

Excise duty on marble increased from Rs.30 per square meter to Rs. 60 per square meter. Proposals to levy 4 percent excise duty on silver manufactured from smelting zinc or lead.

Duty on mobile phones priced at more than Rs. 2000 raised to 6 percent.

MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and bi

chemic systems of medicine to reduce valuation disputes.

Servi ce Tax

Maintain stability in tax regime.

Vocational courses offered by institutes affiliated to the State Council of Vocational Training and testing activiti

in relation to agricultural produce also included in the negative list for service tax.

Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls.

Proposals to levy Service Tax on all air conditioned restaurant.

For homes and flats with a carpet area of 2,000 sq.ft. or more or of a value of Rs.1 crore or more, which are high

end constructions, where the component of services is greater, rate of abatement reduced from 75 to 70 percen

Out of nearly 17 lakh registered assesses under Service Tax only 7 lakhs file returns regularly. Need to motiva

them to file returns and pay tax dues. A onetime scheme called ‘Voluntary Compliance Encourageme

Scheme’ proposed to be introduced. Defaulter may avail of the scheme on condition that he files truthf

declaration of Service Tax dues since 1st October 2007.

Ta x p r o p o sa l s o n t h e I n d i r ect Ta x si d e a r e est im a t e d t o y i el d Rs . 4,70 0 c r o r e.

Good and Servi ces Tax

A sum of Rs. 9,000 crore towards the first installment of the balance of CST compensation provided in the budg

Work on draft GST Constitutional amendment bill and GST law expected to be taken forward.



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Budget at a Glance

Particulars 2011-12 2012-13(BE) 2012-13(RE) 2013-14(BE

Revenue Receipts 751437 935685 871828 1056331

Tax Revenue (net to centre) 629765 771071 742115 884078Non-tax Revenue 121672 164614 129713 172252Capital Receipts 552928 555241 558998 608967

Recoveries of Loans 18850 11650 14073 10654Other Receipts 18088 30000 24000 55814Borrowings and other liabilities 515990 513590 520925 542499Total Receipts 1304365 1490925 1430825 1665297

Non-Plan Expenditure 891990 969900 1001638 1109975

On Revenue Account of which 812049 865596 919699 992908

nterest Payments 273150 319759 316674 370684On Capital Account 79941 104304 81939 117067Plan Expenditure 412375 521025 429187 555322

On Revenue Account 333737 420513 343373 443260On Capital Account 78639 100512 85814 112062Total Expenditure 1304365 1490925 1430825 1665297

Revenue Expenditure 1145785 1286109 1263072 1436169Of Which, Grants for creation of capital Assets 132582 164672 124275 174656Capital expenditure 158580 204816 167753 229129Revenue Deficit 394348 350424 391245 379838

(4.4) (3.4) (3.9) (3.3)

Effective Revenue Deficit 261766 185752 266970 205182(2.9) (1.8) (2.7) (1.8)

Fiscal deficit 515990 513590 520925 542499

(5.7) (5.1) (5.2) (4.8)

Primary Deficit 242840 193831 204251 171814

(2.7) (1.9) (2.0) (1.5)

Key IndicatorsParticulars (US$ bln) 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

GDP growth (%) 9.30 6.7 8.6 9.3 6.2 5IP Growth(%) 15.5 2.5 5.3 8.2 2.9 0.7*

nflation WPI 4.7 8.1 3.8 9.6 8.9 7.6**nflation CPI 6.2 9.1 12.4 10.4 8.4 10**

Exports Growth (%) 29 13.6 (3.5) 40.5 21.3 (4.9)**mports (%) 35.5 20.7 (5) 28.2 32.3 --

Current Acc Bal as % of GDP (1.3) (2.3) (2.8) (2.8) (4.2) (4.6)***

ource: Economic SurveyApril-Dec 2012* Apr-Jan 2012-13** Apr-Sep 2012



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SECTO -WISE IMPACT



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InfrastructureReform Detai l Companies Impacted

Raising Corpus of RIDF Raising corpus of Rural Infrastructure Development Fund (RIDF) to Rs.20,000 crore Positive for all infraCompanies

Tax-free infra bondsInfrastructure tax-free bond of Rs.50,000 crore in 2013-14.

