In the budget announced last Saturday, finance minister Arun Jaitley clearly set out his agenda to place India on a high growth trajectory. This year's budget was a mixed bag with new reforms evinced keeping in mind the bigger picture that is growth. It had none of the big bangs that some people were looking for. Instead, it focused on the government's priorities of fiscal management and growth revival. Let's check out who benefited more; industry or individuals.

So who gained?

It seems that the finance minister has tried to maintain balance while allocating funds and making changes in key areas such as taxation and policy framework. While limiting exemptions to corporates, the finance ministry proposed to reduce corporate tax rates from 30 % to 25 % over the next four years to boost corporate earnings growth. However this would reduce the government's corporate tax revenue by around 2 lakh crore while significantly benefitting corporates. In the near term, however, corporates and the wealthy, with an income over 1 crore would have to pay an extra 2% surcharge thereby raising the overall tax burden on India Inc. to 34.6 per cent in FY16. Nevertheless this move was lauded by corporates as this will help sustain growth over the longer term. Higher share of revenues for states will also encourage many of the progressive minded states to embark on capex plans. The stars have aligned for corporates and a combination of lower taxes and capex should help revive the investment cycle in the country. However, the effects won't be felt immediately and would take time to materialize. The move to cut corporate taxes is one that will make industries more competitive and will leave more cash for investment and expansion.

The gainers among the corporates were the capital goods sector, with the government's ambitious infrastructure spending plan one may expect a revival in the sector in which orders had dried up serving as a panacea from a prolonged slowdown. Development of roads, railroads, upgradation and modernization of infrastructure is expected to speed up construction and real estate sector too. Affordable housing and thrust towards rural development may prove equally lucrative opportunities.

The biggest loser would be the industries providing services and certain companies in the FMCG space such as the beverages and the tobacco industry. Government imposed upto 25% hike in excise duty on Cigarettes. It also hiked excise duty to 18% for sweetened and aerated beverages from 12%. The government increased service tax to 14 % as part of its gradual transition towards Goods and Services Tax (GST). Along with hiking the rate of service tax the government also widened the tax base including amusement parks that offer rides, bowling alleys, amusement arcades, as well as water and theme parks would draw service tax. Admission charges for entertainment events like concerts, non-recognized sporting events, pageants, music concerts and award functions would also be levied the tax, if the amount charged for admission is more than Rs 500. All these factors could add up to reduce household budgets thus affecting the consumer products industry which was experiencing a turnaround in recent months from its worst slowdown in a decade.

These changes could affect consumer spending in certain areas of the economy as everything from eating out to going for a movie would cost more now reducing consumers purchasing power. These reforms are not in favor of the common man. This affects India's growth engine the middle class as they are the highest consumers of services and constitute majority of the population. However in order to mitigate rising food inflation, service tax exemptions were extended to certain pre cold storage services in relation to fruits and vegetables along with transportation of agricultural products so as to incentivize value addition in a crucial sector. Reducing food prices benefits India's poorest (22 % of Indians live below the poverty line).

The finance minister also reduced custom duty for 22 items. With the intention to promote electronics manufacturing, the government exempted excise duty on digital cameras and LCD panels which used to be charged at 10 %. These can be seen as overtures to promote manufacturing activities in India as part of the make in India campaign.

Both industry and common man stand to lose from the hike in service taxes. The government however could earn 24.6 % more revenues from services at Rs 2.09 lakh crore in 2015-16 as against 1.68 lakh crore in the revised estimate for the current financial year while for 2014-15, services, which were a dominant sector of the Indian economy, will yield much lower revenues. The budget had expected that the sector would boost the tax kitty by Rs. 21.59 lakh crore extenuating the governments widening fiscal deficit. The transition to GST will facilitate a better method for direct taxation in line with international standards and will lead to a simple and optimal revenue generating mechanism for the government. Therefore considering all the factors affected in the budget it cannot be said that the government favored corporates over consumers as the effects of lower corporate taxes wouldn't benefit the corporates anytime soon and would materialize atleast after 2-3 years.

PersonalFN believes this budget has been crafted keeping both in mind, the common man and India Inc. Although no direct sops were given to the common man this year, the rationale was that overall growth in the economy would benefit all. In the near term spike in duties and taxes would affect corporate margins as well as household budgets. Over the longer run corporate may benefit by higher sales and pickup in growth while individuals may benefit out of job creation and rise in wages.

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