Budget Preview 2015-16: 'Acche din' for capital market?

Research Team ([email protected]); Tel: +91 22 3982 5441 Dipankar Mitra ([email protected]); +91 22 3982 5405

18 February 2015

Preview

Budget 2015-16

Investors are advised to refer through disclosures made at the end of the Research Report.

A watershed event Overhaul of tax/subsidy, reforms, expenditure quality in focus

n FY16 Union Budget would be presented in the backdrop of easing inflation and interest rates but continued growth challenges which the government needs to address.

n While deficit targets may be achieved by the measures followed recently, focus areas are likely to be the following:

I. Balancing fiscal consolidation with need to boost growth through expenditure. II. Initiate far reaching changes on the taxation front including i) ensuring a non-

adversarial tax regime, ii) steps towards GST and iii) benefit on personal tax. III. Subsidy resolution, by bringing it down to 1.7% of GDP, to create headroom to

spend on infrastructure. IV. Reforms acceleration by innovative financing structure and a revamped PPP with

lower risk for private sector. V. Address long standing issues in the capital market, including high tax incidence.

VI. Rail Budget is likely to launch a plethora of initiatives along with an improvement in its finances.

Exhibit 1: While broadly adhering to deficit reduction path, headroom for higher plan expenditure maybe created INR b YoY % (as % of GDP)

FY15 BE FY15E FY16E FY15BE vs

FY14RE FY15E vs FY14RE

FY16E vs FY15RE

FY14 RE FY15 BE FY15E FY16E

Receipts 15,904 16,897 18,250 13 6 8 14.0 13.9 13.4 13.1 Revenue receipts 10,293 11,322 12,479 16 10 10 9.1 9.2 8.9 8.9

Net tax revenue 8,360 8,941 9,882 17 7 11 7.4 7.6 7.1 7.1

Gross tax revenue 11,589 12,708 14,234 18 10 12 10.2 10.6 10.0 10.2

Income tax receipt 2,417 2,622 2,885 18 9 10 2.1 2.2 2.1 2.1

Corporate tax receipt 3,937 4,252 4,762 15 8 12 3.5 3.5 3.4 3.4

Custom duties collection 1,751 1,908 2,099 15 9 10 1.5 1.6 1.5 1.5

Excise duties collection 1,795 2,052 2,339 15 3 14 1.6 1.6 1.6 1.7

Service tax receipt 1,649 1,831 2,105 31 11 15 1.5 1.7 1.4 1.5 Non-tax Revenue 1,932 2,380 2,597 10 23 9 1.7 1.7 1.9 1.9

Capital receipts (net) 5,462 5,576 5,771 8 2 3 4.8 4.6 4.4 4.1 Net market borrowings 4,539 4,541 4,585 2 0 1 4.0 3.6 3.6 3.3

Gross market borrowings 5,639 5,937 6,341 6 5 7 5.0 4.7 4.7 4.5 PSU Disinvestment 258 321 400 145 24 25 0.2 0.5 0.3 0.3

Expenditure 15,904 16,897 18,250 13 6 8 14.0 13.9 13.4 13.1 Non-plan expenditure 11,149 12,230 12,887 9 10 5 9.8 9.5 9.7 9.2

Non-plan revenue expenditure 10,277 11,217 11,728 8 9 5 9.1 8.7 8.9 8.4 Interest payments 3,801 4,270 4,484 12 12 5 3.3 3.3 3.4 3.2 Non-plan rev exp on defence 1,248 1,417 1,644 8 14 16 1.1 1.0 1.1 1.2 Subsidies outgo 2,555 2,623 2,403 2 3 -8 2.3 2.0 2.1 1.7

Non-plan capital expenditure 872 1,013 1,159 21 16 14 0.8 0.8 0.8 0.8 Plan expenditure 4,755 4,667 5,363 21 -2 15 4.2 4.5 3.7 3.8

Plan revenue expenditure 3,719 4,053 4,653 22 9 15 3.3 3.5 3.2 3.3 Plan capital expenditure 1,037 614 710 17 -41 16 0.9 0.9 0.5 0.5

Gross fiscal deficit 5,245 5,149 5,261 1 -2 2 4.6 4.1 4.1 3.8

Revenue deficit 3,703 3,948 3,902 2 7 -1 3.3 2.9 3.1 2.8

Union Budget 2015-16 | Preview

18 February 2015 2

Budget FY16 - a watershed Prioritizing growth; major tax/subsidy changes; Rail Budget in focus

1. With inflation hitting low ground, growth imperatives come to the forefront

FY16 Union Budget would be presented amid benign inflation but challenging growth scenario. While RBI has started to cut rates, we expect it to step it up by 50bp in Apr-14. Meanwhile, as the government has walked the fiscal tightrope, time has come to accelerate the reform engine and improve quality of spending to aid growth.

i) The year of low inflation and falling rates

Inflation is sharply down n Inflation, both retail and wholesale, has rapidly winded down in a short period

of time of last six months on account of moderation in food inflation and the crash in global commodities.

n We expect CPI inflation to average at 3.9%, while WPI remains near zero at 0.5% during FY16.

n This would call for a proportionate cut in interest rates. While RBI has initiated the rate cut with 25bp reduction on Jan 15, 2015, we expect a cumulative 150bp cut during 2015.

Exhibit 2: FY16 retail inflation to crash to near three-decade lows

Source: Government, MOSL

Exhibit 3: Rates would need to be cut at least by 150-250bp to normalize even with RBI's indicative real rates

Source: RBI, MOSL

ii) Mixed evidences on the state of economy

n The revised GDP series by CSO show that India already fared better-than-thought earlier during the difficult years of FY13, FY14 and FY15. If this trend continues, FY16 growth would likely reach 8% as per the new series.

n This, however, is at variance from a variety of other macroeconomic and sectoral indicators that suggest continued headwinds. The most direct evidence of this is the latest corporate results for 3QFY15, and also aided by IIP, bank credit and key sector trends.

n Government has started to address a few of the sectoral bottlenecks in the areas of mining and infrastructure sectors.

n While the non-fiscal measures are largely on track, in view of the particularly prevailing stress in the private sector, it is a moot question whether growth needs a fiscal support too.

