The financial services industry is looking for its own stimulus of sorts in the Union Budget due next Monday.

With the likelihood of a rise in income tax exemption limit for individuals from the current Rs. 1.5 lakh or the expansion of the tax-exempt deduction window for specified investments beyond Rs. 1 lakh, the industry is hoping that this will kick up more demand for savings-based products.

"Indications are that the tax exemption may go up from Rs 1.5 lakh to Rs 2.5 lakh or the deductions under section 80C may go up from Rs 1 lakh to Rs 1.5 lakh," said a senior government official on conditions of anonymity. "The Urban Development ministry has even sought for a raise tax exemption limit on interest payment on home loans from Rs 1.5 lakh to Rs 2.5 lakh."

Savings can go into post-office instruments, stocks, mutual funds and insurance products, besides pension and public provident funds.

"It will encourage people to save more," said, Sam Ghosh, CEO, Reliance Capital.

"This will make available a larger sum of money that can be invested in equity linked savings scheme of mutual funds," said Sanjay Sinha, CEO, DBS Cholamandalam AMC.