Budget Highlights

Key Features of Budget 2013-2014



  • Little room to give away tax revenues or raise tax rates in a constrained economy.
  • No case to revise either the slabs or the rates of Personal Income Tax. Even a moderate increase in the threshold exemption will put hundreds of thousands of Tax Payers outside Tax Net.
  • However, relief for Tax Payers in the first bracket of Rs2 lakhs to Rs5 lakhs. A tax credit of Rs2000 to every person with total income up to Rs5 lakhs.
  • Surcharge of 10% on persons (other than companies) whose taxable income exceed Rs1 crore to augment revenues.
  • Increase surcharge from 5 to 10% on domestic companies whose taxable income exceed Rs10 crore.
  • In case of foreign companies who pay a higher rate of corporate tax, surcharge to increase from 2 to 5%, if the taxabale income exceeds Rs10 crore.
  • In all other cases such as dividend distribution tax or tax on distributed income, current surcharge increased from 5 to 10%.
  • Additional surcharges to be in force for only one year.
  • Education cess to continue at 3%.
  • Permissible premium rate increased from 10% to 15% of the sum assured by relaxing eligibility conditions of life insurance policies for persons suffering from disability and certain ailments.
  • Contributions made to schemes of Central and State Governments similar to Central  
    Government Health Scheme, eligible for section 80D of the Income tax Act.
  • Donations made to National Children Fund eligible for 100% deduction.
  • Investment allowance at the rate of 15% to manufacturing companies that invest more than Rs100 crore in plant and machinery during the period 1.4.2013 to 31.3.2015.
  • ‘Eligible date’ for projects in the power sector to avail benefit under Section 80-IA extended from 31.3.2013 to 31.3.2014.
  • Concessional rate of tax of 15% on dividend received by an Indian company from its foreign subsidiary proposed to continue for one more year.
  • Securitisation Trust to be exempted from Income Tax. Tax to be levied at specified rates only at the time of distribution of income for companies, individual or HUF etc. No further tax on income received by investors from the Trust.
  • Investor Protection Fund of depositories exempt from Income-tax in some cases.
  • Parity in taxation between IDF-Mutual Fund and IDF-NBFC.
  • A Category I AIF set up as Venture capital fund allowed pass through status under Income-tax Act.
  • TDS at the rate of 1% on the value of the transfer of immovable properties where consideration exceeds Rs50 lakhs. Agricultural land to be exempted.
  • A final withholding tax at the rate of 20% on profits distributed by unlisted companies to shareholders through buyback of shares.
  • Proposal to increase the rate of tax on payments by way of royalty and fees for technical services to non-residents from 10% to 25%.
  • Reductions made in rates of Securities Transaction Tax in respect of certain transaction.
  • Proposal to introduce Commodity Transaction Tax (CTT) in a limited way. Agricultural commodities will be exempted.
  • Modified provisions of GAAR will come into effect from 1.4.2016.
  • Rules on Safe Harbour will be issued after examining the reports of the Rangachary Committee appointed to look into tax matters relating to Development Centres & IT Sector and Safe Harbour rules for a number of sectors.
  • Fifth large tax payer unit to open at Kolkata shortly.
  • A number of administrative measures such as extension of refund banker system to refund more than Rs50,000, technology based processing, extension of e-payment through more banks and expansion in the scope of annual information returns by Income-tax Department.


Indirect Taxes

No change in the normal rates of 12% for excise duty and service tax.

No change in the peak rate of basic customs duty of 10% for non-agricultural products.



  • Period of concession available for specified part of electric and hybrid vehicles extended up to 31 March 2015.
  • Duty on specified machinery for manufacture of leather and leather goods including footwear reduced from 7.5 to 5%.
  • Duty on pre-forms precious and semi-precious stones reduced from 10 to 2%.
  • Export duty on de-oiled rice bran oil cake withdrawn.
  • Duty of 10% on export of unprocessed limonite and 5% on export on ungraded limonite.
  • Concessions to air craft maintenance, repair and overhaul (MRO) industry.
  • Duty on Set Top Boxes increased from 5 to10%.
  • Duty on raw silk increased from 5 to 15%.
  • Duties on Steam Coal and Bituminous Coal equalised and 2% custom duty and 2% CVD levied on both kinds coal.
  • Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vessels increased.
  • Duty free gold limit increased to Rs50,000 in case of male passenger and Rs1 lakh in case of a female passenger subject to conditions.


