Eastern Financiers Ltd.

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Union Budget 2013-2014

28th February 2013

Eastern Financiers Ltd.

EF- Union Budget 2013-14
28th February 2013

Index
Particulars
Introduction Tax Proposals Direct Tax Indirect Tax Service Tax Data Budget at a glance Key Indicators Sector-wise Impact Infrastructure Capital Goods Automobile Banking and Financial Services Real Estate Micro-Finance Broadcasting FMCG & Consumer Durables Oil & Gas Metals & Mining Healthcare Power Education Textiles Agriculture Miscellaneous Capital Market Other proposals

Page No.
3 4 4-5 5-6 6

7 7 8 9 9 9 10 10 11 11 11 11 11 12 12 12 12 13 13 14 14-15

Eastern Financiers Ltd.

EF- Union Budget 2013-14
28th February 2013

Introduction
Finance Minister, Shri P. Chidambaram opted for austerity over free-spending populism in his Budget statement for the FY13-14, despite of general elections due early next year and a sagging domestic as well as global economic scenario. Mr. Finance Minister tabled a statement that reflected minor hiccups on one hand and sanguinity on certain 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 current financial year and 4.8% for FY14, reflecting his commitment to fiscal prudence. Revenue deficit for the current year has been estimated at 3.9% and for FY14 at 3.3%. By FY17 fiscal deficit is estimated to be brought down to 3%, revenue deficit to 1.5% and the effective revenue deficit to zero percent. He highlighted the need to curb the countrys current account deficit, and said that he believes it to be a higher worry than the fiscal deficit. He said that growing imports of oil, coal and the countrys passion for gold shall weigh on the CAD, due to which India 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 payers but slapped a 10% surcharge on 'super-rich' individuals and corporates, levied an inheritance tax and raised duties on mobile phones, cigarettes and luxury vehicles. Implementing the much-talked about super-rich tax, Chidambaram proposed to levy 10% surcharge on income of Rs 1 crore and above and increase in surcharge from 5% to 10% on domestic corporates whose income exceeds Rs 10 crore a year. In his tax proposals in the Budget for 2013-14 to raise an additional Rs 18,000 crore, he announced a benefit of Rs 2,000 to individual tax payers with taxable income of up to Rs 5 lakh but made no change in either slabs or rates of personal income tax which will continue at 10, 20 and 30%. However, reforms on the Goods & Services Tax are still in the future. In an attempt to encourage investment in capital markets, the Finance Minister curtailed securities transaction tax (STT) on equities futures and mutual fund units. The government also introduced a tax on transaction of nonagricultural commodities futures contracts on exchanges as Commodity transaction tax (CTT) so as to facilitate a more open and transparent trading process, especially in gold contracts at 0.01%. CTT that was originally proposed in the Union Budget 2008 but abolished in the Budget of 2009 based on the recommendation of the Prime Ministers Economic Advisory Council. Mr. Minister promoted manufacturing industry by proposing an Investment Allowance which was a long standing demand of the Industry. Companies investing Rs. 100 crore or more in plant and machinery during the period 1-4-2013 to 31-3-2015 will be entitled to deduct an investment allowance of 15% of the investment. He sought to promote investment in infrastructure by issue of tax free bonds, freeing up NELP blocks and increasing tax holiday period for power sector. Emphasizing that Food Security Bill is a promise of the UPA government, Finance Minister P Chidambaram allotted Rs 10,000 crore as incremental cost to implement the bill. He added that 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 reappointed to the finance portfolio in mid-2012 proposed a hike of 29.4% in Budget expenditure for FY14 at Rs. 16,65,297 crore 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 for women's safety with a corpus of Rs.1,000 crore. He moved on to announce setting up of India's first women public sector bank with an initial fund of Rs.1,000 crore. Overall, the Union Budget neither had surprises nor any big announcements but had the necessary caution and intent to revive growth in the economy. However, at a time when the government is walking on a thin rope of staying in power or losing it allthis probably is the best that the FM could have delivered!!!

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EF- Union Budget 2013-14
28th February 2013

Tax Proposals
Direct 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 with 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 10 percent 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, if the taxable income exceeds Rs.10 crore. In all other cases such as dividend distribution tax or tax on distributed income, current surcharge increased from 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 Scheme, 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 of distribution of income for companies, individual or HUF etc. No further tax on income received by investors from 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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EF- Union Budget 2013-14
28th February 2013
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 nonresidents 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 look 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. 50,000, technology based processing, extension of e-payment through more banks and expansion in the scope of annual information returns by Income-tax Department. Tax proposals on the direct taxes side are estimated to yield Rs. 13,300 crore.

