Sectors on Radar
With barely a week left for the Union Budget 2013-14, major industrial sectors are awaiting government’s announcement that will not only give direction to the Indian economy but will also pave the road for development of these sectors. Here is a list of top five sectors which is most likely to be addressed in the Budget.
Real estate sector
Amidst demands of granting industry status to the housing sector, this year the real estate sector will be among the most watched. Industry bodies are also demanding tax exemption on Special Hosing Zones in line with Special Economic Zones. Allowing external commercial borrowing as per the FDI norms is also among the wishlist. Other pending reforms is the Land acquisition Bill, which, if passed will give a major boost to the real estate sector.
If the government fulfills the wishlist of the salaried class which includes separate provision for the principal loan amount which currently is included in 80C (under which maximum limit is one lakh all inclusive) it will bring positive impact to the realty sector.
Another demand of the salaried class is to hike the interest payments on home loan of upto minimum 3 lakh from current Rs 1.5 lakh which is eligible for deduction.
Though all the demands may not be fulfilled but if government fulfills a few of the demands, it will be fruitful for the realtors and their stocks. One can carefully watch real estate stocks during this Budget.
If the government fulfills the wishlist of the salaried class which includes separate provision for the principal loan amount which currently is included in 80C (under which maximum limit is one lakh all inclusive) it will bring positive impact to the realty sector.
Another demand of the salaried class is to hike the interest payments on home loan of upto minimum 3 lakh from current Rs 1.5 lakh which is eligible for deduction.
Though all the demands may not be fulfilled but if government fulfills a few of the demands, it will be fruitful for the realtors and their stocks. One can carefully watch real estate stocks during this Budget.
Automobile sector
Automobile sector is one major sector which should be closely watched during the budget. There is likelihood that the government may hike excise duty on diesel cars (mainly SUV) which has seen sharp reactions from the industry. If government goes ahead with the hike in excise duty it will bring negative impact on the whole sector. The stocks of auto companies may suffer.
Stocks of companies which have dominant presence in diesel vehicles will be net sufferer. However, the companies which deal mostly with petrol cars will not be affected much. But some respite may be seen if government decides to reduce excise duty on electric and hybrid cars. Other demands include reducing excise duty on small cars, buses and increase in expenditure in JNRUM scheme for urban development. But these decisions are unlikely to be taken in considering the ballooning fiscal crisis.
Stocks of companies which have dominant presence in diesel vehicles will be net sufferer. However, the companies which deal mostly with petrol cars will not be affected much. But some respite may be seen if government decides to reduce excise duty on electric and hybrid cars. Other demands include reducing excise duty on small cars, buses and increase in expenditure in JNRUM scheme for urban development. But these decisions are unlikely to be taken in considering the ballooning fiscal crisis.
Banking
Government may go forth with issuing of more new licences in banking sector. This might cast a negative impact on the entire sector because the entry of new players will increase market competition.
Another demand raised by the banking sector allowing tax free infrastructure bonds so as to bring more funds. The banking sector remains at the priority list because these major decisions will give further direction to the sector. Banking stocks should be carefully watched because if the first decision of granting licence is okayed, the stocks of banks may go in red but the second decision might bring cheer across the banking stocks.
Another demand raised by the banking sector allowing tax free infrastructure bonds so as to bring more funds. The banking sector remains at the priority list because these major decisions will give further direction to the sector. Banking stocks should be carefully watched because if the first decision of granting licence is okayed, the stocks of banks may go in red but the second decision might bring cheer across the banking stocks.
Insurance
Decision on FDI in insurance will be eagerly watched. The 49 percent FDI in insurance which has been on the back burner for quite some time now remains to be passed by the government.
Another major announcement awaited for the Insurance sector is the tax rebate under 80C. If government announces a separate provision of tax rebate, apart from 80C or hikes the tax exemption limit under 80C it will bring a positive response to the sector.
The Insurance sector’s stock might see a good rally.
- See more at: http://24by7news.com/homeslider/indian-budget-2013/#.US2xlzcTF5s
Another major announcement awaited for the Insurance sector is the tax rebate under 80C. If government announces a separate provision of tax rebate, apart from 80C or hikes the tax exemption limit under 80C it will bring a positive response to the sector.
The Insurance sector’s stock might see a good rally.
- See more at: http://24by7news.com/homeslider/indian-budget-2013/#.US2xlzcTF5s
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