Economists who deliberated with finance minister Arun Jaitley on macroeconomic policy and industrialists, industry, farmers and social sector bodies which made representations for their demand will be looking forward to the budget today.
Along with them waiting would be Delhi BJP leader Vijay Goel who has given Jaitley some couplets composed by him to be included in the budget speech.
Whether Goyal will be able to see his couplets being read out by Jaitley will not be known before Thursday, but there are enough indications from the North Block – which houses the finance ministry – that a booster dose is awaiting the economy.
Fiscal deficit and inflation are going to be top priority for Jaitley. Ministry mandarins say the government is looking at a fiscal deficit of 2.5% of the GDP. Meanwhile, the phasing off of subsidies on diesel and LPG in small but periodic installments will also be considered.
Also, no new taxation is likely in the budget. Finance ministry sources said Jaitley set aside suggestions regarding imposing inheritance tax, saying that such a thing "does not suit the Indian context".
In his maiden budget though, Jaitley is likely to give some reprieve to the middle class by raising the income-tax exemption limit. The super-rich may not be spared, though.
The government is also examining various incentives on home and education loans. Additionally, the Section 80C tax deductions, which allow a further Rs 1 lakh exemption is also being looked at. The low-income category housing is likely to get a fillip as an interest subvention scheme may be announced in the budget. This is in line with the government's plan to create 100 new smart cities. North Block is abuzz with a word that developers developing these cities alongside the Delhi Mumbai Industrial Corridor will be incentivised.
To spur industrial growth, Jaitley may also come up with plans to rejuvenate Special Economic Zones (SEZs), which could not take off due to imposition of heavy taxes. Sources said the minimum alternate tax regime on SEZs are likely to be addressed. At 18.5% MAT right now, the industry finds that it is hurting the SEZ business. The ministry source said, "PMO is also interested in this. It wants the SEZ taxation sorted out as soon as possible."
Jaitley is also likely to announce a roadmap for the pending CST compensation to states and use it as a dole to work out the Goods and Services Tax.