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The budget is a big deal for the pink papers.
CRYSTAL GAZING

Here are the predictions that India’s newspapers made before the budget

By Shruti Chakraborty

The budget is the busiest time of the year for India’s business dailies. In its run-up, starting nearly a month before and often longer, speculative stories on what will be announced in the budget speech begin to run in the pink papers. A number of stories are about what specific industries are hoping for from the budget. A few are about what the budget will do. Some right, some wrong.

Here is a recap of some of the stories that ran in the papers during the last month predicting what the budget holds:

  • The government will announce a “Rurban mission“ aimed at providing urban facilities in rural areas where 69% of India’s population lives, Mint reported. The mission, which is aimed at providing basic infrastructure like roads, drinking water, electricity and sanitation, will be launched on the lines of a similar model which has been implemented in Gujarat.
  • An investment vehicle known as the infrastructure business trust to help cash-starved infrastructure developers raise long-term capital will be created, the Economic Times reported. The finance ministry is considering a range of tax incentives for such trusts. To raise long-term capital the government will incentivise the creation of such trusts, so that investors will have a lower tax burden and avoid taxation at different levels.
  • To give a boost to the manufacturing sector, the government might introduce an amendment giving relief to automakers, consumer durable manufacturers and others from the Fiat judgment, the Economic Times reported. The judgment had meant that manufacturers offering discounts to encourage sales still had to pay excise to the full extent of the price. Other steps might include creating large regional manufacturing zones and correcting anomalies in the import duty structure.
  • The government is likely to give a number of sops to the automobile industry, starting with a calibration in excise duty, the Hindu Business Line reported. The excise duty on small cars, scooters, motorcycles and commercial vehicles was brought down to 8% from 12% in the interim budget announced in mid-February. Duty was cut for SUVs and large cars from 30% to 24% and for mid-size cars from 24% to 20%. The continuation of the excise duty cuts is expected. More export incentives, free inter-state movement of vehicles, promotion of electric and hybrid vehicles, prevention of overloading, better road safety, emission and fuel-efficiency norms, and a policy on fleet modernization and scrappage are other things the auto industry is expecting to hear from the Finance Minister.
  • Four new centrally sponsored schemes on skill development, irrigation, cleanliness and Ganga rejuvenation are expected, the Hindu Business Line reported. The scheme for Ganga rejuvenation will focus not just on cleaning the river but also for promoting inland water transportation.
  • The Commodities Transaction Tax is likely to be revamped in the coming budget, the Hindu Business Line reported. Though participants want the tax to be removed completely, there are no such indications.
  • The Finance Minister is likely to retain the FY15 gross tax revenue target of Rs13.79 lakh crore set in the interim budget presented in February, the Financial Express said. This will create pressure on budget planners to increase non-tax revenue and capital receipts.
  • The government is likely to announce the so-called Section 80-IA tax holiday in this budget for units of power projects coming up this year, the Financial Express reported. The companies will be able to claim deduction up to 100% on the profits from eligible projects for a period of any 10 consecutive years, in a block of 15 years, starting this year.
  • Defence allocation in the Budget is expected to go up by at least 20% from Rs2.04 lakh crore in the last fiscal, The Financial Express reported. If a 20% hike in the Budget is effected, that would be the highest ever annual increase in the Budget for the armed forces.
  • Tax incentives may be in store for the insurance sector, the Financial Express said. Incentives like the removal of service tax on micro-insurance, reduction of the service tax burden on life insurance premium, increasing the deduction limit to senior citizens and individuals for health insurance as well as a separate deduction limit of Rs1 lakh under the Income Tax Act for insurance premium are expected, the paper said.
  • The FY15 disinvestment target set in the interim budget is expected to be retained, the Financial Express said. The public sector undertakings disinvestment for FY15 would include three initial public offerings, in total expected to garner about Rs6,000 crore. The target also includes a provision of earning Rs 1,500 crore from sale of some sick PSUs, the report notes.