toughestBudgettotofiscalprudenceBudgetinininhavetototoinintohastotohadhadtofiscaltoinfiscaltoinBudgetintohaveBudgettopopulismtotointototohastoinhaveinhastointohaveinfiscaltotoInfiscalfiscaltotoinBudgethadBudgettohavingBudgetBudgetinhadinhadinBudgetBudgethadinintoinBudgetfiscalFinance Minister Arun Jaitley will tomorrow present the current NDA government's fifth and arguably hisyet as he seeksaddress agriculture distress, create jobs and boost growth while at the same time stickTheview of upcoming assembly pollseight states - including three major states ruled by the BJP - and general elections next year, may see new rural schemes and stepping up of funding towards existing programmes like MNREGA, rural housing, irrigation projects and crop insurance.With the recent electionsGujarat indicating erosion of BJP's rural vote base, Jaitley may also unveil incentives for the farm sector.Small businesses, whichtraditionally formed the core support base of the BJP, too may get some sopsease pain causedthem duechaotic rollout of the Goods and Services Tax (GST) and demonetisation.There is also an expectation that common man may get some reliefincome tax by way of a raisethe exemption limit.Also on Jaitley's menu may be upping spending on infrastructure projects like highways and modernisation of railwaysboost economic growth that is at a four-year low.But hedo all this while stickingthe road map of narrowing one of Asia's largest budget deficits, as failing which, India may fall on the wrong side of global investors and credit rating agencies whichlate last year handed out a rare sovereign upgrade.The target Jaitleypreviously set out waslower thedeficit3.2 per cent of the GDPthe currentand3 per cent2018-19, thefor which he would presentthe Lok Sabha tomorrow.Prime Minister Narendra Modi seemedalready lowered expectations of mass voter swaying announcements when he indicated that themay not be resortand that it was a myth that common man wants sop.This will be India's first post-GST and is being keenly watchedsee what Jaitley doesboost growthAsia's third largest economy.There are talks that tax break on capital gains from stock investments may go and it remainsbe seen if Jaitley will finally show some movement on his 2015 promiselower corporate tax rate25 per cent from 30 per cent over four years.Hemanoeuvre all this within limited scope of tinkering with tax rates given that central excise duty, which was levied on goods manufacturedthe country, and service taxboth been subsumedthe GST and he no longerthe sole powerfix rates on them.Also constraining him would be the riseglobal oil prices, which can stoke inflation as well as widen current account deficit.Some kind of incentivesboost exports of certain sectors may be announced while there may be announcements for start-ups as well as for promoting entrepreneurship.Therebeen mixed signals on deficit target, with Chief Economic Adviser Arvind Subramanian earlier this week stating that a pausetheconsolidation plan can't be ruled out while Niti Aayog vice chairman Rajiv Kumar saying the government is likelystickthe target.the first eight months of 2017-18,deficit reached 112 per cent of the target, stoking fears of aslippage. The shortfall was largely duereduced dividends from government companies, which the government looksbridge through stake salestate-owned firms like HPCL.Scrapping the colonial-era tradition of presenting theat the end of February, Jaitleyfor the first time presented the annual accounts on February 1 last year.Thepresentation was advanced by a monthensure that proposals take effect from April 1, the beginning of the new financial year.Also, the nearly century old tradition ofa separate budget for the railways was scrapped and merged with the general budget.The Union2018-19 would be the last fullof the BJP-led NDA government before the 2019 general elections. As per the practice, a vote-on-account or approval for essential government spending for a limited period is takenthe election year and a full-fledged budget presented by the new government.While P Chidambarampresented the previous UPA government's vote-on-accountFebruary 2014, Jaitleypresented a full budgetJuly that year.Thefor 2018-19 will be the first budget post implementation of the GST regime.Even though independent India's biggest tax reform of GST was implemented from July 1, thefor 2017-18 (April- March),followed the practice of tax revenue projections under the heads of customs duty, central excise and service tax alongside direct tax numbers.With excise duty and service tax being subsumedthe GST, the classificationsthe forthcoming budget may undergo change.While a new classification for revenuesbe accrued from GST will be includedthefor the next, for the current year two sets of accounting may be presented -- one for actual accruals during April-June for excise, customs and service tax, and the other for July-March period for GST and customs duty.

Source: Economic Times January 31, 2018 12:11 UTC