New Delhi: Amid high expectations from the common man and corporate India, the maiden budget of Prime Minister Narendra Modi's government on Thursday is expected to extend tax relief to the salaried class and unveil steps to spur investment and growth, even as fiscal situation remains fragile amid deepening Iraq crisis and high inflation.
After four years of slow growth, the promises made by Modi in his winning, high-profile campaign in the run-up to the parliamentary elections, in areas such as jobs creation, curbing price rise and reviving growth have rekindled hope that effective measures will be taken to put the Indian economy back on rails, experts and stake-holders IANS spoke to said.
They looked upon the national budget, to be presented by Finance Minister Arun Jaitley in parliament, as the first major package of policy pronouncements that will give some direction on how the government intends to balance the needs of economic growth and fiscal prudence, while bringing inflation and keeping it under control.
"High expectations surround the maiden budget of the new government. People expect the budget to support growth, be anti-inflationary and committed to fiscal consolidation," said Richard Rekhy, chief executive officer, KPMG in India.
"However, it would be a challenge for the finance minister to fulfill the wishes of all stakeholders and he may have to take bold decisions to bring the sluggish economy back on track," Rekhy told IANS.
Jaitley recently said the government would not indulge in "mindless populism" and that bold decisions will be taken to revive growth, while following the path of fiscal prudence.
The government is widely expected to enhance the basic exemption limit on personal taxation to Rs.300,000 from the current Rs.200,000 lakh to provide relief to common man, especially the middle class, which has been severely affected by persistent rise in prices. Limit of deductions allowed for some expenditure and investments made in pensions and life insurance is also likely to be increased.
Jaitley is also expected to announce a slew of measures and tax incentives to revive investments and industrial growth. He has already extended by six months the excise duty concessions for automobile and consumer durable sectors.
Chief executive officer and managing director of Max Life Insurance Rajesh Sud said the need was to put an effective growth plan in place that will be able to tackle the burgeoning fiscal deficit, tame inflation, maintain a trade deficit level that can be financed by capital inflows and, most importantly, revive industry's confidence.
The net message of all the policy decisions has to be a clear. “India is open to business. It subscribes to transparent dealings.