BUDGET 2013 14 Textile,Infra,Auto,Fmcg

7/30/2019 BUDGET 2013 14 Textile,Infra,Auto,Fmcg

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TEXTILEINDUSTRY



OVERVIEW

• Textile industry is the second largest

employment generating sector in India.

• Contributes 14% to industrial production,4 %

to country’s gross domestic product and 17%

to country’s export earnings.

• It is estimated that India would increase its

textile and apparel share in the world trade

to 8% from the current level of 4.5%



MAJOR PLAYERS

• Raymonds

• Arvind mills

• Vardhaman textiles• Century textiles

• Bombay dyeing ltd.

• Grasim industries• Fabindia



PROPOSALS OF UNION

BUDGET• Removal of excise duty on readymade

garments(cotton and manmade sector)

• Continuation of the Technology Upgradation

Fund Scheme (TUFS) with an investment

target of 1,51,000 crores during plan period.

• Textile parks have been set up under Schemefor Integrated Textile Parks (SITP).



PROPOSALS OF UNION BUDGET

• Companies investing 100 crores 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 in addition to the current

rates of depreciation.

• Working capital and term loans to beprovided to handloom weavers at

concessional rate of 6%.



PROPOSALS OF UNION

BUDGET • A new scheme with an outlay of 500 crores

called the Integrated Processing

Development Scheme will be implemented .

• Handmade carpets fully exempted from

excise duty.

• Duty on import of raw silk increased from 5%

to 15%.



IMPACT OF UNION BUDGET

• Removal of excise duty and the exemption

for handmade carpets will lower the cost in

the hands of the consumer and is likely to

stimulate demand will help in increasing

exports of value added textile.

• Apparel parks will be set up under the SITPs

to house apparel manufacturing units.



IMPACT OF UNION BUDGET

• The proposal for 15% allowance on

investment of 100 crores or more will boost

investment in capital expenditure.

• Concessional working capital credit will

benefit the handloom weavers especially

since a large portion of them belong to

backward classes.

• Import duty on raw silk will enhance the

domestic production in sericulture but is

likely to have a downward effect on imports.



INFRASTRUCTURESECTOR



OVERVIEW

• India is consistently increasing infrastructure

spending.

• Currently India’s infrastructure spending is 8% of

GDP.• The major funding for infrastructure investments was

contributed by budgetary support.

• Commercial banks, NBFCs, Insurance companies

contributed around 40% while 14% of funds wereavailable via Equity and FDI route.

• Huge potential for critical infrastructure

developments consisting of transportation, power

and telecommunication.



MAJOR PLAYERS

• Larsen &Toubro Ltd.

• BHEL.

• Adani Ports.• Jai Prakash Associates Ltd.

• IVRCL Infrastructures & Projects Ltd.

• Gammon India. • Hindustan Construction Company (HCC) .



HIGHLIGHTS

• Core infrastructure industries growth decelerated to

4.4% in FY12 after growing at constant rate of 6.6% in

FY10 and FY11.(due to delay in approvals)

• Investment in infrastructure declined by 52% to Rs 1.0

trillion from Rs 2.2 trillion in the FY11.

• The projected investment in Infrastructure has beenincreased from Rs19,48,100 crore in the 11th five year

plan to Rs. 55,00,000 crore in the 12th five year plan in

order to bridge the demand supply gap.



BUDGET

• Infrastructure debt funds will be encouraged

• Some institutions allowed to issue Tax Free Bonds in 2013-

14 to raise upto Rs.50000 crore.

• To set up Regulatory authority for roads and ports.

• A sum of Rs.5000 cr. will be made available to NABARD to

finance construction.

• To award 3000 km of road projects

• Basic custom duty on steel and iron reduced to 2% from

5%.

• New industrial corridor for Bangalore-Chennai-Mumbai

plant.

• Allocations for ports and harbors Rs.1,30,000 cr.



IMPACT

• Setting up of a regulatory body is positive, as it will

ensure timely clearances, fund allocation for the projects.

• The road projects have been stuck in the last couple of

months and the government needs to urgently award

projects for road building.

• Infrastructure companies will get access to long-term

capital,that is a must as projects have a long gestation

period.

• Credit enhancement by IIFCL means more low cost

funds.

• Higher allocation to infrastructure projects and ease in

availability of long-term finance will augur well for the

construction sector.



Automobile sector

AUTOMOBILE SECTOR



OVERVIEW OF THE INDUSTRY

• The automobile industry in India is one of the largermarkets in the world and had previously been one of the

fastest growing globally, but is now seeing flat or negative

growth rates.

• India's passenger car and commercial vehicle

manufacturing industry is the sixth largest in the world.

• Cars is the major segment in the Indian automotive

industry with a growth rate of more than 19% annually.



OVERVIEW OF THE INDUSTRY

• Asia's third largest exporter of passenger cars.

