The budget could be a joy to behold. The good part is that the Finance Minister has not made exaggeratedly hopeful projections, and so the scope for disappointment could be limited.
Good:
- Bank loans for infra sector to be exempt from CRR, SLR. This should reduce cost of funds for infra companies, and hopefully boost infrastructure.
- FY15 fiscal deficit target pegged at 4.1 percent, FY16 at 3.6 percent .
- Foreign institutional investors’ capital gains to be taxed, and not business income.
- Tax-pass through allowed for real estate, infrastructure investment trusts to avoid double taxation.
- Power plants going operational in March 2015 to get adequate coal supply.
- Tax holiday for power generation companies extended till 2017.
- Subsidy expenses estimated at Rs 2.5 Lakh Crore, almost the same as in the interim Budget
- FDI in insurance sector hiked from 26 percent to 49 percent.
- I-T exemption limit hiked to Rs 2.5 lakh for those below 60 years and up to Rs 3 lakh for senior citizens.
- Divestment target not very aggressive at Rs 43,425 crore. This means that government is not relying heavily on divestment to bridge fiscal deficit .
- Budgetary provision for Pooled Municipal Debt Obligation enhanced from Rs 5000 crores to Rs 50,000 crores to promote and finance infrastructure projects in urban areas on shared risk basis.
Bad:
- No move to repeal retrospective tax amendments
- No clear plan to reduce subsidies.
- No clear plan to recapitalize PSU banks or tackle the NPA problem
- No cut in gold import duty.
- No clear time line for implementation of GST
- No mention of GAAR
- Rs.200 crores set for Sardar Patel’s Statue.
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