Arun Jaitley set to present Modi government's maiden Budget today

 The Narendra Modi government's maiden Budget will be presented in Parliament on Thursday by Finance Minister Arun Jaitley. With high expectations to meet, it remains to be seen whether the Budget will be a bitter pill for the common man in its bid to revive the economy.

It is expected to include subsidy reforms, though the Finance Minister could soften the blow with some tax exemptions. Jaitley is expected to outline a comprehensive plan to boost the economic growth by reviving investments and narrowing fiscal deficits.

For boosting investment, Jaitley is expected to announce tax incentives for industry. As a prelude, the government has already extended the excise duty concessions for automobile and consumer durable sectors till December.

Retrospective taxes may not be revoked. All eyes are on the measures the Finance Minister may announce to attract investments.

The Finance Minister is also expected to take a call on reducing duties on gold import, which were raised last year to check ballooning current account deficit. He could also provide relief to farmers to help them tide over the impact of deficient monsoon which could lead to fall in agricultural output. The government may set up a price stabilisation fund, as promised in the BJP's manifesto.

The new minister may also outline the road map for the roll out of the Good and Services Tax (GST) but it was not clear what will be his approach on the Direct Taxes Code (DTC) about which the Economic Survey made a mention on Wednesday.

The survey has also called for tax reforms including raising the tax to GDP ratio that has fuelled whether he would choose to widen the base or withdraw exemptions. Setting the tone for the Budget, the Survey underlined the essence of urgency to restore growth momentum and address the long-standing structural problems hurting economy.

The survey also made a strong case for "next wave" of economic reforms to meet the aspirations of the people and catch up with the rest of the world. "The Economic Survey 2013-14 conveys a sense of urgency about the course the needs to undertake not only to recapture to the growth momentum fast, but to also ameliorate the long standing structural problem that undermines the economy's long term potential," Finance Secretary Arvind Mayaram said.

The pre-Budget document presented in Parliament called for revamp of complex taxation system and said "bad taxes" like surcharges, cess and dividend distribution levy need to "eventually go" so as to boost investments as well as GDP growth, which has slipped to sub-5 per cent.

The BJP-led government rode to power on promises of providing relief to inflation-hit common man, amid falling growth, stagnating investments, high fiscal deficit and external crisis. On the other hand, Jaitley, though not a hard-core economist, is expected to pursue the path of fiscal prudence and not sacrifice it at the altar of populism. He has already indicated that the government will have to refrain from mindless populism.

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