Live: Soon a demat account to keep all asset details, says FM

4:30 pm: Will create one demat account to keep details of all financial assets, says FM

The Finance Minister said that they were hoping that they would have a single account to keep details of all financial assets.

“We want to create one record where all financial assets are held in de-materialised form… One the FSDC approves the report then we will implement it,” he said.

He said that all regulators had agreed that financial records must be available in one record that would hold

4:20 pm: Chidambaram denies Rahul’s hand in one rank, one pension scheme

Chidambaram says interest rates need to come down to curb fiscal deficit.

“If interest rates come down to that extent fiscal deficit can be lower. The bulk of the fiscal deficit is represented by interest payments,” he said.

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He also ruled out being influenced by Rahul Gandhi when it came to the one rank, one pension scheme saying that he had written his document well before he had decided to endorse it.

“If the vice president cannily anticipated it, I congratulate him,” Chidambaram said.

4:20 pm: Will evaluate gold import curbs, says FM

We have to keep in mind that the goal is to keep the CAD at a sustainable level, the Finance Minister said.

“We will look into it,” he said, adding that it was subject to review and nothing could be said for certain yet.

4:15 pm: Done more for agriculture than any other, says FM

The Finance Minister has denied the allegation that the government hadn’t done enough for agriculture from a reporter who said he hoped his English was understandable.

“We have done more for agriculture than for any other sector…This government has given the maximum support to agriculture,” Chidambaram said.

He ignored the barb about the reporter’s English.

4:10 pm: Banks need to keep aside profits as capital, says Chidambaram

The Finance Minister defended the decision to allocate funds to Indian banks and said it required capital infusions every year but urged them to do it on their own.

“Banking unlike other industries requires capital every year…Banking if you have to grow your business you need additional capital,” he said

Therefore banks must recognise that a significant part must be kept aside as capital, Chidambaram said.

4:05 pm: Chidambaram’s one word description of budget: hope

He was asked by Firstpost columnist Rajeev Sharma about how he would describe the budget.

“My intention was not please anyone but to speak plainly to the people of India,” he said, adding that the government had achieved a fair measure of success.

“In one word, it sends out a clear signal to people of India: Hope,” Chidambaram said.

4:00 pm: FM says excise duty cuts aren’t a stimulus package

The Finance Minister said the excise cuts were no stimulus package and were only meant to boost sales in some sectors.

“Today what we are saying is that these are specific sectors of industry expecting slower growth…We are not borrowing and spending. We are taking less tax so that volumes make up for the lack of recoveries,” Chidambaram said.

The Finance Minister said that there was no contradiction between him and the RBI.

“We have said that from a developing country point of view we need to strike a balance between price stability and growth…There is no contradiction, we have just articulated it more forcefully on past occasions,” he said.

3:50 pm: No question of doing away with one rank, one pension scheme

The Finance Minister said that if he had his way he would have allocated Rs 1000 crore for the one rank, one pension scheme.

“Let me make it clear that decision has now been made. If it requires more than Rs 500 crore then it will be found,” the Finance Minister said.

He said there was no question of going back on the scheme.

3:55 pm: FM says current account deficit could be lower

The Finance Minister said that the curbs to contain the current account deficit was absolutely necessary and he expected it to be even less than last year.

“We’ve therefore estimated CAD will be 45 billion dollars but with luck it may be even less,” he said.

He also defended his growth projections for the Indian economy.

“At the beginning of the year every Finance Minister must be ambitious…That’s the pragmatic approach to budget making,” Chidambaram said when asked about the government’s expected growth figures.

3:50 pm: Chidambaram banks on volumes replacing revenues

The Finance Minister brushed aside pessimism over planned expenditure coming down and said it was a result of ministries saving money and them saving it.

“The revenues not collected by the government are still with teh people of India and they can spend,” Chidambaram said.

“We hope that the economy will pick up. Our estimate was that economy will grow in second quarter,” he said that it hadn’t been even.

Some sectors were showing negative growth like consumer durables and auto industry and that’s why the government had decided to give the industry the benefit of excise duty cuts, he said.

“If the level of sales improves, what you loss in recoveries will be recovered through volumes. We could lose Rs 300 to 400 crore but it could pick up afterwards,” he said.

3:45 pm: Have taken measures to ensure economy remains strong

The Finance Minister said that he had undertaken reforms to ensure that the financial sector would be able to support the real economy and withstand any shocks.

