rediff.com Home > Money > Budget 2001 > CRISIL Budget Impact Analysis Banner Ads
Channels: Astrology | Broadband | Contests | E-cards | Money | Movies | Romance | Search | Weather | Wedding | Women
Partner Channels: Auctions | Auto | Bill Pay | Jobs | Lifestyle | Technology | Travel
March 1, 2001                                       Feedback  

    - BUDGET RUN-UP
    - BUDGET SPEECH '00
    - COLUMNISTS
    - INTERVIEWS
    - CREDIT POLICY
    - ECONOMIC SURVEY
    - GOVT & ECONOMY
    - RAILWAY BUDGET
    - EXIM POLICY '00


    
      


    - BUDGET PROCESS

    - BUDGET 00-01
    - BUDGET 99-00
    - BUDGET 98-99
    - BUDGET 97-98

    - NEWSLINKS


Information you can use

   The Best Budget Sites
   Ministry of Finance
   Budget 2000
   Reserve Bank of India


 




Banner Ads
Banner Ads
Banner Ads
Banner Ads
 Search the Internet
         Tips
 Sites: Finance, Investment
E-Mail this report to a friend
Print this page

Sector Focus : Other Capital Goods

(per cent)

Tariffs (per cent)

 

Customs

Excise

 

2000-01

2001-02

2000-01

2001-02

General machinery

27.5

25.0

16.0

16.0

Parts

27.5

25.0

16.0

16.0

Specified textile machinery

16.5

5.0

16.0

16.0

Parts of specified textile machinery

16.5

5.0

16.0

16.0

Machine tools

27.5

25.0

16.0

16.0

CNC systems

27.5

25.0

16.0

16.0

Cutting tools

27.5

25.0

16.0

16.0

Milking and dairy machinery

27.5

25.0

16.0

16.0

High speed steel/alloy steel

27.5

25.0

16.0

16.0

Steel plates

27.5

25.0

16.0

16.0

Seamless steel tubes

27.5

25.0

16.0

16.0

Clad plates

27.5

25.0

16.0

16.0

Articles made of plastics

37.5

35.0

-

-

Rubber components

40.0

35.0

-

-

Project imports

 

 

 

 

Fertilisers

5.5 + 10 CVD

5.0 + 10 CVD

-

-

Refining of crude petroleum

5.5 + 10 CVD

5.0 + 10 CVD

-

-

Coal mining

5.5 + 16 CVD

5.0 + 16 CVD

-

-

Captive power plants of 5 MW and above

27.5 + 16 CVD

25.0 + 16 CVD

-

-

Power generation project (excluding captive power plants)

5.5 + 16 CVD

5.0 + 16 CVD

-

-

Power transmission projects of 66 KV and above

27.5 + 16 CVD

25.0 + 16 CVD

-

-

Other industrial plants or projects, including oil and gas

27.5 + 16 CVD

25.0 + 16 CVD

-

-


CVD:Countervailing duty

Source: CRIS INFAC

  • Demand for capital goods has slowed down significantly, due to low capacity additions in the key sectors, such as power, and a decline in industrial investments.
  • Margins of domestic electrical equipment manufacturers have declined significantly, due to competition from low-priced imports, imports under duty free schemes (such as EPCG), and low import duties on certain categories of projects (such as fertilisers and power).

Other capital goods: Budget impact

Impact factors

Company name

Impact

Impact factors

ABB

Neut

A, B, C

(316.95, 315.90)

 

 

Alfa Laval

Neut

B, C

(149.80, 151.20)

 

 

Alstom

Neut

A, B, C

(21.50, 23.15)

 

 

BEML

Pos

A, B, C

(28.65, 27.75)

 

 

BHEL

Neut

A, B, C

(164.95, 161.85)

 

 

Flat Products

Neut

A, B, C

(20.00, 20.60)

 

 

Jyoti Structures

Pos

A, B, C

(33.90, 33.25)

 

 

KEC International

Pos

A, B, C

(16.60, 16.85)

 

 


Notes:
Figures in brackets indicate the closing share prices, on February 27, 2001 and February 28, 2001, respectively.
Neut= neutral, Pos=positive

Source: CRIS INFAC

A: The reduction in the customs duty on capital goods (due to the removal of surcharge), is expected to have a marginally negative impact on producers. Domestic producers are expected to face increased competition from project imports, largely in the power sector. The expected growth in construction activity due to increased outlay for the National Highway Development Programme (NHDP) is expected to have a positive impact on construction equipment manufacturers, such as BEML. Increased outlay for rural electrification, power transmission and distribution is likely to benefit manufacturers of transmission towers, such as KEC International and Jyoti Structures.

B: Reduction in the customs duty on raw materials such as steel and non-ferrous metals, is expected to have a marginally positive impact on producers.

C: The reduction of surcharge on corporate tax, from 13 per cent to 2 per cent and the expected decline in interest rates, is expected to have a positive impact on producers.

Rediff-CRISIL Budget Impact Analysis
Budget 2001


Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site.

Tell us what you think of this analysis