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Union Budget 2012-13

, March 16, 2012, 0 Comments

Finance Minister Mr. Pranab Mukhrjee presented a very practical budget today. No big bang reform agenda and no huge social spending programs. Fiscal defit for current year is 5.9% and for the next year it is projected to be 5.1% of GDP. Though skepticism remains about the delivery of such numbers.  Below are the list of stocks which got  affected by the changes proposed in today’s budget.

Oil Sector : Cess on crude petroleum oil revised to Rs 4,500 per metric tonne from Rs 2,500 per metric tonne. Oil major ONGC [stockquote]ONGC[/stockquote] were down more than 4.5 and Oil India [stockquote]OIL[/stockquote] down to 1211 per share. Private players such as Cairn India [stockquote]CAIRN [/stockquote] took a massive hit and were down by more than 6% to 345.55.

Heavy Industries : Analyst were expecting a import duty to be levied on power equipment but no such announcement were made and stocks such as PSU major Bharat Heavy [stockquote]BHEL [/stockquote] were reacted negatively.

MAT Effect : FM proposed the Minimum Alternate Tax (MAT) will be applicable to both SEZ developers and units. Companies would pay MAT on book profits earned for the fiscal year. Following MAT announcement Sun Pharmaceuticals [stockquote]SUNPHARMA [/stockquote] fallen quite substantially.

Bicycle : Bicycle will get dearer due to hike in basic customs duty on bicycles from 10% to 30% and on bicycle parts from 10% to 20%. Surprisingly after such announcement also shares of companies like Atlas Cycle rose significantly.

Two way Fungibility of IDR : Budget 2012 proposed two-way fungibility in Indian Depository Receipts (IDR) in order to encourage more foreign participation in Indian market. IDR of Standard chartered were up by 20% after the announcement.

It is quite evident from today’s budget that FM acted quite cautiously and did not touched upon issue where they are struggling to convince their coalition partner.  FDI in Multi brand retail, in Aviation did not highlighted very much in Budget speech. He remained non committal on major issue such as GST and Insurance Sector reform. From market perspective it is a quite disappointing budget and market shut shop in negative in fact lowest point of the day.