When asked about revenue expenditure figures, Chidambaram said that many ministries were still not showing them and couldn’t be used for deciding allocations of funds.

3:40 pm: FM says he’s hoping India to be second only to US, China in GDP growth

Chidamabaram said that the budget had allocated as much money if not more for social spending schemes of the government.

“I think the ten tasks that I have outlined are the ones that no government ought to ignore,” he said, claiming that they needed bipartisan support to ensure India’s economy went to a higher rank.

I am aiming to take India’s economy to the third rank after India and China, he said, adding that it was achievable.

He also said that when it came to taxes there were some issues that couldn’t brook any delay and therefore the excise duty cuts had taken place.

“It will involve some losses in April and May. But if they manage to sell more than much of it can be recovered. The next government can then review the rates,” he said.

15:35 pm: Chidambaram says economy has grown under UPA

The economy is more stable and will be able to withstand stocks if there are any, said Chidambaram explaining the budget.

The Finance Minister pointed out what had been achieved over the past year and urged people to look at the UPA’s record over the last decade.

“Not withstanding what some people may say the country has seen significant progress. Even if you break it down into two five year periods then the growth rate is higher than the last 33 years,” Chidambaram said.

15:30 pm: Sensex closes 110 points higher

Some cheer for the markets after all and the Sensex has closed 110 points higher. The Nifty closed 18 points higher.

13:44 pmPolitical sniping has begun in earnest. BJP spokesperson Prakash Javdekar told CNBC-TV18: “It’s a farewell speech by the FM. I won’t even give three out of 10 to the Vote on Account. It won’t promote growth or bring down inflation. The one-rank-one-pay announcement [in today’s V-o-A] is the victory of BJP.”****

13:40Investors of government-run banks are rejoicing. The shares are up, the the BSE Bankex up about 0.5 percent. This reaction is surprising given the low recapitalisation funds promised by the finance minister and the cut in expenditure. The cut in expenditure is likely to hit growth, which in turn will increase their non performing assets.

The real reason for the bullishness in the bank shares is the lower government borrowing.

The government today pegged its net borrowing for 2014-15 at Rs 4.57 lakh crore, which is Rs 11,580 crore less than the revised estimates of the current fiscal.

In 2013-14, the government has borrowed Rs 4,68,901.87 crore from the market.

The lower government borrowing means banks will have to invest lower funds in government securities. So they will have more funds in their hand to lend.

The lower government borrowing is also positive for the private sector. This is because government’s lower borrowings would make more resources available for the private sector.

There is nothing much for banks to be happy about the government’s capital infusion promise. The recapitalisation has been budgeted at Rs 11,500 crore, much lower than this years Rs 14,000 crore. Given the sorry state of affairs at various public sector banks, the promised capital is just a drop in the ocean.

SUVs may soon be cheaper by Rs 40,000, says M&M

13: 22 pm Even though the auto sector is cheering the duty cut on cars announced by finance minister P Chidambaram today, the relief may be short lived as experts believe theduty cuts may have to end on June 30 when the new government comes to power.

The excise duty cuts are a huge source of revenue loss for the government and is in a sense a trap for the next government to move to a higher duty rate after four months.

However, both Maruti and M&M have said they plan on passing on the benefits of excise duty cuts to consumers in the form of price cuts.

“The Auto expo and now the excise duty cut in the budget are the two triggers that were needed to spur demand,” said Pawan Goenka in an interview with CNBC-TV18.

Goenka expects Rs 40,000 reduction in SUV prices.

Rs 11200 crore infusion not enough for PSU Banks

12: 35 pm Rating agencyCRISIL said PSU capital infusion budget of Rs 11,200 crore may be inadequate since most of the PSU banks are reeling under massive bad loans.

This level of recapitlaisation will not change the opinion of the markets on the banking sector at the moment,said experts since many public sector banks are sinking under bad loans. United Bank of India is already on the brink, with gross NPAs exceeding 10 percent, and the RBIhas asked the bank not to lend further. LIC will probably be asked to chip in.****

However, when it comes to a rally in the stock markets, expert Ramesh Damani told CNBC-TV8 that now that the budget is over, stocks will rise for the next three months. Earlier in the day, columnist Arjun Parthasarthy had also said that both the Sensex and Nifty could hit record highs in the next three months on hopes a NDA-led coalition forming the next government.

