Budget 2013: Five sectors unlikely to benefit

MUMBAI: The Union Budget 2013, the annual ritual of the government is most likely to be a non-event. In the light of this fact, there are a few sectors, which are unlikely to get any benefit in the Budget. Here are a few of them:

Cement

Being a highly competitive and mature industry, it needs little government support. Due to abundant availability of limestone—a key raw material, the industry is not in need of any sops. Only the supply market – real estate and infra, would need investment for demand in cement products. Analysts believe that it is very nature of the cement industry that gives little scope for any sops.

Aviation

Most sectors experts believe that there is hardly anything expected in the Budget for the sector given the facts that the Civil Aviation Minister has already allowed foreign airlines companies to have a minority stake in airlines companies in India. Beside this, there are increasing reports the aviation ministry plans to refurbish 35 non-metro airports, which should lighten the traffic at metro airports. For airlines companies which pay sales tax in the range of 25-30%, having a uniform sales tax has been an issue for a long time. Beside including Aviation Turbine Fuel (ATF) under declared goods category, there is also an issue of according ‘infrastructure’ status to the industry. Analysts feel these issues are unlikely to get addressed in the Budget.

Hospitality

For hospitality industry, there has been long-standing demand of according infrastructure status to the industry. This demand if granted would result in easy availability of low cost debt, enable raising external commercial borrowing and increase in investment in the tourism sector in India. This demand seems unlikely to be addressed.

Media & Entertainment

With digitisation being the theme of this fiscal, analysts expect very little from the Budget. The thumping response to the first phase of digitisation has increased the earnings prospects of the media industry. Many experts believe that the full potential of the digitisation drive is yet to get reflected in the financials of long-established entertainment, cable and Direct-To-Home (DTH) companies. As a result of this makes many analysts perceive that the industry is already on the path of growth. Hence, there are no high expectations from the Finance Minister.

Healthcare & hospitals

In the healthcare industry, there has been a long-standing demand for 200% weighted deduction on in-house Research & Development expenses. This has been a long-standing demand from the industry, but analysts believe that budgetary constraints may prevent the government from implementing this. Most companies spend 6-7% of sales towards R&D, which is expected to increase going forward. Beside this, companies and sector experts have also been demanding incentives to boost hospital infrastructure development and medical device manufacturing industry.

In addition to these sectors, there are certain sub-sectors such as non-alcoholic beverages, and tyres, which are unlikely to see any sops from the Budget.