Predictions: Union Budget 2013-14 | SupportBiz

Policy Notes

Predictions: Union Budget 2013-14

In an exclusive interaction with SupportBiz, Jyoti Prakash Gadia, Managing Director, Resurgent India, highlighted his predictions about the forthcoming Union Budget 2013-14.

Resurgent India is a fast-growing investment bank offering services in the fields of mergers and acquisitions, private equity, venture capital, complex debt solutions, working capital, project finance and business consulting to growing businesses, including small and medium-sized ones.

Stressing the need for an infrastructure push, Jyoti said, “Deductions for natural resource-based industries could be introduced in this budget. MAT rates may see a reduction, in order to protect the interests of the beleaguered corporate sector.”
On the indirect tax front, Jyoti predicted, “There might be moderate changes in the rates of excise duty on high-end luxury cars and other items of luxury. Service tax being the latest revenue grosser, its integration with excise duty is likely to be made in a cohesive manner. Service tax may be introduced on electricity, leaving the domestic consumers.”

Gadia also stated that the education and IT sectors are likely to be the centre of attention in the budget, since they are the 'thrust sectors' of the Indian economy presently. He also stated that infrastructure funding is likely to be given high priority in the budget.

On the Foreign Exchange Management Act (FEMA), Gadia stated, “FDI in the retail sector having already been put in place, further opening up, with the laying of a roadmap for capital account convertibility is going to be there in this budget.”

Subhash Saraf, Chartered Accountant, stated that there are expectations of a reduction in taxes for the salaried class and raising the general exemption limit to Rs 2.25 lakh. “Besides, the deduction for interest on loan for housing is also expected to be raised to Rs 2.50 lakh, to lead a spurt in demand for loans, and to benefit the housing sector in general. The lock-in period for tax-saving fixed deposits may be reduced from 5 to 3 years. To make use of the gold lying idle with the citizens, a scheme for gold deposit may be introduced.  In line with these expectations, taxes on the super rich may be introduced, with some parameters to define 'super rich', based on luxury spend. Inheritance tax may also be on the anvil,” believes Saraf.