Excise duty

  • Relief to readymade garment industry. In case of cotton, zero excise duty at fibre stage also. In case of spun yarn made of manmade fibre, duty of 12% at the fibre stage.
  • Handmade carpets and textile floor coverings of coir and jute totally exempted from excise duty.
  • To provide relief to ship building industry, ships and vessels exempted from excise duty. No CVD on imported ships and vessels.
  • Specific excise duty on cigarettes increased by about 18%.  Similar increase on cigars, cheroots and cigarillos.
  • Excise duty on SUVs increased from 27 to 30%. Not applicable for SUVs registered as taxies.
  • Excise duty on marble increased from Rs30 per square meter to Rs60 per square meter.
  • Proposals to levy 4% excise duty on silver manufactured from smelting zinc or lead.
  • Duty on mobile phones priced at more than `2000 raised to 6%.
  • MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and bio-chemic systems of medicine to reduce valuation disputes.


Service Tax

  • Maintain stability in tax regime.
  • Vocational courses offered by institutes affiliated to the State Council of Vocational Training and testing activities in relation to agricultural produce also included in the negative list for service tax.
  • Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls.
  • Proposals to levy Service Tax on all air conditioned restaurant.
  • For homes and flats with a carpet area of 2,000 sqft or more or of a value of Rs1 crore or more, which are high-end constructions, where the component of services is greater, rate of abatement reduced from 75 to 70%.
  • Out of nearly 17 lakh registered assesses under Service Tax only 7 lakhs file returns regularly. Need to motivate them to file returns and pay tax dues.  A onetime scheme called ‘Voluntary Compliance Encouragement Scheme’ proposed to be introduced. Defaulter may avail of the scheme on condition that he files truthful declaration of Service Tax dues since 1st October 2007.
  • Tax proposals on Direct Taxes side estimated to yield to Rs13,300 crore and on the Indirect Tax side Rs4,700 crore.


Good and Services Tax

  • A sum of Rs9,000 crore towards the first instalment of the balance of CST compensation provided in the budget.
  • Work on draft GST Constitutional amendment bill and GST law expected to be taken forward.



  • Getting back to potential growth rate of 8% is the challenge facing the country.
  • Slowdown in Indian economy has to be seen in the context of slowing global economic growth from 3.9% in 2011 to 3.2% in 2012.
  • However, no reason for gloom or pessimism. Of the large countries of the world only China and Indonesia growing faster than India in 2012-13. In 2013-14, only China projected to grow faster than India.
  • Between 2004 and 2008, and again in 2009-10 and 2010-11 the growth rate was over 8% and crossed 9% in four of those six years.
  • 11th Plan period had average growth rate of 8%, highest during any Plan period, entirely under the UPA Government.
  • High growth rate can again be achieved through cooperation. 
  • ‘Higher growth leading to inclusive and sustainable development’s to be the mool-mantra.
  • Government believes in inclusive development with emphasis on improving human development indicators specially of women, the scheduled castes, the scheduled tribes, the minorities and some backward classes. This Budget to be a testimony to that commitment.



  • The purpose of Budget to create economic space and find resources to achieve the objective of inclusive development.
  • Dr Vijay Kelkar Committee made its recommendations to Government in September 2012. A new fiscal consolidation path with fiscal deficit at 5.3% of GDP this year and 4.8% of GDP in 2013-14 announced by the Government.
  • Foreign investment in an imperative in view of the high current account deficit (CAD). FII, FDI and ECB three main source of CAD Financing. Foreign investment that is consistent with our economic objectives to be encouraged.
  • Development must be economically and ecologically sustainable and democratically legitimate.
  • Battle against inflation must be fought on all fronts. Efforts in the past few months have brought down headline WPI inflation to about 7% and core inflation to about 4.2%
  • Food inflation is worrying but all possible steps to be taken to augment the supply side to meet the growing demand for food items.
  • Government expenditure has both good and bad consequences and trick is to find the correct level of Government expenditure.
  • Faced with huge fiscal deficit, Government expenditure rationalised in 2012-13.
  • Some economic space retrieved. Space to be used to further Government’s socio-economic objectives.