Positive for IDFC, L&T, etc

Road Construction

Build roads in North eastern states and connect them toMyanmar Positive for companies like

GMR Infra, IRB Infra, IL&FSTransportation, etc.

3000 kms of road projects will be awarded in the first six months of 2013-14.

Road Sector Regulator A regulatory authority for road sector.

Industrial Corridors

Plans for seven new Industrial Corridors have beenfinalized and work on two new smart industrial cities

will start during 2013-14. Positive for Reliance Infra Delhi Mumbai Industrial Corridor (DMIC) to beprovided additional funds.

Chennai Bengaluru Industrial Corridor to be developed

Drinking Water andSanitation

Rs.15,260 crore allocated to Ministry of Drinking Waterand Sanitation Positive for companies like

Triveni Engineering,Pratibha Industries, etc. Setting up of water

purification plant

Rs.1,400 crore provided for setting-up of waterpurification plants in 2000 arsenic and 12000 fluoride-affected rural habitations

Capital goodsReform Detai l Compani es Impacted

Increased Defenceallocation

Allocation for Defence increased to Rs.2,03,672 croreincluding Rs.86,741 crore for capital expenditure.

Positive for BEL, BEML, etc

Investment allowance forCapital expenditure

Companies investing Rs.100 crore or more in plant andmachinery during the period 1.4.2013 to 31.3.2015 willbe entitled to deduct an investment allowance of 15 percent of the investment.

Positive for companies lik ABB, L&T, BHEL, etc

AutoReform Detai l Compani es Impacted

Allocation to JNNURM

Rs.14,873 crore for JNNURM in BE of 13-14 as against RE of Rs.7,383 crore. Out of this, a significant portionwill be used to support the purchase of upto 10,000buses, especially by the hill States.

Positive for Tata Motors, Ashok Leyland, etc.

Extension of Concessionperiod for certain parts of Electric & Hybrid Vehicles

Period of concession available for specified part of electric and hybrid vehicles extended upto 31 Mar2015.

Positive for Electro Therm

Duty Hike on SUVsExcise duty on SUVs increased from 27 to 30 percent. Negative for M&M and Tat

Motors, Maruti Suzuki.



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Banking & Financial ServicesReform Detai l Companies Impacted

Interest sub-vention onFarm Loans extended to

cover private Banks

Interest subvention scheme extended for crop loansborrowed from private sector scheduled commercialbanks.

Positive for ICICI Bank,HDFC Bank etc.

Additional deduction of interest on Housing Loan

Additional deduction of interest upto Rs.1 lakh for aperson taking first home loan upto Rs.25 lakh duringperiod 1.4.2013 to 31.3.2014

Positive for companies likLIC Housing Fin, HDFC andall banks.

Setting up of urbanHousing Fund

National Housing Bank to set up Urban Housing Fund.Rs.2,000 crore to be provided to the fund in 2013-14. Positive for LIC Housing Fi

HDFC, etc.Allocation o Rural HousingFund

Rs.6,000 crore to Rural Housing Fund in 2013-14

Purview of RGESS extended

Rajiv Gandhi Equity Savings Scheme benefits could be

extended upto three years and the limit for investorswanting to invest in RGESS has been raised to Rs 12lakh from Rs 10 lakh earlier.

Positive for HDFC Bank, Aditya Birla Nuvo, etc.

Floating new instruments In consultation with RBI, instruments protectingsavings from inflation to be introduced.

Finalizing DISCOMrestructuring plan

Guidelines regarding financial restructuring of DISCOMS have been announced.

Positive for companies likePFC, REC, etc.

Capital Infusion in PSUBanks

Compliance of public sector banks with Basel IIIregulations to be ensured. Rs.14,000 crore provided inBE 2013-14 for infusing capital

Positive for SBI, UCO BankPNB, etc.

Emphasis on Insurancepenetration

Number of proposals to be finalized, in consultation

with IRDA to increase the penetration of insurance,both life and general, in the country

Positive for SBI, HDFC Ban Aditya Birla Nuvo,etc.

