Budget 2016

• Infrastructure•Metal• Aviation

Infrastructure Sector

Major players in Infrastructure sector in India• Larsen & Toubro• GMR Infra• Jaypee Group• Reliance Infrastructure• Lanco Infratech• Punj Lloyd

The Budget• Total outlay for infrastructure - `2,21,246 crore.• Out of which 97000 cr. is for Road Development and 2.21 lakh cr

spent on Railways • Major changes under Railway budget 2016• North-East India, especially Mizoram and Manipur, to be connected

through broad gauge soon.Impact – Development in Accessibility to N-E Region.

• No hikes in Passenger Fares

Road Development• Total investment in the road sector, including PMGSY allocation,

would be 97,000 crore during 2016-17.• To approve nearly 10,000 kms of National Highways in 2016-17.• Allocation of ` 55,000 crore in the Budget for Roads.• Additional 15,000 crore to be raised by NHAI through bonds.

Impact – Greater accessibility for Transportation.Boost for Manufacturing and other industries

Power• To provide calibrated marketing freedom in order to incentivise gas

production from deep-water, ultra deep-water and high pressure-high temperature areas.• Impact-Future imports will get reduced. But also, with big rewards, big

risks are involved.

• Comprehensive plan, spanning next 15 to 20 years, to augment the investment around 3000Cr.pa in nuclear power generation to be drawn up.• Impact- This step Will help to soon Light up every home in India.

Other measures• New credit rating system for infrastructure projects to be Introduced.• Impact – Useful for analysis for infrastructure projects • A new policy for management of Government investment in Public

Sector Enterprises, including disinvestment and strategic sale, approved.• Impact – Effective decisions related to investments and disinvestments

by government and effective use of public funds.• Public Utility (Resolution of Disputes) Bill will be introduced during 2016-

17• Guidelines for renegotiation of PPP Concession Agreements will be

issued • Impact:-Arrangement for resolution of disputes related to PPP

PROMOTING AFFORDABLE HOUSING

• 100% deduction for profits to an undertaking in housing project for flats upto 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019 and completed in three years. MAT to apply.• Impact- Tax Deductions thus leads to Savings

Budget 2016 Metal Industry

Indian Metal Industry Overview• India is worlds 3rd largest steel Producer• The production of metal in 2014-15 was 91.46MTPA• It employed over 600000 people in India• Total domestic demand for steel is estimated at 113.3 MTPA by 2016-17• Total finished steel production in the country increased at a CAGR of 7.45 per cent

over FY011–15.• The Government of India has allowed 100 per cent foreign direct investment (FDI) in

the steel sector• The steel sector in India contributes nearly two per cent of the country’s gross

domestic product• India’s crude steel capacity reached 109.85 Million Tonnes (MT) in 2014-15, a growth

of 7.4 per cent.• India has the fifth-largest coal reserves in the world at 301.6 billion tonnes (BT)

Major Players• Tata Steel (ranked 11th in the world in terms of production of steel)• Steel Authority of India (SAIL) – ranked 29th in the world.• JSW Steel Limited – ranked 31 in the world.• Essar Steel• Jindal Steel and Power

The Budget • Import duty up on Aluminium• Custom duty on primary aluminium increased from 5% to 7.5%.• Basic Customs Duty on Other aluminium products increased from

7.5% to 10%.

Impacts-Increase in custom duty of aluminium would help to check rising import and encourage domestic industry to grow.

The Budget• Basic Customs Duty on Zinc alloys increased from 5% to 7.5%Impact: Increase in custom duty of zinc alloys would help to check rising import dumping and encourage domestic industry.

• Export duty on Bauxite decreased from 20% to 15%Impact : It is negative for aluminium industry as decrease in export duty on bauxite would decrease domestic ore availability , but it will help Bauxite manufacturer while exporting.

• Export duty on Bauxite decreased from 20% to 15%Impact :It is negative for aluminium industry as decrease in export duty on bauxite would decrease domestic ore availability , but it will help Bauxite manufacturer while exporting.

The Budget• Basic Customs Duty on Brass scrap decreased from 5% to 2.5%.• Excise duty structure on disposable containers made of aluminium

foils being changed from 2% (without CENVAT credit) or 6% (with CENVAT credit) to 2% (without CENVAT credit) or 12.5% (with CENVAT credit)

• Clean Environment Cess' to impact input costs :The doubling of Clean Energy Cess from Rs 200 to 400 per tonne would further increase the input cost for domestic producers.

Aviation Sector

Aviation Sector in India

• It can broadly be divided into military and civil aviation• Ministry of Civil Aviation is responsible for civilian aviation and Ministry of

Defence is responsible for the Indian Air Force.

Introduction• India aims to become the third-largest aviation market by 2020 and the largest by

2030.• The Civil Aviation industry has ushered in a new era of expansion.• International and domestic passenger traffic grew 6.6 per cent and 15.5 per cent,

respectively, in September 2015.• The airlines operating in India are projected to record a collective operating profit

of Rs 8,100 crore (US$ 1.29 billion) in fiscal year 2016, according to Crisil Ltd.

Major Players in Aviation Industry• Indigo IndiGo plans to file documents for an initial public offering within the next two months to raise US$

400 million by selling 10 per cent stake.

• Spicejet SpiceJet plans to enter a deal with Boeing Co. and Airbus Group SE to buy 80-120 jet airplanes

which would help to expand their fleet and rebuild its business

• Go Air• Jet Airways• Tata Sons' joint ventures with Malaysia's AirAsia and Singapore Airlines.

Union Budget – Aviation Sector• Mixed bag for aviation as tax sops offset by ATF duty hike• In civil aviation, 160 non-functional airports to be revived at a cost of

Rs 50-100 crore each and 10 of 25 defunct airstrips.