Indirect 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 coal. Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vessels increased.

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EF- Union Budget 2013-14
28th February 2013
Duty free gold limit increased to Rs. 50,000 in case of male passenger and Rs.1,00,000 in case of a female passenger subject to conditions.

Excise duty
Relief to readymade garment industry. In case of cotton, zero excise duty at fibre stage also. In case of spun yarn 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 ships 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 biochemic systems of medicine to reduce valuation disputes.

Service Tax
Maintain stability in tax regime. Vocational courses offered by institutes affiliated to the State Council of Vocational Training and testing activities 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 highend constructions, where the component of services is greater, rate of abatement reduced from 75 to 70 percent. Out of nearly 17 lakh registered assesses under Service Tax only 7 lakhs file returns regularly. Need to motivate them to file returns and pay tax dues. A onetime scheme called Voluntary Compliance Encouragement Scheme proposed to be introduced. Defaulter may avail of the scheme on condition that he files truthful declaration of Service Tax dues since 1st October 2007.

Tax proposals on the Indirect Tax side are estimated to yield Rs. 4,700 crore.

Good and Services Tax

A sum of Rs. 9,000 crore towards the first installment of the balance of CST compensation provided in the budget. Work on draft GST Constitutional amendment bill and GST law expected to be taken forward.

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EF- Union Budget 2013-14
28th February 2013

Budget at a Glance
Particulars
Revenue Receipts Tax Revenue (net to centre) Non-tax Revenue Capital Receipts Recoveries of Loans Other Receipts Borrowings and other liabilities Total Receipts Non-Plan Expenditure On Revenue Account of which Interest Payments On Capital Account Plan Expenditure On Revenue Account On Capital Account Total Expenditure Revenue Expenditure Of Which, Grants for creation of capital Assets Capital expenditure Revenue Deficit Effective Revenue Deficit Fiscal deficit Primary Deficit 2011-12 751437 629765 121672 552928 18850 18088 515990 1304365 891990 812049 273150 79941 412375 333737 78639 1304365 1145785 132582 158580 394348 (4.4) 261766 (2.9) 515990 (5.7) 242840 (2.7) 2012-13(BE) 935685 771071 164614 555241 11650 30000 513590 1490925 969900 865596 319759 104304 521025 420513 100512 1490925 1286109 164672 204816 350424 (3.4) 185752 (1.8) 513590 (5.1) 193831 (1.9) 2012-13(RE) 871828 742115 129713 558998 14073 24000 520925 1430825 1001638 919699 316674 81939 429187 343373 85814 1430825 1263072 124275 167753 391245 (3.9) 266970 (2.7) 520925 (5.2) 204251 (2.0) 2013-14(BE) 1056331 884078 172252 608967 10654 55814 542499 1665297 1109975 992908 370684 117067 555322 443260 112062 1665297 1436169 174656 229129 379838 (3.3) 205182 (1.8) 542499 (4.8) 171814 (1.5)

Key Indicators
Particulars (US$ bln) GDP growth (%) IIP Growth(%) Inflation WPI Inflation CPI Exports Growth (%) Imports (%) Current Acc Bal as % of GDP Source: Economic Survey * April-Dec 2012 ** Apr-Jan 2012-13 *** Apr-Sep 2012 2007-08 9.30 15.5 4.7 6.2 29 35.5 (1.3) 2008-09 6.7 2.5 8.1 9.1 13.6 20.7 (2.3) 2009-10 8.6 5.3 3.8 12.4 (3.5) (5) (2.8) 2010-11 9.3 8.2 9.6 10.4 40.5 28.2 (2.8) 2011-12 6.2 2.9 8.9 8.4 21.3 32.3 (4.2) 2012-13 5 0.7* 7.6** 10** (4.9)** -(4.6)***

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EF- Union Budget 2013-14
28th February 2013

SECTOR-WISE IMPACT

Eastern Financiers Ltd.

