Union budget 2015: As FM Jaitley lays it all out, the keyword will be optimism
Finance minister Arun Jaitley, who presents his first full budget on Saturday, has the difficult job of ensuring India regains its spot as an investors’ darling, easing rules of doing business and signalling long-term economic reforms without hurting its vast consuming class.business Updated: Feb 27, 2015 23:56 IST
Finance minister Arun Jaitley, who presents his first full budget on Saturday, has the difficult job of ensuring India regains its spot as an investors’ darling, easing rules of doing business and signalling long-term economic reforms without hurting its vast consuming class.
Besides, he has to grapple with a key question: how to create jobs for millions of Indians.
Around noon, you will get to know if Jaitley has put more in your hands to spend. He is expected to raise the income tax exemption limit from Rs 2.5 lakh to about Rs 3 lakh.
The objective: put more money in people’s hands. The hope: they will spend more on goods and services. The desired result: rising sales will prompt companies to invest in creating capacities.
And the spin-off: they will hire more, thus creating more jobs.
Although in office for less than a year, time is ticking for the Modi government to fulfill its poll pledge. It needs to create jobs but has little elbow room in the treasury. It now has to share a larger slice of its tax revenues (42% from 32% earlier) with states following the finance commission’s recommendations.
Jaitley also has to balance the budget books without knocking up prices. He can earn extra revenue by raising service taxes and excise duties on consumer goods such as TVs and cars. But there’s a risk: this will fan inflation by making most services, such as a visit to the gym or salon, costlier.
The budget will also be watched for the government’s stand on welfare handouts, subsidy reforms and measures to counter rising perception that the NDA regime is “anti-farmer”, given the changes it has proposed to make land acquisition easier for building roads and factories. There are more than audible murmurs from among top corporate influencers that the government’s tenure so far has been characterised by a lack of grand vision or striking changes.
Deepak Parekh, banker and chairman of financial services giant HDFC, recently said impatience is creeping in among businessmen as nothing has changed on the ground and there has been little improvement on ‘ease of doing business’ so far.