The Hindu Business Line : Saturday, March 01, 2003

Time to invest in equity, debt
THE Finance Minister's proposal on personal taxation gives investors some breathing space in the face of compression of expected yields on both equity and debt investments. Post-tax yields on small savings continue to be attractive. Post-tax ... More

AUTOMOBILES

Riding the break
PASSENGER cars and multi-utility vehicles (MUV) will soon be cheaper. The Finance Minister, Mr Jaswant Singh, has reduced the total excise duty on passenger cars and MUVs from 32 per cent to 24 per cent. He has dropped the special excise duty to ... More

BUDGET

Jaswant smiles on the salaried
THE Finance Minister, Mr Jaswant Singh, today presented a `play it safe' Budget, side-stepping key recommendations of the Kelkar Task Force but bringing cheer to the salaried class. With a clear view not to antagonise the middle-class in an ... More

Impetus and impediments
PRICE reduction is a time-tested device to stimulate demand. The corporate sector knew it all the time; the explosive growth in the telecom sector in response to dramatic tariff cuts being the latest proof of the concept. The Railway Minister, ... More

Dividend, tax gains for MF investors
While returns earned on the growth option will be subject to a 10 per cent (long-term capital gains) tax, the returns earned by way of dividends will be subject to a higher 12.5 per cent tax. More

CST cut to hurt States by Rs 5,000 cr
THE State Governments stand to lose over Rs 5,000 crore annually from the Union Budget announcement to halve the Central sales tax (CST) rate to two per cent in the coming fiscal. During 2002-03, total revenue from the CST accruing to States ... More

Style & substance true to form
WHEN Mr Jaswant Singh speaks — in his inimitable Queen's English with adequate pauses and diction — parliamentarians, more often than not, listen to him in rapt attention. So was it on Friday in the Lok Sabha. And listen they did, for ... More

Will Mauritius lose its sheen?
WILL the Mauritius route used by companies for bringing in investments into India lose its sheen? Budget 2003 has proposed that investors who buy stocks of listed companies from March 1, 2003 will be exempt from paying tax on the gains they make ... More

A curate's egg
FROM consumers' point of view, Budget 2003 is like a curate's egg — good in patches. The pre-Budget lobbying by the automobile sector seems to have worked. Excise duty on cars, as on ACs and soft drinks, has been brought down from 32 per ... More

That Black Label may cost you less!
IN Mumbai, the consumers may shell out Rs 750 less for a quart of Johnnie Walker Black Label. This, if you like, is indeed the highlight of the Finance Minister's budgetary proposals for the alcoholic beverage sector. The premium ... More

Women give the thumbs-up
LONG before he had even started the Budget exercise, the Finance Minister, Mr Jaswant Singh, a man of few words, had said the one thing he'd like his Budget to do was put more money in the housewife's purse. To find out if Budget 2003 had done ... More

Prices falling? Just read the fine print
WILL your bottle of cola, packet of biscuits, roll of hard-boiled candy, or bottle of deodorant actually become any cheaper? On the face of it, of course, the Union Budget 2003 proposals are significant for most FMCG categories - ranging from ... More

Rly safety gets customs boost
THE Finance Minister, Mr Jaswant Singh, has announced a drastic cut in the customs duty on spares used for railway locomotives to address the key issue of safety and modernisation facing Indian Railways. The customs duty on spares for diesel ... More

Addl surcharge: No major impact
THE income-tax surcharge of 5 per cent imposed in the 2002-03 Budget has been withdrawn for individual tax payers in the 2003-04 Budget. For the corporate sector, the surcharge has been slashed by half to 2.5 per cent. The total net savings ... More

Health cover for the masses
HEALH insurance is being taken to the masses. The Finance Minister, Mr Jaswant Singh, today announced that the public sector general insurance companies have been asked to design a community-based universal health insurance scheme that would ... More

Hope for disability sector
"We're delighted that after several years, `disability' as a core sector has found mention in the Budget." More

Jaswant nurtures biotech dreams
THE biotechnology sector never had it so good. Mr Jaswant Singh made its day with some special mentions and granted some of its wish list. The big cheer comes from the announcement of nil duty import up to 25 per cent of export realisation: it ... More

An oversight for plastic lens manufacturers?

