Interim finance minister Piyush Goyal presents a populist Union Budget full of sops for middle class, farmers and cows to make BJP battle ready for Lok Sabha polls
Union minister Piyush Goyal, who was given additional charge of the finance portfolio recently after Arun Jaitley underwent surgery at a New York hospital recently, began his budget speech, on Friday (February 1), asserting that he was presenting an interim fiscal statement, a vote-on-account. What followed, however, was a nearly comprehensive full budget aimed at reclaiming the political ground that Prime Minister Narendra Modi and his BJP seem to have been losing over the past two years on account of growing joblessness, rural distress and an increasing agrarian crisis.
Since this is the last budgetary exercise of the incumbent government before it seeks a renewed mandate in April-May, Goyal should have, as per parliamentary conventions, presented an interim budget – making provisions for government expenditure to last for the coming three months before the Lok Sabha poll results, due in May, throw up a new mandate. However, Goyal’s budget focused on populist announcements and schemes aimed at winning over disgruntled voters.
Former finance minister P Chidambaram has described the budget thus: “It was not a Vote on Account. It was an Account for Votes”, while Modi, his colleagues in the Union council of ministers and the entire rank and file of the BJP has predictably lauded Goyal for a “historic and balanced budget” that addresses all concerns of India’s economy. Goyal’s cabinet colleague, Union minister Jayant Sinha, was perhaps most honest in his assessment of the budget, declaring that he gave “100 on 10 to this Budget” as it “will ensure we (the BJP) get 400 seats” in the upcoming Lok Sabha polls.
Here are key highlights of the Union Budget 2019:
- Goyal, who also holds charge of the Union railway ministry, announced a Rs 64,587 crore outlay for Indian Railways for the upcoming financial year 2019-2020
- For the upcoming financial year 2019-2020, operating ratio target set at 95 per cent while revised operating ratio estimate for the current financial year is 96.2 per cent
- Facing criticism over unemployment in India, Indian Railways has recently announced recruitment for additional 2.3 lakh people, recruitments will take place over the next 2 years and the newly introduced 10 per cent reservation for economically weaker forward castes will be applicable to them
- Individual taxpayers having taxable annual income up to Rs.5 lakhs will not be required to pay any income tax; persons having gross income up to Rs. 6.50 lakhs are not required to pay any income tax if they make investments in provident funds, specified savings and insurance etc.
- Additional deductions such as interest on home loan up to Rs. 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance and medical expenditure on senior citizens etc, are also provided for in the Interim Budget 2019-20. Thus tax benefit of Rs. 18,500 crore is proposed to be provided to an estimated 3 crore middle class and small taxpayers comprising self employed, small business, small traders, salary earners, pensioners and senior citizens.
- For salaried persons, Standard Deduction is being raised from the current Rs.40,000 to Rs.50,000
- Exemption on levy of income tax on notional rent on a second self-occupied house is also proposed. Currently, income tax on notional rent is payable if one has more than one self-occupied house.
- TDS threshold on interest earned on bank/post office deposits is being raised from Rs. 10,000 to Rs.40,000; TDS threshold for deduction of tax on rent is proposed to be increased from Rs. 1,80,000 to Rs.2,40,000
- PM Kisaan Samman Nidhi package for farmers with outlay of Rs 75,000 crore, Direct Benefit Transfers of Rs 6000 per year promised for farmers
- Two per cent interest subvention to farmers pursuing animal husbandry and fisheries
- Pradhan Mantri Shram Mandan, a mega pension scheme, announced for the unorganised sector with assured monthly pension of Rs 3,000 after the age of 60 years for those who enroll; Government estimates 10 crore people of the unorganised sector to benefit; allocation of Rs 500 crore made for the scheme
- Over 8 crore free LPG connections to be given
- Rs 19,000 crore has been allocated for Pradhan Mantri Gram Sadak Yojana (PMGSY) 2019-20
- All farmers affected by severe natural disasters to will continue to get 2 per cent interest subvention and additional 3 per cent on timely loan repayment
- 21 per cent increase in allocation of funds for the North-East States, amounting to Rs 58,166 crores
- Allocation of Rs.750 crore for Rashtriya Gokul Mission has been announced for the current year; setting up of Rashtriya Kamdhenu Aayog to upscale sustainable genetic upgradation of cow resources and to enhance production and productivity of cows
- The fiscal deficit has been brought down to 3.4 per cent in 2018-19 revised estimate; Current Account Deficit (CAD) projected at 2.5 per cent of GDP for this fiscal
- Rs.60,000 crore allocated for MGNREGA
- By March, 2019, all households will be provided with electricity connection
- Ayushman Bharat to provide medical treatment to nearly 50 crore people in the country
- 22nd All India Institute of Medical Sciences to be set up in Haryana
- Allocation for Integrated Child Development Scheme (ICDS) is increased from Rs.23,357 crore in revised estimate of 2018-19 to Rs.27,584 crore in budgetary estimate for 2019-20
- Allocation of Rs.76,801 crore made for Scheduled Caste welfare programs and Rs 50, 086 crore for Scheduled Tribe welfare schemes
- Defence budget to breach Rs 3 lakh crore mark
—India Legal Bureau