  • Revised Estimates (RE) of the expenditure in 2012-13 at 96% of the Budget Estimates (BE) due to slowdown and austerity measures.
  • During 2013-14, BE of total expenditure of Rs16,65,297 crore and of Plan Expenditure at Rs5,55,322 crore.
  • Plan Expenditure in 2013-14 to grow at 29.4% over Revised Estimates for the current year.
  • All flagship programmes fully and adequately funded and sufficient funds provided to each Ministry or Department consistent with their capacity to spend funds.
  • Budget for 2013-14 to have one overarching goal of creating opportunities for our youth to acquire education and skills that will get them decent jobs or self-employment.



  • Allocations for Scheduled Caste Sub Plan and Tribal Sub Plan increased substantially over the allocations of the current year. Funds allocated to these Sub Plans cannot be diverted.
  • Rs97,134 crore allocated for programmes relating to women and Rs77,236 crore allocated for programmes relating to children.
  • Ministry of Women and Child Development to design schemes that will address the concerns of women belonging to the most vulnerable groups, including single women and widows. An additional sum of Rs200 crore proposed to be provided to the Ministry to begin work.



  • An increase of 12% over the BE and 60% over the RE of 2012-13 to Ministry of Minority Affairs.
  • Allocation of Rs160 crore to the corpus of Maulana Azad Education Foundation to raise its corpus to Rs1,500 crore during 12th Plan period.


A sum of Rs110 crore to the Department of Disability Affairs for ADIP scheme in 2013-14 against RE 2012-13 of Rs75 crore.


  • Health for all and education to all remains priority.
  • Rs37,330 crore allocated to the Ministry of Health & Family Welfare.
  • New National Health Mission will get an allocation of Rs21,239 crore.
  • Rs4,727 crore for medical education, training and research.
  • Rs150 crore provided for National Programme for the Health Care of Elderly.
  • Ayurveda, Unani, Siddha and Homoeopathy are being mainstreamed. Allocation of Rs1,069 crore to Department of AYUSH.
  • Rs1,650 crore allocated for six AIIMS-like institutions.
  • Allocation of Rs65,867 crore to the Ministry of Human Resource Development, an increase of 17% over the RE of the current year.
  • Rs27,258 crore provided for Sarva Shiksha Abhiyaan (SSA).
  • An increase of 25.6% over RE of the current year for investments in Rashtriya Madhyamik Shiksha Abhiyan (RMSA).
  • Rs5,284 crore allocated to Ministries/Departments in 2013-14 for scholarships to students belonging to SC, ST, OBC, Minorities and girl children.
  • Mid Day Meal Scheme (MDM) to be provided Rs13,215 crore.
  • Government committed to the creation of Nalanda University as a centre of educational excellence.



  • Rs17,700 crore allocated for ICDS in 2013-14 representing an increase of 11.7% over 2012-13.
  • Allocation of Rs300 crore in 2013-14 for a multi-sectoral programme aimed at overcoming maternal and child malnutrition. Programme to be implemented in 100 districts during 2013-14 to be scaled to cover 200 districts the year after.



  • Rs15,260 crore allocated to Ministry of Drinking Water and Sanitation.
  • Rs1,400 crore provided for setting-up of water purification plants in 2000 arsenic - and 12000 fluoride-affected rural habitations.



  • Allocation of Rs80,194 crore in 2013-14 for Ministry of Rural Development marking an increase of 46% over RE 2012-13.
  • Proposal to carve out PMGSY-II and allocate a portion of the funds to the new programme that will benefit States such as Andhra Pradesh, Haryana, Karnataka, Maharashtra, Punjab and Rajasthan.


Rs14,873 crore for JNNURM in BE 13-14 as against RE of Rs7,383 crore.  Out of this, a significant portion will be used to support the purchase of upto 10,000 buses, especially by the hill States.


