The Union Budget 2015 is set to be announced by Finance Minister Arun Jaitley under the new Modi government. There is high anticipation in the air and all Indians are very positive about what’s in store for us. Some are expecting infrastructure and construction sector to benefit a lot from the Budget 2015 decisions or policies, while some are expecting the automobile sector to boom due to some good budget reforms. Tomorrow’s budget can lay a strong foundation towards re-writing a glorious economic history for India. Let’s have a quick look at some of the positive cues that augurs well for various sectors as far as Union Budget 2015 is concerned:
- Narendra Modi has often stressed on the need to do away with taxes and make business easily doable by Indians. Along these lines, it India’s FM Arun Jaitley would be expected to start a better tax regime for India. India needs and expects a simplified tax code with strong framework of tax policies that could make things easier for all in the long run. Government has repeatedly stated its vision of ensuring a non-adversarial tax regime to bring an end to ‘tax terrorism’ as mentioned by our Finance Minister.
In this regard, many steps have already been taken especially if you see the transfer pricing area (amendment of Transfer Pricing Regulation). These are positive indications which raise our hopes considerably.
As of now India is ranked 142 in the global ‘Ease of Doing Business’ category. It is believed that Narendra Modi wants to climb up this ranking and be in the top 50 atleast so that foreign investors can be attracted to invest capital and boost India’s infrastructure. For that to happen, the tax reforms during Budget 2015 would be absolutely vital. For now, the indicators look positive.
- Considering the developments that happened under Gujarat model, it would be fine to expect implementation of a standard GST (Goods and Services Tax) across India. In fact, the constitutional amendment bill with regards to introduction of Goods and Services Tax
(GST) has even been introduced in Lok Sabha. This would considerably ease the way goods move or get transported from the producers to the end-consumers. Also, Modi government’s liking towards improving infrastructure facilities is known to all. So, there are significant chances of great investments done in the infrastructure sector. This combination of a standard GST and better infrastructure will help to maintain the demand-supply balance pretty well and even keep inflation in check (as goods price inflation often happens due to issues on the supplier side). This could help India develop into a single integrated market.
- Huge potential to raise great funds through disinvestment as well as from Coal India stake sale and PSUs (wider shareholding).
- ‘Make In India’ campaign has been promoted significantly by our PM and the government. It raises hopes of the budget initiating good measures to boost the manufacturing sector. Some tax changes for the manufacturing domain can be expected to attract more domestic interest and to generate employment in the long run.
- As is the case with most Union Budgets, there is expectation regarding increase of tax exemption limit for the personal income tax to give a boost to expenditure. There are positive chances of tax slab rates being modified much to the joy of the hard-earning people who pay tax.
- There is strong scope for Subsidy resolution by bringing it to 1.7% of GDP so as to enable infrastructure-based spendings.
The signs are great and it would be great to see a smile on the face of every Indian when the Budget 2015 is announced on 28th February 2015.
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