Archive for February, 2013
The Reserve Bank today welcomed the General Budget , saying it has laid the foundation for lowering fiscal and current account deficits, apart from supporting both domestic and foreign investments.
The central bank said the government’s net market borrowing target of around Rs 5 lakh crore (budget estimate for the next fiscal is Rs 4.84 lakh crore) is manageable. RBI Deputy Governor Urjit Patel at the customary post-budget press conference here said, “The Budget will go a long way in lowering the fiscal risks.
“The fiscal targets achieved in 2012-13 (5.2 percent of GDP) and that laid down for 2013-14 (projected at 4.8 percent) will lay the foundation for a sustainable rebalancing of government finances. This would impart confidence in the economy and support investments, both domestic and foreign.”
Asked about monetary response to the Budget proposals in general and the fiscal consolidation roadmap in particular, Patel said the RBI response will be known on March 19. “As you know, the mid-term monetary policy review is next month. So, we will reflect on that and discuss it next month.”
The Budget estimated fiscal deficit for the current financial year at 5.2 per cent, and at 4.8 percent in FY14. Patel said along with lowering of twin deficits (FD and CAD), the Budget will boost household savings along with creating a space to augment private investment.
“The Budget sets the stage for lowering the twin deficits, moderating the drafts of government on household financial savings and help create the fiscal space to augment private investment,” the RBI Deputy Governor maintained.
On the concerns regarding higher subsidies, Patel, who took over the job last month, said the Budget has taken significant steps to bring down fiscal deficit and challenges arising from subsidies are being met by the Government.
“The Budget has taken significant steps forward for taking the overall fiscal deficit down and the challenge of subsidies is being met….this is a medium-term programe and we have both 2012-13 and 2013-14 numbers, which indicate the Government expenditure and borrowings are being brought down and I think, overall that’s a good thing.”
Standard & Poor’s said on Thursday India’s budget for the 2013/14 fiscal year would have no impact on the country’s sovereign credit ratings, warning there was potential for the government to exceed its budgeted spending.
S&P also said there had been “little progress” in structural reforms to reduce the “vulnerability” in the government’s fiscal position.
S&P last year cut its outlook on India’s “BBB-minus” sovereign ratings to “negative,” threatening to push the country into sub-investment category.
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Updated : 03.21pm / 28th Feb
There has been no changes in either the income tax rates or slabs in the Union Budget 2013-14 but Finance Minister P Chidamabaram allowed some relief for those who earn between Rs 2-5 lakh per year by announcing that they would be granted a tax credit of Rs 2000.
Defence Budget will be Rs 2,03,672 crore, which includes Rs 86,741 crore capital expenditure in 2013-14.
With an eye firmly on the Lok Sabha elections which are scheduled for early 2014, Finance Minister P Chidambaram focused on rural India while presenting Union Budget 2013-14 in Parliament on Thursday. He announced that the Ministry of Rural Development will be given Rs 80,194 crore in 2013-14 while about Rs 33,000 crore has been allotted for MGNREGA even as he cautioned that Indian economy was not out of the woods.
He announced that states which have completed Pradhan Mantri Gramin Sadak Yojana will be eligible for PMGSY-II, others will continue with PMGSY-I, which led to uproar from the Opposition benches. The Agriculture Ministry has been given Rs 27,049 crore and the average annual growth rate of agriculture and allied services is estimated at 3.6 per cent in 2012-13 when 250 MT foodgrains was produced, said Chidambaram.
Admitting the Indian economy is still to get back on the track of fast growth, Finance Minister P Chidambaram while presenting Union Budget 2013-14 in Parliament on Thursday said that even though it remains a challenge but added that he was confident that the country would bounce back.
Pointing out that food inflation is also a major cause of worry, he said that government will take steps on production side to control it. FDI, FII and external commercial borrowings are our choice and tight monetary policy is needed to contain inflation. We have to encourage foreign investments which are in accordance to meet the economic objectives. I have no choice but to rationalise expenditure,” he said.
12:43 pm: FM increases in import duty on high end motor vehicles from 75% to 100%; and on motor cycles from 60% to 75%.
Excise duty on SUVs raised from 27% to 30%. Will not apply to SUVs registered as taxis
12:43 pm: Eating out becomes expensive! Finance minister plans to impose service tax on all AC restaurants.