EF- Union Budget 2013-14
28th February 2013

Infrastructure
Reform
Raising Corpus of RIDF Tax-free infra bonds

Detail
Raising corpus of Rural Infrastructure Development Fund (RIDF) to Rs.20,000 crore Infrastructure tax-free bond of Rs.50,000 crore in 201314. Build roads in North eastern states and connect them to Myanmar 3000 kms of road projects will be awarded in the first six months of 2013-14. A regulatory authority for road sector. Plans for seven new Industrial Corridors have been finalized and work on two new smart industrial cities will start during 2013-14. Delhi Mumbai Industrial Corridor (DMIC) to be provided additional funds. Chennai Bengaluru Industrial Corridor to be developed Rs.15,260 crore allocated to Ministry of Drinking Water and Sanitation Rs.1,400 crore provided for setting-up of water purification plants in 2000 arsenic and 12000 fluorideaffected rural habitations

Companies Impacted
Positive for all infra Companies Positive for IDFC, L&T, etc Positive for companies like GMR Infra, IRB Infra, IL&FS Transportation, etc.

Road Construction Road Sector Regulator

Industrial Corridors

Positive for Reliance Infra

Drinking Water and Sanitation Setting up of water purification plant

Positive for companies like Triveni Engineering, Pratibha Industries, etc.

Capital goods
Reform
Increased Defence allocation Investment allowance for Capital expenditure

Detail

Companies Impacted

Allocation for Defence increased to Rs.2,03,672 crore Positive for BEL, BEML, etc. including Rs.86,741 crore for capital expenditure. Companies investing Rs.100 crore or more in plant and machinery during the period 1.4.2013 to 31.3.2015 will Positive for companies like be entitled to deduct an investment allowance of 15 per ABB, L&T, BHEL, etc cent of the investment.

Auto
Reform
Allocation to JNNURM Extension of Concession period for certain parts of Electric & Hybrid Vehicles Duty Hike on SUVs

Detail
Rs.14,873 crore for JNNURM in BE of 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. Period of concession available for specified part of electric and hybrid vehicles extended upto 31 Mar 2015. Excise duty on SUVs increased from 27 to 30 percent.

Companies Impacted
Positive for Tata Motors, Ashok Leyland, etc.

Positive for Electro Therm Negative for M&M and Tata Motors, Maruti Suzuki.

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EF- Union Budget 2013-14
28th February 2013

Banking & Financial Services

Reform
Interest sub-vention on Farm Loans extended to cover private Banks Additional deduction of interest on Housing Loan Setting up of urban Housing Fund Allocation o Rural Housing Fund

Detail
Interest subvention scheme extended for crop loans borrowed from private sector scheduled commercial banks. Additional deduction of interest upto Rs.1 lakh for a person taking first home loan upto Rs.25 lakh during period 1.4.2013 to 31.3.2014 National Housing Bank to set up Urban Housing Fund. Rs.2,000 crore to be provided to the fund in 2013-14. Rs.6,000 crore to Rural Housing Fund in 2013-14

Companies Impacted
Positive for ICICI Bank, HDFC Bank etc. Positive for companies like LIC Housing Fin, HDFC and all banks. Positive for LIC Housing Fin, HDFC, etc.

Rajiv Gandhi Equity Savings Scheme benefits could be extended upto three years and the limit for investors Purview of RGESS extended wanting to invest in RGESS has been raised to Rs 12 lakh from Rs 10 lakh earlier. In consultation with RBI, instruments protecting Floating new instruments savings from inflation to be introduced. Finalizing DISCOM Guidelines regarding financial restructuring of restructuring plan DISCOMS have been announced. Compliance of public sector banks with Basel III Capital Infusion in PSU regulations to be ensured. Rs.14,000 crore provided in Banks BE 2013-14 for infusing capital Number of proposals to be finalized, in consultation Emphasis on Insurance with IRDA to increase the penetration of insurance, penetration both life and general, in the country Introduction of CTT Proposal to introduce Commodity Transaction Tax

Positive for HDFC Bank, Aditya Birla Nuvo, etc.

Positive for companies like PFC, REC, etc. Positive for SBI, UCO Bank, PNB, etc. Positive for SBI, HDFC Bank, Aditya Birla Nuvo,etc. Negative for MCX

Real Estate
Reform
TDS on transferring immovable property Reduction in abatement rate for high-end Construction

Detail
TDS at the rate of 1 percent on the value of the transfer of immovable properties where consideration exceeds Rs.50 lakhs. 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 from 75 to 70 percent.