3.4 3.9 3.92

4

6

8

10

12

14

FY84

FY86

FY88

FY90

FY92

FY94

FY96

FY98

FY00

FY02

FY04

FY06

FY08

FY10

FY12

FY14

FY16

E

CPI Inflation (YoY %) Third-lowest CPI inflation in 3 decades

1.5

0.6

3.1

2.1

RBI's

In

dica

tive

real

rat

e

Real

rate

-L

ong

peri

od

avg

Real

rate

w

ith

150b

p cu

t

Real

rate

w

ith

250b

p cu

t

Real rate (%)

UNION BUDGET


18 February 2015 3

Exhibit 4: The new series has upgraded and accelerated GDP growth estimates


Exhibit 5: Meanwhile, corporate results have worsened sharply

Source: Company, MOSL

Exhibit 6: Industrial growth has been slowing down


Exhibit 7: Bank credit growth has plummeted

Source: RBI, MOSL

Exhibit 8: Government has started to address sectoral bottlenecks - but more needs to be done


5.1

6.97.4

8.0

4.5 4.75.6

FY13 FY14 FY15E FY16E

New series Old Series

4

13 1311

14

5 2

0

8

15

11

15

7

2

1Q 2Q 3Q 4Q 1Q 2Q 3Q

FY14 FY15

Sales Growth PAT Growth

-1.0

1.9

-0.8-0.4

4.5

1.30.5

1Q 2Q 3Q 4Q 1Q 2Q 3Q

IIP growth (YoY %)

9

12

15

18

Apr-

13

Jun-

13

Aug-

13

Oct

-13

Dec

-13

Feb-

14

Apr-

14

Jun-

14

Aug-

14

Oct

-14

Dec

-14

Bank credit (YoY %)

Coal § Ordinance for auction

of coal blocks § The auction process has

started

Power § Separate agri feeder

mooted § Focus on T&D and

renewables

Road

§ Kickstarts EPC from PPP § Fast environmental

clearance

§ Hikes rail fares § Invites private

participation under various modes

Railways


18 February 2015 4

2. Fiscal correction has followed ready pattern The fiscal correction for last three years has been rather formula driven. Sharp cutback in plan expenditure effected as tax collections fall short of optimistic targets. In latter part of the year, squeezing PSUs for higher dividend, careful construction of spectrum auction and a rush to disinvestment saved the day for government.

n After the post crisis years of fiscal expansion, India is back on the fiscal

consolidation path for the last three years as per the pre-set medium term framework.

n A closer look at the methods employed to achieve this reveal application of a few accounting tricks and some substantial efforts, including the following: i) Deflated both revenue and expenditure or the government’s size in

comparison with the budgeted estimate. ii) Tax optimism at the beginning of the year to be matched by a steep cut in

plan expenditure during the course of the year. iii) Tapping PSUs (including RBI) for higher dividend. iv) Ensuring success of spectrum auction. v) Hurried disinvestment in the last quarter.

Exhibit 8: Tax collections have fallen behind the target set


Exhibit 9: Government has cut plan expenditure to achieve the deficit target


Exhibit 10: Most disinvestments have been pushed to the fourth quarter to meet fiscal targets…


Exhibit 11: …these methods have allowed the deficit target to be met


7.47.7

7.87.6

7.0

7.3 7.4

6.8

FY12 FY13 FY14 FY15

Net

tax

reve

nue

(as

% o

f G

DP)

Budget estimates Revised/Expected

4.9 5.2 4.94.54.6

4.1 4.23.7

FY12 FY13 FY14 FY15

Plan

exp

endi

ture

(as

% o

f G

DP)

Budget estimates Revised/Expected

37

30

60

0

20

40

60

80

100

120

1Q (Apr - Jun) 2Q (Jul - Sep) 3Q (Oct - Dec) 4Q (Jan - Mar)

Series1 5.7

4.8 4.64.1

FY12 FY13 FY14 RE FY15 E

Fiscal deficit to GDP


18 February 2015 5

3. The focus areas of FY16 budget

FY16 budget is expected to be a watershed. First is to settle the question of relaxing fiscal constraints for which influential voices have weighed their opinion. Big changes are expected on the taxation front in i) ensuring a non-adversarial tax regime, ii) steps towards GST and iii) benefit on personal tax. The decline in oil prices has provided a unique opportunity to cut back subsidy to 1.7% of GDP, thus creating headroom to boost infrastructure. Reforms too may focus on infrastructure, wherein an innovative financing structure and revamped PPP with lower risk sharing by private sector can reignite the investment cycle. Capital market may benefit through addressing some of the long pending demands. Rail Budget too is likely to launch a plethora of initiatives along with an improvement in its finances.

i) The fiscal math: is there a case for loosening up?

FY15 target challenging but possible to meet n In its maiden budget, the new government retained the revised deficit target

announced by UPA-II. Maintaining this year’s target is paramount to demonstrate its capability to achieve goals set, ensure policy continuity and preserve the investment climate.

n At a first glance, the fiscal situation for FY15 looks challenging during Apr-Dec 2014, with the fiscal deficit already reaching full year’s budget estimate. However, in the similar vein of last two years, the shortfall in tax revenue is being sought to be neutralized by no-growth in plan expenditure, higher non-tax collections and a late impetus to the disinvestment process.

n As per our expectation, the cutback in plan expenditure coupled with higher non-tax collections (both on account of higher PSUs profits and expected over-achievement of spectrum auction) would outweigh the loss of revenue on account of lower tax collection and shortfall in disinvestment.

Exhibit 12: Primarily due to a shortfall in tax revenue…


Exhibit 13: …Plan expenditure has not been allowed to grow


1116

-7

2214

19 19

3827

5

-1

27

715

7 5

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

YTD (Apr- Dec)

Net Tax Revenue (YoY %)

17

2

22

4

19

6

16 18

23 25 2319

117

19

0

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

Plan Expenditure (YoY %)


18 February 2015 6

Exhibit 14: Thus, a cutback in plan expenditure and higher non-tax revenue to offset the shortfall in tax and disinvestment


Influential voices have weighed for a relaxation for FY16 n FY16 Budget, though at the crossroads, can be a watershed. On the one hand,

India has embarked on a medium term fiscal framework that has survived the political regime so far. Complicating this has been the relatively high GDP growth estimates in the new series that apparently reflect non-recurring efficiency gains by corporates during the last three years. Investors’ sentiments too have improved markedly.

n Pitted against these are considerations that a variety of economic indicators, as highlighted above, continue to demonstrate weaknesses. This has led to some “influential voices” to seek at least a temporary relaxation from the pre-set deficit reduction plan and use the additional fiscal space to give a boost to infrastructure to kickstart the economy.