`A boost for infrastructure'

`Small & simple' Ministry

CEMENT

Cement: An excise load
THE housing industry will bear the brunt of soaring cement prices, despite the Finance Minister trying to please the tax-payers by continuing with the existing tax rebate of Rs 1,50,000 on housing. The Finance Minister, has announced an ... More

Many pluses, 1 minus
I THINK there are many positives in this Budget for the cement industry, and one negative. The positives are the Budget's focus on infrastructure, the new road projects of 10,000 km announced, the provision of 25 per cent made for concrete roads, ... More

Good news for cement sector
The Government has finally acknowledged the need for giving a thrust to concrete roads and has accepted the industry's demand for use of cement in road construction. More

`Hike in excise duty on cement unnecessary'

Cement industry sore over hike in excise duty

ECONOMY

How much do we really owe?
JUST how much do we as a nation collectively owe to ourselves and the rest of the world? The latest Union Budget expects this figure to touch Rs 17,80,064 crore as of March 31, 2003. (Actually it also claims that it has to get about Rs 300 crore ... More

BUDGET TEXT

Jaswant packs panch punch to push reforms
The following are excerpts from the Union Budget speech delivered by the Finance Minister, Mr Jaswant Singh: Mr Speaker, I am greatly honoured to present the sixth successive Budget of the Government of the National Democratic ... More

ENGINEERING

Engineering: Increase in service tax
Engineering: The Budget increased the rate of service tax applicable for maintenance and repair service, namely Annual maintenance Contracts (AMC) and authorised maintenance and repair services from the present 5 per cent to 8 per ... More

EXCISE AND CUSTOMS

Gold duty cut to beat down smuggling
THE Finance Ministry's decision to slash customs duty on imports of gold had an immediate impact on the prices of the precious metal, which slipped on the Mumbai market today. Standard gold prices moved down by Rs 160 per 10 gm to Rs 5580 from ... More

FERTILISERS

Fertilisers: Bracing up
THE hike the selling prices of urea and Di-Ammonium Phosphate (DAP) proposed in the Budget will not have any direct earnings implications for the key players in the fertiliser industry. The move is, however, significant for the industry for its ... More

Urea price hike not to benefit fertiliser cos

HEALTH

Differing views on risks posed by asbestos use
DOES the use of asbestos pose health risks? Non-governmental organisations (NGOs) have been highlighting the health hazards. The issue has assumed added importance in the backdrop of the steel lobby reportedly pressurising the Union Ministry of ... More

HOTELS

A five-star plan
WITH an aim to boost tourism in the country, the Finance Minister has rolled out a slew of measures to provide a fillip to the hospitality industry. These measures would be perceived as a welcome break by an industry that went through trying ... More

PETROLEUM

Want better roads? Pay 50 paise more for diesel, petrol
THE public will have to pay more as fuel cess, apart from the toll fees for using highways in the country. The Government has decided to impose an additional cess of 50 paise per litre each on diesel and petrol for funding road development in ... More

45 pc hike in kerosene, LPG subsidy
THE Budget has proposed a 45 per cent raise in the subsidy on kerosene and LPG to Rs 6,300 crore this fiscal over the previous year's figure. In reality, the subsidy is only Rs 4,100 crore, having dropped by a whopping 40 per cent over the ... More

Big disappointment on oil front
BIG disappointment was in store for those who expected the Union Finance Minister to rationalise duties on petroleum products. Far from it, Mr Jaswant Singh has increased the additional duty on petrol and diesel by Re 0.50 to Rs 1.50 per litre. ... More

ONGC signs pact with IOC to sell crude

Rs 3,600 cr more from petro sector likely

PHARMACEUTICALS

Budget breathes new life into pharmaceuticals sector
IT is being hailed as the "best budget" that the pharma industry has seen in the last few years — not just because it has been favourable to the industry, but more importantly, it has been kind to consumers. With life-saving drugs being ... More

Booster dose for drugs
THE Budget exempts life-saving drugs attracting nil or 5 per cent Customs duty from excise duty; the list of these drugs stands expanded.. Customs duty on specified life-saving equipment has been reduced from 25 per cent to 5 per cent and ... More

Pharma sector hails sops

POWER

Lower customs duty on equipment hailed — Easing of policy unlikely to lead to new power projects
POWER sector experts do not think extending the benefits of the mega power policy to more projects will result in any real gains in terms of more generation projects taking off. They point out that there are hardly any projects in the pipeline, ... More

