Finance minister Pranab Mukherjee is likely to increase the income tax exemption limit on individual savings from R1 lakh at present by up to R50,000, in a bid to raise the savings rate which has been falling since 2007-08.
In recent Budget meetings with ministry officials, Mukherjee has indicated his desire to raise the exemption limit, a senior official said on condition of anonymity.
The savings rate is estimated to have fallen sharply by as much as 500 basis points in the current fiscal from its pre-crisis peak of 36.9% of GDP in 2007-08 as per RBI and CSO data.
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