Aftermath of BUDGET 2013-2014

Tax credit of 2000 in the 1^st tax slab of (2-5 lakh) is going to affect 1.8 crore people of INDIA.

To boost the infrastructure two IDFs (infrastructure debt funds) have been announced. Currently there are two companies in which one is INDIA INFRA DEBT LIMITED , a NBFC and collaboration of  ICICI,CITIBANK,LIC and Bank of Baroda collaboration .

Tax- free bonds worth Rs 50,000 crore will be allowed in this year. This will create capital for companies like IIFCL (Indian infrastructure finance company limited ) which are generating this tax –free bonds to fill their shortage of funds.

RAJIV GANDHI EQUITY SAVING SCHEME ( which offer a deduction under 80 CCG which can act as a boost for domestic investors )is back with some tweaks like the entry limit have been changed from 10 lakh salary holders to 12 lakh salary holders . Its 3 year tax benefit is surely going to attract small investors in the domestic capital market.

In this era of finding a shelter over your head, this budget has announced something really good. For the first time home-loan appliers , there will be an additional tax benefit of 1 lakh on the interest amount paid  upto a loan of 25 lakh in fiscal year 2013-14 . This will come as a relief to first time home buyers over the original 1.5 lakh interest paid on home loan.

New bonds like inflation indexed national certificates or inflation indexed bonds by RBI will also going to attract small investors.

For the female group announcement of an all woman-powered female bank by the month of October is seriously good news. Easy to get loan for females in these banks without a sense of alienation  

Same KYC form for banks is also going to work for new insurance policies so somewhere lesser paper work is going to attract insurance funding.

With a dedicated debt exchange within stock exchange, debt market is sooner going to be relieved.

The main eyes were on the subsidiaries announcement for fertilizers and fuels ( biggest import of india 2474 INR billion imports ) which was less than what was required ( instead of 1 lakh approx for fertilizer it received only 65000 crore . This compensation can only be seen as reflected in steep increase of fertilizer price in future or by under compensating with fertilizer companies. By increasing fertilizer prices will have a triggering effect in increased food prices and so farmers will demand high minimum support prices.

Same is the situation with fuel subsidiaries, with the shortfall of what is actually needed in this budget year, seeing the trend 65000 crore fuel subsidiaries will not be sufficient for upcoming budget year 2013-2014 and it will be met in sharp increase in petro-products so the triggering effect in other commodities.


Ref- Firstpost articles