STEEL

Steel sector sees silver lining
ALTHOUGH the steel sector has not been given any direct fiscal relief in this year's Budget, it is happy with the thought that Mr Jaswant Sinha's maiden budget is likely to give the steel sector a boost via higher demand. Mr V. Gujral, ... More

TAXATION

Signals were clear on Kelkar
RIGHT from the beginning, it was amply clear that the Government would fall short of implementing the recommendations of the Kelkar Committee report on direct and indirect taxes. At least, not in the Budget for the new fiscal, especially when ... More

TEXTILES

`Duty retention on cotton yarn welcome move'
THE powerloom development and export promotion council (PDEXCIL) has expressed relief on retention of the 8 per cent excise duty rate for cotton yarn `disregarding' the Kelkar committee's recommendation to enhance the duty. The PDEXCIL ... More

SIMA hails abolition of `deemed' credit

Textile wears a smiling look

SSI

SSI list pruned further
THE Finance Minister, Mr Jaswant Singh, today announced a further pruning of the list of items reserved for production by the small-scale industry (SSI) sector, but it will take a few months for the exact list of dereserved industries to be ... More

TYRES

Tyre cos hope for more sales mileage
IN a major relief to the nearly Rs 9,700-crore tyre industry, the Finance Ministry has agreed to a proposal that would allow tyre companies in the country to use "averaged freight" in their invoices while clearing goods from their factories and ... More

COAL

Buoyant coal outlook calls for more pvt hands
THE focus of Mr Jaswant Singh's Union Budget on infrastructure development poses an indirect challenge to the domestic coal sector. The reason — it has to meet the increased requirements of good quality coal for the cement and steel ... More

PERSONAL PRODUCTS

Look great and feel good
THE total excise duty on aerated soft-drinks has been brought down from 32 per cent to 24 per cent. This is a significant drop in excise duty, but a simultaneous reduction in abatement from the existing 50 per cent to 45 per cent is likely ... More

CARS

Price cuts drive auto into top gear
GO ahead, spoil yourself. Catch the wind in your hair. Buy the bigger car, the one of your dreams. And still be left with enough money in your pockets to fuel up for a year! Think its `Mission Impossible', think again. With the eight per cent ... More

Car makers upbeat about sales volumes
THE proposed excise reduction for motor vehicles from 32 per cent to 24 per cent in the Union Budget 2003-04 has given automobile manufacturers something to cheer about. In an upbeat mood, Mr Jagdish Khattar, Managing Director, Maruti Udyog ... More

Towards a cycle of development
I think in many ways the Budget has talked of specific economic initiatives, especially in terms of investment in infrastructure and a new cash management system. What this cash management system will do is to reduce non-development expenditure. ... More

Toyota to cut price; Volvo may not
TOYOTA Kirloskar Motor Ltd is expected to reduce prices of its cars and multi-purpose vehicles following the announcement of reduction in excise duty by 8 per cent to 24 per cent. "We are planning to pass on the benefit to the customers," the ... More

Smooth road ahead for car companies
THE auto industry, which had lobbied hard for a reduction in excise duty, is quite pleased with the excise duty cut announced in the Budget, although it was hoping that reduction would have been more. Car manufacturers wanted the Government to ... More

BEVERAGES

Excise cut to fizzle out on soft drink prices
THE significant excise reduction for soft drinks announced in the Union Budget notwithstanding, consumer prices are not likely to be brought down any further in the approximately Rs 7,000-crore carbonated soft drinks (CSD) industry. While the ... More

GEMS & JEWELLERY

Gem sector finds hope
BUT for the impact of a looming US-backed war against Iraq, India's gem and jewellery industry would have enough reasons to celebrate on account of the Union Budget 2003-04. What the industry had been seeking has finally come through. In a bid ... More

MEDICAL & SURGICAL EQUIPMENTS

Good news for the sick
THE good news from the hospital sector is that the patient will win. For private hospitals, the lowering of customs duty on equipment and 40 per cent depreciation on life saving devices will mean that the patient also benefits, according to Mr ... More

