MUMBAI (Reuters) - Finance Minister Arun Jaitley will present the budget for the 2014/15 fiscal year on Thursday, after his Bharatiya Janata Party won a landslide victory in May to form the first majority government in three decades.
The budget is expected to unveil bold reforms in a bid to turn around an economy growing at decade-lows, but there won't be major changes to taxes, according to a Reuters survey.
NEW REFORMS EXPECTED, MAJOR INITIATIVES:
-- Announcement of plans to cash in on India's soaring stock market by selling stakes in major companies to raise funds and bridge the gap between revenues and expenditure.
-- Cutting giveaways on fuel and petroleum products to reduce India's $40 billion subsidy bill, which is a key reason for the country's wide fiscal deficit.
Here are measures that analysts and investors expect for key industrial sectors:
Autos:
* Rollout of a goods and service tax (GST) to help streamline and standardise the cost of selling cars
* Incentives for exports of vehicles, for free movement of vehicles between states and for getting dated cars off the road
* Support to promote and manufacture electric and hybrid vehicles
Financial Services:
* Having a roadmap to creation of a holding company for state-run banks
* Increase of ceiling on foreign direct investment (FDI) in insurance sector to 49 percent from 26 percent
* Tax exemption on long-term infrastructure bonds
* Increase in housing loan interest limit beyond 150,000 rupees for tax exemption
* Higher allocation for capital infusion in state-owned banks
* Tax incentives to encourage expansion of affordable housing
Healthcare:
* Tax incentives to spur investment in research and development
* Simpler tax norms, including rapid implementation of GST
* Increase tax exemption for setting up hospitals
* Infrastructure status along with tax benefits
* Revive clinical trials in India
* Double healthcare expenditure to 8 percent in next 5 years
Infrastructure:
* Accelerate dedicated plans for dedicated freight corridors
* Open more projects, particularly parts of the railway network, to foreign direct investment
* Set up a national fund for infrastructure projects, which could source funds from China or Japan
* Roadmap for attracting long-term debt for infrastructure projects
Metals and Mining:
* Address issues around mining regulations and adopt reforms for raw material security
* Reforms to reduce logistical bottlenecks in transport of metals and raw materials to and from mines
* Introduction of competitive auctions for allocation of minerals and raw materials
* Continuation of tax benefits on capital expenditure
Oil and gas:
* Reduction of subsidy bill through fuel price reforms
* Reintroduce import duty on crude oil
* Continuation of diesel price hikes and deregulation of diesel price
Power:
* Fast tracking of stalled projects, easier access to power plants and coal mines
* Deregulation of electricity prices
* Tax concessions and incentives to promote investment into renewable energy
Real estate:
* Streamlining of tax laws to enable listing of real estate investment trusts (REITs)
* Establishing a single window clearance for speedy project approvals
* Grant industry status to the sector, which would lower the risk weightage assigned to it by banks
* Increase in tax deduction benefit limit on home loan interest, which is currently capped at 150,000 rupees annually
Retail and consumer goods:
* Implementation of GST and tax reforms that will lead to an increase in personal disposable incomes
* Announcement of easing of rules on FDI in online retailing
* Increase in tax on cigarettes
(Compiled by Aman Shah; Editing by Sumeet Chatterjee and Richard Borsuk)