12:43 pm: Finance minster hikes Special Excise Duty (SED) on cigarettes by 18%
12:42 pm: Finance minister to introduce DTC Bill in Budget session of Parliament
12:42 pm: Finance minister no change in standard rate of excise duty, service tax
12:42 pm Finance minister: 20% final withholding tax on unlisted companies’ share buyback
12:41 pm: Finance minister: Modified provisions under GAAR effective April 1, 2016
12:40 pm: Finance Minister says to incorporate January decisions on GAAR
12:39 pm: Finance minister STT reduced to 0.1% on equity futures
12:37 pm Finance Minister: CTT of 0.01% on non-agri commodity futures
12:36 pm: Finance Minister: To reduce STT on equity futures, MF units
12:25 pm: Super rich tax; 10% surcharge on income above Rs 1 crore. The surcharge has been hiked to 10% from 5%.
FM announces 10% surcharge on companies with income over Rs 10 crore.
The 80IA has been extended by one-year. The DDT surcharge raised to 10% from 5%.
The government will continue with education cess at 3%.
“The additional surcharge on taxes only for 1 year,” FM says.
12:21 pm: The finance minister to set up tax administration reforms commission. He says there is “no case to revise direct tax rates or slabs.
“The tax credit of Rs 2,000 for income up to Rs 5 lakh,” the FM announces
11:55 am: A first for India! FM announces his plans to set up an all-women’s bank via public sector. It will be a women bank, by women, for women.
The FM will provide Rs 1,000 crore initial capital to the proposed all-women’s bank.
11:48 am: Finance Minister will provide Rs 14,000 crore for PSB recapitalization. He will constitute a panel on transaction costs, and financial policies.
11:46 am: The finance minister doubles Small Industries Development Bank of India (SIDBI) Refinance Fund to Rs 10,000 crore.
11: 45 am: The government plans to encourage PPP projects along with Coal India.
It will encourage shale gas projects and review the natural gas pricing policy.
Finance Minister says blocked NELP blocks will be cleared and there will be a policy on shale gas based on revenue sharing.
11:42 am: Finance minister inflation-indexed bonds to be announced On June 1. The government will introduce inflation-indexed instruments, the minister announced.
“Will up to Rs 25 lakh 1st home loan to get more tax cuts,” he says.
The income limit for RGESS eligibility has been raised to Rs 12 lakh.
11:40 am: Finance Minister will allocate additional Rs 10,000 crore for Food Security Bill in FY14.
11:39 am: FM says 3000 km of road projects will be awarded in first six months of FY14.
“To constitute regulatory authority for roads sector,” he says.
11:38 am: The finance minister will approve Rs 50,000 crore tax-free bonds in FY14. The government expects to raise Rs 25,000 crore via tax-free bonds in FY13
As per the Budget announcement, IIFCL will give credit enhancement to companies.
Finance minister says infra debt funds will be encouraged going forward.
Interest subvention on farm loans repaid on time will continue, he told the House.
11:31 am: The finance minister allocates Rs 27,049 crore to agriculture ministry in FY14 — a hike of 22% from FY13
11:25 am: The FM hikes rural development spending by 46% to Rs 80,194 crore. He has allocated Rs 33,000 crore for MGNREGA. To allot Rs 14,873 crore for JNNURM in FY14.
The Budget has extended the 4% farm loan scheme to private sector banks. “Interest subvention on farm loans repaid on time to continue,” Chidambaram announces.
Importantly, Rs 65,877 crore has been allocated to education development — 17% hike from FY13.
11:20 am: Finance minister says no choice but to rationalise spending. “The total budget estimate for FY14 at Rs 16.65 lakh crore.”
11:07 am: Finance Minister says the final GDP growth rate would be lower than CSO, RBI estimates. RBI estimated GDP growth of 5.5% in FY13.
FM says not unaffected by what is happening in rest of the world.
He says global economic growth slowed to 3.2% in FY12 versus 3.9% (YoY)
11: 00 am: Finance minister P Chidambaram begins his Budget speech in the Parliament, says “no reason for pessimism.”
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Updated : 11.00am / 28th Feb
NIFTY FUTURE closed 5798
Yesterday we have updated strong Resistance 5790
We gave Sell call @ 5784 Stop-loss 5790, Booked Profit @ 5760… 24 Points Profit ( First 1 hr trade ).
Marked low was 5749 then taken U Turn, Noon we have updated Resistance 5810 to 5820
Marked high was 5817.45 then Closed 5797
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Today Budget Day & F&O Expiry Day
If Budget very Good will see 5950, 6000 & 6060 coming Days
If Budget Worst will see 5600, 5520 & 5375 coming Days
If Budget FLAT will see 5700 & 5650 coming Days
Today’s Nifty Future Resistance 5820 if trade above the level will check 5850
After budget if stays above 5850 will check 5890 & 5930 levels…….
Today’s Support 5780 if trade below the level after Budget will see 5740
Thereafter non stop slide upto 5680 & 5630 levels……..
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Updated : 09.05am / 28th Feb