Introduction of CTT Proposal to introduce Commodity Transaction Tax Negative for MCX

Real EstateReform Detai l Companies Impacted

TDS on transferring

immovable property

TDS at the rate of 1 percent on the value of the transferof immovable properties where consideration exceeds

Rs.50 lakhs.

Negative for all Real estate

companies

Reduction in abatement rate for high-end

Construction

For homes and flats with a carpet area of 2,000 sq.ft. ormore or of a value of Rs.1 crore or more, which arehigh-end constructions, where the component of services is greater, rate of abatement reduced fromfrom 75 to 70 percent.

Negative for companies likDLF, Unitech, etc.



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Micro-FinanceReform Detai l Companies Impacted

Allocation of fund A sum of Rs.100 crore provided to India MicrofinanceEquity Fund.

Positive for SKSMicrofinance

BroadcastingReform Detai l Companies Impacted

Enhancing private FMRadio Coverage

All cities having a population of more than 1,00,000 willbe covered by private FM radio services

Positive for companies likEINL, Reliance Broadcast,etc.

FMCG & Consumer Durables

Reform Detai l Companies Impacted

ncreased spending onMGNREG

Allocation of Rs.80,194 crore in 2013-14 for Ministry of Rural Development marking an increase of 46% overRE 2012-13. MGNREGS will get Rs.33,000 crore, PMGSY will get Rs.21,700 crore, and IAY will get Rs.15,184crore.

Positive for all FMCG &Consumer Durable

Companies

Duty HikeSpecific excise duty on cigarettes increased by about 18percent. Similar increase on cigars, cheroots andcigarillos.

Negative for ITC, GodfreyPhillips, VST Ind.

Oil & GasReform Detai l Companies Impacted

Review of Natural gaspricing Policy

The low domestic gas prices have disincentivisedfurther exploration and investment in domestic gasassets. If prices are hiked it shall promote furtherinvestment in gas sector.

Positive for ONGC

Shale Gas ExplorationPolicy

A policy to encourage exploration and production of shale gas will be announced Positive for RIL

Starting Operations in theDabhol LNG Terminal

The 5 MMTPA LNG terminal in Dabhol, Maharashtrawill be fully operational in 2013-14. Positive for GAIL

Metals & MiningReform Deta il Companies Impacted

PPP Policy for Coalprocurement

Devising a PPP policy framework with Coal India Limitedas one of the partners to reduce dependence onimported coal.

Positive for CIL

ntroduction of excise onilver manufacturing frommelting zinc

The government has introduced 4% excise duty on silvermanufactured from smelting zinc or lead to bring therate on par with the excise duty applicable to silverobtained from copper ores and concentrates.

Negative for Hindustan Z



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HealthcareReform Deta il Companies Impacted

Allocation to Ministry of Health & Welfare Rs.37,330 crore allocated to the Ministry of Health &Family WelfarePositive for Companies l

Glenmark, Sun PharmaCipla, etc.

Allocation to new HealthMission

New National Health Mission will get an allocation of Rs.21,239 crore

Allocation to elderlyHealthcare

Rs.150 crore provided for National Programme for theHealth Care of Elderly.

Allocation to AYUSH Ayurveda, Unani, Siddha and Homoeopathy are beingmainstreamed. Allocation of Rs. 1,069 crore toDepartment of AYUSH.

Power

Reform Detai l Compani es ImpactedConstruction of ransmission System

Government to construct a transmission system fromSrinagar to Leh at a cost of Rs.1,840 crore.

Positive for Power GriJyoti Structures, KEC In

Generation basedncentives re-introducedor Wind energy Projects

‘Generation-based incentive’ reintroduced for windenergy projects and Rs.800 crore allocated for thispurpose.

Positive for Suzlon

Benefit under Section 80-A extended

‘Eligible date’ for projects in the power sector to availbenefit under Section 80- IA extended from 31.3.2013 to31.3.2014.

Positive for Adani PoweJSPL, etc.

Education

Reform Deta il Compani es Impacted

Allocation to SSARs.27,258 crore provided for Sarva Shiksha Abhiyaan(SSA).

Positive for CompanieLike Everonn Educatio

,Educomp, CareerEducation, Compucom

etc.

