New Delhi: India Inc is having high expectations from the first yearly Budget of Narendra Modi government. Finance Minister Arun Jaitley is expected to give sops to the individual tax payers, unveil initiatives to boost investments by corporates and promote manufacturing as part of the Make In India campaign that aims to make India a global manufacturing hub and create jobs.
Here is the list of few of the expectations of different sectors from the Union Budget 2015-16:
The manufacturing sector, especially micro, small and medium enterprises (MSMEs), has a great deal of expectations from the budget. The sector is hoping to get a boost from Prime Minister Narendra Modi's ‘Make in India' campaign that aims to promote investment and create jobs. Reforms on issues related to taxation, GAAR and FDI will clearly help the sector to get more long-term investment.
Small cities are bringing a lot of opportunities for developers and they are hoping that government would liberalise norms and allow FDI in construction and affordable housing. Realtors hope that government would provide finances on lower interest rates and will re-introduce tax benefits under section 80 IB (10) of the Income Tax Act.
The government's expenditure in education sector has been not up to the expectations in the past few years. The sector hopes to change that and expects the government to make education accessible and affordable so that even people living in rural areas can have access to good schools. The sector expects the government to take the initiative by offering credit guarantee funds that would allow banks to give loans without collateral.
The insurance industry had earlier recommended that the tax relief be linked to the term of the policy instead of sum assured in case of life insurance. Expectations from the Budget are that tax relief is given to a proposal where the term of the policy is more than 10 years. This would promote long term savings habit and benefit the persistency ratio of life insurance companies as well.
The Union Budget 2015-16 is expected to deliver on providing investments in India's technology infrastructure which is very weak in the country. A robust infrastructure network, laying down of OFC cables throughout the country would build foundation for India's digital economy. To build the digital India, the basic technical infrastructure is a must need.
The automobile industry expects a reduction in excise duty on automobiles. The sector hopes to combat demand slowdown and measures towards restarting stalled infrastructure projects to help revive demand with it. The next generation automobile makers like manufacturers of hybrid and electric vehicles want the government to consider proposal to give incentives to make them cheaper.
The booming e-commerce industry needs to be more organized and need regulatory and tax reforms. The owners of e-commerce websites have great expectations from the budget and hope to see implementation of the Goods and Services Tax (GST) ahead of this year's budget session. The state governments want the FM to organize the tax structure associated with e-commerce.
Banks in the country expect the government to bring some changes including laws on asset recovery, roadmap for capital raising and revival of capital expenditure. The revised GDP figures will allow the government in setting a higher quantum of fiscal deficit in 2015-16, possibly at 3.8-3.9% of GDP.
Disinvestments in government undertakings have been very fruitful this year with Rs 24,329 crore so far. The 10% Coal India limited's stake sale fetched Rs 22,558 crore on January 30. The government is hoping to earn another Rs 3,000 crore by selling a stake in Power Finance Corporation and Rural Electrification Corporation in coming days.
To combat the increasing need of power in the country, solar power is a viable option. The sector expects that the government would bring the solar power equipment under zero VAT/CST regimes, similar to solar panels. Retail lending facility through commercial banks for buying solar energy equipments, should be made as easy as getting a consumer loan.