The Budget turned out to be neutral for the real-estate sector, with no significant initiatives being announced for this sector. Though the real estate sector has been an important constituent of the India growth story, many needs of the industry have been left unaddressed. The Budget has also not provided any direction on matters such as taxation of REITs nor has it provided clarity on contentious issues related to SEZs.

Infrastructure
India Budget 2008 was presented in Parliament by the Finance Minister, P Chidambaram on February 29, 2008.

At the outset, a perusal of the Finance Minister's speech and the proposals of the Finance Bill, 2008, it emerges that as compared to the benefits given to the infrastructure sector in terms of reduction of duties of excise and customs, there has been a sizeable budgetary allocation of funds under the various developmental projects and social schemes of the Government.

It appears that the Government has decided to fund more developmental projects and social scheme projects to spur the growth of certain specific sectors within infrastructure instead of giving fillip to these sectors by way of extending tax incentives.

Energy
India Budget 2008-09 was presented in Parliament by the Finance Minister, P Chidambaram on February 29, 2008.

The expectations of the Energy sector were wide sweeping, in the backdrop of growing energy needs of the nation, the recognition that development of infrastructure is of critical importance to deliver sustained economic growth, and the impact of climate change. The tax proposals contain moderate changes to the prevailing fiscal framework; the emphasis is on strengthening the tax administration and tax compliance procedures.

Specific to the oil & gas industry, the Finance Bill 2008 introduces sunset to tax holiday to refining, and exclude "petroleum and natural gas" from the definition of mineral oil eligible for the income tax holiday. Service tax on exploration activities continues to be a deterrent. Status quo is maintained in respect of most of the other tax implications prevailing for the energy industry.

Media and Communications

Union Budget 2008 proposals do not contain any amendments in the Direct taxes regime specific to the media and communications industry and contain marginal proposals concerning Indirect taxes.

Technology

The Technology sector expected much relief from the Union Budget 2008 on account of the continuing pressure on margins after sharp appreciation in rupee and slowdown in the US economy. However, the Budget has not lived up to the expectations of this sector as far as the direct tax proposals are concerned, primarily as there was no extension of the tax holiday for STP/ EOU units. On the indirect tax proposals, the introduction of a new service category of "information technology software services" has been largely welcomed, as it removes removing classification disputes and provides input credit benefits (especially for service exporters).

Financial Services

The Union Budget 2008 was present in Parliament by the Finance Minster, P Chidambaram on February 29, 2008.

The expectations of the financial services industry were wide sweeping. Budget 2008 proposes relatively limited changes in the taxing framework for the financial services industry. The key changes include an increase in the tax rate for short term capital gains realized on transfer of specified securities as well as rationalization of the law relating to securities transaction tax. There is reaffirmation of the intent to develop a deep and liquid corporate bond market.

Two key areas where industry participants had hoped that the Budget would provide some clarity and relief, however, which were not addressed in the Budget, include the characterization of income from securities transactions as capital gains or business profits, and the taxation of SEBI registered venture capital funds.