Allocation to RMSA An increase of 25.6 per cent over RE of the current year forinvestments in Rashtriya Madhyamik Shiksha Abhiyan(RMSA).

Allocation towardsHuman resourceDevelopment

Allocation of Rs.65,867 crore to the Ministry of HumanResource Development

TextilesReform Deta il Compani es Impacted

Continuation of TUF Technology Upgradation Fund Scheme (TUFS) to continue in12th Plan with an investment target of Rs.1,51,000 crore.

Positive for all TextilPlayers

Sops for ReadymadegarmentsManufacturers

Relief to readymade garment industry. In case of cotton, zeroexcise duty at fibre stage also. In case of spun yarn made of manmade fibre, duty of 12 percent at the fibre stage.

Positive for Raymond Aditya Birla Nuvo, Pag

industries, etc.

Concessional Loans forhandloom Sector

Working capital and term loans at a concessional interest of 6 per cent to handloom sector.



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AgricultureReform Detai l Compani es Impacted

Increased allocation to Agriculture

Rs.27, 049 crore allocated to Ministry of Agriculture, anincrease of 22 per cent over the RE of current year. Positive for all agricultur

based companies Agricultural Credit Allocation

For 2013-14, target of agricultural credit kept at Rs.7lakh crore.

Interest Subvention Interest subvention scheme for short-term crop loans tobe continued.

Positive for Advanta IndiaBayer Corp., Kaveri Seeds

Rallis India, MonsantoIndia

Allocation towardscommencement of Crop

DiversificationProgramme.

Rs.500 crore allocated to start a programme of cropdiversification that would promote technologicalinnovation and encourage farmers to choose cropalternatives.

Positive for companies likKaveri Seeds, Camson Bio

etc. Allocation towardsintroduction of new crop

varieties

Allocation made for pilots programme on Nutri-Farmsfor introducing new crop varieties that are rich in micro-nutrients.

Funds for RKVY & NationalFood Security Mission

Rashtriya Krishi Vikas Yojana and National Food SecurityMission provided Rs.9,954 crore and Rs.2,250 crorerespectively.

Allocation towardsintegrated watershed

Programme

Allocation for integrated watershed programmeincreased from Rs.3,050 crore in 2012-13 (BE) toRs.5,387 crore.

MiscellaneousReform Detai l Companies Impacted

ncremental tax onroyalty payments

Proposal to increase the rate of tax on payments by wayof royalty and fees for technical services to non-residentsfrom 10 percent to 25 percent.

Negative for ACC, HUL, Maruetc.

Hike In Customs DutyCustoms Duty on pre-forms precious and semi-preciousstones reduced from 10 to 2 perent

Positive for Rajesh exports

Duty exemptionTo provide relief to ship building industry, ships andvessels exempted from excise duty. No CVD on importedships and vessels.

Positive for ABG Shipyard, GShipping, etc.

Duty increase Excise duty on marble increased from Rs.30 per squaremeter to Rs.60 per square meter.

Duty increaseDuty on mobile phones priced at more than Rs.2000raised to 6 percent

Negative for Spice Mobiles

mposition of ServiceTax

Proposals to levy Service Tax on all air conditionedrestaurant.

Negative for SpecialityRestaurants Ltd



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Capit al Mar ket Reforms

Number of proposal has been finalized in consultation with SEBI.

Designated depository participants authorised by SEBI may register different classes of portfolio investors, subject to compliance with KYC guidelines.

SEBI will simplify the procedures and prescribe uniform registration and other norms for entry for foreign portfolio

investors.

Investor having stake of 10 per cent or less in a company will be treated as FII and, where an investor has a stake o

more than 10 per cent, it will be treated as FDI.

FIIs will be permitted to participate in the exchange traded currency derivative segment to the extent of their Indian

rupee exposure in India.

FIIs will also be permitted to use their investment in corporate bonds and Government securities as collateral tomeet their margin requirements.

SEBI to prescribe requirement for angel investor pools by which they can be recognized as Category I AIF venture

capital funds.

Small and medium enterprises, to be permitted to list on the SME exchange without being required to make an initi

public offer (IPO).

Stock exchanges to be allowed to introduce a dedicated debt segment on the exchange.

