The Union Budget for the fiscal year 2016-17 will be presented on February 29 by Finance Minister Arun Jaitley. The Budget comes in the midst of China's yuan devaluation and a global slowdown. Let us have a look at what are the top expectations from Narendra Modi government's full-fledged second Union Budget.
Banking and markets: Analysts are against giving any more subsidies in the upcoming Budget and be fiscally prudent. Bankruptcy Law is also awaited.
Start-ups: The start-ups are expecting to receive a tax holiday in the Budget to give the sector a boost and support Prime Minister's Start-up India initiative.
Manufacturing: The sector is expecting an incentive from the Budget to manufacture high energy efficient products to compete in the global markets.
IT sector: The sector expects this year's Budget to be high on digital literacy after Modi's focus on initiatives like Digital India, Skill India and Smart Cities. It could mean an IT-based financial aid for students. The sector also expects a percentage of the IT budget to be set aside for cyber security. They expect the excise duty on hardware also to be brought down.
Real estate: The home buyers are expecting an increase in interest deduction limit of the current Rs 2 lakh for self-occupied house. The analysts of the sector are also expecting some incentives for faster and timely construction of properties for the benefit of home buyers. Experts are also expecting government to incentivise home insurance and increase the HRA limit for self-employed people, which is currently at Rs 2,000.
Personal finance: Expectations are that the tax exemption limit on savings may be increased in the upcoming Budget to boost the investment scenario in the economy. Bankers have sought a significant hike in the tax exemption slabs to promote savings. They have suggested raising the tax exemption limit on savings (e.g. PPF, unit linked insurance scheme, equity linked saving plan) to 2.5 lakh per annum from the current 1.5 lakh. They have also asked to reduce the maturity period on tax-free term deposits to 1 year from the currently 5-year-period.
Social security: Inclusive growth is high on the agenda of the government and expectations are high that the Union Budget will focus on social security measures for women, senior citizens and children. Social security groups are expecting an increase in the amount of pension for senior citizens and widows. They are also expecting an increased budgetary allocation for the education sector and universal education for all up to 18 years of age. They expect creation of National Social Security Board to provide social security to the workers of unorganized sector along with provisioning of higher credit and input subsidies to farmers.