Cover Story
- Some CEOs liked it, some didn’t, but few could afford to ignore Chidambaram’s 2008-09 budgetary bouquet.
- Writing off farm loans worth Rs 60,000 crore, increasing Income Tax exemptions, slashing excise duties…Finance Minister Chidambaram’s Budget 2008 is aimed at winning votes in an early poll. Watch complete Budget speechHighlights of Union Budget 2008Full coverage: Budget 2008Surfers' comments on Budget 2008Read full text of FM's speechClick to read sectoral analysisRead experts views on Budget 2008Budget at a glanceWhat’s cheaper, what’s dearer?
- P. Chidambaram considers himself a lucky Finance Minister—that is, one who brings luck. And lucky he has been over the last four years as India’s Chief Financial Officer, but not so much because of his government’s policy making as the economic boom across the world.
Editor's note on Budget 2008
You may be a Harvard Graduate, one of the finest legal minds in the country and even an old hand at budget making, but when you are also a politician with political masters and, worse, an election to win, then you have no choice but to set aside whatever your rational mind may dictate. Buoyant tax revenues a lower fiscal deficit and an economy that’s in top gear permit the FM to pump big money into agriculture and the social sector. Those efforts might help at the hustings, too. Transportation - A long way to go
The Indian Textiles sector has been particularly affected by the rupee appreciation, which has marred the government’s export target of $25 billion (Rs 1,00,000 crore) during 2007-08.Telecom - Talk shifts decisively to wireless
The Indian Telecom Industry is one of the fastest-growing Telecom markets in the world, with a huge potential to expand in the wireless segment. Teledensity is up from 18 per cent to 24 per cent over the last year.Retail - Space for more growth
Driven by strong income growth, changing lifestyles, favourable demographic patterns, Indian retail is expanding at a rapid pace. The retail sector was valued at around Rs 11,000 crore, growing at over 30 per cent year-on-year.Real estate - Thriving with increased investments
The Indian Real Estate Industry witnessed heightened activity in 2007 characterised by massive development, sustained end-user demand and increased interest from international players. The Year 2007 has seen the power sector gaining momentum. India achieved a capacity addition of 34,000 MW in the 10th Plan, taking the capacity to 141,000 MW.Lifesciences - Healthy potential
India’s Pharmaceutical Industry stands fourth in terms of volume and 13th in terms of value. It is valued at over $13 billion (Rs 52,000 crore). While it is export driven, the domestic sector has also done well in recent times.Auto - Negotiating a rough patch
Outlook for 2008-09 continues to be positive. Budget 2008 has done its bit by slashing excise on two-wheelers and small cars.Oil & gas - Future is where gas is
India’s growing oil consumption (8 per cent year-on-year)and almost stagnant domestic production has resulted in increasing dependence on imports.Banking & financial services - Boogie-woogie for the brokerages
The year so far has been a mixed bag for the sector. Increased interest rates have positively impacted their spreads, while the slowdown in credit off-take has contained asset growth.Metal & mining - Steeling for growth
Strong domestic demand for steel has led to both greenfield and brownfield capacity expansions, making India the fifth-largest crude steel producer in the world. The Media and Entertainment Industry was estimated at Rs 55,000 crore in 2007, having grown 22 per cent over the previous year.IT & ITES - Hemmed in by manpower costs
IT-ITES Sector revenues are expected to touch $64 billion (RS 2,56,000 crore) in 2007-08, up 33 per cent over 2006-07. India’s promising infrastructure development continues to drive the cement sector. The double-digit growth in demand during the last couple of years is likely to continue.Hospitality & Tourism - On a high growth trajectory
The Tourism Industry has been on a high growth trajectory. In the premium segment, RevPARs (Revenue Per Available Room) increased by 4 per cent to 40 per cent (during April-December 2007 as compared to the same period of 2006) across eight major cities with the exception of Bangalore. Rising household incomes, per capita consumption, increased FOReign investments and growing demand from rural markets have allowed the sector to grow at a steady 12-13 per cent in 2007. Agriculture may be the buzzword, but sweeping duty cuts impact other sectors, too. Easily the sectors that benefitted most from Budget were auto, lifesciences, and media. Stock market - All for the common man
The Finance Minister was uniquely positioned to present a landmark Budget, as Budget 2008 comes in the backdrop of robust economic growth in GDP of 8.7 per cent in 2007-08. In presenting the budget for 2008-09, Finance Minister P. Chidambaram seems to have achieved the impossible. He did not give up any of the ongoing schemes or subsidies; in fact, allocations for most of them have been enhanced. This Budget was presented in the context of an interesting year from a macro-economic perspective. The year started out on a very positive note with strong economic indicators and a buoyant capital market, but ended with tangible concerns around a slowdown in global growth and its impact on emerging economies like India and China.International tax: Towards a new direct tax code
The pre-election union Budget was expected to be on populist lines and the current Budget lived up to this trend. The Budget focussed on social outlay and tax reform was not the main driver.Personal tax - Time for individuals to celebrate
Millions of individuals waited with bated breath to hear whether the Finance Minister would dish out some sops to them in his direct tax proposals.Indirect tax - More of the same
Budget 2008 does not have any radical or bold moves on the indirect tax front. This is probably just as well, given that in an election year, the best that one can expect is no overly populist measures.Direct taxes - A balanced budget
The economic backdrop to the Budget 2008 was mixed; though India has witnessed high growth rate in the recent past, coupled with burgeoning foreign exchange reserves and phenomenal increase in the direct tax collections, the fear of US slowdown, inflation, ever-strengthening rupee and high interest rates, are a matter of some concern. Budget at a glance
Budget 2008-09, which is high on promises for indebted farmers, rural development projects focussing on health, education and employment, also tucked in a few surprises for the urban tax payers.An inflationary budget - Yashwant Sinha
It’s clear that UPA is going to be voted out: which is why they are making some desperate attempts and in the act creating a difficult situation for the next government. Has the FM done enough to address the potential impact of a US recession on India, exporters reined in by an appreciating rupee and investors caught out by volatile markets? Budget 2008 hasn’t tinkered with the investment landscape too much save promising a few more investment products. Here’s what it has in store for your investments. Small cars are in the fast lane, but mobile phones get dearer. 
