New Delhi [India], Jan.28 : Meeting excessive expectations riding on the forthcoming Union Budget in the aftermath of demonetisation could be a challenging task for the Finance Minister Arun Jaitley, a pre-Budget assessment by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) pointed out.
"If there is one sector which needs the maximum of government attention, it is the rural landscape," the paper said.
"However, there are competing demands amidst high expectations built around a large scale relief to individual income tax payers and the corporate seeking reduction in the corporate tax rate to 25 per cent.
The individual tax payers are expecting a big rise in the exemption limit and not a token amount of Rs 10,000-20,000.
" With near consensus reached on the GST roll out from July, the outcome in terms of tax collection may be uncertain even as the Centre remains committed to fill the shortfall of the states.
Yet another fall out is the digital space which is pinning high hopes on the Budget in terms of lot more investment commitment for the internet and broadband expansion and other telecommunication infrastructure.
"Even though the agriculture sector is expected to perform well in terms of production thanks to good Monsoon and useful winter showers, the industrial production and services remain subdued.
Cut in interest rates does make a difference, but that alone would not be enough to revive demand -led investment," the paper noted.
Commenting on the macro picture, an ASSOCHAM spokesman said, "The way expectations are soaring high, especially in the stock market , the Finance Minister may find it tough to come up to them ,under conflicting demands.
Besides the financial implications, the Budget is expected to come out with a lot of policy and procedural changes for improving ease of doing business." With the Railways Budget being merged with the Union Budget, the onus of providing sufficient funds for the country's largest transporter would also fall on the Finance Minister, somewhat, though the responsibility of raising funds commercially for a huge capital expenditure would continue to be on the Railways.