Budget 2016 is here! What does it hold?

The Honourable Finance Minister presented the Annual Budget 2016 today (February 29, 2016) in the parliament. While he touched upon a lot of points, here is a brief on what the budget holds for the different sectors in the stock market and some specific scrips that would be affected.

Food

4 new schemes to enhance dairy-farming in India at Rs. 850 crores. A positive for Prabhat Dairy

Agri

ePlatform to connect wholesale Agri markets. This is a positive for Dhanuka Agritech
Unified agri market scheme to enhance farmer access to markets. Fertiliser companies will benefit
Have to give farmers income security, aim to double farmer income.
Propose to spend Rs. 86500 crores on irrigation projects in 5 years. A shot in the arm for Jain Irrigation
Allocation for Accelerated Irrigation Benefits Program at Rs. 17000 crore for FY17
Allocation to farming sector at Rs. 35984 crore

Automotive

2.5% tax on diesel vehicles. Negative for M&M, Ashok Leyland, Eicher Motors
To levy 1% infra cess on small gasoline cars, negative for Maruti Suzuki

Banking, Finance and Insurance

Government to make provision for Bank recap in FY 17. Positive for Banks
Propose to launch new health care scheme with Rs. 1 lakh as cover per family. Positive for Insurance companies
Propose Rs. 5500 crore for crop insurance scheme for FY 17. Positive for Insurance companies
Finance Minister says Rs. 25000 crore for bank recapitalisation. The amount is less than expected. So a negative for PSU Banks

Cigarettes

To raise excise duty on most tobacco products by 10 – 15%. This is a negative signal for ITC, VST Industries, Godfrey Phillips

Information Technology

To set up high education financing agency with Rs. 1000 crore capital. A positive for Aptech
To focus on social sector especially health care, education and skill development. Positive for Education companies

Real Estate

Propose 100% deduction to undertakings for construction of affordable housing. Positive for DLF, DB Realty, NBCC
Raise personal IT house rent exemption to Rs. 60000 from Rs. 24000 per annum

Mining

Clean energy cess for coal Rs. 400 per tonne. Negative for Coal India, JSW

Oil & Gas

To incentivise gas production from deep-sea and ultra deep waters, positive for ONGC, Cairn
No re-imposition of customs duty on crude

Health Care

To exempt part of Dialysis equipment from basic customs duty. A positive for Opto Circuits

Power

Propose Rs. 8500 crore for rural electrification. Positive for Power Grid, NTPC, PFC, REC
FM allocates Rs. 9000 crore towards Swachh Bharat Mission. Positive for A2Z Infra
The Government is committed to the achievement of 100% village electrification by May 1, 2018. Augurs well for KEC International, L&T, Kalpataru Power

Transport