The Union Budget is usually presented in the last week of February, however the Union Budget for 2012-13 is an exception, wherein this time it will be presented in the second week of March, 2012 due to ongoing elections in five states of the country.
Individuals, economists and investors including FIIs await the Budget announcements of the various measures to boost the various sectors of the economy – industry in particular. The Budget also has a significant impact on the stock markets which is a barometer of the strength of the country’s economy. The Companies Bill is expected to be unveiled in this Budget Session.
The Budget for 2012-13 seems to be a complicated Budget for Mr Pranab Mukharjee on account of the declining growth rate of India Inc. India’s GDP growth rate slowed to 6.9% for the Financial year 2011-12 which is mainly due to the global economic situation, the Eurozone crisis coupled with the domestic factors like high interest rate. The other concerns have been on account of the inflation touching its peak and fiscal deficit expected to be very high.
Some of the recommendations and expectations in the proposed Union Budget are to:
– provide initiatives that can accelerate the pace of private investments,
– make it easier and simpler for businesses to grow
– promote more foreign investment in India
– accelerate the country’s progress in basic and higher education, in the areas of nutrition, health and shelter.
– reduce the slab of security transaction tax
– bring a steady tax regime in Direct Tax Code ( DTC) is required
– agree on the Goods & Services Tax (GST)
– provide measures to promote affordable housing for people.
Apart from the wish list sent by Corporate India to the Finance minister, Corporate America has also sent a budget wish list urging for a raise in the FDI cap in insurance sector to 49 percent and opening up of multi-brand retailing.
The Corporate sector is presently shaken up by the news of:
1. The merger of Sterlite Industries into sister concern and iron ore miner Sesa Goa which is facing opposition from the shareholders of both the companies.
2. India’s luxury airline Kingfisher being hit hard by a deep rooted financial crisis of. The group is in talks for a potential rescue package and has approached the Indian Government for a change in the law that would ease the restrictions on foreign ownership of airlines. Kingfisher believes that its future lies in the hands of the Indian government, which relies on a strong aviation sector to support economic growth. Let us watch what key policy decisions does the government take with regard to allowing foreign carriers to have a stake in domestic airlines.
Hope that India Inc. will eventually overcome all the turbulences and that the budget will meet the expectations of the one and all while simultaneously addressing the key concerns. Wishing for lots of positive surprises from the Union Budget.