Union Budget 2013-14 will be declaring on first week of March. We are expecting lot from this Budget this year, it may be last Budget of ruling party and it may reduce impact of inflation on common man pocket. We expect Budget will be good for market and give support to move it above psychological level. It is likely to be Dream Budget.
We expect budget is likely to be estimated around 4.8% of GDP and Fiscal consolidation may be reduced in comparison to FY13.
Oil and gas sector may be benefited by government. Custom duty may be restore on import of crude oil and price mechanism will be change for crude oil export. It is positive for private oil and gas companies such as Cairn India and neutral for Public sector units due to high realization of crude prices.
For Auto sector it is likely to be Tax neutral. The auto sector, which is already facing slow down mainly due to overall economy and demand .Excise duty may be increased on auto sales. Last year government had raised Excise duty on all segments such as two wheelers, cars, trucks etc.
We expect there will be recommendation to enhance R&D sector in Budget 2013. R&D will enhance the production and extraction of natural resource, scientific researches and technological advancement. The Government should also promote Indian software industries to develop more intellectual property of India.
In FMCG sector many product such as condensed milk, tea, starches, vegetable saps, sugar etc likely to be free from excise duty it will be good for common man pocket but it will left negative impact on earnings of high pricing companies such as HUL, GPCL and Colgate.
We think that Budget will give a support to Indian market as well as suitable for common man. We expect Government will announce and proactive policies considering forthcoming general election.