Union Budget 2015: 10 Key Expectations from Arun Jaitley

Finance Minister Arun Jaitley faces a burden of expectations in his first full-year Budget. The economy needs investments, but the private sector is reeling under falling profitability. The government has been cutting back on its expenditure. Consumers have got some relief from high inflation, but there's no sign that demand is rising. Investors are wary that markets have run up ahead of fundamentals. Clearly, meeting expectations will be a tough job for the 62-year old finance minister.

1. Fiscal Consolidation: Mr Jaitley is expected to cut down fiscal deficit from 4.1 per cent of GDP this year to 3.6 per cent of GDP in the fiscal starting April 1. The challenge for him will be to provide more funds for infrastructure, without veering away from the fiscal roadmap.

2. 'Make in India' push: The Budget is expected to provide tax breaks and incentives for domestic manufacturers to push the 'Make in India' campaign, a centerpiece of PM Modi's plan to create jobs and rejuvenate the economy.

3. Goods and Services Tax: Mr Jaitley has promised to implement a nationwide GST from April 1, 2016, but a consensus eludes the Bill that promises to turn the country into a unified market. The Budget is expected to come up with a roadmap on the key legislation.

4. General Anti-Avoidance Rules: The feared law aimed at companies and investors routing money through tax havens such as Mauritius is scheduled to come into effect from April 1, 2015. Analysts expect Mr Jaitley to delay its implementation.

5. Income tax: Mr Jaitley's first Budget led to savings of up to Rs 40,000 for those in the highest tax bracket. The finance minister has often said he is against increasing the burden on salaried class. Income tax exemptions are expected to go up in Saturday's Budget, but some indirect taxes may be hiked to compensate for the loss in revenue, analysts say.

6. Banking Reforms: State-run lenders are not only struggling with rising bad loans, but also need recapitalization to finance the economic upturn. A roadmap to improve the health of public sector banks is expected in Budget.

7. Subsidy Reforms: Subsidies on food, fuel, fertiliser, etc. amount to a staggering Rs 3.77 lakh crore but reach only a few of the targeted poor, the Economic Survey said. Mr Jaitley is expected to initiate steps to rationalize subsidies to finance capital expenditure.

8. Higher Capital Spending: The government has to push public spending on infrastructure to jump-start the economy. As much as $50 billion (Rs 3 lakh crore) is needed for new roads, rail lines, ports and irrigation facilities.

9. Expenditure Management: The government needs to maintain a firm control on expenditures for create more space for productive or capital spending.

10. The Budget is expected to streamline flagship welfare schemes like the National Rural Employment Guarantee Act (NREGA), the largest public works programme in the world. The scheme provides jobs for 50 million households and is credited for dramatically reducing distress sales of land in years of drought. (With Agency Inputs)