Amidst rising restlessness and anger in the farmers, middle class, salaried class and unorganised sectors in the poll bound year, the Modi government has announced a series of sops in the interim budget for 2019-20. Five key take ways include the Rs 6,000 crore direct income for farmers, full tax rebate if annual income upto Rs 5 lakh, no tax if rent is upto rs 2.4 lakh, pension for 10 crore workers and two per cent interest relief for micro, small and medium enterprises (MSMEs). After humiliating defeat in three heartland states in the recent assembly elections, the ruling BJP used the opportunity to cover its bases ahead of ensuing Lok Sabha election likely to be held in April.
“This is not just an Interim Budget, this is a vehicle for developmental transformation of the nation,” said the union finance minister Piyush Goyal while presenting the interim budget for 2019-20.
However, the major concern is with regard to fiscal deficit pegged at 3.4% of gross domestic product (GDP) for 2019-20 with the government keeping the target of 3% of fiscal deficit to be achieved by 2020-21. Goyal mentioned that the fiscal deficit has brought down to 3.4% in 2018-19 RE from almost 6% seven years ago.
Goyal announced the PM Kisan programme for the benefit of small and marginal farmers who have less than two acre of land. They will get Rs 6,000 directly in the bank accounts in three instalments. The implementation of this programme will cost the government Rs 75,000 crore. The finance minister has allocated Rs 20,000 core for current fiscal 2018-19 and it will be implemented from December 2018 onwards.
In a serious bid to lure the middle class, Goyal has given a bonanza. He has proposed income up to Rs 5 lakh to be exempted from Income Tax, tax relief of more than Rs 23,000 crore to 3 crore middle-class taxpayers, rise in Standard Deduction to Rs 50,000 from Rs 40,000, increase in TDS threshold to from Rs 10,000 to Rs 40,000 on interest earned on bank/post office deposits, existing rates of income tax to continue and tax exempted on notional rent on a second self-occupied house.
The government also decided to hike the gratuity limit from Rs 10 lakh to Rs 20 lakh from the next financial year.
The government has announced a pension scheme for workers in the unorganised sector with a monthly income of up to Rs 15,000. They will have an assured monthly pension of Rs 3,000 after they retire at 60.
For labour and MNREGA, Piyush has given more attention. The Pradhan Mantri Shram Yogi Maan-dhan scheme aims to ensure fixed monthly pension to 10 crore unorganised sector workers. He has made an allocation of Rs 60, 000 crore allocation for MGNREGA in BE 2019-20 with a proposal to expand the employment opportunities expanded. He informed that the EPFO membership has increased by 2 crore and minimum income for every category of workers increased by 42% in last 5 years.
Goyal said the defence budget will cross Rs 3,00,000 crore for the first time ever, The One Rank One Pension scheme is under implementation in full spirit with Rs 35,000 crore already disbursed. There has been increase in military pay service.
Goyal, who holds railway ministry, has proposed capital support of Rs 64,587 crore proposed in 2019-20 (BE) from the budget and announced an overall capital expenditure programme of Rs 1,58,658 crore. The Operating Ratio is expected to improve from 98.4% in 2017-18 to 96.2% in 2018-19 (RE) and to 95% in 2019- 20 (BE).
The FM has proposed 2% interest subvention on an incremental loan of Rs 1 crore for GST registered MSMEs, at least 3% of the 25% sourcing for the Government undertakings will be from women owned MSMEs and up to Rs 1 crore loans can be availed in less than an hour. The government will give renewed focus on internal trade and the Department of Industrial Policy and Promotion will be renamed to Department for Promotion of Industries and Internal trade.
Goyal has provided sops for the entertainment industry too. The Indian filmmakers will get access to single window clearance as well for ease of shooting films and regulatory provisions will rely more on self-declaration. The government will introduce anti-camcording provisions in the Cinematograph Act to control piracy.