Companies Impacted
Negative for all Real estate companies

Negative for companies like DLF, Unitech, etc.

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EF- Union Budget 2013-14
28th February 2013

Micro-Finance
Reform
Allocation of fund

Detail

Companies Impacted

A sum of Rs.100 crore provided to India Microfinance Positive for SKS Equity Fund. Microfinance

Broadcasting
Reform
Enhancing private FM Radio Coverage

Detail

Companies Impacted

All cities having a population of more than 1,00,000 will Positive for companies like be covered by private FM radio services EINL, Reliance Broadcast, etc.

FMCG & Consumer Durables

Reform Increased spending on MGNREG Detail
Allocation of Rs.80,194 crore in 2013-14 for Ministry of Rural Development marking an increase of 46% over RE 2012-13. MGNREGS will get Rs.33,000 crore, PMGSY will get Rs.21,700 crore, and IAY will get Rs.15,184 crore. Specific excise duty on cigarettes increased by about 18 percent. Similar increase on cigars, cheroots and cigarillos.

Companies Impacted
Positive for all FMCG & Consumer Durable Companies Negative for ITC, Godfrey Phillips, VST Ind.

Duty Hike

Oil & Gas

Reform Review of Natural gas pricing Policy Shale Gas Exploration Policy Starting Operations in the Dabhol LNG Terminal Detail
The low domestic gas prices have disincentivised further exploration and investment in domestic gas assets. If prices are hiked it shall promote further investment in gas sector. A policy to encourage exploration and production of shale gas will be announced The 5 MMTPA LNG terminal in Dabhol, Maharashtra will be fully operational in 2013-14.

Companies Impacted Positive for ONGC

Positive for RIL Positive for GAIL

Metals & Mining

Reform PPP Policy for Coal procurement
Introduction of excise on silver manufacturing from smelting zinc

Detail
Devising a PPP policy framework with Coal India Limited as one of the partners to reduce dependence on imported coal. The government has introduced 4% excise duty on silver manufactured from smelting zinc or lead to bring the rate on par with the excise duty applicable to silver obtained from copper ores and concentrates.

Companies Impacted
Positive for CIL

Negative for Hindustan Zinc

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Eastern Financiers Ltd.

EF- Union Budget 2013-14
28th February 2013

Healthcare
Reform
Allocation to Ministry of Health & Welfare Allocation to new Health Mission Allocation to elderly Healthcare Allocation to AYUSH

Detail
Rs.37,330 crore allocated to the Ministry of Health & Family Welfare New National Health Mission will get an allocation of Rs. 21,239 crore Rs.150 crore provided for National Programme for the Health Care of Elderly. Ayurveda, Unani, Siddha and Homoeopathy are being mainstreamed. Allocation of Rs. 1,069 crore to Department of AYUSH.

Companies Impacted
Positive for Companies like Glenmark, Sun Pharma, Cipla, etc.

Power
Reform
Construction of transmission System Generation based incentives re-introduced for Wind energy Projects Benefit under Section 80IA extended

Detail
Government to construct a transmission system from Srinagar to Leh at a cost of Rs.1,840 crore. Generation-based incentive reintroduced for wind energy projects and Rs.800 crore allocated for this purpose. Eligible date for projects in the power sector to avail benefit under Section 80- IA extended from 31.3.2013 to 31.3.2014.

Companies Impacted
Positive for Power Grid, Jyoti Structures, KEC Int. Positive for Suzlon Positive for Adani Power, JSPL, etc.

Education
Reform Allocation to SSA Allocation to RMSA Allocation towards Human resource Development Detail
Rs.27,258 crore provided for Sarva Shiksha Abhiyaan (SSA). An increase of 25.6 per cent over RE of the current year for investments in Rashtriya Madhyamik Shiksha Abhiyan (RMSA). Allocation of Rs.65,867 crore to the Ministry of Human Resource Development

Companies Impacted Positive for Companies Like Everonn Education ,Educomp, Career Education, Compucom, etc.

Textiles
Reform Continuation of TUF Sops for Readymade garments Manufacturers Concessional Loans for handloom Sector Detail
Technology Upgradation Fund Scheme (TUFS) to continue in 12th Plan with an investment target of Rs.1,51,000 crore. Relief to readymade garment industry. In case of cotton, zero excise duty at fibre stage also. In case of spun yarn made of manmade fibre, duty of 12 percent at the fibre stage. Working capital and term loans at a concessional interest of 6 per cent to handloom sector.

