Nine important features to look out for in Union Budget 2017 Autoplay Autoplay 1 of 1 Pre-budget expectations With few days to go for the annual financial plan presentation, finance minister Arun Jaitley may come up with various amendments in various clauses related to any number of Acts, but what is more important is the fact that individuals should get benefited the most.



Here are the pre-budget expectations from Arun Jaitley's budget 2017 speech:

The International Monetary Fund’s World Economic Outlook painted a somewhat optimistic picture of the global economy while estimating a slower growth for India in the current fiscal, expecting the growth to jump back over the 7% mark during the next fiscal as consumption revives.At the same time, the New Year has also seen the domestic economy starting to recover from the temporary disruption caused by the move to demonetise. However, despite a positive beginning, the year is not without its share of macro risks. Check out the emerging risks on the horizon:The overall response by the governments to the slowdown in the growth in developed markets had been to adopt policies to protect their markets and labour. In 2016, the G20 countries have taken more trade restrictive measures than trade facilitating ones. Such protectionist trade policies create uncertainties as they are meant to provide immediate stimulus and therefore tend to be more variable and less consistent. More protectionism could mean more pressure on exports for emerging market economies. For India, it could be a sort of a double whammy as a large share of our import basket is consumed by oil, which has on account of OPEC cuts seen a hardening in prices.Most multilateral agencies expect global growth to pick up in the current year. The higher level of growth is being premised on the back of a stable and higher growth in the US, stable growth in China and a rebound in growth of some emerging economies. A higher US growth is likely due to higher fiscal expenditure while some emerging markets such as Brazil and Russia are likely to see better numbers as commodity prices have risen.China has been on a firmer footing of late as the central government returns to its old playbook of debt-fuelled growth facilitated by cheap credit. China achieved growth at 6.7% in 2016 and will likely slow further in 2017 to around 6.5%. But, given how the growth is being achieved, it seems that the Chinese authorities might be reaching limits of the current policy mix of fiscal and monetary stimulus. This has important ramifications for the Indian market as China could go in for some Yuan devaluation, which would mean some depreciation of the domestic currency to maintain competitiveness.Britain’s vote to exit the EU led to a fall in equity indices and a huge depreciation of the British pound as well as the Euro. Given the dynamics of the situation, there could be a case for ‘Hard Brexit’ wherein Britain leaves the single European market and looks for options like free trade deals. For companies with substantial interestsin both UK and EU, this uncertainty may impact their investment and growth plans. There could be another bout of volatility due to the Italian banking crisis. Reports suggest that Italian banks are saddled with around €350 billion. The government in Rome is looking to bail out the third largest bank in the Italian economy by pumping in more money. Given the linkages in financial markets, India would also be affected as any adverse event could cause some outflow of funds.According to the government estimates, growth was expected to come down to 7.1% in FY17. If demonetisation is factored in, then growth in the current year is likely to be further affected on account of consumer’s inability and some hesitation to spend. This can lead to a short term vicious cycle of lower expected consumption feeding into lower investment expectation and most people just postponing plans till they feel that a new normal has come in the economy.Given the rising commodity prices, uncertainty about domestic as well as export demand, the private investment expenditure could take longer to pick up. Whether growth recovers in FY2017-18 depends on how the government sets about allocating its expenditure between short term consumption stimulus and long term capital formation.According to the last year’s Economic Survey, the overall average tax to GDP ratio for emerging markets stood at 21.4%, while India’s level stood at 16.4% in FY14. Which is why reforming the indirect tax structure by introducing a single system of GST can be expected to lead to some disruption. These disruptions would emerge as the numerous small businesses learn to adapt to not only a new taxation system but also to an incremental digital framework for compliance with the new regime. On the whole, the GST can be expected to provide a price stimulus for goods, which, if large enough to counteract the expected increase in cost of services, will ultimately uplift growth. ?