Like his previous 4 budgets, Mr.P.Chidambaram has taken this year too considerable efforts in listening to the public & Industry on their wish list for India Budget 2008. Like previous years this year too he will stop with listening and the budget will be a political compulsion/election-oriented one. Following are my guesses on what he will do tomorrow:
- Some marginal concessions for Rupee/Dollar Hit export industry will be announced, only for the worst affected like Textile, Leather & accessories
- The biggest wish of the IT Industry, the extension of STPI scheme beyond 2009 will not be done. If mentioned, it will just say the decision is being left to the next government
- The duties and customs will be brought down and aligned with commitments given by the government to ASEAN and other trade pacts
- Income Tax rates will be left untouched. The minimum income level will be increased, some more exemptions for senior citizens & women will be given
- He will certainly promise setting up a new committee to simplify direct/indirect taxes to take advantage of the buoyant collections this year
- Service Tax will be increased by 2% (or) Educational Surcharge will be increased by additional 1% and it will be promised for further infrastructure/power developments/oil under recovery
- Implementation of 6th Pay commission which might give over 25% hike to government employees salaries and benefits. Possibly removal of new hiring restrictions in selective departments
- Increase the budget allocation for Defence especially the Nuclear & Missile programmes
- New farm oriented credit announcements will be made
- Dividend tax will be tweaked a bit to appease the stock market