Union Budget 2013: What are common man's expectations from Budget?

Rakesh Mehta
Fullerton Securities & Wealth Advisors

Expectations of Retired person: Special attention towards pension, travelling (especially at the time when railways have increased tariffs) and getting more interest rates on the deposits will be the key area of interest for retired person.

Expectations of Small Businessman: An increment in exemption limit of Service Tax, Excise duty etc. will help small businesses to improve profitability.

Expectations of homemaker: There is already a lot of pressure on account of high inflation and with government passing subsidy burden on to customers (by increasing fuel prices, capping LPG usage, etc.) has made it difficult for common man to make his both ends meet. The increase in exemption limit to Rs. 3 lacs would provide some relief to households.

Expectations of Student: There has always been major thrust towards education sector in every budget and this year’s budget is expected to be on same lines. Higher amounts are expected to be allocated towards higher education, skills and vocational training. Key Programmes like Sarva Sikhsha Abhiyaan (RTE-SSA), Rashtriya Madhyamik Sikhsha Abhiyan, Integrated Child Development services and National Programme of Mid-Day meals will continue to get higher allocation. Development of 2500 schools through Public-Private Partnership is also a positive step that government took in 12th Plan.

Also, the cost of educating children is consistently rising and is cause of concern for students as well as parents. Current income tax framework provides deduction on education fees under section 80C and deduction on interest paid for education loan under section 80E. Any announcements pertaining to these sections will be closely watched by students.

Expectation of NRI: Introduction of a higher income tax slab for income of Rs.20 Lakhs and above would hit NRI savings. However, an increase in deduction towards housing loan will attract NRI interest. Also, schemes related to NRI investments in various avenues like Non-Residential External (NRE) deposits and long term government/corporate bonds that garner good returns will be keenly watched.

Expectation of Investors: Further amendments in Rajiv Gandhi equity scheme will be helpful. Removal of Securities transaction tax (STT) on equities can bring cheer to investors. However, there is high probability of its implementation on commodities transactions.