| Date: |
29-02-2016 |
| Subject: |
Arun Jaitley To Meet President, Budget Speech At 11 Today |
New Delhi: Finance Minister Arun Jaitley has left for Rashtrapati Bhawan to meet President Pranab Mukherjee with the Union Budget enclosed in a briefcase, brown tending to red. The Union Cabinet will approve the Budget at 10 am and Mr Jaitley will present it to Parliament at 11.
Prime Minister Narendra Modi wants today's budget to appeal to India's rural poor, officials familiar with his thinking said, in a strategy shift designed to boost his party, the BJP's prospects in crucial state elections to be held soon.
But that will disappoint investors. Stock markets opened lower ahead of Budget announcements on Monday morning.
The government is expected to increase spending on agriculture, health and social sectors, a change from its focus on infrastructure spending and market reforms, officials told Reuters.
In its first two years in power, the Modi government splurged on roads and railways at the expense of welfare programmes in the hope of creating economic stimulus. The PM"s gamble was that infrastructure investment would eventually generate dividends for the poor and the rural community.
But rising rural distress after back-to-back droughts and the recent election defeat in Bihar, a largely agricultural state, have upset that calculus. The BJP calculates that the opposition successfully attacked the government as a "suit boot ki sarkar (government for the rich)." Today's budget is expected to counter that criticism ahead of key elections in heartland farming states such as West Bengal this year and Uttar Pradesh next year.
But the increased social spending may hike the closely watched fiscal deficit to 3.8 percent of GDP next financial year from a target of 3.5 percent, one official said. Last week, the rupee slumped on fears of a higher deficit level.
Investors are looking for concrete initiatives from PM Modi's government to make it easier to do business, with hopes it will move to simplify a complex tax regime seen as deterring investors.
While Mr Jaitley has previously outlined his intention to reduce corporate tax from 30 to 25 percent before the next election, Monday is expected to be the first time he lays out a detailed roadmap to reach that target.
"I have an exam too. 125 crore Indians are going to test me, tomorrow is the Budget," Prime Minister Narendra Modi said in his radio address Mann Ki Baat on Sunday as he wished school students for the board examinations that begin tomorrow.
The finance ministry has promised that the 2016-17 budget will be "growth-oriented" in the face of a global climate that appears significantly more challenging than last year.
Source : profit.ndtv.com
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