Monday, February 21,
With rising inflation & increasing interest rates on the back drop; Industry expectations from the forthcoming budget are not too high as the market is slipping.* Higher inflation is to be a major concern in the budget. Times are challenging but opportunities are overwhelming. Following are some expectations from the forthcoming budget :-
Excise duty on automobiles might be hiked by 2%
Venu Srinivasan, chairman and managing director, TVS Motor says, Excise duty on automobiles might be hiked by 2%. “Yes, it could go up, though we are hoping that it will not,” he said in an interview to CNBC-TV18.
Srinivasan feels that higher excise duty, in an environment of rising petrol prices and rising interest rates, could slowdown the growth momentum in the automobile sector.
However, he warns that if duties were hiked, the extra cost would be passed on to customers. “Rising commodity prices leave little cushion for absorbing the hike, he said.
Government on the other hand had previously reduced the excise duty to 8% as a part of the stimulus package and said would increase it in phases. The implementation of GST of around 14% is also around the corner. So, it will be interesting to see how and what steps Government undertakes.
Abolish 5% duty on coal imports: Sushil Kumar Shinde, Cabinet Minister for Power
After recognizing the strong shortfall of domestic coal threatening to destabilize its power generation plans, Power ministry has appealed to Government to cut down import duty of 5% in the upcoming budget on imports of the minerals.
According to the ministry, coal imports have been steadily going up. The domestic utilities imported 16 MT in 2008-09 before touching 23.2 MT in 2009-10. Maintaining that supply from CIL and other domestic sources could fire power turbines of up to 3,000 MW only, the power ministry warned that “new capacity of about 20,000 MW is likely to be grounded for want of domestic coal.
The ministry contended that the situation is going to be more troublesome in 2011-12 fiscal due to scarcity and inadequate availability of coal from Coal India Limited and its limitations in blending beyond 10-15 per cent of the total consumption. CIL officials have told the Plan Panel in a meeting on January 27 last that of the total demand of 480 MT in 2011-12, they can only supply 319 MT.
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