Finance Minister will have myriad issues to address to in his last budget for the current government. Indian economy achieved an economy growth rate of 9.25% for the period 2006-07, incorporating measures for the sustenance of such growth in the coming fiscal would be a Herculean task given the slowdown cues in the world economy. For the current fiscal year there are many concerns like US slow down, rupee appreciation and forex reserve standing at 250 billion US dollars. Crude price hovering near to 100$ is indicating a higher inflation in the days to come. Fiscal deficit needs to be scaled down to 3% of the GDP.

Better infrastructure incentivizing measures coupled with revamps in direct tax rates and structure are expected from the FM. An excise of direct tax on corporate from 33.6% to 25% will incite the corporate world. A 45% growth in tax collection gives the FM leeway to ease tax slabs. Constant pestering from the corporate world about the FBT (Fringe Benefit Tax) can result in FM reviewing the FBT. Excise duty retrenchment is on the anvil as the duty is higher in India than the global benchmark for the duty. Banking and pension sector may attract more reforms. As a part of commitment of India towards Global Warming Reduction one can observe subsidies on equipments of alternative source of energy.

Being a minister cum politician cum an astute economist one can expect a very streamlined People’s budget from the Finance Department. Soft on the household taxes and subsidies for the agriculture sector might be the highlight of the budget. In Toto, a Soft Budget is on the radar as FM needs to safeguard the vote bank of his party.


3 thoughts on “BUDGET 2008

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Susan Kishner

  2. Surely this is going to be a people’s budget. election in 2009, FM cannot take a risk of losing the goal of UPA. but surelt some relief in agricultural side can be expected from the FM.
    Also the much talked about GST ( Goods and Services Tax) has to be implemented in the year 2010. So a ground work needs to be done in this FY budget as this is the penultimate budget to the implementation of GST. Surely some more services needs to be incorporated in the Service sector.
    Also the foreign investments or FDI needs to be promoted in India. thus FM might raise the FDI limit in some crucial sectors. During the UPA regime the FDI-GDP ratio has phenomenally increased to 39%. also the global economic slowdown make the blue chip companies to see india as a preferred destination. its upto the FM to make them come to india by raising the FDI limits.

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