New Delhi : Speculation is rife as the Deliverance Day, July 10, nears: Will the Union Budget meet the overwhelming expectations of both the business community, the middle class, the common man and the youth, who consider Narender Modi a dream merchant? Will Finance Minister Arun Jaitley do a mythical Arjun to unveil a magic package that will please everybody?
On once score there is unanimity: the Budget will spell out steps to rev up the growth engine, even though the fiscal situation remains fragile amid deepening Iraq crisis and stubbornly high inflation.
TAX SOPS: The buzz is that the Budget may contain tax sops for the salaried class. But Jaitley may not tinker with the threshold limit or the other tax slabs; rather he could provide relief by incentivising savings. Limit of deductions allowed for some expenditure and investments is also likely to be increased.
INVESTMENT: For boosting investment, he is expected to announce tax incentives for industry. As a prelude, the government has already extended excise duty concessions to automobile and consumer durable sectors till December.
GOLD IMPORT: The FM is also expected to take a call on reducing duties on gold import, which were raised last year to check ballooning current account deficit.
FARMERS: Jaitley could also provide relief to farmers to help them tide over the impact of a deficient monsoon which could lead to fall in agricultural output. The government may set up a price stabilisation fund, as promised in the BJP’s manifesto.
GST ROLLOUT: He may also outline the road map for roll out of the Good and Services Tax but it is not clear what will be his approach on the Direct Taxes Code about which the Economic Survey made a mention on Wednesday.
RETROSPECTIVE TAX: In a bid to restore investor’s confidence, both domestic and foreign, Jaitley may announce scrapping of the provision of retrospective taxing of corporate mergers and acquisitions, a legacy of the UPA that was blamed for scaring away foreign investors.
Analysts said the finance minister will have a tough task in balancing the needs of growth revival and fiscal prudence. Jaitley had recently said that the government would not indulge in “mindless populism” and may take bold decisions to revive growth and follow the path of fiscal prudence.
According to a survey conducted by industry body FICCI, India Inc expect the Budget to be “pro-growth giving due focus on ironing out of the issues faced by the industry and investors.” — IANS/CNN IBN