In this year's budget the finance minister may raise the income tax exemption limit to Rs 3 lakh from the existing Rs 1.8 lakh. (Reuters)
All eyes will be on finance minister Pranab Mukherjee as he presents Budget 2012-13 buffeted by compulsions of coalition politics, a shaky domestic economy and the persisting global economic crisis.
Amid the growing chorus of a policy paralysis, criticism over scandals and concerns over a slowing economy, a question mark looms over whether he will announce reformist measures, including politically sensitive ones like FDI in retail and pensions.
Mukherjee might have good news for the salaried class, with indications he might marginally raise the income tax exemption limit by Rs. 20,000 to Rs. 2 lakh per annum.
Shreyas Navare's take on the Budget!
This is aimed at leaving more money in the hands of people stung by inflation and in an economy that's staring at the prospect of a sustained slowdown.
The Economic Survey, tabled in Parliament on Thursday, said growth would gather speed over the next two years, but radical policy changes, including FDI in retail and availability of farm land for the industry, were needed.
The survey pegged the annual economic growth at about 7.6% in 2012-13 and 8.6% in the year after.
The survey obliquely hinted that political compulsions had forced a delay in reforms in key areas.
"There were also the pressures of democratic politics, which slowed reforms," it said.
But question marks hung over how many of the survey's intentions could fructify. Similar recommendations in the past have not always found reflection in the Budget.
"It (the survey) is a vital input for preparation of the Budget. I view this Economic Survey as a vehicle for new ideas and alternative policy options," said Mukherjee.
According to former finance minister and BJP leader Yashwant Sinha, "The finance minister should cut expenditure left and right. In eight years, this government has gone on increasing expenditure and shown no discipline."
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