  • Average annual growth rate of agriculture and allied sector was 3.6% during XI Plan against 2.5% and 2.4% in IX and X plans respectively.
  • In 2012-13, total food-grain production will be over 250 million tonnes. Minimum support price for every agricultural produce has increased significantly under the UPA Government.
  • Rs27,049 crore allocated to Ministry of Agriculture, an increase of 22% over the RE of current year.
  • Agricultural research provided Rs3,415 crore.



  • For 2013-14, target of agricultural credit kept at Rs7 lakh crore.
  • Interest subvention scheme for short-term crop loans to be continued scheme extended for crop loans borrowed from private sector scheduled commercial banks.



  • Bringing green revolution to eastern India a remarkable success. Rs1,000 crore allocated in 2013-14.
  • Rs500 crore allocated to start a programme of crop diversification that would promote technological innovation and encourage farmers to choose crop alternatives.
  • Rashtriya Krishi Vikas Yojana and National Food Security Mission provided Rs9,954 crore and Rs2,250 crore respectively.
  • Allocation for integrated watershed programme increased from Rs3,050 crore in 2012-13 (BE) to Rs5,387 crore.
  • Allocation made for pilots programme on Nutri-Farms for introducing new crop varieties that are rich in micro-nutrients.
  • National Institute of Biotic Stress Management for addressing plant protection issues will be established at Raipur, Chhattisgarh.
  • The Indian Institute of Agricultural Bio-technology will be established at Ranchi, Jharkhand.
  • Pilot scheme to replant and rejuvenate coconut gardens implemented in some districts of Kerala and the Andaman & Nicobar extended to entire State of Kerala.



  • Matching equity grants to registered Farmer Producer Organization (FPO) up to a maximum of Rs10 lakhs per FPO to enable them to leverage working capital from financial institutions.
  • Credit Guarantee Fund to be created in the Small Farmers’ Agri Business Corporation with an initial corpus of Rs100 crore.



  • National Livestock Mission to be set up.
  • A provision of Rs307 crore made for the Mission.



Additional provision of Rs10,000 crore for National Food Security Act.



  • Communication with investors to be improved to remove any apprehension or distrust, including fears about undue regulatory burden.
  • Need of new and innovative instruments to mobilise funds for investment in infrastructure sector. Measures such as:
    • Infrastructure Debt Funds (IDF) to be encouraged,
    • IIFCL to offer credit enhancement.
    • Infrastructure tax-free bond of Rs50,000 crore in 2013-14,
    • Build roads in North eastern states and connect them to Myanmar with assistance from WB & ADB,
    • Raising corpus of Rural Infrastructure Development Fund (RIDF) to Rs20,000 crore and
    • Rs5,000 crore to NABARD to finance construction for warehousing.  Window to Panchayats to finance construction of godowns.



  • A regulatory authority for road sector.
  • 3000 kms of road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh will be awarded in the first six months of 2013-14.


The Cabinet Committee on Investment (CCI) has been set up. Decisions have been taken in respect of a number of gas, power and coal projects.



  • Companies investing Rs100 crore or more in plant and machinery during the period 1.4.2013 to 31.3.2015 will be entitled to deduct an investment allowance of 15% of the investment.
  • Incentives to semiconductor wafer fab manufacturing facilities, including zero customs duty for plant and machinery.



  • Need to incentivise greater savings by household sector in financial instruments.
  • Following measures proposed:
    • Rajiv Gandhi Equity Savings Scheme to be liberalised.
    • Additional deduction of interest up to Rs1 lakh for a person taking first home loan upto Rs25 lakh during period 1.4.2013 to 31.3.2014
    • In consultation with RBI, instruments protecting savings from inflation to be introduced.



  • Plans for seven new cities have been finalised and work on two new smart industrial cities at Dholera, Gujarat and Shendra Bidkin, Maharashtra will start during 2013-14
  • Delhi Mumbai Industrial Corridor (DMIC) to be provided additional funds during 2013-14 within the share of the Government of India in the overall outlay, if required.
  • Chennai-Bengaluru Industrial Corridor to be developed.
  • Preparatory work has started for Bengaluru Mumbai Industrial Corridor.


