India is bracing for a leaner-looking Union Budget on February 1 with the Goods and Services Tax (GST) taking away of major chunk of indirect taxes. The Budget document on Part B, as well as Finance Minister Arun Jaitley's speech should be shorter by a few pages.
Part B of the Budget deals with taxation proposals -- both direct and indirect and also, new policy announcements by the government. The new policies could be in the form of new programmes and also the policy changes in the existing programmes. For example, any tweaking in Mudra Yojana or Start Up India or electoral funding will be incorporated in Part B.
Customs duty, which still forms a part of indirect taxes, will be there in the Part B of the Budget.
Besides, Part B will also incorporate administrative changes, if any, in the GST laws. Any last minute changes in the GST rates before the Budget will also have to be added in this part of Budget document and Jaitley's speech.
What will not be there in Part B, is, a long list of excise duties and service tax because these two are now part of the GST laws.
Similarly, a list of annexures running into a number of pages will be absent from the Budget speech and the documents. The annexures dealt mainly with excise and service tax.
Unlike his predecessors, Jaitley's Budget speech too contained a lot of annexures on direct and indirect taxes which made the speech lengthy. Annexures may be retained in the Budget speech as far as direct taxes are concerned.
On direct taxes side, Part B will include income tax and corporation tax. In this, the finance minister may surprise the salaried class by either increasing exemptions in the personal income tax or/and tweaking the income tax rates. Industry is also expecting a corporate tax exemption from the government to perk up investments.
A senior government official told DH that the entire exercise is in keeping with Prime Minister Narendra Modi's emphasis to make the budget document simpler, so that people with basic knowledge of economy and business can have a grasp of the whole thing.
Part A of the Budget speech is more concerned about macro aspect of the economy hence of more interest to economists. It covers the broad outlays of money for different Sectors. Introduction of new schemes, priorities of the government and focus areas.