“The widespread belief amongst market participants is that India will see the NDA led by the BJP come into power this year and there is a lot of hope that the new government will take the economy out of the woods. It is a different matter that its going to take a lot to get the economy out of the woods going by the performance of the economy in fiscal 2013-14. However markets like to live on hope and as that hope gains ground, there will be a tendency to buy into that hope,” he says. ( Read more here)

6% duty cut on SUVs is the biggest positive, says Maruti

12:15 pm TheBSE auto index rose nearly 1 percent after the Finance Minister P Chidambaram presented the Interim Budget 2014 since he proposed to cut excise duty on small cars, two-wheelers, commercial vehicles, SUVs as well as medium sized cars.

Hero Motor Corp gained 2 percent after finance minister proposes duty cut on two-wheelers.

Excise duty cut on cars will lead to some resurgence in demand for the auto sector, said Adi Godrej, chairman of Godrej Group.

However, former SIAM president SS Chandilya pointed out that the demand will only pick up if the next government continues with the excise duty cuts.

Crisil also noted that excise cuts will not have any material impact and is only marginally positive in the near term.

Maruti on the other hand said a cut in SUV segment by 6 percent is the biggest positive for the auto sector. The auto major expects growth in the compact car segment to improve post the excise duty cut.

Markets will be enthused for next three months

12:06 PM Banks will get recap funds of only Rs 11,200 crore this year. This figure is perhaps grossly inadequate when many public sector banks are sinking under bad loans. United Bank of India is already on the brink, with gross NPAs exceeding 10 percent, and the RBIhas asked the bank not to lend further. LIC will probably be asked to chip in.****

Despite slowdown in tax revenues, FM has maintained his fiscal deficit target for FY14, said value investor Ramesh Damani in an interview with CNBC-TV18.

“Since Chidambaram met market expectations in terms of the fiscal deficit number, markets will be enthused for the next three months,” said Damani.

12:00 pm Chidambaram beats his own fiscal deficit target told parliament that India’s fiscal deficit would be contained at 4.6 percent of GDP in 2013/14, beating his own target.

While he did not propose any changes in tax laws, he did cut excise duty by 2 percent on capital and consumer durables. He also brought relief for the auto sector by cutting excise duty on medium cars to 20% from 24%. On SUV cars he cut excise duty to 24 percent from 30 percent and for small cars the duty has been cut to 8 percent from the current 12 percent.

Chidambaram also exempted loading, unloading, packaging of rice from service tax.

FY14 fiscal deficit seen at 4.6%, Nifty gives up gains

11 am As the finance minister P Chidambaram presents the Interim Budget 2014 in Parliament, markets have given up almost all gains.

While the Nifty is up just 9 points at 6050, the BSE Sensex is up 30 points at 20398.

However, the finance minister said that the fiscal deficit target for financial year 2014 is seen contained at 4.6 percent of GDP, well below the red line of 4.8 percent.

He also said thatexports are pegged to grow to $326 billion; up 6.4% but lamented that manufacturing sector is not seeing an uptick.

“I believe I have been vindicated,” said Chidambaram, pegging India’s Q4 growth for the current fiscal at 5.2 percent.

10:35 am: Just 30minutesleft to Finance Minister P Chidambaram’s vote on account and markets continue to remain choppy. While the BSE Sensex is up 53 points at 204119, the Nifty is up 12 points at 6057.

Markets are not betting on any major policy announcement, but will await the fine print on how Chidambaram meets his fiscal deficit target of 4.8 pct for the current fiscal year, and spending plans for FY15.

The chief of the Confederation of Indian Industry, Infosys’ Kris Gopalakrishnan, said the finance minister will likely talk about the achievements of his party instead of making big-bang announcements.

Meanwhile, value investor Raamdeo Agrawal of Motilal Oswal said investors should focus more on the economy’s fundamentals, which have been improving, rather than the Vote of Account.

Budget just a 1-hour wonder, FM may relook at duty on gold

10:00 am Expectations from the interim budget are lowbut stable inflation data, positive foreign flows and December-quarter results are strong enough cues for markets to rise even if the budget does not surprise positively.

The market is unlikely to give any importance to the numbers that the government will give away in the vote on account, said experts on the CNBC-TV18.

“The market is much more than the government’s numbers. The earnings season has been good, better than expected. The market is now reasonably priced and evenly poised,” Ramdeo Agarwal of Motilal Oswal Financial Services told the TV channel.

