Finance minister Arun Jaitley will present the first full-year Budget of Prime Minister Narendra Modi's government. Will Modi government's "make or break" fiscal exercise for the promised economic reforms and put India on a long-term high-growth rate. Buget is expected to vigorously push Modi's pet "Make in India" campaign. Budget may also have some good news for the middle class. Budget is likely to either raise tax slabs or hike investment limit in saving instruments. Finance minister may keep the fiscal deficit target at 3.6 per cent of GDP, down from 4.1 per cent expected this year.

The economic survey has said that it should aim at creating a competitive, predictable, clean and exemption-light tax policy regime that will lower the cost of capital, incentivize savings and facilitate tax payer compliance. It underlined the need for "Big Bang" reforms to boost growth to 8-10 per cent in the coming years. It has pitched for raising public investments to drive economic growth and improving business environment by making regulation and taxes less onerous. It is expected that he may look to raise the tax exempted investment limit in health insurance as well as exempt savings in pension schemes at all three stages — entry, accrual and withdrawal.

By Premji