Other Pr oposals

Rur al Development

Allocation of Rs. 80,194 crore in 2013-14 for Ministry of Rural Development marking an increase of 46% over R

2012-13.

Proposal to carve out PMGSY-II and allocate a portion of the funds to the new programme that will benefit Stat

such as Andhra Pradesh, Haryana, Karnataka, Maharashtra, Punjab and Rajasthan.

JNNURM

Rs. 14,873 crore for JNNURM in BE 13-14 as against RE of Rs. 7,383 crore. Out of this, a significant portion will be

used to support the purchase of upto 10,000 buses, especially by the hill States.

Backwar d Regions Gr ant Fund

New criteria for determining backwardness to be evolved and reflect them in future planning and devolution of

funds.

Ski ll Development

Target of skilling 50 million people in the 12th Plan period, including 9 million in 2013-14.



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Science and Technology

Substantial enhancements given to Science and Technology, Space and Atomic Energy.

Rs. 200 crore to be set apart to fund organizations that will scale up S&T innovations and make them available to th

people.

nst it ut ions of Excellence

A grant of Rs.100 crore each made to 4 institution of excellence. The institutions are Aligarh Muslim University-

Aligarh campus, Banaras Hindu University-Varanasi, Tata Institute of Social Sciences-Guwahati campus and the

Indian National Trust for Art and Cultural Heritage (INTACH).

Sports

National Institute of Sports Coaching to be set up at Patiala at a cost of Rs. 250 crore over a period of three years.

Broadcasting

All cities having a population of more than 1,00,000 will be covered by private FM radio services.

Panchayat i Raj

Augmentation in the Budget allocation of Rajiv Gandhi Panchayat Sashaktikaran Abhiyan (RGPSA) to Rs.455 crore i

2013-14. An additional Rs. 200 crore proposed to be provided.

Post Off ices

An ambitious IT driven project to modernize the postal network at a cost of Rs. 4,909 crore. Post offices to become

part of the core banking solution and offer real time banking services.

Ghadar Memor ial Government to fund the conversion of the Ghadar Memorial in San Francisco into a museum and library.

Cent r al Schemes

Centrally Sponsored Schemes (CSS) and Additional Central Assistance (ACA) Schemes to be restructured into 70

schemes. Central fund for the schemes to be given to the States as part of central plan assistance.

Thr ee pr omises

Promises made to woman, youth and poor.

The government stands in solidarity with their girl children and women and pledged to do everything possible

empower them and to keep them safe and secure. A fund - “Nirbhaya Fund” - to be setup with Governme

contribution of Rs. 1,000 crore.

Youth to be motivated to voluntarily join skill development programmes. National Skill Development Corporation t

set the curriculum and standards for training in different skills. Rs. 1000 crore set apart for this scheme.

To the poor of India direct benefit transfer scheme will be rolled out throughout the country during the term of the

UPA Government with the motive “Äapka paisa aapke haath”.



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EASTERN FINANCIERS RESEARCH DESK

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Nandita Jaiswal- Sr. Research Analyst 033 – 4011 7800 [email protected]

Biswarup Chakraborty- Research Analyst 033 –4011 7800 [email protected]

Disclaimer

Eastern Financiers Ltd. as a firm may have investment positions in the company shares discussed above. This document i

meant for our clients only and is not for public distribution. This material is for the personal information of the authorized

recipient, and we are not soliciting any action based upon it. This report is not to be construed as an offer to sell or the

solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. The

material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and

it should not be relied upon as such. Neither Eastern Financiers Ltd., nor any person connected with it, accepts any

liability arising from the use of this document. The recipient of this material should rely on their own investigations and

take their own professional advice. Opinions expressed are our current opinions as of the date appearing on this materia

only. While we endeavor to update on a reasonable basis the information discussed in this material, there may be

regulatory, compliance, or other reasons that prevent us from doing so. Prospective investors and others are cautioned

that any forward looking statements are not predictions and may be subject to change without notice. If you have any

questions about this report please get in touch with Eastern Financiers Ltd. 102, 104 & 210 ‘Lords

7/1, Lord Sinha Road, Kolkata : 700 071, Phone - 033-4000 6800, Email: [email protected] Website

www.easternfin.com

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