Exhibit 15: Influential voices have argued for relaxation of deficit reduction plan

Source: Media, MOSL

ii) Taxation - big changes likely A non-adversarial tax regime n Government has repeatedly articulated its vision of ensuring a non-adversarial

tax regime and end ‘tax terrorism’ in the words of the finance minister himself. n Many promises made in FY15 budget in this regard have already been fulfilled,

particularly in the area of transfer pricing.

5,312 5,148

1,041

313 30 210255

1,083

Fisc

al d

efic

it FY

15 B

E

add

net t

ax s

hort

fall

add

disi

nves

tmen

t sh

ortf

all

add

slip

page

on

non-

plan

min

us e

xcis

e on

oil

prod

ucts

min

us n

on-t

ax (P

SUs)

min

us c

ut b

ack

in p

lan

Fisc

al d

efic

it FY

15 E

4.1% of GDP4.1% of GDP

For

•Niti Aayog•Chief Economic Adviser•Economists with whom FM had Pre-

budget consultation

Against

•Prime Minister and Finance Minister•Reserve Bank of India•Expenditure Commission•Global and bond market investors•Edit of most media houses


18 February 2015 7

Exhibit 16: Some recent measures to ensure non-adversarial tax regime

28-Jan-15 Vodafone relief and similar dispensation to others: Government accepted the order of Bombay High Court in the case of Vodafone India Services Private Limited (VISPL) dated 10.10.2014. The decision is expected to reduce litigation on similar issues and put to rest the "uncertainty prevailing in the minds of foreign investors and taxpayers in respect of possible transfer pricing adjustments on transactions related to issuance of shares, and thereby improve investment climate in the country".

20-Jan-15 No summons to senior management of large companies: Government barred tax officials to issues summons to senior management of large companies except when there are indications of their involvement in a decision making process. Further summons should be issued only by offices of the rank of superintendent and only after prior written permission of an officer not below the rank of an assistant commissioner, with reasons to be recorded.

30-Sep-14 Non-adversarial tax regime: Central Board of Excise and Customs (CBEC) was instructed to implement an action plan to evolve non-adversarial tax administration including the following measures: i) Maintain appointment time, ii) Prompt acknowledgement of all communication, iii) expeditiously attending to all queries, iv) regular interaction with trade and industry, v) simplify registration process to obviate the need for physical visit by the taxpayer, vi) facilitate online credit of refunds, vii) easing of compliance verification norms.

Source: Government, Media, MOSL

Exhibit 17: Government has already fulfilled many of its tax proposals for FY15 Budget


Progress towards Goods and Services Tax n The constitutional amendment bill for introduction of Goods and Services Tax

(GST) has already been introduced in the Lok Sabha. n While most of the design and implementation issues are still being evolved, it is

evident from the scope of the constitutional amendment bill that GST would bring significant benefit to corporates and the government.

n The indirect tax proposals in the budget are likely to conform to the roadmap for eventual implementation of GST. This may include the following changes: i) Addressing the inverted duty structure in many sectors. ii) Rationalization of many prevailing rates towards GST rate. iii) Partially address the contentious issue of fiscal transfer.

•Cases arising out of retrospective amendment of 2012 addressed

•Legislative and administrative changes to reduce litigation

•Addition of benches to Authority of Advanced Ruling

•Enhancement in the scope of Settlement Commission

•Amended Transfer Pricing Regulation

•Liberalized facility of 5% withholding tax for Indian corporates abroad


18 February 2015 8

Exhibit 18: GST is expected to bring higher revenue for government and many benefits to corporates


Exhibit 19: To address inverted duty structure for success of ‘Make in India’

Source: Media, MOSL

Exhibit 20: Higher devolution of taxes to states - in a gradual move to Finance Commission’s recommendations


A new direct tax code n Government is reportedly working on a revised direct tax code (DTC) that

attempts to enforce lower tax burden with improved compliance and reduce the plethora of exemptions that now plagues the direct tax structure.

n To provide a boost to consumption, government may consider raising the limit for exemption for personal income tax. To boost investment, deductions available under various instruments may be raised (including medical due to the rising cost, and housing, in view of its objective for affordable housing).

GST BENEFIT

Tax buoyancy

as more ad valorem Tax

buoyancy as

destination based

Tax buoyancy through better

compliance

Higher services tax

through higher tax

Blurring definition b/n goods & service = less dispute

Wider applicability of input tax

credit

Uniformity of tax

structure across states

Collapse of commodity categories to simplify

25 27 28 26 26 26 26 25 26 26 26 28 29 28 27 28 29 30

42

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY15

FY16

States' share in tax revenue14th Finance Commission Recommendations

Benefits to Government

Benefits to corporates

Aluminum, Capital Goods Cement, Chemicals Electronics, Paper Steel, Textiles Tyres, Autos Telecom equipment Petroleum products


18 February 2015 9

Exhibit 21: Middle class can expect some relief in the minimum taxable limit being raised


Exhibit 22: FY16 Budget likely to usher in many changes in the taxation regime

Source: Media, MOSL

iii) Subsidy resolution - unique opportunity n The sharp decline in oil prices has accorded an unique opportunity to rationalize

subsidy well within the 2% of GDP norm set earlier. n The under-provisioning of subsidy too may end with major petroleum products

being deregulated and DBT instituted for other cases. n Halving of oil subsidy alone can achieve nearly half of the fiscal correction

needed (25bp of ~50-60bp) during the year.

Exhibit 23: Decline in oil price is doing half the job of fiscal deficit reduction


n Among other subsidies, several measures aimed at reducing food inflation

would help lower food subsidy by another 10-15% through better targeting.