Government to construct a transmission system from Srinagar to Leh at a cost of Rs1,840 crore.



  • Two new major ports will be established in Sagar, West Bengal and in Andhra Pradesh to add 100 million tonnes of capacity.
  • A new outer harbour to be developed in the VOC port at Thoothukkudi, Tamil Nadu through PPP at an estimated cost of Rs7,500 crore.



  • A bill to declare the Lakhipur-Bhanga stretch of river Barak in Assam as the sixth national waterway to be moved in Parliament.
  • Preparatory work underway to build a grid connecting waterways, roads and ports.



  • A policy to encourage exploration and production of shale gas will be announced.
  • The 5 MMTPA LNG terminal in Dabhol, Maharashtra will be fully operational in 2013-14.



  • In the medium to long term need to reduce our dependence on imported coal.
  • One way forward is to devise a PPP policy framework with Coal India Ltd as one of the partners.
  • Ministry of Coal to announce Government’s policies in due course.



Guidelines regarding financial restructuring of DISCOMS have been announced.
State Government urged to prepare the financial restructuring plan, quickly sign MoU and take advantage of the scheme.



  • Benefits or preferences enjoyed by MSME to continue up to three years after they grow out of this category.
  • Refinancing capacity of SIDBI raised to Rs10,000 crore.
  • Another sum of Rs100 crore provided to India Microfinance Equity Fund.
  • A corpus of Rs500 crore to SIDBI to set up a Credit Guarantee Fund for factoring.
  • A sum of Rs2,200 crore during the 12th Plan period to set up 15 additional Tool Rooms and Technology Development Centres with World Bank assistance.
  • Ministry of Corporate Affairs to notify that funds provided to technology incubators located within academic Institutions and approved by the Ministry of Science and Technology or Ministry of MSME will qualify as CSR expenditure.



  • Technology Up-gradation Fund Scheme (TUFS) to continue in 12th Plan with an investment target of Rs1,51,000 crore.
  • Allocation of Rs50 crore to Ministry of Textile to incentivise setting up Apparel Parks within the SITPs to house apparel manufacturing units.
  • A new scheme called the Integrated Processing Development Scheme will be implemented in the 12th Plan to address the environmental concerns of the textile industry.
  • Working capital and term loans at a concessional interest of 6% to handloom sector.
  • Scheme of Fund for Regeneration of Traditional Industries (SFURTI) extended to 800 clusters during the 12th Plan.



Support to measures to be taken to boost exports of goods and services.


A standing Council of Experts to be constituted in the Ministry of Finance to analyse the international competitiveness of the Indian financial sector.



  • Compliance of public sector banks with Basel III regulations to be ensured.
  • Rs14,000 crore provided in BE 2013-14 for infusing capital.
  • All branches of public sector banks to have ATM by 31.3.2014.
  • Proposal to set up India’s first Women’s Bank as a public sector bank. Provision of Rs1,000 crore as initial capital.
  • Rs6,000 crore to Rural Housing Fund in 2013-14.
  • National Housing Bank to set up Urban Housing Fund. Rs2,000 crore to be provided to the fund in 2013-14.



  • A multi-pronged approach to increase the penetration of insurance, both life and general, in the country.
  • Number of proposals finalised, in consultation with IRDA such as empowering insurance companies to open branches in Tier-II cities and below without prior approval of IRDA, KYC of banks to be sufficient to acquire insurance policies, banks to be permitted to act as insurance brokers, banking correspondent allowed to sell micro-insurance products and achieving the goal of having an office of LIC and an office of at least one public sector general insurance company in towns with population of 10,000 or more.
  • Rashtriya Swasthya Bima Yojana to be extended to other categories such as rickshaw, auto-rickshaw and taxi drivers, sanitation workers, rag pickers and mine workers.
  • A comprehensive social security package to be evolved for unorganised sector by facilitating convergence among different schemes.



