Test for reform zeal of Modi government in make-or-break Budget today, tax sops likely
New Delhi: Prime Minister Narendra Modi’s stomach for free-market economics faces a major test on Saturday when the first full Budget will be unveiled by Finance Minister Arun Jaitely.
Reaping the benefits of low global prices for oil, India’s main import, Modi’s government sees itself in a sweet spot with spare cash to modernize ageing roads and railways without busting fiscal deficit and inflation targets.
“Let us stop unnecessary expenditure so that money can reach the poor,” Modi told Parliament on Friday after the Economic Survey report committed to bringing the fiscal deficit down to 3 per cent of gross domestic product – from more than 4 per cent at present – in the medium-term. “We believe in optimum utilisation of our infrastructure,” he said.
Finance Minister Arun Jaitley will present the first full year Budget of the NDA government on Saturday and is widely expected to push forward the ‘Make In India’ campaign.
An overhaul of economic data has propelled India to the top of the league of fast-growing major economies, and the current account deficit is projected to fall below 1 per cent in 2016, which would help stabilize the rupee and build up reserves.
But expectations for a further shift in expenditure from subsidies to infrastructure are sky high among investors who made India the best performing stock market in Asia after China last year on hopes Modi’s government brings sweeping reforms to labour, tax and land laws.
via NorthEast Calling http://ift.tt/17EWqmT
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