2005: 135,000

2006: No change

2007: 145,000

2008: 150,000

2009: 160,000

2010: No Change

2011: 180,000

2012: 200,000

2013: No Change

2014: 250,000

2015 ???

Direct tax

•Revision in MAT, clarification for SEZs/FPIs•Deferment of GAAR by two years•Setting a threshold for taxing indirect share transfer•Allowing foreign firms to get nod to claim deduction on

DDT•Relief on personal taxation

Indirect tax

•Correcting the inverted duty structure•Removal of the plethora of concessions and differential

rates toward GST mean rate•Streamlining Special Additional Duty•Raising of service tax rates•Reimposition of customs duty on crude oil•Increasing road cess•Clarification on taxation of E-commerce

856

635

632

304

349

1,17

5

1,31

6

1,31

6

1,85

3

2,00

5

0.75

0.49 0.50

0.22 0.22

FY14 FY15 BE FY15 E FY16 E FY17E

Petroleum subsidy (INRb)Tax & Royalty (excluding corporate tax and dividends) (INRb)Petroleum subsidy (as % of GDP) (RHS)

Note: Upstream burden assumed a@85% of incremental oil between USD60-70/bbl)


18 February 2015 10

n Urea decontrol and National Fertilizer Policy would be two instruments that are likely to be deployed to curtail fertilizer subsidy in the medium term.

n To build the infrastructure for targeting necessary to administer subsidies effectively, the Aadhaar enrolment expanded to cover 60% of the population from 50%, at the time of the new government assuming office.

n It has also fast forwarded the rollout of Direct Benefit Transfer (DBT) scheme for LPG after re-launching it as a new scheme ‘Pratyaksh Hastantarit Labh’ or Pahal.

Exhibit 24: The new government kept up the pace of Aadhaar issuance to cover 60% of population


Exhibit 25: It has also set a target of moving all households with cooking gas under DBT by Mar-15


iv) Head and heart: reforms and pet schemes

n More than fiscal maths, FY16 budget would be looked forward for signals it gives

for continuity and acceleration to the reform process. n Need of the hour is to erect a financing structure for infrastructure that would

involve government funding as seed capital. PPP structure needs to be reworked with a lower risk by the private sector.

n Some of the INR1b schemes floated in the last budget may see significant enhancement in their allocation too.

n We expect a rather steep increase in allocations for industrial corridor, smart cities, power T&D, urban transport, defence, education and tourism.

Exhibit 26: Many reform measures likely to be initiated in the budget

Source: Media, MOSL

632 (New Govt.

forms)

750 (Current

coverage)

0

200

400

600

800

Sep-

10

Apr-

11

Nov

-11

May

-12

Dec

-12

Jun-

13

Jan-

14

Jul-1

4

Feb-

15

No. of Aadhaar issued (million)

240

150

37.5

90

150

Total no With gas connection

DBT at Nov-14

DBT at present

Target by Mar-15

No. in million

Measures taken already•Populism: Diesel deregulation, hike in rail fares, financial

inclusion and direct benefit transfer•Legislative (including ordinance): Land acquisition; FDI in

rail, defence; relaxation in labour laws•Facilitation: Coal block auction, environmental

clearance, easing industrial licencing, doing business parameters

Measures likely in FY16 budget•Focus areas: Power (T&D), energy, roads, ports and railways•Financing infra: Newer financing models for infrastrucutre with

government participation•Reworking PPP: A new improved framework for PPP with risk

mitigation for the private sector


18 February 2015 11

Exhibit 27: Government announced various INR1b schemes last year that may be upscaled this time Area Name/Details of the scheme Area Name/Details of the scheme Manufacturing National Industrial Corridor Authority - Pune Rural

entrepreneurship Village Entrepreneurship Programme

Power Ultra Modern Super Critical Coal Based Thermal Power Technology

Employment Counseling facility at employment exchanges

Power 1 MW Solar Parks on the banks of canals Employment Young Leaders Programme Urban Transport Metro projects in Lucknow and Ahmedabad Governance Good Governance

Water resource Interlinking of rivers Education - virtual classroom

Communication Linked Interface for Cultivating Knowledge (CLICK)

Agriculture Two institutes at Assam and Jharkhand Education Modernization of Madrasas Agriculture Agri-Tech Infrastructure Fund Climate change National Adaptation Fund Agriculture Soil Health Card Conservation National Centre for Himalayan Studies in

Uttarakhand

Agriculture Indigenous cattle breeds and inland fisheries Defence War Memorial and Museum

Agriculture Kisan (Farmers') TV Defence Technology Development Fund Agriculture Commercial organic farming in North East Communication Community Radio Stations Tourism National Mission on Pilgrimage Rejuvenation

and Spiritual Augmentation Drive (PRASAD) Tribal welfare Van Bandhu Kalyan Yojana

Tourism National Heritage City Development and Augmentation Yojana (HRIDAY)

Girl Child Beti Bachao, Beti Padhao

Tourism Archeological sites preservation Sports Sports university in Manipur Tourism Development of ghats and beautification of

riverfront Sports Training for forthcoming Asian and

Commonwealth games


v) ‘Acche din’ for capital market?

n Capital market, in the past, has been saddled with arbitrary taxes and over-

regulation. n FY16 budget has raised expectations to more friendly measure to help improve

domestic and foreign investors.

Exhibit 28: Overburdened capital market expects some relief this time

Source: Media, MOSL

Tax

rela

ted

mea

sure

s

Reduce dividend distribution tax

Reduce securities transaction tax

MF retirement plans with tax benefits

Reduce commodity transaction tax and exempt some more from the purview of it

Rejig small investment schemes like RGESS

Non

-tax

rela

ted

Implement minimum dividend obligations for listed companies

Simplify account opening requirements

Allow demat-linked bank accounts


18 February 2015 12

vi) Rail Budget to be closely watched n Along with the general budget, rail budget too assumes significance this time,

with the government identifying it as a focus area and a domain expert minister being in charge.

n We expect railways to report an improvement in finances, bolstered by freight revenue, announce new innovative sources of funding and make some headway in taking the PPP schemes forward, besides announcement toward improvement in infrastructure, operations and passenger amenities.