  • Proposal to amend the SEBI Act, to strengthen the regulator, under consideration.
  • Number of proposal finalised in consultation with SEBI.
    • Designated depository participants, authorised by SEBI, may register different classes of portfolio investors, subject to compliance with KYC guidelines.
    • SEBI will simplify the procedures and prescribe uniform registration and other norms for entry for foreign portfolio investors.
    • Rule that, where an investor has a stake of 10% or less in a company, it will be treated as FII and, where an investor has a stake of more than 10%, it will be treated as FDI will be laid.
    • FIIs will be permitted to participate in the exchange traded currency derivative segment to the extent of their Indian rupee exposure in India.
    • FIIs will also be permitted to use their investment in corporate bonds and Government securities as collateral to meet their margin requirements.
    • SEBI to prescribed requirement for angel investor pools by which they can be recognised as Category I AIF venture capital funds.
    • Small and medium enterprises, to be permitted to list on the SME exchange without being required to make an initial public offer (IPO).
    • Stock exchanges to be allowed to introduce a dedicated debt segment on the exchange.



  • Support to municipalities that will implement waste-to-energy projects.
  • Government to provide low interest bearing fund from the National Clean Energy Fund (NCEF) to IREDA to on-lend to viable renewable energy projects.
  • ‘Generation-based incentive’ reintroduced for wind energy projects and Rs800 crore allocated for this purpose.



Backward Regions Grant Fund
New criteria for determining backwardness to be evolved and reflect them in future planning and devolution of funds.


Skill Development

Target of skilling 50 million people in the 12th Plan period, including 9 million in 2013-14.



  • Allocation for Defence increased to Rs2,03,672 crore including Rs86,741 crore for capital expenditure.
  • Constraints not to come in the way of providing any addition requirement for the security of nation.


Science and Technology

  • Despite constraints substantial enhancements given to Science and Technology, Space and Atomic Energy.
  • Rs200 crore to be set apart to fund organisations that will scale up S&T innovations and make these products available to the people.


Institutions of Excellence

A grant of Rs100 crore each made to 4 institution of excellence.


National Institute of Sports Coaching to be set up at Patiala at a cost of Rs250 crore over a period of three years.

All cities having a population of more than 1 lakh will be covered by private FM radio services.

Panchayati Raj
Augmentation in the Budget allocation of Rajiv Gandhi Panchayat Sashaktikaran Abhiyan (RGPSA) to Rs455 crore in 2013-14.  An additional Rs200 crore proposed to be provided.


Post Offices

  • An ambitious IT driven project to modernise the postal network at a cost of Rs. 4,909 crore. Post offices to become part of the core banking solution and offer real time banking services.


Ghadar Memorial
Government to fund the conversion of the Ghadar Memorial in San Francisco into a museum and library.

Central Schemes
Centrally Sponsored Schemes (CSS) and Additional Central Assistance (ACA) Schemes to be restructured into 70 schemes. Central fund for the schemes to be given to the States as part of central plan assistance.


Three promises

Promises made to woman, youth and poor.

  • We stand in solidarity with our girl children and women. And we pledge to do everything possible to empower them and to keep them safe and secure. A fund - “Nirbhaya Fund” - to be setup with Government contribution of Rs1,000 crore.
  • Youth to be motivated to voluntarily join skill development programmes. National Skill Development Corporation to set the curriculum and standards for training in different skills. Rs1000 crore set   apart for this scheme.
  • To the poor of India direct benefit transfer scheme will be rolled out throughout the country during the term of the UPA Government with the motive “Äapka paisa aapke haath”.



  • Plan expenditure is placed at Rs5,55,322 crore.
  • Non Plan Expenditure is estimated at Rs11,09,975 crore.
  • Fiscal deficit for the current year contained at 5.2% and for the year 2013-14 at 4.8%.
  • Revenue deficit for the current year at 3.9% and for the year 2013-14 at 3.3%.
  • By 2016-17 fiscal deficit to be brought down to 3%, revenue deficit to 1.5%  and effective revenue deficit to zero%.11



  • Clarity in tax laws, a stable tax regime, a non-adversarial tax administration, a fair mechanism for dispute resolution and independent judiciary for greater assurance is underlying theme of tax proposals.
  • Tax Administration Reforms Commission to be set up.
  • In short term need to reclaim peak of 11.9% of tax GDP ratio achieved in 2007-08.



