Whether the Budget to be presented by the NDA government will be vote on account or something more will only be known on February 1 when the Finance Minister Arun Jaitley presents the Budget 2019. Enough hints have been dropped to indicate that the Budget will not be a mere vote on account.
However, a very limited scope is available to the government to make major changes on the tax front. With 2019 being the election year, there is expectation from the common man that some relief be granted in tax rates and deductions, and the government may oblige the common man by raising slab rates by about Rs. 50,000. This will have a very positive sentimental impact without sacrificing large revenue.
On the corporate tax front, very little may be done by the government. Not much is expected in terms of reliefs as finances of the government are stretched.
Major changes are also not expected in Goods and Services Tax (GST) as all amendments have to be approved first by the GST Council. The GST Council has already made substantial changes in the last two meetings. Besides, for the changes expected by the real estate sector, the government has recently set up a committee.
However, this Budget will give the government an opportunity to make grand announcements for the things to come in future if a BJP government is elected. Notable announcements can be expected on availability of credit to the rural, MSME (micro, small and medium enterprises), health and farming sectors.
(Ashok Shah is Partner at N.A. Shah Associates LLP)
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