Mumbai: Finance Minister Arun Jaitley on Thursday will present the general budget for the 2014-15 fiscal on Thursday, after the BJP won a landslide victory in May to form the first majority government of the country in three decades. India is also likely to cut gold import duty to 6 per cent to 10 per cent.
The budget is expected to unveil bold reforms in a bid to turn around an economy growing at decade-lows. But there won’t be major changes to taxes, according to a Reuters survey.
NEW REFORMS EXPECTED, MAJOR INITIATIVES:
Announcement of plans to cash in on India’s soaring stock market by selling stakes in major companies to raise funds and bridge the gap between revenues and expenditure.
Cutting giveaways on fuel and petroleum products to reduce India’s $40 billion subsidy bill, which is a key reason for the country’s wide fiscal deficit.
Here are measures that analysts and investors expect for key industrial sectors:
Autos:
Rollout of a goods and service tax (GST) to help streamline and standardise the cost of selling cars
Incentives for exports of vehicles, for free movement of vehicles between states and for getting dated cars off the road
Support to promote and manufacture electric and hybrid vehicles
Financial Services:
Having a roadmap to creation of a holding company for state-run banks
Increase of ceiling on foreign direct investment (FDI) in insurance sector to 49 percent from 26 percent
Tax exemption on long-term infrastructure bonds
Increase in housing loan interest limit beyond 150,000 rupees for tax exemption
Higher allocation for capital infusion in state-owned banks
Tax incentives to encourage expansion of affordable housing
Healthcare:
Tax incentives to spur investment in research and development
Simpler tax norms, including rapid implementation of GST
Increase tax exemption for setting up hospitals
Infrastructure status along with tax benefits
Revive clinical trials in India
Double healthcare expenditure to 8 percent in next 5 years
Infrastructure:
Accelerate dedicated plans for dedicated freight corridors
Open more projects, particularly parts of the railway network, to foreign direct investment
Set up a national fund for infrastructure projects, which could source funds from China or Japan
Roadmap for attracting long-term debt for infrastructure projects
Metals and Mining:
Address issues around mining regulations and adopt reforms for raw material security
Reforms to reduce logistical bottlenecks in transport ofBSE -5.31 % metals and raw materials to and from mines
Introduction of competitive auctions for allocation of minerals and raw materials
Continuation of tax benefits on capital expenditure
Oil and gas:
Reduction of subsidy bill through fuel price reforms
Reintroduce import duty on crude oil
Continuation of diesel price hikes and deregulation of diesel price
Power:
Fast tracking of stalled projects, easier access to power plants and coal mines
Deregulation of electricity prices
Tax concessions and incentives to promote investment into renewable energy
Real estate:
Streamlining of tax laws to enable listing of real estate investment trusts (REITs)
Establishing a single window clearance for speedy project approvals
Grant industry status to the sector, which would lower the risk weightage assigned to it by banks
Increase in tax deduction benefit limit on home loan interest, which is currently capped at 150,000 rupees annually
Retail and consumer goods:
Implementation of GST and tax reforms that will lead to an increase in personal disposable incomes
Announcement of easing of rules on FDI in online retailing
Increase in tax on cigarettes
