Union Budget: A ‘brief’ case of political compulsions?
New Delhi: With barely hours left for Finance Minister Arun Jaitley, political pundits and financial analysts predict a budget, which would set the course for the 2019 general election.
When financial analysts foresee change in tax regime by way of simplification of direct taxes, streamlining Goods and Service Tax and reduction of corporate tax, political pundits points to a budget where the government is expected to play for the gallery. Some argue that political compulsions may overpower the economic policy in the budget this time.
As it is the last budget before the 2019 polls in all likelihood more thrust will be given to welfare schemes. More sops for farmers and rural population are on cards. Some announcements are expected for job creation as ‘unemployment’ is major issue used by the opposition against the Modi government.
Rationalisation of direct tax rates, simplification of Customs procedures and relief in GST rates are among key expectations of the Indian Inc on the tax front.
— President of India (@rashtrapatibhvn) February 1, 2018
Education, infrastructure and health is also slated to gain and continuing with women empowerment programmes some new announcements are also expected. The infrastructure thrust could see highways, modernisation of railways and allotment for urban development.
Keeping up with the promise in election manifesto, BJP have already announced 100 big cities, the last ten being announced a week back.
Spike on the expenditure front is expected but the FinMin will be looking at alternative sources for the funding as he would be careful not to breach government’s fiscal deficit target.
As agriculture growth have slowed down to 2.1 per cent, the sector is poised to gain as the centre will be looking to keep its election promise. On tax front smaller tax payers could gain as Finance Minister may give concession for smaller businesses and the smaller taxpayers.