Budget 2012: Here's what the experts think

Fiscal deficit number of 5.1 % of GDP is more realistic

"The total Gross borrowing programme of 5.69 Lakh crore and net borrowing of 4.79 crore is higher compared with market expectation.

"The fiscal deficit number of 5.1 % of GDP is however more realistic.

"The borrowing programme will be front loaded, due to lower revenue receipts and higher redemptions in the first half of the financial year.

"The ten year G sec yields may trade in the band of 8.10 -- 8.60 % in the first half of the financial year."

--- Mr Murthy Nagarajan, Head -- Fixed Income, Tata Asset Management Ltd

Grid connected renewable capacity to benefit by extension of sunset clause u/s 80IA

Extension of sunset clause of 80IA for power projects will applicable for grid connected renewable power plants aswell and this is good for the sector.

Barring this there is no major boost for renewable sector which was expected to get greater attention and favourable policy direction given the supply constraints faced by conventional power plants.

And this is a great disappointment.

-- Ramesh Kymal, CMD Gamesa Wind Turbines

Higher borrowings would impact the g-sec yields negatively

Commenting on the impact of Union Budget 2012-13 on the Indian g-sec market, Sandeep Nanda, Chief Investment Officer, Bharti AXA Life Insurance said, "The net borrowing figure of Rs.4.8 trn is almost 10% higher than last years and the gross borrowing of Rs. Rs.5.7 trn is aprox higher by 12% than last year.

This would impact the government bond yields negatively and the 10 year yield would move up to 8.40 to 8.50 by March end.

We think that the RBI will have to do Open Market Operations next year to support the government borrowing programme next year."

-- Sandeep Nanda, Chief Investment Officer, Bharti AXA Life Insurance

Honest budget implicating ground realities

"Budget 2012-13 has been an honest budget implicating ground realities with continued focus on fiscal consolidation.

"The expected fiscal deficit of 5.1% and full rollback of impetus during global crisis of 2008 by hiking the rate of excise and service tax rate will help in achieving it and appears highly achievable.

The budget though also had a modest increase in the allocation to social welfare schemes and provided relief to individuals hiking tax exemption limit (Income till Rs 200000 exempted from Tax).

Also, reduction in customs duty for import of coal, LNG and capital equipments along with hiking allocation to road sector has to a certain extent taken care of some of the concerns faced by infra sector.

Initiatives such as the Rajiv Gandhi equity savings scheme, lower STT on delivery, and higher tax free infra bonds will lead to increased participation from retail investors through these benefits."

-- Anup Bagchi, MD & CEO, ICICI Securities Ltd

Increase in Excise & Service Tax by 2% will add to inflation

I am happy to hear the Date of GST implementation in August 2012.

The Steps of Creating a Equity for Small & Medium Sector is a very good move to boost the SME investment spree.

Increasing in Excise & Service Tax from 10 % to 12 % will add to inflation.

We feel this was not very stability friendly move.

In the totality it will be an inflation driving proposition by the Finance Minster.

There is nothing Special in the budget which is will initiated the next level of much awaited reforms.

-- Makrand Appalwar - CMD, Emmbi Polyarns

On a scale of 10, the Union Budget is a dreary 6!

In one word, I would describe the budget as Unimaginative! : No Stimulus – No reform – No Course Correction

At its simplest Budget 2012 seems to be mainly a patchwork of policy tweaks – and vanilla prescriptions for various sectors of the economy.

It fails to deliver any clear signal to India Inc about the Government's commitment to reform and growth.

It does seem to be peppered with promises of FDI reform but no concrete timeline on offer makes it less believable in the current political climate with allies already indulging in the theater of the absurd with Rail budget.

The IT industry for Third year in a row seems to have been overlooked with much expected adjustments to SEZ regime and support for SME's failing to make it the roster once again.

Support for UID is the sole good news on the domestic IT.

Aam Admi does walk away with a few goodies like Tax break etc but will need to be a beneficiary of the social safety net -- to really feel being taken care of by the FM.

-- Lavanya Rastogi, OSScube

Negatives like increase in excise duty and service tax was largely expected

"The total demat accounts in the country are less than 2.5 crore (around 2% of the total population of the country), the new scheme envisages an income tax deduction of 50% to new retail investors, who invest upto Rs.50,000 directly in equities.

Since the upper limit of annual income is less than Rs 10 lakhs to claim this benefit, it covers a significant portion of the tax-paying population.

This should provide significant impetus for an individual (who is not in the markets, as of now) to enter the capital markets.

This should not only reduce the volatility in stock market prices but pave way for distributed and strong holding of equity shares considering the lock-in period of minimum three years.

This announcement is important considering the fact that the household savings deployed in equity capital markets has come down sharply.

As regards the overall budget, the FM has done a decent job considering the constraints on the Government's finances.

Negatives like increase in excise duty and service tax was largely expected.

Also credible is the fact that he has addressed the black money issue.

More important is, he has heeded to the problems of sectors like power and has encouraged investment in infrastructure.

Overall, equity markets and brokerage houses should heave a sigh of relief that the Budget has passed without doing any overall damage to the investor sentiment.

In fact, I would like to add that it is positive considering that the market is smart enough and had discounted quite a few fears, a large part of which turned out to be unfounded.

All eyes will now be on the RBI and hopes that there will be interest rate reduction coming in April."

-- Kishore Bang, co-founder & director, Nirmal Bang Group

New Initiatives Will Lead To Increased Participation from Retail Investors

"Budget 2012-13 has been an honest budget implicating ground realities with continued focus on fiscal consolidation.

"The expected fiscal deficit of 5.1% and full rollback of impetus during global crisis of 2008 by hiking the rate of excise and service tax rate will help in achieving it and appears highly achievable.

The budget though also had a modest increase in the allocation to social welfare schemes and provided relief to individuals hiking tax exemption limit (Income till Rs 200000 exempted from Tax).

Also, reduction in customs duty for import of coal, LNG and capital equipments along with hiking allocation to road sector has to a certain extent taken care of some of the concerns faced by infra sector.

Initiatives such as the Rajiv Gandhi equity savings scheme, lower STT on delivery, and higher tax free infra bonds will lead to increased participation from retail investors through these benefits."

-- Anup Bagchi, MD & CEO, ICICI Securities Ltd

Union Budget 2012-13: Complete coverage