11
to loans from cooperative credit structures, would give further
stimulus to the sector. Moreover, reduction in LNG customs
duty would provide further support to fertiliser manufacturing
companies, as this is one of the major inputs. Overall, the
budget remained positive for the fertiliser sector.
Healthcare
Budget Recommendations
• Propose to amend Drugs and Cosmetics Rules to ensure
availability of drugs at reasonable prices and promote use of
generic medicines.
• Foreign Investment Promotion Board (FIPB) to be abolished in
FY18 and further liberalisation of FDI policy being considered.
• Under Maternity Benefit Scheme,
R
6,000 will be transferred
directly to the bank accounts of pregnant women who undergo
institutional delivery and vaccinate their children.
• New rules for regulation of medical devices to be formulated.
View:
The overall budget was neutral for the healthcare sector. While
there was no announcement on providing infrastructure status
to the hospital industry, abolishment of FIPB may expedite
inflow of FDI in the sector. The maternity benefit scheme is
likely to be marginally positive for some of the diagnostics and
hospital chains which have presence in rural areas. We await
more clarity on the proposed amendment of the Drugs and
Cosmetics Rules. Overall, while the budget was neutral for
the sector, the industry is likely to track global developments
like imposition of drug price control in USA, which may be
negative for the sector, especially pharma companies which
have high exposures in USA.
Infrastructure
Budget Recommendations
• A total outlay of
R
3.96 trillion proposed for the infrastructure
sector, as against
R
3.49 trillion in FY17BE.
• Allocation of
R
649 bn for roads and highways and
R
190 bn
under the Pradhan Mantri Gram Sadak Yojana.
• Proposed construction and development of 2,000 km of roads
to enhance coastal connectivity.
• Allocation of
R
550 bn to railways via budgetary support. The
total capital and development expenditure for railways has
been pegged at
R
1.31 trillion.
• A total outlay of
R
2.41 trillion in FY18 proposed (as against
R
2.16 bn in FY17BE), for the transportation sector as a whole,
including railways, roads and shipping.
• To create a Rashtriya Rail Sanraksha Kosh for passengers’
safety, with an initial outlay of
R
1 trillion over a period of
5 years.
• Railway tracks of 3,500 km to be commissioned in FY18
as against 2,800 km in FY17, apart from a proposal to feed
about 7,000 stations with solar power in the medium term.
Service charge on e-tickets booked through IRCTC has been
withdrawn.
• Railways will implement end-to-end integrated transport
solutions for select commodities through partnership with
logistics players, who would provide both front and back-end
connectivity.
• A new Metro Rail Act to be enacted with focus on innovative
models of implementation and financing, as well as
standardisation and indigenisation of hardware and software.
• Select airports in Tier II cities to be taken up for operation and
maintenance in the PPP mode.
• Allocation of
R
342 bn to Ministry of Urban Development, as
against
R
245 bn in FY17BE.
• Allocation of
R
1.08 trillion to Ministry of Rural Development, as
against
R
878 bn in FY17BE.
• Allocation of
R
230 bn under Pradhan Mantri Awaas Yojana (as
against
R
150 bn in FY17BE) to complete construction of 10 mn
houses (for the houseless and those living in kutcha houses) by
2019.
• Allocation of
R
100 bn to BharatNet Project towards provision
of high speed broadband connectivity on optical fibre in more
than 1,50,000 gram panchayats, with wifi hot spots and
access to digital services at low tariffs.
• Affordable housing to be given infrastructure status, which will
enable these projects to avail the associated benefits.
View:
The government continued its aggressive stance on the
infrastructure sector with a number of projects aimed at
development of roads & highways, railways and green field
projects; modernisation of ports; revival of underserved
airports; augmentation of investment for nuclear power
generation; and revival of PPP-led projects. The total allocation
for roads, railways, ports and airports has been pegged at
R
2.41 trillion, which is a positive for the sector. Moreover,
steady allocation towards AMRUT schemes for smart cities,
affordable housing and big ticket metro projects will help
revive the sector further. We continue to maintain our positive
view on the sector. L&T, Voltas and Crompton Greaves are
some of the stocks which could benefit from these provisions.
Information Technology/E-commerce/ Start-ups
Budget Recommendations
• Proposal to leverage IT and launch SWAYAM platform with at
least 350 online courses.
• Innovation Fund for secondary education proposed to
encourage local innovation.
• Profit (linked deduction) exemption available to start-ups
changed from ‘3 years out of 5 years’ to ‘3 years out of 7 years’.
• MAT credit now allowed to be carried forward by up to
15 years from 10 years currently.
• Allocation for skill development increased to
R
30.16 bn—up
by 38.8% from the revised estimates of FY17.
T
he
U
nion
B
udget
2017-18
