REUTERS - The government will deliver on Thursday its budget for the 2013/14 fiscal year that starts on April 1. Finance Minister P. Chidambaram is expected to push fiscal consolidation through spending cuts while looking to increase revenues to ward off the threat of a credit rating downgrade.
Following are expectations from economists, analysts, investors and companies from the budget.
FISCAL DEFICIT
* Government target seen at 4.8 percent of gross domestic product for 2013/14
* Government has revised 2012/13 target to 5.3 percent of gross domestic product, compared with 5.1 percent estimated in the budget in March.
GROWTH
* Government's GDP growth forecast for 2013/14 seen at 6 to 6.5 percent, compared with a decade-low of 5 percent in 2012/13, according to estimates released by the ministry of statistics. The finance minister has said the economy should expand 5.5 percent in 2012/13.
BORROWING
* Analysts expect net government borrowing below 5 trillion rupees in FY14, little changed from 4.67 trillion rupees in FY13
Reuters website on budget http://in.reuters.com/subjects/india-budget-2013
SUBSIDIES
* Total subsidy burden seen falling by 400 billion-500 billion rupees from estimated 2.6 trillion rupees in FY13
* Ratio of subsidy payments to GDP seen below 2 percent by the end of 2013/14, compared with preliminary expectations of about 2.5 percent in 2012/13
* FY14 food subsidy bill seen between 850 billion and 1 trillion rupees versus 750 billion rupees budget estimates for current year
* Likely to cut fertiliser subsidy by at least 15 percent for 2013/14
SPENDING
* Finance minister plans to cut FY14 public spending target by up to 10 percent from FY13's original target Of 14.9 trillion rupees
* Spending on defence, rail, other development and welfare projects to be cut, according to Reuters sources
* FY13 public expenditure already reduced by 9 percent from original target
DIVESTMENT
* Likely to target 400 billion rupees via stake sales in FY14 in state-run companies versus estimated 300 billion rupees in FY13
TAXES
* Likely to lay out roadmap for implementation of goods and services tax (GST)
* Low expectations for increase in headline corporate tax rates
* Income tax slabs may be increased
MARKETS
* May remove cap on foreign institutional investments in rupee-denominated corporate bonds, or at least in infrastructure bonds
* May expand definition of term "infrastructure" to include companies that develop affordable housing
* May simplify processes for foreign investors
* Seen removing withholding tax on corporate bonds that have no restrictions on maturity or lock-in periods, or bring it down substantially
* May abolish or reduce securities transaction tax on equity investments
COMMODITIES
* May remove import duty on iron ore or raise duty on some steel imports to support domestic steel industry; could reduce iron ore export duty at behest of mines ministry
* May cap imports or cut number of companies authorised to import gold if purchases have not slowed by February 28
* Production tax on jewellery and unveiling of gold saving schemes with some tax breaks seen
* May raise import tax to cut rising purchases of vegetable oils from Malaysia and Indonesia
* May levy transaction tax on commodity futures
* May give tax breaks to new LNG terminals, could also remove customs duty on LNG imports
* May extend tax breaks for new oil refineries and projects
* May implement export tax on value-added oilmeal products
COMPANIES
* Auto industry hopes for excise duty cut on small cars to 10 percent from 12 percent
* Budget may impose additional duty on diesel cars and utility vehicles
* Roadmap expected for capital infusion into state-owned banks
* IT services providers hope for clarity around transfer pricing norms, foreign tax credit and refund of service tax claims
* Telecommunications companies lobby for reduction in levies and tax breaks
* Real estate sector wants tax concessions and other fiscal benefits to builders, financiers and buyers of affordable housing
* Retail and consumer goods companies want industry status and an independent ministry set up for retail as well as a cut in rate of service tax on commercial property rent
* Budget may propose increase in excise duty for cement makers
* May remove import duty on thermal coal and introduce tax-free bonds for power sector
(Compiled by Aradhana Aravindan in Mumbai; Editing by Ranjit Gangadharan)
