Preparations for the Union Budget for 2004-05 have already begun, even before the formation of the Congress-led coalition government is in place.
The fine-tuning of the Budget, likely to be presented by mid-July, would be done by the next finance minister with inputs from the Common Minimum Programme.
The CMP is likely to contain proposals for providing social safety net, particularly to the 37 crore (370 million) workers in the unorganised sector, sources said. It is also expected to suggest a two per cent cess on salaries of employees of the organised sector to fund a job insurance scheme.
With an attempt to strike a balance between reforms and development, the new finance minister would have to prune wasteful expenses while auguring revenues.
Revenue secretary Vineeta Rai, however, said the serious exercise would start only after the new government assumes office. "We are waiting for the directions from the new government (for preparing the Budget)," she said.
The new government is already under pressure to keep energy prices stable despite a rise in international oil prices, now at over $40 a barrel.
At the same time, it has a commitment to bring down the fiscal and revenue deficits as envisaged in the Fiscal Responsibility and Budget Management Act of 2003.
The National Democratic Alliance government had estimated a lower fiscal deficit of 4.8 per cent of GDP in 2003-04 compared to the Budget estimate of 5.6 per cent.
It had projected the fiscal gap to come down to 4.4 per cent of GDP in 2004-05.
Revenue collections have been buoyant recently despite the give-aways in excise and customs by the NDA government in January following higher growth of 8.1 per cent.
With the new government planning higher expenditure on social sectors, it is to be seen how it proposes to garner additional revenue.
The new government has already promised to carry forward tax reforms with inputs from Kelkar panel's recommendations and adopt policies that are "pro-savings, pro-investment, pro-growth" and emphasise on higher employment generation.
It has also indicated major investments in agriculture, irrigation and infrastructure including continuation of the highway projects of the NDA government.
