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July 10 (Reuters) - Indian Prime Minister Narendra Modi'snew government on Thursday unveiled its first budget ofstructural reforms aimed at reviving growth, winning praise frominvestors despite a lack of clarity over how it would cap thebig fiscal deficit.
Modi's government, in office for less than two months, saidit would raise caps on foreign investment in the defence andinsurance sectors, and launch a tax reform to unify India's 29federal states into a common market. [IN:nL4N0PL1MD]
The following sectors/companies will benefit or be impactedby the budget proposals:
WINNERS:
* Increase in foreign direct investment cap in the insurancesector to 49 percent from 26 percent now will benefit companiessuch as ICICI Bank Ltd, Max India Ltd,Housing Development Finance Corporation Ltd (HDFC) that have insurance ventures with foreign partners.
* Real estate companies such as DLF Ltd, UnitechLtd, Phoenix Mills Ltd, Parsvnath DevelopersLtd will benefit from the proposal to provideincentives for setting up real estate investment trusts.
* Plan to develop 100 smart cities and increase inallocations to support rural housing will help developers andhousing finance companies such as HDFC, LIC Housing Finance Ltd and Dewan Housing Finance Corp Ltd.
* The proposal to allow manufacturing units to sell productsvia e-commerce platforms is likely to benefit the local units of foreign retailers such as Nike Inc, Marks and SpencerGroup and Puma SE.
* Insurance and asset management companies will gain from aproposal to increase the tax exemption limit on certaininvestments to 150,000 rupees from 100,000 rupees per year.
* Companies such as Larsen & Toubro Ltd, IL&FSTransportation Networks Ltd and IRB InfrastructureDevelopers Ltd will benefit from plans to increasespending to build roads and ports.
LOSERS:
* A proposal to increase excise duty on cigarettes isnegative for companies such as ITC Ltd and VSTIndustries Ltd. Cigarette makers usually pass on anytax hikes to consumers, which may impact sales.
* A more than $2 billion tax dispute between Vodafone GroupPLC and the Indian government will likely drag on afterthe finance minister did not propose revoking a controversialretrospective tax rule change in 2012.
Vodafone said in a statement on Thursday it intended to pushahead with international arbitration to resolve the dispute.
* No change in import duty on gold and silver from thecurrent 10 percent is negative for companies such as TitanCompany Ltd and Gitanjali Gems Ltd as somehad expected a cut. (Reporting by India Company News team; Compiled by DeviduttaTripathy; Editing by Sumeet Chatterjee and Miral Fahmy)
