Eight Things To Expect In Budget 2017

Budget 2017 is unique in many respects. From advancing the date of budget presentation to clubbing railway and general budgets, this budget is quite special. This is the first budget being presented after the historic demonetisation of the higher denomination notes.

The eight things that one can expect in this year's budget are:

Post-Demonetisation measures

To ensure that the benefits of the demonetisation are not frittered away, the Government will unveil a comprehensive strategy to discourage people from using cash transactions. Finance minister Arun Jaitley is likely to announce tax rebates and incentives to encourage transactions through cards and digital means. The Fin Min will also possibly announce measures to tax cash withdrawals above a threshold.

Income Tax relief

There is a likelihood that there could be big announcements in the income tax slabs and rates. Tax breaks on moneies parked in fixed deposits, insurance premium and mutual funds from Rs 1,50,000 to Rs 2,00,000 a year under the popular Section 80C scheme are expected.

Railways to shun populism

For the first ever time, the railway budget will be merged with the general budget. This shows the Government's intension to free the state-owned railways from populism. A combined budget could imply that the Indian Railways can avoid setting aside funds for dividends of about Rs 10,000 crore to the government every year. As a result, the passengers may have to pay more for safety measures.

Agriculture to get a boost

Jaitley could possibly announce a series of measures to minimise the demonetisation pain for farmers. The government has already waived of interest for 60 days on existing farm loans for the latest kharif and rabi crops. Some more alleviative measures might follow.

Goods and Services Tax regime

Jaitley is widely expected to announce Goods and Services Tax (GST)'s implementation schedule in the budget . This will effectively connect the markets within the country and consolidate a patchwork of local and central duties into a single levy.

Corporate Tax cuts

A cut in the corporate income tax rates by 1.25-1.5 per cent is expected. The move will signal the beginning of reforms in taxation system, which till now has been very complex and difficult to implement.

Manufacturing to get a boost

The government might announce tax incentives for the labour-intensive industries as part of "Make in India" initiative to boost manufacturing, create jobs and revive exports. There could be a fiscal boost to the mega industrial cities across the country. The Government will also possibly announce several initiatives to promote and encourage startups.