Sector

Announcement in Budget

Implications

Impact

Power

10 year tax holiday for power companies who start production and distribution on  March 31, 2017

This will have a multiplier effect on the investments in power projects and kick-start projects expected during XII Plan Period but were on hold.

POSITIVE

Rs 100 crore for cleaner thermal power technology

This is likely to give a boost to the equipment manufacturers in thermal power market

POSITIVE

Govt committed to providing 24x7 power supply to all homes

Government has set-forth a herculean task which will require reforms from fuel supply side, say CIL’s ability to ramp-up production, radical improvements in AT&C losses, de-centralization of power supply in Rural, etc.

POSITIVE

Rs.200 crore for power reforms in New Delhi

The aid is likely to benefit the electricity scenario in the nation’s capital. All the same, BJP is expected to be benefited when the next assembly election takes place.

NEUTRAL

Rs.500 Crore for Deen Dayal Upadhyay rural electrification programme

Rural electrification is critical in terms of socio-economic development of rural areas. In India there is a significant amount of progress needed to strengthen the rural masses through enhanced agricultural and rural industrial development

NEUTRAL

Coal

Clean energy cess increased from Rs 50/ tonne to Rs 100/tone

Doubling of clean energy cess will have a bearing on the price of power, coal and steel.

NEGATIVE

Existing impasse of coal sector will be resolved

Much needed for an energy starved nation. Government needs to seriously consider and implement options to boost the production levels while ensuring coal supply qualities from the single major coal company in India

POSITIVE

Basic custom duty on all variety of coal made uniform

This means that a uniform 2.5% customs duty on imported coal will be levied.

NEUTRAL

Oil & Gas and Fertilizer

In order to complete gas grid, 15,000 km of additional pipeline to be developed through PPP mode

Gas pipeline infrastructure has been operating at sub-optimal utilization factor. Some of the key gas pipelines that were recently awarded are yet to see any momentum. Unless there is any clarity on gas prices and policy parameters in E&P, gas pipeline capacity addition will not have the desired results.

NEUTRAL

A new urea policy would be formulated

Since there is huge price disparity among different types of fertilizers. There is a detrimental impact on the soil conditions due to a disproportionate use of certain fertilizers.

NEUTRAL

Subsidy, petro-economics and fertilizer subsidy will be re-looked

Regarding removing subsidy on HSD, Domestic LPG and Kerosene, government seems to be taking a delayed approach.

NEUTRAL

Renewable Energy

Ultra modern solar power projects to be taken up in Rajasthan, Tamil Nadu, Ladakh with Rs 500 crore

Right from the time when Narendra Modi led government came to power the solar power industry has been betting heavily on an enhanced growth potential in solar power industry. The current Budget Update very well confirms that.

POSITIVE

Excise duty on solar sheets exempted

POSITIVE

New and renewable energy deserves high priority

By allocating INR 1,000 Crore for renewable sector schemes the renewable sector is expected to see major transformations in the times to come. Schemes such as Green Energy Corridor Project will attract investments in renewable energy.

POSITIVE

Roads & Highways

Investment in NHAI and state highways to the tune of Rs 37,887 crore, including Rs 3000 crore for North East

This will boost the hinterland movement of freight which is crucial for both imports and exports of goods.

POSITIVE

INR 14,389 crore for PM Sadak Yojana for village roads

PM Sadak Yojana is a nationwide plan to give improved road access to remote villages. This budget allocation is expected to boost the socio-economic condition in the remote areas.

NEUTRAL

Reality

Tax exemption on interest component on housing loan raised to Rs 2 lakh from Rs 1.5 lakh

The move is likely to create some incremental real-estate demand by giving taxpayers an incentive to invest.

NEUTRAL

Rural housing: Rs 8000 crore for national housing banking programme

With a view to facilitate rural housing in India, the move is likely to unleash an untapped potential in rural housing segment

POSITIVE

Rs. 4000 crores for National Housing Bank for low-cost housing

The cement and steel sector will see a revival and a boost in demand from the domestic market. 

POSITIVE

Rs 7,060 crore allocated for building new cities

POSITIVE

FDI in housing: Low cost housings to be encouraged

POSITIVE

Water & Irrigation

Rs 3600 cr set aside for National Rural Drinking Water

This is a much needed step to improve the health standards of the rural population which is crucial in the socio-economic upliftment of rural population.

NEUTRAL

Rs 100 crore set aside for project to link rivers

This will go a long way in creating well networked water resources and creating a balance in the demand-supply of water. Power demand-supply in India is worst hit during summer season due to a surge in the demand for power by agriculture segment. Inter-linking of rivers will also facilitate in-land waterways as a means of transportation mainly for freight.

POSITIVE

Rs 4200 crore set aside for Jal Marg Vikas project on river Ganga connecting Allahabad to Haldia , over 1620 km

Will boost the inland waterways connecting east.

NEUTRAL

Rs. 1000 cr for irrigation plan named Pradhan mantri krishi sichayin yojana

Will be a boost for the agricultural sector

NEUTRAL

Rs.500 crore for water reforms in Delhi

Both Power and Water reforms are much needed for supporting the nation’s capital which observes a consistent influx of inhabitants.

NEUTRAL

Ports

16 new  port projects to be awarded this year

Will give a significant boost not only in terms of de-bottlenecking the freight movement, but also investments in port infrastructure, logistics, ship building industry, tankages, etc.

POSITIVE

Rs 11,600 cr for developing outer harbour projects

NEUTRAL

Kakinada port to be developed for handling hardware exports

Will offer a significant economic boost for the newly form state.

NEUTRAL

Aviation

Scheme for development of new airports at tier II and III cities through PPP mode

Will unleash PPP opportunity in low-cost airports

POSITIVE

Railway

Metro will be proposed in cities with over 2 million population. Metro will come up in Lucknow and Kanpur.

Much needed step for providing a faster and efficient means of public transportation. This would also ensure in improving the pollution levels and consumption of liquid fuel.

POSITIVE

Rs. 100 cr set aside for metro scheme in Ahmedabad and Lucknow

POSITIVE

Rs 1000 crore provided for rail connectivity in northeastern region

Will significantly bridge the infrastructure gap in North Eastern states and providing socio-economic development of villages along the international border.

NEUTRAL

Other key announcements made by Finance Minister Mr. Arun Jaitley while presenting the Union Budget FY15

Government will work to introduce the much awaited Goods and Service Tax (GST) this year

GST is perceived as a major tax reform which is expected to get a 360degree welcome in India. GST will not only streamline the tax administration and result in higher tax collection for center and states, but also make production and exports from India more competitive

 

POSITIVE

Banks can give long-term funding to infrastructure

The move will de-bottleneck the challenge faced by the banks on asset-liability front.

POSITIVE

Retrospective taxation: We are committed to providing industry-friendly tax reforms. A committee under CBDT will scrutinize tax disputes.

A positive news for investment climate in the infrastructure sector

POSITIVE

Aim to achieve 7-8 per cent economic growth rate in next 3-4 years

Much needed for changing the status quo

POSITIVE

Bold steps will be taken to revive economy

POSITIVE

Tax/GDP ratio must be improved

POSITIVE

 

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