Union Budget 2009 Sensex down 869 FBT Commodity Tax Abolished

by Ravi Dixit | July 5, 2009 at 09:44 pm

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Pranab Mukherjee presented the Union Budget 2009 and the various critics across all the business channels are giving the budget a 5 to 8 on 10, but the Indian stock markets are giving it a huge thumbs down and have tanked by more than 800 points. This despite of the GDP growth rate of 9% on a sustainable basis that Finance Minister is projecting!

Worst ever performance by stock markets on a budget day today! Sensex actually dropped by 1,000 points from the day high!

There is no cut back in Excise and Customs, however FBT and Commodity tax has been abolished and personal income tax limit has been raised by INR 10,000/- and INR 15,000/- for senior citizens.

MAT Minimum Alternate Tax has been hiked from 10% of the profits to 15% of the profits!

Government has set out a target of INR 1120 Cr. from disinvestment of PSUs, but there is no roadmap for a long term disinvestment or retail and housing finance front. There were expectations that the income tax exemption limit for housing loan will be raised in this budget. This has not been met and is a source of disappointment.

It is being estimated that Stock Markets had factored radical changes in the economic policies with a run up to the 6th July, but now the unrealistic expectations are dashed the stock markets are correcting.

On the face of it looks like a knee jerk reaction to the budget. Coming days will decide that if there is a begining downward trend or a short term reaction.!

IST 15:56 Bombay Sensex is in the red down 869 points

IST 15:32 Bombay Sensex is in the red down 878 points

IST 15:17 Bombay Sensex is in the red down 870 points

IST 14:29 Bombay Sensex is in the red down 759 points already recovering?

IST 14:19 Bombay Sensex is in the red down 812 points a big thumbs down.

IST 14:11 Bombay Sensex is in the red down 734 points.

IST 11:40 Bombay Sensex is in the red down 40 points from start.

IST 11:31 Bombay Sensex is UP by 180 points.

Original Story:

Indian Finance Minister Pranab Mukherjee has started his budget speech to the Indian Parliament. This budget speech is keenly watched all across teh country as it will show the way forward for the Indian Economy. He is aiming at 9% growth and the budget is the instrument that will pave the way forward.

6.8% Fiscal deficit is there in the Indian Union Budget, International investors are feeling disappointed by the budget. For the FII standpoint there are no fresh incentives!

He is saying that infrastructure projects are critical for the gorwth of the country and he is assuring that sufficient funds are made available for the same.

Highlights of Indian Union Budget 2009 presented by Pranab Mukherjee:

Public holding in PSUs to go up!
Fringe Benefit Tax (FBT) removed.
Personal Income Tax Surcharge removed
15,800 Cr. Allotment for railways.
STPI scheme extended for 1 year.
Mumbai finds mention in the speech, INR 500 cr. for storm water drainage project.
GOvernment will create 1.2 crore jobs.
Nationa Gas Grid to facilitate flow of gas across the country.
Agriculture is important as 50% of the population is dependent on this, INR 3lac 25 thousand crore set aside for agricultural credit. To ensure that agriculture sector grows by 4%
Print Media was given stimulus by waiving 15% commission on DAVP ads and rate hike of 10%, the same package is extended for six more months!
Petroliem pricing policy: 3/4 of Indian Oil requirements are imported. A committe to work out a system for petrolieum pricing.
New Tax System: Designed for voluntary compliance, the target now is and abolish coercive tax collection system and move to hassle free tax collection.
For the common man income tax limits have been hiked by INR 10k and INR 15k for Senior Citizens. The 10% surcharge has also been done away with.

Industry Wise impact of Budget 2009

Stress on infrastructure a positive for steel and cement industry!

11:26 am - Pranab Mukherjee: To provide additional Rs 1000 crore over interim budget for irrigation 11:24 am - Pranab Mukherjee: To pay additional subvention of 1% to farmers who pay short-term farm loans on schedule 11:24 am - Pranab Mukherjee: Agriculture credit target Rs 3.25 lakh crore 11:23 am - Pranab Mukherjee: To develop long-distance gas pipelines to develop national grid 11:23 am - Pranab Mukherjee: Mumbai flood project BRIMSTOWAD to get Rs 500 crore 11:20 am - Pranab Mukherjee: To raise allocation for urban poor schemes to Rs 3973 crore in FY10

IBN Live on Budget 2009:

Promising to halve poverty by 2014 and add 1.2 crore jobs each year, Finance Minister Pranab Mukherjee presented India's budget for this fiscal that hikes income tax exemption limit and steps up allocations for welfare schemes and infrastructure, while assuring high growth for the $1.2 trillion economy once again.

Economic Times on Union Budget 2009

To ensure that infrastructure projects do not face financing difficulties arising from the current downturn, the Government has decided that IIFCL will refinance 60 per cent of commercial bank loans for PPP projects in critical sectors over the next fifteen to eighteen months. The IIFCL and Banks are now in a position to support projects involving a total investment of Rs.100 thousand crore in infrastructure. Combined with the steps we are taking to increase public investment
in infrastructure, this will provide a big boost to such investment.

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