Universal basic income transfers for poor may be introduced: HDFC -Governance Now

Universal basic income transfers for poor may be introduced: HDFC

Service tax rates could be increased to bring them in line with GST rates and some tweaks in corporate and personal tax regimes are expected

GN Bureau | January 30, 2017

#money transfer #HDFC #UBI #universal basic income #poverty

Universal basic income transfers for the poor are likely to be introduced only on a pilot basis but low-cost housing could get a bigger boost, said HDFC bank in its budget expectations.

The budget will be presented on February 1.

Read: Mid-19th century poverty levels in UK, US resemble those in India today: Expert

The HDFC bank report said that the theme of black money crackdown' and “digitization” could be reinforced. Service tax rates could be increased to bring them in line with GST rates and some tweaks in corporate and personal tax regimes are expected.

Assuming that the government is likely to project the effect of demonetization to be transitory, growth and tax targets for FY18 could be aggressive. Overall, fiscal deficit could at best be at 3-3.3% for FY18 (in line with the FRBM committee recommendations), and not paused at 3.5% of GDP.

It said that the 2017 budget will be presented against the challenging backdrop of an uncertain global environment, domestic economy reeling under the impact of demonetization, subdued private capex cycle and many unknowns confronting the government (such as roll out of GST). Given the context, therefore, we expect the government to provide some support to the economy however the optics of the budget are unlikely to dazzle.

The bank said it expects the budget to focus more on effective implementation and increased allocation to existing projects rather than announcing new schemes/projects. Some popular announcements mainly to help the sectors that have suffered in the demonetization process like MSMEs and rural economy are however likely.

HDFC report on budget expectations 2017

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