NEW DELHI: Finance minister Arun Jaitley will present the first full-year Budget of Prime Minister Narendra Modi’s government today.Financial experts are looking at this Budget as Modi government’s “make or break” fiscal exercise for the promised economic reforms and put India on a long-term high-growth rate.
The Buget is expected to vigorously push Modi’s pet “Make In India” campaign. It is also expected that the Budget will also have some good news for the middle class.
The Budget is likely to either raise tax slabs or hike investment limit in saving instruments. The finance minister is also likely to pursue the path of fiscal consolidation and keep the fiscal deficit target at 3.6 per cent of GDP, down from 4.1 per cent expected this year.
Besides doling out sops to the individual tax payers, he is also expected to unveil initiatives to boost investments by the corporate sector and promote manufacturing as part of the “Make In India” campaign that aims to make the country a global manufacturing hub and create jobs.
The economic survey released on Friday on the eve of the Budget said that it should aim at creating a competitive, predictable, clean and exemption-light tax policy regime that will lower the cost of capital, incentivize savings and facilitate tax payer compliance. It has also underlined the need for “Big Bang” reforms to boost growth to 8-10 per cent in the coming years.
Besides, it has pitched for raising public investments to drive economic growth and improving business environment by making regulation and taxes less onerous. Jaitley, who in his maiden Budget in July 2014 had outlined his approach to providing relief to individual tax payers, is expected to continue this in the BJP government’s first full year Budget.
Last year, he had raised the personal income tax exemption limit by Rs 50,000 to Rs 2.50 lakh and also raised by same amount the exemption from payment of I-T on savings to Rs 1.50 lakh. However, this time around Jaitley, according to experts, may choose only one of them as he looks at additional revenue to boost public spending and push economy to high growth path.
He may also look to raise the tax exempted investment limit in health insurance as well as exempt savings in pension schemes at all three stages — entry, accrual and withdrawal.
(With inputs from PTI)cerdit :http://timesofindia.indiatimes.com/