Prime Minister Narendra Modi who believes in 'Ek Bharat Shresta Bharat' will be focusing to pull back the economy to high growth path from its predecessors, curb inflation, accelerate investment, focus on job creation, encourage foreign investment and domestic investment by simplifying tax regime to add a few in his maiden budget.
No place for populism
Railway Minister Sadananda Gowda said no to populism in the Railway Budget presented yesterday and in a similar move Finance Minister Arun Jaitley is also expected to present a growth oriented budget by not indulging in mindless populism.
The Finance Minister who is to present his maiden budget tomorrow have already hinted of not indulging in mindless populism and is expected to pursue the path of fiscal prudence to revive the economy.
"If you indulge in mindless populism you burden the exchequer...you convert yourself into a high taxation society. It does not work. Therefore if you have to follow a path of fiscal prudence, (you should) have a certain amount of discipline," Jaitley had said earlier.
Expectations are soaring high from Arun Jaitley's maiden budget to raise tax slabs and also to hike the annual tax exemption limit to provide the much needed relief to salaried class buried under stubbornly high inflation. Announcing tax incentives in the budget will boost investment and ultimately raise the GDP. Stagnating investments, high fiscal deficit and external crisis(recent being the on-going Iraq crisis) has been some of the major challenges infront of the new Government and tax sops with introduction of GST(Goods and Services Tax) will bring the much needed relief to the common man.
Govt may impose higher tax on people earning more than Rs. 10 crore annually
At the same time the Government may impose higher tax on people earning more than Rs. 10 crore annually and also go tough on smokers with hike in excise duty on tobacco product.
With fiscal deficit being 4.5% of GDP in 2013-14 Jaitley is expected to work on reviving the macroeconomic environment and take steps to rationalize expenditure. The Finance Minister is also expected to take a call on reducing duties on gold import, which were increased last year to check ballooning current account deficit(CAD).
Inflation remains a key concern
Inflation rose to five-month high of 6.01 per cent in May and with signs of EL Nino weather phenomenon this year leading to weak monsoon have badly effected the agricultural output. Contain spiraling prices is among the top priorities for the Modi Government. The Finance Minister may announce much awaited relief to farmers and set up price stabilisation fund to help them overcome impact of deficient monsoon.
Harsh medicines of Modi to revive economy
In order to resuscitate the floundering economy, Prime Minister Narendra Modi have hinted of bitter pills to boost country's self-confidence. The Modi Government apart from focusing on fiscal prudence, may announce some tough measures on retrospective tax amendment in the budget. The harsh medicines is likely to boost the markets as well.