1. Indian Merchants’ Chamber Discussion on Amendments proposed in Finance Bill 2013 21 March 2013

2. The number game

3. Budget 2013–2014— Thought sharing by EYPage 3 Macro assumptions ► GDP Growth at 6.1% - 6.7% ► Nominal GDP Growth at 13.4% ► Assumed inflation rate at 7% if real GDP growth is about 6.4%

4. Budget 2013–2014— Thought sharing by EYPage 4 Non Plan Expenditure / Subsidies Expenditure (1) BE 2012-13 (2) RE 2012-13 (3) BE 2013-14 (4) % change in (4) over (3) Non Plan9699001001638110997510.8 Plan52102542918755532229.4 TOTAL14909251430825166529716.4 Major Subsidies(2) RE 2012-13 (3) BE 2013-14 (4) % change in (4) over (3) Food85000900005.9 Fertilisers65974659720 Petroleum9688065000(33.0) TOTAL247854220972(10.8) Rs crores

5. Budget 2013–2014— Thought sharing by EYPage 5 Revenue RE 2012-13BE 2013-14% change Gross Tax Revenue1038037123587019.1% Non tax Revenue12971317225232.8% Total Revenue Receipts8718276105633121.2% Corporate Tax33341737678213% Surcharge1500430519103% Education Cess104531221916.9% Taxes on income19393222950218.3% Surcharge-4400- Education Cess5998701717% Customs16485318730813.6% Excise17199619755414.9% Service Tax13269718014135.8% Rs crores

6. Budget 2013–2014— Thought sharing by EYPage 6 Implied tax buoyancies # Type of tax FY14 Tax buoyancy (% change in tax revenue/ % change in GDP at market prices) 1 Gross Tax Revenue1.48 2 Corporation Tax1.26 3 T axes on Income other than Corporation Tax 1.53 4 Customs1.02 5 Union Excise duties1.11 6 Service Tax2.67  Overall expenditure increase of 16.4% is being financed by assuming a nominal growth of 13.4% and a buoyancy of nearly 1.5 in gross tax revenues. This seems unrealistic.  This buoyancy was 0.93 in FY12 and 1.3 with respect to RE in FY13.

7. Reaction to the Budget: EY – ET Budget Poll

8. Budget 2013–2014— Thought sharing by EYPage 8 EY – ET Budget Poll Majority of the respondents agreed that: ► More was expected from the Budget in terms of ► Clear road map on GST ► Clarification on indirect transfer ► Guidelines on step taken to implement the Shome committee reports on GAAR and Indirect transfer ► 60% of the respondents felt that foreign investors had no cause for cheer with the Budget provisions ► On the policy front, the Budget lacked incentives to attract foreign investments which could impact growth ► While the FM has kept the indirect tax rates steady and sought to regularize the property market, increase in surcharge rates and ambiguity on TRC have not gone down well.