Budget Review - Edelweiss Research

To:

Hi,

Enclosed is budget review from Edelweiss. The detailed sectoral analysis is
attached in the excel file. Also below is Mr. Nischal Maheshwari comment on
budget.

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Best Regards

Md Tayyab Imadi
Sampark PR
Mumbai
+91-9967212492

*Nischal Maheshwari – Head Research, Edelweiss Securities:*

1. The measures to support growth with a "common man" focus has broadly
been as expected, but there is nothing significant on the future roadmap of
reforms and disinvestments.

2. The increase in fiscal deficit projection to 6.8% of the GDP is also
a steep rise. The upward revision in borrowing requirement by INR 900 bn
will have adverse implications for interest rates. Gross borrowing target
now reaches INR 4.5 tn for FY10 – this will definitely have adverse
implication for interest rates. Our view on 10-yr yield: 7%+ consistently
for most part of H2FY10, end-march 2010: 7.5%.

3. Reduction in surcharge on the personal income tax structure, higher
exemptions and deductions for income tax payers, scrapping FBT, no increase
in excise duties, or further commitment towards implementing GST are
positives – but will remain overshadowed by the negatives like increase in
MAT, larger fiscal deficit, lack of reforms roadmap.

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