This will be the seventh time Mukherjee will be presenting budget in the Lok Sabha, the second highest number of time by any finance minister. Mukherjee had presented budgets for three consecutive years in early 1980s.
Tax payers will be looking forward to some relief from Finance Minister who is expected to raise the income tax exemption limit to at least Rs 2 lakh in his budget proposals.
The Minister may also marginally raise the slabs in other tax brackets of 10 percent, 20 percent and 30 percent. The Direct Taxes Code (DTC) Bill has also made a mention of it.
The DTC, which will replace the Income Tax 1961, however, will only come into force from 2013-14 and the Minister may make a formal announcement on it in his budget speech.
The Standing Committee of Parliament that has scrutinised the DTC Bill has already submitted its report to the Lok Sabha Speaker.
Although the Committee had suggested raising the tax exemption limit to Rs 3 lakh, it is unlikely that Mukherjee will agree to it in view of the need to contain fiscal deficit.
With limited space for give away, the Budget is likely to balance populism with some tough measures to check tax evasion and generation of black money.
However, in view of reverses in the recently concluded state assembly elections, Mukherjee may go slow on economic reforms like FDI in multi-brand retail and further opening of the insurance sector to foreign investment.
There could be some bad news for prospective car buyers as government may hike duties on luxury items to raise resources.
Mukherjee is facing a huge challenge of reviving economic growth, which has slowed down over the last six quarters.
The country's gross domestic product (GDP) growth fell to three year low of 6.1 percent in third quarter of the current financial year. It was recorded 7.7 percent in the first quarter and 6.9 percent in the second quarter of the current fiscal.
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