Industry & Economy
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Automobiles
M&M to gain from higher farm credit
The Finance Minister, Mr P. Chidambaram, in his Budget speech has focused on agriculture besides the allocation for rural areas. He has proposed farm credit at Rs 2,80,000 crore for the next year as against the expected Rs 2,40,000 crore during the current year.
Extension of farm credit will increase investment in agriculture and will boost consumption in rural areas, consequently benefiting companies supplying to rural India. This, therefore, will also benefit Mahindra & Mahindra.
Excise reduction
The excise duty reduction for three-wheelers to 12 per cent from 16 per cent will have positive impact on the demand for three wheelers and hence a welcome decision. But it does not have any direct impact for M&M as we manufacture three-wheelers in notified area with zero duty.
The excise duty deduction in hybrid vehicles from 24 to 14 per cent is definitely a positive step and will pave the road for an early introduction of hybrid vehicles. We also manufacture light commercial vehicles, where the proposed reduction is from 16 per cent to 12 per cent and we will pass on the benefit of such a reduction to the consumers.
Another welcome feature is the elimination of double dividend distribution tax in case of dividend from subsidiary to parent and further from parent to ultimate shareholder. Expected benefit of this amendment at current levels of dividend from subsidiaries would be around Rs 12 crore for M&M.
(As told to Business Line)
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