Mamata to offer more sops in Railway Budget
Mamata Banerjee will present the Railway Budget in Parliament today (24.02.10) and all indications are it will be a populist Budget with an eye on the West Bengal Assembly elections scheduled in 2011. Mamata is unlikely to propose any increase in passenger fares. Railway security and infrastructure are likely to be on top of her agenda, even though no major accident has taken place in the last one year.
Fiscal reform likely to top the Budget agenda
From what is evident in the CSO data for GDP growth and fiscal deficit forecast for the current year, it appears certain fiscal deficit management and measures to push growth beyond 7% will be on top of the agenda. This could mean policy makers shall take a hard look at concessions, an impact thereof on the macroeconomy and of course, strategies for greater tax revenue mobilization.
Partial stimulus rollback likely in Budget
After the Central Statistical Organisation estimated economic growth at 7.2 per cent for this fiscal against 6.7 per cent a year ago, Planning Commission Deputy Chairman Montek Sigh Ahluwalia had also said, "we should say stimulus has succeeded and we should begin to phase it now." However, direct tax rates are not likely to be tweaked for the time being as the Finance Ministry is unlikely to initiate reforms on the direct taxes code now, which is still being debated at various government levels.
Cut import duty on hybrid cars
The current scenario of rising costs of raw materials and high rates of interest, continued consumer demand for automobiles and automobile components looks slim. Although car sales in India have surged 32 percent in January 2010, industry analysts believe the rise in sales is the result of fear that the Government would roll back tax cuts in the upcoming budget.
Government Must Give MFIs Its Due
Over the past decade, microfinance has emerged as an influential and high potential industry in its own way. In spite of the support extended by the Microfinance institutions (MFIs), the past budgets were not very encouraging.MFIs look forward for the tax breaks which are enjoyed by the banks as it could lower their costs and pass those savings onto borrowers by reducing interest rates. Thereby, MFIs would be more affordable for the poor and could flourish further across India.