Exhibit 29: Major announcements likely in Railway budget

Source: Media, MOSL

Back to basics on Railways

Fair changes unlikely; no pass through of lower diesel prices

Progress and expansion of DFC

Rollout and expansion of high speed network

Building of 200-kmph train coaches indegenously

Conneting J&K, North East and hilly regions on a priority basis

Improved design of coaches and vaccum toilets

Plan to eliminate all level crossings

Upgradation of station complexes for comprehensive government services, skill developments

Significant improvements in passenge amenities


18 February 2015 13

Exhibit 30: FM/government speak… gearing up to meet expectations Area Statement Source Innovation Get 'out of the box' ideas for Budget: PM to ministers http://www.business-standard.com/article/pti-stories/get-out-of-the-box-

ideas-for-budget-pm-to-ministers-115010500913_1.html Next budget should be full of new ideas: PM http://www.business-standard.com/article/pti-stories/next-budget-

should-be-full-of-new-ideas-pm-114110100885_1.html Growth GDP growth to be much better in 2015-16: Jaitley http://www.business-standard.com/article/pti-stories/gdp-growth-to-be-

much-better-in-2015-16-jaitley-114122900372_1.html Deficit Government making efforts to stick to fiscal deficit

target, says FM Arun Jaitley http://economictimes.indiatimes.com/news/economy/finance/budget-2015-government-making-efforts-to-stick-to-fiscal-deficit-target-says-fm-arun-jaitley/articleshow/46177035.cms

Fiscal consolidation: Modi govt feels indiscipline may hit credit rating & RBI’s monetary easing

http://economictimes.indiatimes.com/news/economy/policy/fiscal-consolidation-modi-govt-feels-indiscipline-may-hit-credit-rating-rbis-monetary-easing/articleshow/46090076.cms

Reform FM Arun Jaitley hints at reform-packed Budget (focus on reforms in power, energy, railways and ports and more public investment into these sectors)

http://economictimes.indiatimes.com/news/economy/policy/budget-2015-fm-arun-jaitley-hints-at-reform-packed-budget/articleshow/46143185.cms

Budget to unveil second generation reforms: Jaitley http://www.thehindubusinessline.com/economy/policy/budget-to-unveil-second-generation-reforms-jaitley/article6626983.ece

Tax Jaitley hints at tax regime of global standards http://www.business-standard.com/article/economy-policy/jaitley-hints-at-tax-regime-of-global-standards-114122900106_1.html

Jaitley hints at not raising tax rates, sops for manufacturing

http://www.business-standard.com/article/pti-stories/jaitley-hints-at-not-raising-tax-rates-sops-for-manufacturing-115012301119_1.html

Govt mulls scrapping dividend tax http://www.business-standard.com/article/reuters/govt-mulls-scrapping-dividend-tax-bloomberg-115020500740_1.html

FM for tax reforms, quick decisions to ensure stability http://www.business-standard.com/article/pti-stories/fm-for-tax-reforms-and-quick-decisions-to-ensure-stability-115012700919_1.html

Jaitley says he is against burdening salaried, middle class with more taxes

http://www.thehindubusinessline.com/economy/jaitley-says-he-is-against-burdening-salaried-middle-class/article6625077.ece

Spending Jaitley hints at more spending cuts http://www.business-standard.com/article/pti-stories/jaitley-hints-at-more-spending-cuts-115020600433_1.html

Disinvestment

Govt ready to privatise sick PSUs, says Jaitley http://www.business-standard.com/article/economy-policy/india-economic-summit-govt-ready-to-privatise-sick-psus-says-jaitley-114110600046_1.html

Jaitley: Major disinvestment decisions by March-end http://www.thehindubusinessline.com/economy/jaitley-major-disinvestment-decisions-by-marchend/article6774739.ece

Power Piyush Goyal asks FM to come out with innovative models for renewable energy projects

http://economictimes.indiatimes.com/industry/energy/power/budget-2015-piyush-goyal-asks-fm-to-come-out-with-innovative-models-for-renewable-energy-projects/articleshow/46232919.cms

Road Road Ministry seeks doubling of allocation to Rs 50K-crore

http://economictimes.indiatimes.com/news/economy/infrastructure/budget-2015-road-ministry-seeks-rs-50k-crore-budget-allocation/articleshow/46162314.cms

Source: Media, MOSL


18 February 2015 14

Exhibit 31: While broadly adhering to deficit reduction path, headroom for higher plan expenditure maybe created INR b YoY % (as % of GDP)

FY15 BE FY15E FY16E FY15BE vs FY14RE

FY15E vs FY14RE

FY16E vs FY15RE

FY14 RE FY15 BE FY15E FY16E

Receipts 15,904 16,897 18,250 13 6 8 14.0 13.9 13.4 13.1 Revenue receipts 10,293 11,322 12,479 16 10 10 9.1 9.2 8.9 8.9

Net tax revenue 8,360 8,941 9,882 17 7 11 7.4 7.6 7.1 7.1

Gross tax revenue 11,589 12,708 14,234 18 10 12 10.2 10.6 10.0 10.2

Income tax receipt 2,417 2,622 2,885 18 9 10 2.1 2.2 2.1 2.1

Corporate tax receipt 3,937 4,252 4,762 15 8 12 3.5 3.5 3.4 3.4

Custom duties collection 1,751 1,908 2,099 15 9 10 1.5 1.6 1.5 1.5

Excise duties collection 1,795 2,052 2,339 15 3 14 1.6 1.6 1.6 1.7

Other tax revenue 1,689 1,874 2,149 30 11 15 1.5 1.7 1.5 1.5

Service tax receipt 1,649 1,831 2,105 31 11 15 1.5 1.7 1.4 1.5 States' share in tax revenue 3,182 3,685 4,270 20 9 16 2.8 3.0 2.9 3.1

Non-tax Revenue 1,932 2,380 2,597 10 23 9 1.7 1.7 1.9 1.9

Interest receipt 210 198 198 -6 -6 0 0.2 0.2 0.2 0.1

Dividend and profits receipts 882 1,052 1,158 2 19 10 0.8 0.7 0.8 0.8

Receipts of union territories 11 11 11 1 1 0 0.0 0.0 0.0 0.0 Other non-tax revenue 829 1,119 1,231 22 35 10 0.7 0.8 0.9 0.9