• 2nd largest 2 wheeler market in the world

• Most competitive markets with low costs, which make it

an attractive assembly base for foreign automotive

manufacturers



Key drivers for the growth of

Indian Auto industry

KEY

DRIVERS

Improved Infrastructure

Finance Availability

Rising Family Income

Favourable duty structure Changing lifestyle

Exchange of Cars

Low car penetration

Poor public transport system



CATEGORY WISE MARKET SHARE

Type Market Share

Two Wheelers 76%

Three Wheelers 4%

Passenger Vehicles 15%

Commercial Vehicles 4%



MAJOR PLAYERS

SEGMENTS MAJOR PLAYERSTwo Wheeler Bajaj Auto, Tvs Motor,

Heromotocorp, Honda

Three Wheeler Mahindra and Bajaj Auto ltd

Cars Maruti Suzuki, Tata Motors,

Hyundai, General motors, Honda.

LCVs, M & HCVs, MUVs Eicher Motors, Ashok Leyland, Tata

Motors



BUDGETARY MEASURES

MEASURES IMPACT

Proposes to increase the excise duty on

SUV’s from 27 % to 30 % (suv taxis

excluded)

SUV’s from Mahindra Bolero, Scorpio,

XUV500, Toyoto Fortuner, Tata Safari

Storm will cost more, hence would affect

the sales

Increase in the duty of luxury vehicles

from 75% to 100%

Affect the imports of luxury cars and will

accelerate the domestic manufacturing

and assembling which will result in more

investment and jobs

Increase in the duty of motorcycles withengine capacity of 800cc or more

High end motorcycles like the Ducatisand the Harley Davidsons will get price

more which will encourage domestic

sales.

Granted extension on specified parts of

electric and hybrid vehicles

Electric car companies such as Mahindra

Reva will be benefited



BUDGETARY MEASURES

MEASURES IMPACTS

The Government has decided to

constitute a regulatory authority

for the road sector

Better roads which will encourage

local transport in the states.

JNNURM will be continued in the

12th plan and allocating 148.7 bn

for the project.

Better and frequent transport facilities

for the commuters.

Tata Motors & Ashok Leyland stand to

benefit from this allocation

SIDBI allotted Rs.10,000 crores to

boost ancillary sector

Apollo tyres, Bharat force and

Exide will be benefited



TO SUM IT UP

• Automobile industry is unhappy with the dutyhikes.

• The burden of the taxes will be passed on to theconsumers

• The sales of automobiles are not very encouragingand the duty hikes will further lower the sales

• Only relief is that no diesel tax is imposed.



Fast Moving ConsumerGoods (FMCG)



OVERVIEW

• The Indian FMCG sector is the fourth largest sector in the economy

with a total market size of Rs. 167,100 crores.

• The market is estimated to grow to US$ 100 billion by 2025,

according to market research firm Nielsen.

• In the last decade the FMCG sector has grown at an average of 11% a

year; in the last five years, annual growth accelerated to 17%.



• The FMCG Industry is characterized by a well established

distribution network, low penetration levels, low operating cost,

lower per capita consumption and intense competition between the

organized and unorganized segments.

• FMCGs are slowly and gradually positioning and deeply penetrating

in the fast growing rural market. The Rural market contributes to

one-third of the FMCG sales.



MAJOR PLAYERS



BUDGET MEASURE IMPACT

Increased allocation to rural developmentprograms by 46% to 80,194cr.

(Positive)

Favorable for FMCG players like HUL, Dabur

India, Marico etc as it would increase income inthe hands

of rural consumers, thereby boosting

consumption.

Increase in the specific excise duty on cigarettes

to about 18%.

(Negative)

Tax burden will be passed on to customers. ITC

plans to increase the prices by 15%.

Increase in excise duty to 6% on Mobile Phonescosting more than Rs 2000

(Negative)

Raise end user prices by 8-9%.

BUDGET



GOLD &

JEWELRY



• India is the largest importer of Gold in the world.

• Imported gold worth $43 bn in 2010-11 and $62

bn in 2011-12.

• 50% of the gold & jewelry purchases are used in

weddings.

• 45% of jewelry business is in South India.

• In the last 5 years, prices sore by 115%.

• India consumes over 30% of the global supply.

OVERVIEW



• Your Description Goes HereCONSUMER

ITEMSIMPACT

BUDGET

MEASURE

Imported Jewelry Positive

Duty-free limit on imported

jewelry raised to Rs 50,000 in

the case of a male passenger

and Rs 100,000 in the case of

a female passenger.

Precious Stones PositiveBasic customs duty had been

cut from 10% to 2%.

BUDGET



TransitionalPage

BUDGET MEASURE IMPACT

0.001% CTT (Commodities Transaction

Tax) on gold futures.

Tax cut on gold ETF (Exchange TradedFund)

Will increase transaction costs but add

to the cost of risk management and

dissuade genuine hedgers.

0.01% CTT on 10 gms of goldInvestor will have to shell out Rs 3.33 (at

current market price)

BUDGET 2013 14 Textile,Infra,Auto,Fmcg

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