The report’s expectations are based on principles of inclusive growth and meeting the medium term objectives set by the government.
SBI’s pre-Budget report called Ecowrap states expectations based on principles of inclusive growth and meeting the medium term objectives set by the government. According to the report, the budget should prioritise agriculture, MSME, infrastructure and affordable housing.
The report has stated that the income tax exemption limit needs to be raised by Rs 50,000 to Rs 3 lakh due to rise in personal disposable income post the 7th Pay Commission. The move will benefit around 75 lakh people, it said.
The report further said that if the exemption limit of interest payments under housing loan is increased to Rs 2.5 lakhs for existing home loan buyers, from Rs 2 lakhs now, it will benefit 75 lakh home loan buyers and cost the government just about Rs 7,500 crore.
The report has also said that the government can exempt interest of savings bank deposits to encourage savings. The exemption limit on TDS on interest on term deposits with banks may be raised from the present limit of Rs 10,000 per annum, it said. Also, the lock-in period for tax savings term deposits needs to be reduced to 3 years from the present 5 years and these deposits should be brought under EEE (exempt, exempt, exempt) tax regime.
Agriculture reforms should aim at re-examination of legally created structures whose provisions are restrictive and create barriers to free trade, it said.
Regarding investment revival, the report said capital subsidy in case of delayed projects equal to cost overrun may be provided. Cost overrun may be funded at concessional interest rate by the government in such cases. Also, there is a “dire need” to publish monthly payroll report in India for formal sector as job creation is “grossly underreported”. Other measures like providing support infrastructure and skilling and certifying workers need to be adopted, it added.
Source: Financial Express