Capital receipts (net) 5,462 5,576 5,771 8 2 3 4.8 4.6 4.4 4.1 Net market borrowings 4,539 4,541 4,585 2 0 1 4.0 3.6 3.6 3.3

Gross market borrowings 5,639 5,937 6,341 6 5 7 5.0 4.7 4.7 4.5

Repayment of mkt borrowings 950 1,397 1,756 46 47 26 0.8 1.1 1.1 1.3 Net external assistance 54 57 60 5 5 5 0.0 0.0 0.0 0.0 Recovery of loans and advances 108 105 110 -3 -3 4 0.1 0.1 0.1 0.1 PSU Disinvestment 258 321 400 145 24 25 0.2 0.5 0.3 0.3

Expenditure 15,904 16,897 18,250 13 6 8 14.0 13.9 13.4 13.1 Non-plan expenditure 11,149 12,230 12,887 9 10 5 9.8 9.5 9.7 9.2

Non-plan revenue expenditure 10,277 11,217 11,728 8 9 5 9.1 8.7 8.9 8.4 Interest payments 3,801 4,270 4,484 12 12 5 3.3 3.3 3.4 3.2 Non-plan rev exp on defence 1,248 1,417 1,644 8 14 16 1.1 1.0 1.1 1.2 Subsidies outgo 2,555 2,623 2,403 2 3 -8 2.3 2.0 2.1 1.7

Non-plan capital expenditure 872 1,013 1,159 21 16 14 0.8 0.8 0.8 0.8 Non-plan cap. exp on defence 789 907 1,052 20 15 16 0.7 0.7 0.7 0.8

Plan expenditure 4,755 4,667 5,363 21 -2 15 4.2 4.5 3.7 3.8 Plan revenue expenditure 3,719 4,053 4,653 22 9 15 3.3 3.5 3.2 3.3

Revenue exp on central plan 2,652 2,411 2,748 -51 -9 14 2.3 1.0 1.9 2.0 Assistance to states plan 1,067 1,643 1,905 204 54 16 0.9 2.5 1.3 1.4

Plan capital expenditure 1,037 614 710 17 -41 16 0.9 0.9 0.5 0.5 Capital exp on central plan 913 485 563 18 -47 16 0.8 0.8 0.4 0.4 Loan to states plan 124 129 147 11 10 14 0.1 0.1 0.1 0.1

Gross fiscal deficit 5,245 5,149 5,261 1 -2 2 4.6 4.1 4.1 3.8

Revenue deficit 3,703 3,948 3,902 2 7 -1 3.3 2.9 3.1 2.8 Primary deficit 1,445 879 777 -27.9 -39 -12 1.3 0.8 0.7 0.6 GDPmp 113,551 126,538 139,824 13.4 12.5 10.5

Fiscal deficit as % of GDP 4.6 4.1 3.8 Source: Government, MOSL


18 February 2015 15

Exhibit 32: Plethora of indirect taxes need to be simplified

BUDGET RATES Customs (%) Excise (%)

Type FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14

Automobiles

New Cars - Completely knocked down units (CKD) 10.3 10.3 10.3 10.3 10.3 - - - - -

New Cars - Semi-knocked down units (SKD) 61.8 61.8 61.8 61.8 61.8 - - - - -

New Cars - Completely Built units (CBU) 61.8 61.8 61.8 - - - - -

New Cars - specified small cars 61.8 61.8 61.8 - - 8.2 10.3 10.3 12.4 12.4

New Cars - others 61.8 61.8 61.8 - - 20 22.7 22.7 24.7 24.7

Second hand cars 103 103 103 - - 20 22.7 22.7 24.7 24.7

Utility Vehicles 10.3 10.3 10.3 10.3 61.8 8 22.7 22.7 24.7 24.4

Two-wheelers 61.8 61.8 61.8 61.8 61.8 8.2 10.3 10.3 12.4 12.4

Trucks (LCVs & MHCVs) 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

Buses (LCVs & MHCVs) 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

Tractors 10.3 10.3 10.3 10.3 10.3 - - - - -

Steel items 5.2 5.2 5.2 7.7 7.7 8.2 10.3 10.3 12.4 12.4

Pig iron 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Engine & Engine Parts - Four-wheelers 7.7 7.7 7.7 7.7 7.7 12 10.3 10.3 12.4 12.4

Engine & Engine Parts - Two-wheelers 7.7 7.7 7.7 7.7 7.7 12 10.3 10.3 12.4 12.4

Drive transmission, steering, Suspension and braking parts, Silencer,Exhaust pipes & radiatiors - Four-wheelers 10.3 10.3 10.3 10.3 10.3 12 10.3 10.3 12.4 12.4

Drive transmission, steering, Suspension and braking parts, Silencer,Exhaust pipes & radiatiors - Two-wheelers 10.3 10.3 10.3 10.3 10.3 12 10.3 10.3 12.4 12.4

Electrical Parts 7.7 7.7 7.7 7.7 7.7 12 10.3 10.3 12.4 12.4

Engine & Engine Parts 7.7 7.7 7.7 7.7 7.7 8.2 10.3 10.3 12.4 12.4 Drive transmission, steering, Suspension and braking parts, Silencer,Exhaust pipes & radiatiors 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

Electrical Parts 10.3 7.7 7.7 7.7 7.7 8.2 10.3 10.3 12.4 12.4

Raw Materials for auto components 5.2 5.2 7.7 7.7 10.3 10.3 12.4 12.4

Batteries 10.3 10.3 - 12.4 -

Tyres New Tyre 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 10.3 10.3

Tyres (used /retreaded tyres) - Truck and bus 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 10.3 10.3

Tyres (used /retreaded tyres) - Car cross ply / radials 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 10.3 10.3

Raw Materials for tyres - Natural rubber 20.6 7.7 20 20.3 20 - - - - -

Raw Materials for tyres - SBR (1502) 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 10.3 10.3

Raw Materials for tyres - PBR (1220) 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 10.3 10.3

Raw Materials for tyres - NTC fabric 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 10.3 10.3

Raw Materials for tyres - Carbon black (N330) 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 10.3 10.3

