New Delhi, July 8
The Rail Budget derailed the BSE Sensex today which suffered its worst fall in 10 months by losing 518 points after the announcement of the Railway Budget with profit-booking across the board.

The markets while welcoming the ideas were concerned about the lack of implementation specifics in the Rail Budget, including that on FDI, PPP, rail tariff authority, private sector investment and concerns over lower spending which brought down the railway manufacturers stocks down by upto 20%.

Calling the Railway Budget, “High on promises, low on design”, India Ratings said while the Railway Budget talks about India trying to be the largest freight carrier globally and identifies alternative funding requirements to achieve this target, it does not state a clear strategy to meet these requirements.

“We believe the announcement of bullet trains and diamond quadrilateral for high-speed trains are all statements of good intent and will take a while to come true,” it said.

Amar Ambani, Head of Research at IIFL, said, “Railway Budget was big on ideas but the market felt that it fell short on implementation. Market had already run up in anticipation of bold reforms. The market now fears that the Union Budget may also fail to excite”.

Share prices of companies that cater to the railway sector came under pressure and some logged losses of up to 20% despite important announcements made by Railway Minister Sadananda Gowda in his maiden Rail Budget. Prominent losers included shares of Texmaco Rail, Titagarh Wagons, Kalindee Rail Nirman and Container Corp.

The markets have run up a lot in anticipation of the twin Budgets and with the burden of expectations over the new government, any disappointment will see a sharp fall in indices.

Arvind Mahajan, partner and Head of Infrastructure and Government Services, KPMG in India, said while there was a discussion on PPP and FDI in Railways, the Budget speech lacked details and the announcements in the coming weeks will be important to understand the specifics.

Jayant Manglik, president-Retail Distribution, Religare Securities, said on the eventful session of the Railway Budget, the benchmarks were seen declining almost vertically and lost more than 2% in the end.

New Delhi, July 8
India Inc has welcomed the thrust on resource mobilisation in the Railway Budget and the attempt to balance the commercial and social obligations.

Welcoming the thrust on resource mobilisation in the Rail Budget, FICCI president Sidharth Birla said, “The Railway Minister has tried to put the railways back on track and attempted a balance between commercial and social obligations. We welcome the proposal for financing bulk of future projects through PPP route that will help overcome the constraint of low investment, enhance connectivity and accelerate the process of modernisation.”

The minister has focused on improving the safety and security systems, including use of ultrasonic system to detect problems on railway tracks and phased elimination of un-manned level crossings, Birla added.

Ajay S Shriram, president, CII, said “The Rail Budget has presented a broad vision on what needs to be done in this critical sector in order to upgrade infrastructure and improve operational efficiency. The minister has been realistic and candid in acknowledging the problems faced in the implementation of projects and improving revenue realisation”.

Sharad Jaipuria, president, PHD Chamber of Commerce and Industry, has described the Railway Budget as growth-oriented since it rightly emphasises on re-building the Railways through public-private-partnership mode, including inviting foreign capital with FDI route as also committing for passenger amenities with their adequate safety measures in place.

Rana Kapoor, president, Assocham and MD & CEO, YES Bank, said the Budget aims to unleash the Indian economy by tapping the tremendous inherent potential of the Indian Railways, like what Japan and China did over the past few decades. Implementation of the proposals within the Budget will revolutionalise transportation and logistics, and reduce the cost of doing business and generate efficiency and productivity for the nation, as also boost tourism, he added.

Nadir Godrej, chairman, CII National Committee on Chemicals, said the industry welcomes the Railway Budget, which is aimed at bringing a new life to Railways as well as industries dependent on it. “We are appreciative of dedicated freight corridors on the Eastern and Western sectors of the Golden Quadrilateral. The chemical industry also welcomes the initiative by the ministry of increasing port connectivity by rail in PPP mode”, Godrej said.

New Delhi, July 8
Ahead of his maiden Budget, Finance Minister Arun Jaitley today said he favours controlling fiscal deficit through expansion of economy and tax buoyancy rather than contracting expenditure. Replying to supplementaries during the question hour in the Rajya Sabha, he said fiscal prudence was required to put the country’s economy back on track.

If fiscal deficit goes out of control it would mean the nation is borrowing more to finance its current expenditure and will leave behind a legacy of debt, he said. “Fiscal deficit has to be maintained at acceptable levels, he said without divulging target for 2014-15. The Budget on Thursday would reveal those numbers,” he said.

Fiscal deficit is showing a declining trend during the past three years.

In 2013-14, it was 4.5% of the GDP, down from 4.9% in the previous year and 5.8% in 2011-12, he said.

“The level of fiscal deficit during current year (2014-15) up to May is Rs 2,40,837 crore which is 45.6% of Budget Estimate of 2014-15,” he said.

The government, he said, had adopted a road map for fiscal consolidation following an amendment to the Fiscal Responsibility and Budget Management (FRBM) Act. The FRBM Act provides for lowering fiscal deficit to 3% of GDP. Jaitley said he favoured bringing down fiscal deficit by “expansion of economy and tax buoyancy rather than by contracting expenditure”.

New Delhi, July 8
The Finance Ministry is considering selling 5% stake in ONGC in the current fiscal, which could garner about Rs 17,000 crore to the exchequer.

At the current market price, a 5% stake sale or over 42 crore shares would fetch about Rs 17,000 crore to the exchequer. — PTI

New Delhi, July 8
The government today announced extension of special package of industrial incentives for Himachal Pradesh and Uttarakhand.

As per a Commerce and Industry Ministry notification, the state governments had written that units in the states which commenced production after January 7, 2013, should be given an extension of time period.

BRIEFLY

Ericsson opens 4th global network centre in India
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Fertiliser industry seeks increase in urea prices
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1.3 lakh investors traded via mobiles on the NSE in Q1
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SP Babuta appointed director of P&SB
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Samsung launches Galaxy K zoom at Rs 29,999
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Spice launches SIM-enabled smartwatch for Rs 3,999
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