TAX PROVISIONS

• Hike in minimum exemption limit for taxable income by Rs 50,000 to Rs 200,000 a year to stimulate demand by Rs 150 billion.
• Sec 80C limit should be enhanced from Rs 1 lakh at present.
• IT exemption on interest paid on Housing loans to be enhanced.

ECONOMY

• Finance Minister to target a fiscal deficit of 6.2-6.5% for FY10 with $8bn receipts from PSU sale/3G auction.
• Retaining the focus on spurring economic growth without straining the already weak fiscal position.
• Attract foreign capital both in the form of portfolio flows and FDI as these could be instrumental in bridging the infrastructure financing gap.
• Augmenting revenues through disinvestment and 3G spectrum sale.
• FDI limit on some sectors such as insurance, media etc should be enhanced.
• Pushing ahead with next generation reforms in the banking, insurance and pension space.
• Reduce excise duty on CVs by 400 bps.
• Increase in excise duty on cement and steel.
• Rural development through the Bharat Nirmaan scheme in rural housing, irrigation etc.
• Allocation to social sector especially National Rural Employment Guarantee Scheme (NREGS) maybe hiked significantly.
• Increase in funding of agriculture loans. Some reduction in crop loans (with funding) to support rural demand, especially given the delay in the monsoons is required. Wastefulness should be avoided.
• Bringing down subsidies and more importantly improving the targeting of these subsidies also in the medium term.
• Announcement of an implementation schedule in which the government will share with its people the status of the major projects highlighting delays in implementation and cost overruns.
• Focus on building the physical and social infrastructure and more importantly, a clearly articulated infrastructure development and financing policy.
• While the VAT regime has been implemented to a large extent, a clear road map for the National level Goods & Services Tax is important. This is expected to benefit the economy as it widens the tax net, bringing in the unorganized sector. This also replaces the irritant of various state level levies with one coherent national levy and would enhance the ease of doing business in India.