Cement

Portland cement 0 0 0 0 0 8 10.3 10.3+ 12.4+ 12.4

Rs160/t Rs120/t +Rs120/t

White cement 10.3 10.3 10.3 10.3 10.3 8 16.5 16.5 12.4 12.4

Cement clinker 10.3 10.3 10.3 10.3 10.3 8 10.3 10.3+ 12.4 12.4


18 February 2015 16

Rs200/t

Gypsum 5.2 5.2 2.6 2.6 2.6 14.4 0 0 0 0

Pet coke 5.2 5.2 2.6 0 0 16.5 15.5 15.1 15.1 15.4

Limestone 5.2 5.2 5.2 5.2 0 0 0 0

Non-Coking Coal 5.2 5.2 0 0 0 0 0 0

Consumer Durables B/W TVs 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

Colour TVs (CRT,LCD) 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

Refrigerators 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

Room ACs 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

Washing machines 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

LCD Panel 5.2 5.2 5.2 0 0 8.2 10.3 10.3 12.4 12.4

CPT and glass parts 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

Compressors, Thermostat & Tubes 7.7 7.7 7.7 7.7 7.7 8.2 10.3 10.3 12.4 12.4

Steel 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Polymers 5.2 5.2 5.2 5.2 10.3 10.3 12.4 12.4

Fertilizers Urea 5.2 5.2 5.2 5.2 5.2 - - - 12.4 12.4

DAP 5 5.2 5.2 5 5 - - - 12.4 12.4

MOP 5.2 5.2 5.2 5 5 - - - 12.4 12.4

Ammonia 5.2 5.2 5.2 5.2 5.2 - - - 12.4 12.4

Phosphoric acid 5.2 5.2 5.2 5.2 5.2 - - - - -

Sulphur 2.1 2.1 2.1 2.1 2.1 - - - - -

Rock phosphate 2.1 5.2 5.2 5.2 5.2 - - - - -

Naphtha 0 - - - - - - - - -

Fuel oil / LSHS (Non-Feed Use) 0 - - - - - - - - -

Contracted LNG 5 5 5 5 - - - -

IT : Hardware Packaged software 0 0 0 0 0 0 0

Personal Computers 0 0 0 8.2 10 10.3 12.4 12.4

Monitor 0 0 0 8.2 10 10.3 12.4 12.4

Keyboard 0 0 0 8.2 10 10.3 12.4 12.4

Mouse 0 0 0 8.2 10 10.3 12.4 12.4

Printer 0 0 0 8.2 10 10.3 12.4 12.4

FDD, HDD, CD-ROM drive and other storage drives3 0 0 0 0 5.2 6.2 6.2

Motherboards 0 0 0 8.2 10 10.3 12.4 12.4

Microprocessors 0 0 0 8.2 10 5.2 6.2 6.2

Routers 0 0 0 8.2 10 10.3 12.4 12.4

Modems 0 0 0 8.2 10 10.3 12.4 12.4

Media & Entertainment Digital cinema equipment 7.7 7.7 7.7 7.7 7.7 8.2 10.3 10.3 12.4 12.4

Broadcasting equipment 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

Set-top boxes 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Non-ferrous Aluminium ingots 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4


18 February 2015 17

Aluminium products - Flat-rolled products 7.7 7.7 7.7 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Aluminium products - foils 7.7 7.7 7.7 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Aluminium scrap 0 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Non-coking coal 5.2 5.2 5.2 0 0 - 10.3 0 0 0

Caustic soda 7.7 7.7 7.7 7.7 7.7 8.2 10.3 10.3 12.4 12.4

Calcined petroleum Coke 0 5.2 2.6 2.6 2.6 8.2 10.3 10.3 14.4 12.4

Copper 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Copper scrap 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Copper ore and concentrates 2.1 2.1 2.1 2.6 2.6 8.2 10.3 10.3 4.1 4.1

Lead 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Lead ore and concentrates 2.1 2.1 2.1 2.6 2.6 8.2 10.3 10.3 4.1 4.1

Zinc 0 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Zinc ore and concentrates 2.1 2.1 2.1 2.6 2.6 8.2 10.3 10.3 4.1 4.1

Oil & Gas

Motor spirit (MS) 2.6 7.5 7.5 2.5 2.6 13.4

Rs14.4 Rs14.4 Rs9.5 Rs9.5

/ltr /ltr /ltr /ltr

Aviation turbine fuel (ATF) 5.2 10 10 8 8.2 8.2 8 8 8.2 8.2

Naphtha 5.2 5 5 5 19.6 14.4 14 14 14.4 14.4

Superior Kerosene Oil (SKO) - Industrial use 5.2 10 10 5 5 14.4 14 14 14.4 14.4

Superior Kerosene Oil (SKO) - Domestic use 0 0 0 0 0 0 0 0 0 0

High-speed diesel (HSD) 2.6 7.5 7.5 2.6 2.6 3.6

Rs4.6 Rs2.6 Rs3.6 Rs3.6

/ltr /ltr /ltr /ltr

Fuel oil 5.2 10 10 5 5 14.4 14 14 14.4 14.4

Liquefied Petroleum gas (LPG) - Domestic use 0 0 0 0 0 0 0 0 0 0

Bitumen 5.2 10 10 5 5 14.4 14 14 14.4 14.4

Crude oil 0 5 5 0 0 0 0 0 0 0

Natural Gas - Power (Priority sector) 5.2 5 5 0 0 0 0 0 14 14

Natural Gas - Non Power (priority sector) 5.2 5 5 5 0 0 0 0 14 14

LNG-Power 5.2 5 5 0 0 0 0 0 0 0

LNG-Non Power 5.2 5 5 5 5 0 14 14

CNG 5.2 5 5 5 0 14.4 14 14 0 0

Paper Newsprint 0 0 0 0 0 0 0 0 0 0

Maplitho 10.3 10.3 10.3 10.3 10.3 4.1 4.1 5.2 6.2 6.2

Duplex board 10.3 10.3 10.3 10.3 10.3 4.1 4.1 5.2 6.2 6.2

Art Board 10.3 10.3 10.3 10.3 4.1 5.2 6.2 6.2

Wood pulp (hard) 5.2 5.2 5.2 5.2 5.2 0 0 1 2.1 2.1

Wood pulp (soft) 5.2 5.2 5.2 5.2 5.2 0 0 1 2.1 2.1

Waste paper (OCC) 5.2 5.2 2.6 0 0 0 0 0 6 6.2

Petrochemicals Polymers - hdPE (IM) 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Polymers - ldPE 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Polymers - lldPE 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Polymers - PPHP (IM) 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Polymers - PVC 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Polymers - PS (GP) 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4


