Deutsche Bank expects the following 12 big policy measures in the budget,
(1) Rationalize subsidies in a politically prudent manner through moderate monthly price hikes, stretching beyond diesel to LPG and even kerosene (Key beneficiaries: HPCL, BPCL ONGC, Oil India)
(2) Re-direct government expenditure from revenue to capital expenditure and use welfare programmes for capacity creating outlays. Enhance resource allocation to infrastructure. (L&T, UltraTech, ABB, Siemens)
(3) A reorientation of the MGNREGA scheme towards focused capacity creating measures like rural roadways and irrigation projects (UltraTech)
(4) Announcement of new flagship mega-infrastructure projects with time bound deadlines - Delhi Mumbai industrial corridor, Diamond quadrilateral for railways, broadband highways, smart cities. (L&T, ABB, Siemens)
(5) Usher in a new regime of FDI Liberalization with special focus on raising FDI limits in Defense, railways and insurance to 51 per cent or higher (Siemens, L&T, Bharat Forge, Max India, Reliance Capital)
(6) The highest ever target for disinvestments of government's equity stakes in PSU companies. Announced target in range of Rs.60,000- Rs. 80,000 crore.
(7) Create enabling environment for higher flows into equity capital markets, by raising investment limits of pension funds and the LIC in equity capital markets. (Kotak Mahindra Bank, HDFC Bank, Reliance Capital)
(8) Address the urgent need to recapitalize PSU banks either via diluting government stakes to 51 per cent or through establishing holding company entity for government stakes in PSU banks. (Punjab National Bank, Bank of Baroda)
(9) With limited room to raise taxes , and yet address fiscal imbalances, government to rely on raising revenue through auction of resources like coal and telecom spectrum, which can be fairly significant.
(10) Provide tax relief to the middle class through raising basic exemption limit to Rs. 3 lakh - Rs. 4 lakh and hiking deduction under Sec 80C to Rs. 2 lakh. The revenue thus foregone may be compensated by raising tax on the super-rich.
(11) Articulate a credible roadmap with time-bound deadlines on ushering the Goods and Services Tax (GST) by March 2016.
(12) Address foreign investor concerns on retrospective taxation by making India's tax environment transparent, less adversarial and prospective only.
Source: NDTV Profit
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