Budget likely to focus on tax reforms, subsidy reduction: Experts
01/07/2014 16:21
The upcoming Union Budget 2014 which is expected to be the first litmus test of the ruling NDA government may provide some major measures to bolster Asia’s third biggest economy, which has been stuck below the 5 per cent growth mark for the past two fiscals.
According to Barclays, the Union Budget 2014 is likely to be a pro-growth budget focussed on tax reforms, reduction in subsidies and asset sales by government in state-run enterprises as the government seeks to mend its finances.
The budget may provide some timeline for the implementation of the Goods and Services Tax (GST) which is likely to boost the revenue kitty of the exchequer from indirect taxes.
At the same time, a reduction in fuel, fertilizer and food subsidies will also ease pressure on strained government finances. A lowering of oil subsidies will come as a major boost to the oil for gas sector as it will lower the under-recoveries of OMCs who are forced to sell fuel at below market rates.
"Given the pro-growth credentials of Narendra Modi, the new Prime Minister, expectations of administrative and policy reforms are high. We expect the first test of this to come in the government budget announcement. We expect the government to propose a pro-growth budget focused on tax reforms, lower subsidies and asset sales," Barclays said in its India Equity Strategy report, the PTI reported.
01/07/2014 16:21
The upcoming Union Budget 2014 which is expected to be the first litmus test of the ruling NDA government may provide some major measures to bolster Asia’s third biggest economy, which has been stuck below the 5 per cent growth mark for the past two fiscals.
According to Barclays, the Union Budget 2014 is likely to be a pro-growth budget focussed on tax reforms, reduction in subsidies and asset sales by government in state-run enterprises as the government seeks to mend its finances.
The budget may provide some timeline for the implementation of the Goods and Services Tax (GST) which is likely to boost the revenue kitty of the exchequer from indirect taxes.
At the same time, a reduction in fuel, fertilizer and food subsidies will also ease pressure on strained government finances. A lowering of oil subsidies will come as a major boost to the oil for gas sector as it will lower the under-recoveries of OMCs who are forced to sell fuel at below market rates.
"Given the pro-growth credentials of Narendra Modi, the new Prime Minister, expectations of administrative and policy reforms are high. We expect the first test of this to come in the government budget announcement. We expect the government to propose a pro-growth budget focused on tax reforms, lower subsidies and asset sales," Barclays said in its India Equity Strategy report, the PTI reported.
