Government May Present Union Budget On February 1, Amid High Hopes Of Tax Cuts

Finance Minister Arun Jaitley is likely to present his third full-year Budget on February 1. The date has been advanced by three weeks to after a government decision taken last year.

The Union Budget from this year would also present the finances of the Indian Railways, which till last year used to be exercise under the railways minister.

The government's decision to advance the presentation of Union Budget came after experts' feedback that suggested that the move will allow earlier allocation of funds for government schemes and projects and will lead to better implementation on ground. 

The earlier exercise of presenting the Budget on the last working day of February resulted in releasing of funds not before the month of May. This created a backlog of funds, delaying the implementation of government funded schemes.

This year's Budget is significant as it follows the grand decision of demonetisation of high value currency notes by the government in November 2016. The decision led to severe shortage of currency in the economy leading to squeeze in economic activity in the country. Most ratings agencies as well as banks have projected a decline in the GDP in the range of 1 -2 per cent in the coming quarters.

Economists as well as industry lobby groups have suggested a need for lowering of personal as well as corporate taxes to boost consumer demand in the economy, which suffered a jolt due to demonetisation.

Industry body CII in its recently issued recommendation for Budget 2017-18 called for reducing the corporate income tax rate to 18 per cent, including all surcharges and cess, along with removal of all tax incentives and concessions. 

Currently, companies pay a corporate tax of around 30 per cent.

(With agency inputs)