Budget 2017: I expect the Finance Minister to give importance to the infrastructure and power sector in the Budget, says Nitin Gadkari.
Nitin Gadkari expects Budget 2017 to be ‘historic’. In an interview to ET Now, the Roads and Transport minister said, “I expect the Finance Minister to give importance to the infrastructure and power sector in the Budget”. Gadkari sees India to grow in double-digits in the coming years and believes that there is a “good atmosphere” for development in the country. “I believe that India is the best destination for investment,” he said, adding that investors are keen to invest in Indian infrastructure, power and energy sectors.
Narendra Modi government is likely to present Budget 2017 on February 1. The Budget is special not only for the fact that it has been preponed, but more importantly because it comes within months after Modi government’s massive demonestisation drive. Most analysts and economists expect Budget 2017 to be tax-payer friendly, especially given the pain that common man has faced after old Rs 500 and Rs 1000 notes ceased to be legal tender money.
An India Today report, citing sources, said that the government may look at increasing the base slab for income tax exemption from the current Rs 2.5 lakh to Rs 4 lakh. Also, Jaitley has indicated that the benefits accruing to the government as a result of demonetisation will give room to bring down the common man’s tax burden.
Jaitley said this in expectation of a rise in digital transactions. “Once they (digital transactions) are substantially digital, they get caught in tax net. Therefore, the future taxation level would be much higher than what is currently being collected. This would also enable the government at some stage to make taxes more reasonable, which will apply to both direct and indirect taxes,” he said.
However, Amarpal Chadha, Tax Partner & India Mobility leader for EY doesn’t think that a hike to Rs 4 lakh is possible as of now. “There are chances that a hike in tax exemption limit may be announced, but I am not sure if it will go up to Rs 4 lakh. Realistically the Finance Minister may announce a hike from the current Rs 2.5 lakh to Rs 3 lakh or maybe even Rs 3.5 lakh. Rs 4 lakh would be a lot, because then a lot of people who currently pay tax would go out of the ambit,” he told FE Online.
Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax at KPMG in India is of the view that FM Jaitley may look to increase the spending power of people. “If demonetisation would not have happened, I would not have expected any populist measure in Budget 2017 on the tax front. But with all the pain the people are feeling because of the implementation of the move, there are chances that Budget 2017 may see measures that will increase the spending power in the hands of the common man,” she told FE Online.