"Budget 2012-2013"-A summary

In his sincere efforts finance minister was both clear and strict with his approach for the session 2012-13. This budget no doubt is going to add inflationary pressure on people and is in a sense a cruel one. Hint of further tightening of subsidiary on petroleum product is a tough stand when inflation is still a big problem for our growing economy.This budget theme is managing fiscal deficit of government.Some important points for investors in this budget.....

1. Government efforts for attracting retail investors in equity markets is quite visible and goes with reducing STT from 0.125% to 0.1%. Further an income tax deduction of 50% to new retail investors with income below 10 lacks who invest up to Rs 50,000 directly in equities is going to attract some fresh investors in this already dull market. In addition Rs 10,000 deduction has been allowed for taxpayers for interest from saving bank account.
2. Budget provide some relief to aviation sectors by fully exempting basic custom duty on importing parts of aircraft and testing equipment. But whats a treat to already broke industry is that budget allowed external commercial borrowing of up to $1 billion. This step is going to be a boon for KFA,JETAIRWAYS. Although terms of borrowing need to be analyzed before making any investment decision.
3. I see this budget good for companies in power,aviation,education and infra sectors. Also FMCG is a sector for safe investors.

Some points before making any investment decision....:

1. Crude oil price is going to determine the growth. This is one factor which seems hurting the economy in days to come.
2. Inflationary pressure will add up and no relief in near term is visible.
3. Food inflation will add more pressure.
4. Days to come are going to be challenging. Greece debt problem in my view is much bigger than what is seen as easy to tackle job. Its connected.