18 February 2015 18

Polymers - ABS 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Polymers - SBR (1502) 10.3 10.3 10.3 10.3 10.3 8 10.3 10.3 12.4 12.4

Polymers - PBR (1220) 10.3 10.3 10.3 10.3 10.3 8 10.3 10.3 12.4 12.4

Basic petrochemicals & intermediates - EDC 2.1 2.1 2.6 2.6 2.6 8 10.3 10.3 12.4 12.4

Basic petrochemicals & intermediates - VCM 2.1 2.1 2.6 2.6 2.6 8 10.3 10.3 12.4 12.4

Basic petrochemicals & intermediates - Styrene 2.1 2.1 2.6 2.6 2.6 8 10.3 10.3 12.4 12.4

Basic petrochemicals & intermediates - Ethylene 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Basic petrochemicals & intermediates - Propylene 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Basic petrochemicals & intermediates - Butadiene 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Basic petrochemicals & intermediates - Benzene 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4 Basic petrochemicals & intermediates - Toluene 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Basic petrochemicals & intermediates - Naphtha 5.2 5.2 5.2 5.2 5.2 14.4 14.4 14.4 12.4 12.4

Commodity Chemicals - LAB 7.7 7.7 7.7 7.7 7.7 8 10.3 10.3 12.4 12.4

Commodity Chemicals - PAN 7.7 7.7 7.7 7.7 7.7 8 10.3 10.3 12.4 12.4

Commodity Chemicals - Methanol 7.7 7.7 7.7 7.7 7.7 8 10.3 10.3 12.4 12.4

Commodity Chemicals - Phenol 7.7 7.7 7.7 7.7 7.7 8 10.3 10.3 12.4 12.4

Commodity Chemicals - Orthoxylene 5.2 5.2 5.2 5.2 5.2 8 10.3 10.3 12.4 12.4

Pharmaceuticals Bulk drugs 7.7 7.7 7.7 7.7 7.7 8 10.3 10.3 12.4 12.4

Formulations 10.3 10.3 10.3 12.4 12.4 4.1 4.1 5.2 6.2 6.2

Steel GP/GC 5.2 5.2 5.2 7.7 7.7 8.2 10.3 10.3 12.4 12.4

CR coils 5.2 5.2 5.2 7.7 7.7 8.2 10.3 10.3 12.4 12.4

HR coils 5.2 5.2 5.2 7.7 7.7 8.2 10.3 10.3 12.4 12.4

Bars and rods 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Alloy steel 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Billets/Slabs 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Pig iron 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

HBI/Sponge iron 5.2 - - - - 8.2 10.3 10.3 12.4 12.4

Ferro alloys 0 - - - - 8.2 10.3 10.3 12.4 12.4

Steel melting scrap 0 - - - - 8.2 10.3 10.3 12.4 12.4

Iron ore 2.1 2.1 2.1 2.1 21 8.2 10.3 10.3 12.4 12.4

Coking coal (< 12% ash content) 0 - - - - - - - - -

Coking coal (> 12% ash content) 0 - - - - - - - - -

Metallurgical coke 0 - - - - - - - - -

Non-coking coal 5.2 5.2 5.2 0 0 - - 5 1 -

Sugar Domestically produced sugar- Free Sale na NA NA NA NA 979 978.5 978.5 978.5 978.5

Domestically produced sugar- levy na NA NA NA NA 639 638.6 638.6 638.6 638.6

Imported white sugar 61.8 0 0 10.3 10.3 979 978.5 978.5 978.5 NA

Imported raw sugar 0 0 0 10.3 10.3 979 978.5 978.5 978.5 NA

Molasses 10.3 10.3 10.3 10.3 10.3 773 772.5 772.5 772.5 772.5

Telecom Cellular phones 0 0 0 0 0 8.2 10.3 10.3 1 1

Cellular phones (price <= Rs 2000) 1 1

Cellular phones (price > Rs 2000) 1 6.2


18 February 2015 19

Telecom networking equipment 0 0 0 0 0 8.2 10.3 10.3 12.4 12.4

base stations 0 0 0 0 0 8.2 10.3 10.3 12.4 12.4

Wireless Internet data card 0 0 0 0 0 0 0 0 0

HDSL systems 0 0 0 0 0 8.2 10.3 10.3 12.4 12.4

Apparels & Fabrics

Cotton-based apparels 10.3 10.3 10.3 10.3 10.3 4.1 4.1 5.2

6.18/ 6.18/

12.36 12.36

Non cotton-based apparels 10.3 10.3 10.3 10.3 10.3 4.1 10.3 10.3 12.4 12.4

Cotton woven fabrics 10.3 10.3 10.3 10.3 10.3 4.1 4.1 5.2 6.2 6.2

Non-cotton woven fabrics 10.3 10.3 10.3 10.3 10.3 4.1 10.3 10.3 12.4 12.4

Cotton knitted fabrics 10.3 10.3 10.3 10.3 10.3 4.1 4.1 5.2 6.2 6.2

Non-cotton knitted fabrics 10.3 10.3 10.3 10.3 10.3 4.1 10.3 10.3 12.4 12.4

Cotton yarn (40s) 10.3 10.3 10.3 10.3 10.3 4.1 4.1 5.2 6.2 6.2

Cotton 0 0 0 0 0 0 0 0 0 0

Fibre & intermediates* PSF 1.2d 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

VSF 1.5d 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

POY 126d 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

VFY 120d 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

PV 30s (70:30) 10.3 10.3 10.3 10.3 10.3 8.2 10.3 10.3 12.4 12.4

PTA 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

MEG 5.2 5.2 5.2 5.2 5.2 8.2 10.3 10.3 12.4 12.4

Paraxylene 0 0 0 0 0 4.1 4.1 5.2 12.4 12.4

* Man made; Note: Data after FY14 not available Source: Government


18 February 2015 20

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