According to Nilesh Shah of Envision Capital, the budget is going to be a one-hour wonder. The market is unlikely to read much into the statements in the vote on account.

Meanwhile, Dinesh Kannabar of KPMG sees the finance minister making sector-specific announcements on excise duty changes. He believes the FM may relook at excise duty on gold and silver. Apart from this, he is unlikely to make any major announcements on tax front as any amendments to direct taxes would need Parliament approval.

The market will approach the upcoming elections as a binary event, says Masha Gordon, VP & Head of Emerging Market Equities, Pimco. “The key thing to watch for will be the government’s commitment to fiscal consolidation,” she said in an interview to CNBC-TV18.

Sensex cautious, Budget may be non-event for markets

9:30 amFinance Minister P Chidambaram’s last budget for the UPA-2 is unlikely to be a major trigger for the market as this is an interim budget and the government will not make any big announcements.

The key figures to watch out for are the fiscal deficit and the next year’s government borrowing.The estimates are that the target for fiscal deficit will be 4.2-4.3 percent of GDP. For the borrowing, the figure is seen Rs 6.3 lakh crore.

While the BSE Sensex opened0.33 percent higher at 20429, Nifty opened 0.35 percent higher at 6076.

According to Kaushik Basu, Chief Economist of World Bank,fiscal consolidation has to be the mantra over the next two Budgets so that by the time another major crisis comes India is sufficiently tight fiscally.

The last budget had targeted the deficit at 4.8 percent of GDP. But the government’s calculations went hay wire after the US tapering fears pummelled the rupee, resulting in an increase in the fuel subsidies.

However, it is widely expected the government will be able to contain the figure at or below the target. The market also knows how the finance minister achieves this. The high dividend pay in from public sector companies, cut in plan expenditure and spectrum auction windfall have even helped the government cut its borrowing this year.

The market is likely to react to only if the finance minister overshoots these expectations.

Markets closely watching tax benefits, FY15 fiscal deficit target

9:00 am Interim budget for 2014-2015, which the government will unveil later today, will set the tone for the stock markets in near-term.Besides, global cues, movement of rupee and investment pattern of foreign institutional investors (FIIs) will also be important for the domestic indices.

Finance Minister P Chidambaram will present the interim budget ahead of the general elections due in the next three months.

“The Vote-on-Account will be watched closely. Within that, markets will try to understand the contours of the fiscal deficit. Moreover, any indirect-tax benefit to any sector may have an impact,” said Dipen Shah, Head of Private Client Group Research, Kotak Securities.

The country’s fiscal deficit is expected below 4.5 percent for FY14, but the target for FY15 is likely to be 4.2 percent. How the government will reach this target is the main question now. Whether the FM will cut the plan expenditure drastically or roll-ever expenditure into the next fiscal year is to be seen.

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Experts said on the macro front, market participants will closely watch the FY'15 fiscal deficit target, which will determine the size of market borrowing for the next fiscal.

On the taxation front, tax collections will hugely underperform the aggressive targets the FM set out in Budget 2013, especially corporate tax & excise. Certain short term measures announced in budget 2013 will lapse. However, there are hopes of a cut in gold import duties and excise on auto.

“Overall, the near-term trend is showing sell on rallies, and till Nifty closes decisively above 6,100, investors may book profit in rallies. In coming week, 6,100 shall be crucial deciding level in near-term, and the index is likely to witness further buying above this level,” said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Limited.

CNBC-TV18’s Udayan Mukherjee believes markets will be volatile today but since it is an interim budget, it is unlikely that there will be any major policy announcement.

Mukherjee said that markets have been extremely range bound. “If you had asked me last week whether markets would get into a range, I would have probably said no, because at that point the market had lost a lot of ground in very swift time from 6,300 plus to below 6000. It was bouncing off the 200 DMA and most traders and chartists would have though that the market was in for a slightly bigger short-term bounce

Over the last week, the Sensex lost 9.74 points – the third straight weekly drop.Persistent capital outflows from foreign funds mainly affected the market sentiment. Foreign institutional investors (FIIs) were net sellers of Rs 106.96 crore during the week, including the provisional figure of February 14.

Ahead of the budget, the Indian markets have plunged more than 800 points so far in the year 2014 and 158 points in February alone.Marketmen said going ahead the general elections due in May will take the centre stage and their outcome would be crucial for determining stock market direction.

With inputs from PTI