Amid high expectations from the middle class and and industry, Finance Minister Arun Jaitley present's his maiden budget tomorrow that may contain tax sops for the salaried, dumping of the controversial retrospective tax and spelling out of steps to revive investment and manufacturing for growth.
There are high hopes that the budget for 2014-15 to be presented in Parliament may actually not tinker with the threshold limit or the other tax slabs but could provide reliefs by incentivising savings.
For boosting investment, Jaitley is expected to announce tax incentives for industry. As a prelude, the government has already extended the excise duty concessions for automobile and consumer durable sectors till December.
The Finance Minister is also expected to take a call on reducing duties on gold import, which were raised last year to check ballooning current account deficit.
He could also provide relief to farmers to help them tide over the impact of deficient monsoon which could lead to fall in agricultural output. The government may set up a price stabilisation fund, as promised in the BJP's manifesto.
The new minister may also outline the road map for roll out of the Good and Services Tax (GST) but it was not clear what will be his approach on the Direct Taxes Code (DTC) about which the Economic Survey makes a mention today.
In a bid to restore investor confidence, both domestic and foreign, Jaitley may announce scrapping of the provision of retrospective taxing of corporate mergers and acquisitions, a legacy of the UPA that was blamed on putting off foreign investors.
The survey has also called for tax reforms including raising the tax to GDP ratio that has fuelled whether he would choose to widen the base or withdraw exemptions.
Setting the tone for the Budget, the Survey underlined the essence of urgency to restore growth momentum and address the long-standing structural problems hurting economy. The survey also made a strong case for "next wave" of economic reforms to meet the aspirations of the people and catch up with the rest of the world.
"The Economic Survey 2013-14 conveys a sense of urgency about the course the needs to undertake not only to recapture to the growth momentum fast, but to also ameliorate the long standing structural problem that undermines the economy's long term potential," Finance Secretary Arvind Mayaram said.
The pre-Budget document presented in Parliament today called for revamp of complex