With less than 24 hours for Finance Minister Nirmala Sitharaman to present the Union Budget for 2020-21, here is a list of what the Aam Aadmi, industry and market are hoping for from the finance minister.Rejig in personal tax rates
The Aam Aadmi is seeking reduction in the personal income tax rates, rejig of existing tax slabs, and raising the minimum personal income tax exemption limit from the current Rs 2.5 lakh. Reports suggest the government may allow tax saving via infrastructure bonds of up to Rs 50,000 a year.Sops to boost real estate
Homebuyers want principal repayment on a housing loan be separated from the overall limit of Rs 1.5 lakh u/s 80C. They also propose increase in the maximum available deduction on interest payment to Rs 500,000 from Rs 200,000 at present. The industry wants immediate deployment of Rs 25,000 crore Alternative Investment Fund (AIF) and last mile funding extended even for net worth negative and non-RERA registered projects. Builders are seeking a one-time restructuring of loans and increase in the limit of affordable housing from the current cap of Rs 45 lakh.Market seeks extension of LTCG threshold, removal of DDT
Currently, profits earned sold after one year attracts long term capital gains tax of 10 percent plus cess. Market is hoping that profit from sale of equity shares held for two or three years will be exempt from long term capital gains tax. They are also expecting that dividend distribution tax (DDT) will be abolished. Experts feel that even if DDT is scrapped, the government may instead tax shareholders who receive the dividends.
Import duties on more than 50 items may be hiked
The Budget may see an increase in import duties on more than 50 items including electronics, electrical goods, chemicals and handicrafts, targeting about $56 billion worth of imports from China and elsewhere.
Boost infra spending to revive economy
Capital outlay towards transportation infrastructure may be increased and the finance minister may provide the roadmap for achieving the National Infrastructure Pipeline (NIP) target of Rs 102 lakh crore over FY20 to FY25.
The logistics sector is seeking grant of infrastructure status, a single ministry to look after its needs and rise in the share of domestic waterways in India’s overall modal mix to facilitate seamless freight movement and de-congest the already clogged road and rail networks. The government may consider announcement of national logistics policy to promote seamless movement of goods across the country.Reduction in GST tops demands of auto industry
Reduction in the Goods & Services Tax (GST) tops the budget wish-list of the beleaguered automobile industry. The industry wants the government to temporarily pare down the GST rate to 18 percent from the present 28 percent.
Also on its wish-list is rollout of a scrappage policy, extension of electric vehicle benefits to private buyers, incentives for manufacturing of EV batteries and reduction in GST on hybrids to 18 percent from 28 percent or some reduction be made on the 15 percent cess.NBFCs seek permanent refinance window/banks don’t expect much
Non-banking finance companies (NBFCs) have sought a permanent refinance window for the sector in the Union Budget, which they say will help them diversify their funding sources. They are hoping that the government may extend the partial guarantee scheme (PCG) that was announced to increase flow of credit from banks
Apart from bank recapitalisation that the government has already prioritised for the merging lenders, banks are not expecting any major changes in the budget.FDI hike in insurance companies
Budget 2020-21 may see increase in the foreign direct investment (FDI) threshold to 74 percent for the insurance sector from 49 percent at present.Ailing pharma sector seeks booster shot
Pharmaceutical companies are seeking revival of tax benefits offered on R&D, incentives to encourage bulk drug manufacturing units in India, and measures that would boost schemes like the Ayushman Bharat Yojana.Two agriculture initiatives in the pipeline
Focus on farmers credit, incentives through direct benefit transfer (DBT) for assisting farmers get their share for inputs required for farming, improved mechanisation/better irrigation facilities, better yield for their products and access to the direct market mechanism are some of the demands of farmers.
The Finance Minister is expected to announce two agriculture initiatives: one related to crop diversification and the other to provide financial assistance to create Farmer Producer Organisations (FPOs). She may allocate Rs 500-600 crore to promote crops other than paddy in states such as Punjab, Haryana and western Uttar Pradesh where the groundwater level is low.Steel industry looks for duty protection
The steel industry is hoping for relief on the duty side. It has asked for relief on imports of different kinds of coal -- anthracite coal and coking coal -- frequently used in making different grades of steel.FMCG sector seeks a stimulus package
Fast moving consumer goods (FMCG) companies is expecting a stimulus package in the Budget, which in turn could help revive demand. It is seeking a boost in demand via
budget announcements on pricing support and incentives/subsidies, reconsideration of personal income tax slabs, labour reforms and reduction in GST slabs.