OREANDA-NEWS. March 19, 2012. Rajiv Agarwal CEO & MD, Essar Ports

"The budget is positive for the infrastructure sector. Some of the initiatives announced like doubling the limit for tax free infrastructure bonds to Rs 60,000 crore, and exemptions in basic customs duty for thermal coal for power generation will be beneficial for the ports sector. The budget provides for better access to credit and reduction of cost of debt in infrastructure sector through credit enhancement and take-out financing. Reduction of withholding tax from 20% to 5% on ECB for infrastructure is also a welcome move.”

H imanshu Chakrawarti - CEO, The MobileStore

"We welcome the positive statement from the honourable Finance Minister regarding working towards a consensus for FDI in multi-brand retail. This will open up investments in the sector, improve infrastructure, aid expansion of modern trade and generate employment

T he significant increase in investment in infrastructure bodes well for secondary demand for sectors like ours to kick in

The increase in tax payer exemption limits and the slabs will make it easier for consumers to take part in small indulgences like mobile buying

Increase in standard excise duty from 10% to 12% will have an impact on prices. The extent of the impact (on domestic production) on the mobile business needs to be ascertained

The increase in service tax from 10% to 12% will have a direct impact on retail rentals

Overall, the budget seems quite neutral in terms of impact on The MobileStore business.”

Alok Gupta - CEO, Essar Retail

"For retail sector, it is reassuring that government is committed to FDI for multi-brand retail which is much needed to bring global best practices. GST implementation will cut down complexity & cost to drive better stock availability at last mile and is much needed. Personal tax reduction should hopefully improve consumer sentiment. However, policy initiatives and direct tax reforms have been offset by an increase in indirect taxes - service tax & excise duty. The key therefore is timely implementation of the proposed FDI/GST policy. "

LK Gupta - MD & CEO, Essar Oil

"It is a budget aimed at promoting investment in infrastructure and achieving growth target. There are a slew of measures the finance minister has announced which will make resource-raising easier for the large industry as well as small and medium entrepreneurs. The hike in excise and service taxes are along expected lines as the government is slowly removing the fiscal stimulus it had introduced a few years ago.

As far as the oil and gas sector is concerned, we are slightly disappointed that the government has overlooked the sector by delaying any announcement on fuel price deregulation which could have provided a level playing field to the private oil marketing companies. However, we do believe that some action will take place on this front soon. Removal of Custom Duty on Steam Coal and LNG is a welcome step. Non extension of section 80-IB tax holiday benefit could affect future investment in Refinery Sector and thus deprive the country from emerging as a major global hub for export of petroleum products.

On the positive side, increased allocation for roads will lead to a higher demand for bitumen, which refiners like us will be benefit from. It is good to note that the government has begun a pilot project of direct transfer of subsidy to buyers of kerosene and cooking gas."

Dilip Oommen - CEO & MD, Essar Steel

"Baring a few positive signals, especially infrastructure, the budget is more a work-in-progress budget which is unlikely to propel a major turnaround in the Indian economy in the near term. On the positive side, we are happy to see big infrastructure boost by providing ample liquidity in the form of measures like doubling the limit for tax free bonds to Rs 60,000 crore, lowering ECB rates to 5% from 20%, and introduction of Viability Gap Funding (VGF) under the Scheme for Support to PPP in infrastructure. This will enhance spending in the infrastructure sector.

For the iron and steel sector, the budget is reasonable. The Finance Minister’s decision to enhance basic customs duty on non-alloy, flat-rolled steel to 7.5% from 5%, and reduction of basic customs duty on imported plant and machinery for setting up or substantial expansion of iron ore pellet plants or iron ore beneficiation plants from 7.5 % to 2.5% will help in keeping our costs competitive. Also, our allied sector, mining, will benefit considerably from reduction in basic customs duty on machinery and instruments for surveying and prospecting from 10% to 2.5%, which will indirectly benefit us as their S&R costs will see some reduction."

AR Ramakrishnan - MD, Essar Shipping Ltd.

"Overall, there is no announcement in terms of direct initiative for the Indian shipping industry in the budget today. The customs duty on ships (CVD) which was introduced in the Budget last year has now been notified to be withdrawn with retrospective effect. This was, however, implemented soon after the last year’s budget itself.

There are positive opportunities that could arise for the Indian shipping industry from the various initiatives announced for the power, steel and ports sectors. These initiatives will help the specific sectors in their ongoing projects and growth plans. These sectors being substantial users of Indian shipping services, the support provided to them over the next two/three year period would have a positive impact for shipping companies.

The amendments in service tax, including Negative List and Exempted List, together with the finalisation of Place of Supply Rules, will need to be studied in detail for any positive impacts on availment of Cenvat for the Shipping industry. "

V Suresh - CFO, Essar Power

"The budget strives to provide a welcome relief on various fronts in the short run to address most of the issues of the power sector. Liberalization in ECB financing will enable availability of more debt resources at a lower cost for the power sector sector. DDT rationalization will help improve return on equity for the multi-tiered structure of most power companies. To sum up, this, along with steps being taken to improve coal availability, signals a significant turnaround for the power sector."