Sectoral Impact of Budget

Automobiles

Excise duty on two wheelers and three wheelers was reduced from 16% to 12%. If the benefit is passed on to customers, we may witness a increase in volumes from the current decreased volumes.

Excise rate for small passengers cars and for buses was lowered to 12% from 16%

Impact: positive

Companies: Two wheelers : Bajaj Auto, Hero HOnda, M&M and TVS Motor
Cars and Trucks: Maruti, Tata Motors, Ashok Leyland

Banking

Farm loan writeoff is good for banks if government contributes the entire amount as its share.

Financial conglomerates like Kotak Mahindra bank, ICICI Bank and State Bank get benefits from the provision of set-off of dividend distribution tax paid by subsidiaries toward DDT payable by parent company.

As the disposable income of people increases due to Income tax relief, savings will increase and it is als good for banking.

Overall positive impact
-----------

Cement
The excide duty on bulk cement (non-retail) is now higher of 14% ad-valorem or Rs 400/ton from Rs 400/ton earlier. This could result in higher excise of Rs. 5 to 6 per bag. Bulk cement sales are now 40% of cement sales. Cement producers have to recover this increase first before making any further increase in prices.

Impact negative
-------------

Engineering

Reduced excise duty on goods likely to boost demand.
Customs duty on project imports lowered

Impact positive
--------------
FMCG
Reduction in excise duty from 16% to 14% will help reduce prices by 1%. The reduction in income tax coupled with price decrease due to excise duty will provide a boost in volume growth for the sector.

In the case of cigarettes, due to increase of duty on nonfilter cigarette, consumer may upgrade to filter cigarette.

Reduction of excise duty on refrigeration equipment will encourage cold chain growth and thus help increase sales of processed food companies.

Reduction in excise on water purifiers will purifier companies.

Impact: positive
-----------------
Information Technology

Extension of STP scheme not granted.
On packaged software excise duty is increased from 8% to 12%.
IT education companies may benefit due to higher allocation in the budget for skill development

Impact: Neutral
--------------------

Infrastructure

The budget made allocations to infrastructure development programs

Bharat Nirman - Rs. 313 billion
J Nehru NURM - Rs. 69 billion
Acclerated irrigation benefit program Rs.200 billion
Rural infrastructure development fund Rs.140 billion

Continued thrust on infrastructure spending is good news.

Impact positive
------------------------

Media

Ministry and broadcasting has an allocation of Rs.1,910 cr (Rs.1,610 cr last year). Government has removed customs duty on specified parts of set top boxes and its components from the current rate of 16%

Expect cheaper set top boxes and growth of direct to home operators

impact positive
------------------------

Oil and Gas

Withdrawal of customs duty on naphtha for petrochem production marginally negative for Reliance

impact neutral