The Union Budget of India, also referred to as the Annual Financial Statement is one of the most important financial plans made for the forthcoming accounting period in the country. The Financial Budget is presented by means of the 'Financial Bill' and the 'Appropriation bill'. It is also known as the 'Estimated Receipts and Expenditures of the Government of India' and lists of a list of all the estimated expenses, revenues and expenses of the Government of India. This document is presented on the last working day of February by the Finance Minister. It is basically an account of how the Government has spent the money in the previous year as well as how the Government proposals to spend the same for the coming year.
The bill has to first be approved and passed by both the houses of the Parliament before it can come into effect on April 1st - the start of the financial year. These budgetary proposals stated in the budget will then be applicable from the 1st of April and continue till the 31st of March of the following year. Initially the bill was announced at 5PM on the last working day of February, but has changed to announcing the budget at 11 AM.
It is through the budget that the Government can modify tax heads; with an objective of either increasing the Government receives or with an objective to promote certain behaviors like spending.
The budget does not directly affect one's lifestyle or responsibility towards the family; but it does change the personal income tax rates or slabs which in turn have a bearing on salary; impacting the cash flow for the family.
Some of the key announcements that were made in the Union Budget 2013-14 which specific to investments and the share markets include:
· An allocation of INR 97,000 Crore has been made towards women's development
· There will be two new ports that will be set up in Andhra Pradesh and West Bengal which will add 100 million tonnes of handling capacity
· The textile ministry has been allocated INR 50 Crore to establish apparel parks
· The Rajiv Gandhi Equity Scheme is to be liberalized
· The production of food grain during 2013-13is estimated at 250 million tonnes
· An allocation of INR 110 Crore will be made towards the department of disability
· An allocation of INR 15,260 Crore will be made towards drinking water and sanitation ministry.
· A regulator will be designated for road projects; 3,000 km of road projects will be awarded in the first 6 months of 2013-14.
· The farmer-producer organizations will be associated INR 50 Crore.
· Excise duty on cigarettes will be increased by 18 percent.
While some of the proposals in the Union Budget will adversely affect the select companies in the long run there are certain stocks that investors should shed from their portfolio. Some of them include Force Motors, HCL Infosystems, and Specialty Restaurants.
The 2013/14 budget caps an intensive and detailed seven month campaign which was presented by Union Finance Minister P. Chidambaram. It has been one of the most anticipated Indian budgets of recent years as the Government tries to rein in a bloated fiscal deficiency; theby restoring confidence to Asia's third-largest economy.
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