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About a week before presenting his first Budget, finance minister Arun Jaitley, at an event organised by Institute of Chartered Accountants of India, spoke about his concerns and the immediate challenges the government faces:
*Improved CAD is the only silver lining
It may mean that measures imposed earlier to rein in gold imports may be relaxed.
*Fiscal deficit is a major challenge
Keeping it to 4.5 per cent of the GDP for FY14 and 3.1 per cent for FY15 will be difficult
*Rate of inflation is beyond acceptable limit, uncertain monsoon, Iraq crisis big
Measures to address the supply-side issues to bring down food inflation.
*Lack of stable tax regime dissuades investors
Retrospective amendments may be done away with while clarity is likely to be brought on indirect transfers.
*Country needs to make conscious choices through informed debates
This is an indication that the rail fare hikes may stay put.
*Choice has to be made between fiscal prudence and mindless spending and populism
Sops like debt waiver are unlikely, subsidies to go down.
*Mindless populism burdens exchequer, leads to high taxes
*Doors will be open for sectors which need investment, provide employment
FDI in sectors like defence and e-commerce may be allowed soon
*To retain investors, government has to be supportive, taxation has to be reasonable
*Willing to look at certain recent legislation but business has to realise that free trade means fair trade New Companies Act may be amended to address investor concerns