Macro issues addressed, status quo on CTT, gold import duty

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The Union Budget fo 2014-15 has made an attempt to address the macro issues in commodity industry while at the same time while presenting a bold roadmap for medium term fiscal consolidation, according to a cross section of experts from financial services industry. However, analysts said that no particular measures have been announced to provide relief for commodity futures sector which has seen its trading volumes plummet in the past one year after the imposition of Commodity Transaction Tax (CTT) in the previous budget.
The bullion industry expected a decrease in gold import duty and doing away with the 80:20 scheme which did not happen.
The budget highlighted the new government’s rational approach to policies for taxation, government spending and growth. Infrastructure, Real estate & Finance sectors were amongst the biggest winners, with measures to improve funding availability to infrastructure & low-cost housing and providing a boost to REITs and bank infra lending. The budget’s focus on rationalizing tax arbitrages and anomalies across various items, acknowledging need for taxation clarity on retrospective amendments, advance rulings, etc. was also welcome. No major spending binge was announced and fiscal prudence was also maintained. FDI in defence & insurance was also a step in the right direction. Overall, the markets can continue to look forward to an improving outlook for the Indian economy, spelling positive for Indian equities.
Overall, the budget seems to have delivered in line with market expectations, with adequate focus on infrastructure and measures to boost financial savings. Though, more clarity on the roadmap to GST would have been welcome. ABLE welcomes the focus on strengthening of institutions as Technical Research Centres as this will strengthen the skill gaps and boost productivity. The emphasis given to startups, entrepreneurship, innovation and incubation is also a welcome initiative to boost technology and product innovation. It is also heartening to see the focus on the agriculture and biotechnology sector. The scaling up of agri-biotech clusters will help enhance competitiveness and innovation capacity

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