Union Budget 2015: Things to watch out for

Prime Minister Narendra Modi's stomach for free-market economics faces a major test on Saturday, in a budget that could wreck the leader's promises of ‘Acche Din’ (good days) if there's no roadmap to reform. Reaping the benefits of low global prices for oil, India's main import, Modi's government sees itself in a sweet spot with spare cash to modernize ageing roads and railways without busting fiscal deficit and inflation targets.

Here are a few things that you can watch out for in the Union Budget 2015

• Tax sops for the manufacturing sector and capital goods industries to boost the PM’s ‘Make In India’ campaign
• General Anti-Avoidance Rules (GAAR) to be postponed by at least two years as it could adversely affect the investment climate
• Special Economic Zones (SEZs) may witness tax concessions to perk up business investments
• More disinvestment plans by the government in the coming years
• There will be steps by the government to ensure gradual transition towards a non-adversarial tax regime
• Steps to open up the Insurance sector even more; the Government has already approved an ordinance in December to raise foreign investment in the insurance sector from 26% to 49%
• Steps to provide clarity on the roadmap to Goods and Services Tax (GST) for uniform tax rates within the country
• Reforms to kickstart the mining sector post the e-auction of coal mines and the Government’s willingness to boost the sector via amending the MMDR Act, 1957
• Larger involvement of the Direct Cash Transfer by the government which would contribute over a billion dollars towards overall savings next year
• More budgetary allocation towards infrastructure building, especially creation of ‘Smart Cities’
• Promote renewable energy by extending incentives for the sector; also provision for renewable energy parks
• Education concessions for women which will be in line with the ‘Beti Bachao, Beti Padhao’ campaign launched by the PM
• Infrastructure projects for the North-East region; announcement of projects for better connectivity
• Larger capital allocation for modernization of PSUs
• Lower allocation to the centre for the social schemes such as the NREGA, FSA, etc. More capital allocation to the states as a step towards co-operative federalism
• High priority to PSU defence equipment manufacturing companies (HAL, BEML etc.) in terms of budget allocation to increase resource base for indigenous development; in line with PM’s vision of Make In India
• Tax incentives in the Budget to encourage companies to participate in ‘Swachh Bharat Abhiyan’ and Clean Ganga Campaign
• Swachh Bharat cess of 0.05% on all items under service tax including phone bills, restaurant bills, IT and IT-enabled services bills
• Some of the large cities may offer municipal bonds to finance infrastructure under the Smart Cities Initiative
• Incentives for PSU banks to keep the accounts created under the ‘Jan Dhan Yojana’ active, with increased transactions including under the direct benefits transfer scheme, which is being operated under the ‘Pahal’ project
• Transfer of more economic power to the states as promised by the Central Government in line with its concept of co-operative federalism.
• More initiatives to boost ease of doing business through launching of e-biz portals
• Larger allocation of funds for the Skill Development Programme, especially in high-tech industries such as aerospace
• Boost to fisheries in line with the PM’s call for a ‘Blue Revolution’
• Tax sops to companies that focus on clean energy generation, conservation and efficiency
• Boost to agricultural products sector and warehousing facilities for optimal use of crop outputs
• Specific plans to develop cities with historical monuments and cultural heritage under the Heritage City Development Scheme (HRIDAY).
• Selective FDI in the media and entertainment industry. Already some part of it has been facilitated through the e-auction of private FM radio channels
• Skilling programmes and youth development programmes to be launched; also more initiatives to launch training institutes or increase their numbers
• Measures to improve drainage systems in and around the course of the Ganges as urged by the PM during the ‘Namaami Gange’ initiative
• More capital allocation to enhance India’s cyber-security infrastructure