Companies Impacted Positive for all Textile Players Positive for Raymond, Aditya Birla Nuvo, Page industries, etc.

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EF- Union Budget 2013-14
28th February 2013

Agriculture
Reform
Increased allocation to Agriculture Agricultural Credit Allocation Interest Subvention

Detail
Rs.27, 049 crore allocated to Ministry of Agriculture, an increase of 22 per cent over the RE of current year. For 2013-14, target of agricultural credit kept at Rs.7 lakh crore. Interest subvention scheme for short-term crop loans to be continued.

Companies Impacted
Positive for all agriculture based companies Positive for Advanta India, Bayer Corp., Kaveri Seeds, Rallis India, Monsanto India

Allocation towards commencement of Crop Diversification Programme. Allocation towards introduction of new crop varieties Funds for RKVY & National Food Security Mission Allocation towards integrated watershed Programme

Rs.500 crore allocated to start a programme of crop diversification that would promote technological innovation and encourage farmers to choose crop alternatives. Allocation made for pilots programme on Nutri-Farms for introducing new crop varieties that are rich in micronutrients. Rashtriya Krishi Vikas Yojana and National Food Security Mission provided Rs.9,954 crore and Rs.2,250 crore respectively. Allocation for integrated watershed programme increased from Rs.3,050 crore in 2012-13 (BE) to Rs.5,387 crore.

Positive for companies like Kaveri Seeds, Camson Bio, etc.

Miscellaneous
Reform Detail Companies Impacted
Proposal to increase the rate of tax on payments by way Incremental tax on Negative for ACC, HUL, Maruti, of royalty and fees for technical services to non-residents royalty payments etc. from 10 percent to 25 percent. Customs Duty on pre-forms precious and semi-precious Hike In Customs Duty stones reduced from 10 to 2 perent Positive for Rajesh exports To provide relief to ship building industry, ships and Positive for ABG Shipyard, G E vessels exempted from excise duty. No CVD on imported Duty exemption Shipping, etc. ships and vessels. Excise duty on marble increased from Rs.30 per square Duty increase meter to Rs.60 per square meter. Duty on mobile phones priced at more than Rs.2000 Duty increase Negative for Spice Mobiles. raised to 6 percent Imposition of Service Proposals to levy Service Tax on all air conditioned Negative for Speciality -Tax Restaurants Ltd restaurant.

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EF- Union Budget 2013-14
28th February 2013

Capital Market 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 of 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 to meet 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 initial public offer (IPO). Stock exchanges to be allowed to introduce a dedicated debt segment on the exchange.

Other Proposals
Rural Development
Allocation of Rs. 80,194 crore in 2013-14 for Ministry of Rural Development marking an increase of 46% over RE 2012-13. Proposal to carve out PMGSY-II and allocate a portion of the funds to the new programme that will benefit States 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.

Backward Regions Grant Fund

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

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

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EF- Union Budget 2013-14
28th February 2013
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 the people.

Institutions of Excellence
A grant of Rs.100 crore each made to 4 institution of excellence. The institutions are Aligarh Muslim UniversityAligarh 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.

Panchayati Raj
Augmentation in the Budget allocation of Rajiv Gandhi Panchayat Sashaktikaran Abhiyan (RGPSA) to Rs.455 crore in 2013-14. An additional Rs. 200 crore proposed to be provided.

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

Central 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.

Three promises
Promises made to woman, youth and poor.
The government stands in solidarity with their girl children and women and pledged to do everything possible to empower them and to keep them safe and secure. A fund - Nirbhaya Fund - to be setup with Government contribution of Rs. 1,000 crore. Youth to be motivated to voluntarily join skill development programmes. National Skill Development Corporation to 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 apka paisa aapke haath.

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EASTERN FINANCIERS RESEARCH DESK

Rajesh Agarwal Head of Research Nandita Jaiswal- Sr. Research Analyst Biswarup Chakraborty- Research Analyst 033 4011 7811 rajesh.agarwal@easternfin.com 033 4011 7800 nandita@easternfin.com 033 4011 7800 biswarup.chakraborty@easternfin.com

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