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BUDGET FY2010

BUDGET FY2010. PRESENTED BY PALLADIO PRANSA & PARTNERS. BUDGET FY2010- Key Takeaways. The Indian Government’s expenditure will exceed Rs10 trillion in FY10 to boost economic growth with higher investments in infrastructure.

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BUDGET FY2010

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  1. BUDGET FY2010 PRESENTED BY PALLADIO PRANSA & PARTNERS

  2. BUDGET FY2010- Key Takeaways • The Indian Government’s expenditure will exceed Rs10 trillion in FY10 to boost economic growth with higher investments in infrastructure. • Most of this will be devoted to extra spending on roads, irrigation and power • The government has pegged revenues from auction of 3G spectrum • at Rs350bn • Fiscal deficit has increased to 6.8% of GDP compared to 5.5% in • February 09 • 144% rise in spending on the rural employment guarantee scheme • An increased allocation of nearly INR40bn for urban housing and promises to give credit at “reasonable rates” to small businesses.

  3. Impact on Infrastructure • Increase in investment in the infra sector from 5.8% of GDP to more than 9% of GDP • Higher outlay on Urban infrastructure (outlay up 87%) and Power (APDRP scheme outlay up 160%) • IIFCL will refinance 60% of commercial bank loans for PPP projects over the next 15-18 months • Bank credit to infrastructure projects has increased to its highest point in the last 4 years • Abolishing of the Fringe Benefit Tax • Increase in Minimum Alternative Tax (MAT) from 10% to 15%-marginally negative for infra projects

  4. Reasonable Increase In Allocation for Projects

  5. Infrastructure Spending as a % of GDP

  6. Lending to Infrastructure as % of Total Bank Credit Is at a Four-year High

  7. Rail Budget • Union Railway Minister Ms. Mamta Banerjee presented her first budget for the United Progressive Alliance (UPA) on 3 July 2009 • Keeping the passenger fares and freight rates unchanged, she has presented a people and industry friendly budget. • Freight rates were unchanged and passenger rates were reduced by 2% • Gross Traffic earnings for FY10 is projected at Rs 884 bn • Targets are positive. We expect companies like L&T, Kalindee Rail, IRCON, Era Construction, Kernex Micro along with other companies in railway space are key beneficiary.

  8. Annual Plan 2009-10 • Budget estimates for construction of new lines and track work has also been revised significantly by 74% to Rs 47 bn as compared to Rs 27 bn in the interim budget. • New Lines outlay- Rs. 2.9 bn, increase of 166% on interim budget • Gauge conversion- Rs. 1.7 bn- increase of 24% on interim budget • Acquisition of 18000 wagons in 2009-10 against 11000 in 2008-09 • Additional budgetary support of Rs. 20 bn sought for 11 national projects.

  9. Annual Plan 2009-10… • Dedicated Freight corridors declared ‘ Diamond Rail Corridors’ • Foundation being laid for Eastern Industrial Corridor alongside the Eastern Freight Corridor • Railways’ land banks to be productively utilized to catalyze development in this corridor • 57 new train services to be introduced. • Extension of 27 trains also envisaged. • Frequency of 13 trains to be increased.

  10. Key Initiatives • Ten Rail projects in the North-East region have been declared as National Projects • Railways budget announced more public private partnerships (PPP’s) • Under the PPP model railways is planning to construct 50 stations which are to be developed into world class stations with international facilities • Laying of Optic Fibre Cable Network along Railway track for commercial utilization

  11. Key Initiatives contd..

  12. THANK YOU

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