Checking on challenges

The key challenge for the finance minister’s team will be to come up with a Budget that addresses the problems of high inflation without compromising on growth, keep on the path of fiscal consolidation and formulate tax proposals keeping in mind the introduction of Direct Taxes Code (DTC) and Goods and Services Tax (GST) next year.

Additional revenue generation for keeping fiscal deficit on track would require new initiatives as next year there will not be any window like the one this year presented by 3G auctioning. Black money tax immunity scheme and disinvestment, both, can generate additional resources but political acceptance will be a major challenge here for the finance minister.

Support to the flagship schemes is a must, but Mukherjee will have to move beyond just providing money for them as he has to tighten expenditure management and also kickstart big-ticket reform measures for taking the growth rate to double digit.

Exiting the stimulus completely is a tough task for him as despite his indications for the same, a section of the industry feels that excise duty should remain at 10 per cent.