Auto growth in February likely to be negative, says Nomura

According to Nomura, negative factors like weak retail demand, high base of last year and loss of production due to the two-day nationwide strike would affect auto sales in February 2013

During February 2013, sales volumes in the auto industry are likely to decline due to some negative factors, mainly on weak retail demand, says Nomura Research in a note. “We expect the car industry volumes to decline by 20% year-on-year (y-o-y), medium and heavy commercial vehicles (MHCV) volumes to decline by 30%-32% and two-wheeler volumes to remain flattish y-o-y in February,” the brokerage said.


According to Nomura, while retail demand has been weak, the y-o-y growth in February could also be impacted. “Growth could be impacted by the high base of last year due to pre-buying ahead of an increase in the excise duty and loss of production and sales in many parts of the country due to the two-day nationwide strike. Thus we think there could be negative surprises against our estimates,” the report said.


Expect Maruti Suzuki to gain market share in the car industry

“For Maruti Suzuki India (MSIL), we expect around an 11% decline in car volumes compared to an expected 20% decline for industry volumes as the company benefits from a strong order book for its Swift and D’zire models. As per our estimates, MSIL could have around 50% market share in the domestic car market in February 2013 against about 44% in FY13 so far,” Nomura said.


Two-wheeler industry volumes expected to remain flat 

Nomura said, “In the 2-wheeler segment, we expect flat volumes y-o-y in February. Volume growth at Honda Motorcycles (about 10%) will likely be offset by a decline in Bajaj Auto's (NE: -7%) and Hero MotoCorp’s (NE: -2%) volumes, in our view.”


No signs of revival in MHCVs yet; negative for Ashok Leyland

“Industry volumes in the MHCV segment will likely remain weak; we expect a 30%-32% decline y-o-y in February. We expect Tata Motors and Ashok Leyland volumes to decline by 43% and 21%, respectively, while, Eicher will likely see lower decline of around 4%,” Nomura said.


Reiterate our preference for 4-wheelers; M&M and MSIL remain our top picks

Nomura said, “We reiterate our preference for companies where there is strong visibility of earnings growth and valuations are reasonable relative to historical averages. MSIL and Mahindra & Mahindra (M&M) remain our top picks in the sector. For M&M, we expect 16% volume growth in the utility vehicles (UV) segment led by the Quanto model. We believe that recovery in the tractor industry might take some more time and expect about 2% volume decline for M&M in this segment in February.”


JNPT seeks SEBI nod to raise up to Rs 2,000 crore via tax-free bonds

The proceeds are proposed to be utilised for the dredging works for deepening and widening of the Mumbai harbour channel and JN Port’s navigational channel and capital expenditure for other port projects

Jawaharlal Nehru Port Trust (JNPT), India’s largest container port, has approached the Securities and Exchange Board of India’s (SEBI) for approval to raise up to Rs2,000 crore through tax-free bonds.


In its draft prospectus with the market regulator, JNPT said it would raise “up to Rs500 crore with an option to retain over-subscription up to Rs1,500 crore such that the overall issue size does not exceed Rs2,000 crore”.


“The net issue proceeds raised through this issue are proposed to be utilised primarily for the purpose of dredging works for deepening and widening of the Mumbai harbour channel and JN Port’s navigational channel and capital expenditure for other projects in relation to the port operations,” JNPT said.


Kotak Mahindra Capital, ICICI Securities, SBI Capital Markets are the lead managers, while Bigshare Services is the registrar to the issue.


The shipping ministry controlled entity handles nearly 60% of the country's total container traffic.


In January, the finance ministry has given its nod to JNPT along with Dredging Corporation of India (DCI) and Ennore Port, to collectively raise Rs3,500 crore from tax-free bonds.


Earlier this month, Ennore Port had approached SEBS for approval to raise up to Rs1,000 crore by issuance of tax-free bonds to support its financing activities.


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