Will the aam aadmi tax slabs be tinkered with this year? Will this be a populist budget? These and other questions were tackled during a roundtable discussion organised by BW Businessworld in association with NewsX.
The experts taking part in the discussion looked at the humongous task Finance Minister Arun Jaitley has in front of him.
The budget this year comes on the heels of demonetisation, which has been a big talking point across the country.
Will this be a populist budget?
Sharad Mohan, owner of Calibre Investments, said: "It would not be a populist, but the whole definition of it would change. Because if only 24 lakhs are paying tax and they want to increase that to at least one crore, then it won't be a populist budget, they will have to reduce the tax slab. The average rate was only 12% in 2014-15. So if they want to increase the broadbase of that, something dramatic needs to be done".
"Also, the fiscal numbers this time look good; therefore they will have an incentive to pass that on".
Sunil Jhaveri, chairman of MSJ Capital& Corporate services Pvt Ltd, said, "The fiscal number this year is expected to look good. The FM may be in a better position to take up populist measures without touching the fiscal numbers. The government is not going to sit on the money they have saved, which will kickstart the economy and will percolate down to the private sector".
"Demonetisation will have a direct impact in terms of increased number of taxpayers. The government will start looking at decreasing tax slabs, to begin with", said RM Vishaka, MD, India First Life Insurance.
Apart from demonetisation, elections are another big factor that will be the major influencer.
"The budget needs to be seen from 2 aspects, one being demonetisation and elections. Therefore, increasing the tax base will be one, reduce the tax brackets and other would be to fight the black money. We expect the FM to set the tone for the next coming years. Short term infra would also be seen as an important space, which would show results in the short period, including low cost housing", Sharad said.
Taking a policy stance, Vishaka said personal risk management as a policy is worst implemented today for an individual.
"A lot of people do not declare their income. The incentive for the government today is to see how they declare that and encourage them to do more. This need to be combined with risk management and linked as a percentage of income and not as fixed slabs".
Coming to a ballpark figure, "There are only 6% retailers today are licensed, 94% do not come in the books. If you get the 94% back, the maths says it all", Vishaka said.
BW Reporters
Naina Sood is a Economics graduate and has done her post graduation in International economics and Trade. She has deep interests in Indian economy and reforms