Union Finance Minister Arun Jaitley is likely to propose in his budget on Monday the lowering of the corporate tax from 30 per cent to 29 per cent, the first cut in the series planned to bring it down over the next four years to 25 per cent. The roadmap for these cuts, along with the corresponding withdrawals of tax exemptions each year, will also be announced.
A top official source told The Hindu that the fiscal deficit for the current year will be kept within the target of 3.9 per cent of GDP and the target for the next year of 3.5 per cent has also been retained. “There will be no slippage or pause in this year or the next year… Consolidation will be in line with the commitment,” he said.
This decision, the source said, would restrict the room for government spending during the year. “The budget will not be able to accommodate all demands from everybody.” The source said the government was exploring the possibility for leveraging the assets under management of Life Insurance Corporation, Employees’ Provident Fund Organisation and the National Pension Scheme as part of the plans for recapitalising the public sector banks that have stressed balance sheets and are saddled with bad loans. The source said Mr. Jaitley could also make a small reference to the road map being planned for this proposal.
Cross-holdings among banks may be considered later
The Economic Survey tabled in Parliament on Friday recommends that the assets of the Reserve Bank of India and other regulatory institutions be leveraged for the plans to recapitalise the public sector banks that have stressed balance sheets and are saddled with bad loans.
Cross-holdings among banks could be considered later, a top official source said.
The Hindu had earlier reported that the budget would unveil a road map for big-ticket disinvestment, including strategic sales, in the state-owned companies like BHEL and the oil and defence public sector units, including ONGC, IOC, HPCL, BPCL, HAL and BEML. The government would announce increases slightly more generous than the recommendations of the Seventh Central Pay Commission. The payouts, beginning on April 1, will include arrears for three months. More than Rs. 1 lakh crore has been budgeted under the head, Union Finance Minister Arun Jaitley said last month.
In 2012-13, LIC reported Rs. 15.2 lakh crore of assets under management. As on October 03, 2015, the National Pension Scheme (NPS) and the Atal Pension Yojana that was launched on June 1, 2015, together have total assets under management of more than Rs.1 lakh crore.
The two schemes have more than one crore subscribers.