MEDICAL INSTITUTIONS & HOSPITALS

More benefits for health care
"IT'S music to my ears," said an elated Dr Prathap C.Reddy, Chairman, Apollo Hospitals Group, reacting to Budget 2003-04's announcements for the health sector. Medical tourism, is a concept that Dr Reddy has been propagating for some time now and ... More

PAPER, BOARD & NEWSPRINT

Small paper mills in excise trap
ALL small paper mills based on non-conventional and agro-based materials with an annual production capacity of up to 3,500 tonnes will now have to pay eight per cent excise duty. Till now these mills were exempted from the purview of the duty. ... More

INDUSTRY ASSOCIATIONS

Chennai port has been neglected: SICCI

READYMADE GARMENTS

Keep that shirt on, prices are not going to fall
THE two per cent cut in excise duty on garments will not bring any drop in consumer price. Most of the branded apparel companies said the excise cut fell short of expectations and will have minimal impact on retail price. The Finance Minister ... More

KNITWEAR & HOSIERY

Knitters decry Cenvat net
THE rationalisation of excise duty structure for the textile sector aimed at completing the `Cenvat' chain announced in the Union Budget presented by Mr Jaswant Singh on Friday has brought in the knitwear industry into the excise net for the ... More

MINING & QUARRYING

Mining units unhappy
THE country's mining and mineral industry is not quite happy with the this year's Budget. According to the Federation of Indian Mining Industries (FIMI), "there has not been any significant rationalisation in the tax and duty structure to benefit ... More

DISINVESTMENT

Govt hopeful of meeting disinvestment target
THE Government today said that the disinvestment target of Rs 13,200 crore for the year 2003-04 was not "ambitious" and the amount would be mobilised through sale of certain blue-chip companies slated for privatisation in the coming year. "We ... More

Hoping on big-ticket divestments
CALL it optimism, wishful thinking, touching faith in the system or plain courage, the Finance Minister, Mr Jaswant Singh, has budgeted for, believe it or not, Rs 13,200 crore as proceeds from disinvestment in 2003-04. This, when the actual ... More

Disinvestment target fixed at Rs 13,200 cr
THE Budget for 2003-04 has set a target of Rs 13,200 crore as realisation from sale of Government equity in PSUs under the disinvestment programme. This is despite the fact that the Government could mop up only Rs 3,360 crore during the current ... More

SMALL SAVINGS

Small savings: Remain beneficial for common man
THE continuance of tax incentives for small saving schemes and a relatively attractive interest rate, despite the 1 percentage point decrease, is expected to cheer investors. The final report on direct taxes authored by Dr Kelkar dubbed the ... More

INCOME TAX

A dividend sop and an unkind cut
A HEART-warming dividend tax exemption and a heartburn-causing small savings rate cut is what the Budget gave to the investors. The tax exemption on dividends in the hands of investors may not be to the extent suggested by Kelkar Task Force. ... More

Jaswant leaves more money in salaried pocket
Among the other benefits offered to the individual tax payer, expenses up to Rs 12,000 per child for two children have been made eligible for tax rebate under Section 88 of Income-Tax Act. More

Dividend tax, capital gains tax to go — Capital markets get a lift
IN a move that is designed to boost the capital markets, the Finance Minister, Mr Jaswant Singh, today announced the withdrawal of dividend tax at the hands of shareholders and abolishment of long-term capital gains tax. From April 1, 2003, ... More

Dividend tax removal — Promoters, high tax payers to be major beneficiaries
THE Government has reverted to the system of exempting dividend tax in the hands of the receiver and instead levying a distribution tax of 12.5 per cent in the hands of the company. Who benefits? The move will benefit all equity ... More

Will purse bear burden or bulge?
HAS the Finance Minister, Mr Jaswant Singh's maiden Budget put more money in the housewives' purse? The answer is probably yes and no. Yes, because of some of the concessions including increased deduction under Sec 80L, abolition of dividend ... More

Budget vs the professional CA
OMISSION of limited scrutiny concept introduced last year may no doubt reduce the work for professionals but will enable devotion of such time for more productive purposes. Going by what the Finance Minister mentioned with reference to ... More

TOURISM

`A leg-up' for tourism trade
THANKS to a host of incentives given to the tourism industry in the Budget, India can finally hope to compete with the other tourist destinations in this part of the world. The Chief Operating Officer, Sita Inbound Division, Mr Himmat ... More

CARTOON