Quick takeaways from Chidambaram's Interim Budget

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Quick takeaways from Chidambaram's Interim Budget
It was largely expected to be a non event for the stock markets and barring a few giveaways for the auto, capital goods and consumer durables sector, there were no surprises in the "Vote on Account" or the Interim Budget. The fiscal deficit projection has come in as a pleasant surprise, though the stock markets have remained largely steady, indicating that it may not have been an enterprising "Vote on Account" after all. Take a look at the quick highlights.

Fiscal deficit projected at 4.6% for FY 2014

The fiscal deficit in the interim budget has been projected at 4.6 per cent of GDP. It maybe recalled that in last year's budget, the Finance Minister had said that the fiscal deficit was targeted at 4.8 per cent. The FM also made it clear that the deficit would not be breached. True to his word, the deficit has not been breached by estimating the same at 4.6 per cent. Some say it is clever maths by pushing certain subsidies to the next year.

Relief for the capital good sector

There was good news for the capital goods sector as there was some relief by way of excise duty cuts to 12 per cent from 10 per cent.

Excise benefits for the auto sector

There were an excise duty cut on large and mid sized cars to 20 per cent. This has come as a huge relief for the sector, which has been witnessing a slowdown for the last few quarters. Stocks like Maruti and Mahindra and Mahindra rallied following the news.

Excise duty on mobile handsets at 6 per cent

Excise duty on mobile handset will now be 6 per cent on CENVAT credit to encourage domestic production and perhaps compete with imports of handsets from China.

Excise duty on SUVs cut to 24% from 30%

Excise duty on SUVs has been cut. Companies like Mahindra and Mahindra are likely to benefit.

Capital goods and consumer durables

Excise duty cut by 2% for capital goods & consumer durables, sector which will make refrigerators, and washing machines cheaper.

Fiscal deficit for 2015 estimated at 4.1 per cent

In what surprised analysts the fiscal deficit for 2015 has been cut to 4.1 per cent of GDP. This many analysts feel is overly optimistic and the new government, which will take charge at the centre probably in May-June 2014, may not be able to achieve the same.


Story first published: Monday, February 17, 2014, 12:31 [IST]
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