Interim Finance Minister Piyush Goyal’s presented the last budget before the general elections. Every Indian had high hopes for themselves, and the government too did not want to leave any stone unturned to impress the countrymen. While the budget had something for everyone, speculations were rife that this time it will give some relief to the salaried middle class that was left out. The farmer community on the other was expecting newer schemes and rebates from the ruling government before it comes to seek their votes.
The F.M too did not disappoint, he tried to cover almost everyone in the scope of benefit. On the preset of elections this budget has proposed tax breaks for the middle class and sops for farmers and millions of employees in the unorganized sector. Income up to Rs 5 lakh per year will be exempted from tax; farmers owning up to 5 hectares of land will get income support of Rs 6,000 per year and unorganized sector employees will get Rs 3,000 per month pension
Here are the highlights from the FM’s speech:
Income Tax reliefs:
- Tax rebate limit raised to 5 lakh from the existing 2.5 lakh, which in addition with 1.5 lakh rebate under Section 80(C) means no tax for those whose taxable income is under Rs 6.5 lakh.
Note-Tax rebate means, the tax payers can get refund on the tax paid to the government while tax exemption means there is no income tax to be paid. Budget 2019 includes tax rebate and not tax exemption!
- Standard deduction increased to Rs 50,000 from Rs 40,000 for salaried class.
Tax exemptions on investments:
- Individuals with gross income up to 6.5 lakh rupees will be exempted from tax paying if they invest in provident funds and prescribed equities
- TDS threshold limit for rental income increased from to 2.4.lakh from 1.8 lakh.
- Income up to Rs 40,000 from interests from banks and post offices exempted from tax deduction.
- Tax exemptions from Capital gains under Section 54 to be available up to Rs 2 crore. These exemptions will be available for 2 properties.
- Income tax relief for notional rent from unsold property extended to 2 years from 1 year.
- Income Tax returns to be processed within 24 hours and refunds will be paid immediately.
- Within nearly two years, almost all assessment and verification of IT returns will be done electronically by an anonymised tax system without any intervention by officials
- Small and marginal farmers to get assured income of Rs 6,000 per year.
- Farmers owning up to 2 hectare of lands will be entitled to Rs 6,000 per year in three equal installments. The scheme shall be effective from December 1, 2018.
Interest subvention for farm loan takers:
- To provide security against natural disasters, farmers will be given 2% interest subvention in case of natural calamities. They will be given an additional 3% subvention in case they repay the loan on time.
Animal husbandry will be promoted by giving 2% interest subvention to farmers who pursue animal husbandry and fisheries jobs through Kisaan credit cards. Kamdhenu scheme will be launched to promote animal husbandry.
- Group of Ministers will discuss ways to reduce GST for house buyers.
- F.M also told that the direct tax collections increased from Rs 6.38 lakh crore in 2013-14 to almost Rs 12 lakh crore; The tax base is up from Rs 3.79 crore to 6.85 crore.
- Businesses will be allowed to file quarterly GST returns in case the annual turnover exceeds Rs 5 crore.
- Indian Customs to fully digitised exim transactions and leverage RFID for logistic. Govt abolishes duties on 36 capital goods.
- GST collections in January 2019 had crossed Rs 1 lakh crores.
Sops for workers:
- A yearly pension of Rs 3000 will be given to workers in unorganised sectors.
- Government launched the Pradhan Mantri Shram Yogi Maandhan Yojana for unorganised sector workers. This scheme will work towards generatiuon of income up to Rs 15,000 per month. Beneficiaries will get Rs 3,000 per month pension with a contribution of Rs 100 per month after retirement. Govt has allocated Rs 500 crore for the scheme.
- Limit for Gratuity has been increased from 10 lakh to 30 lakh.
- Rs 60,000 crore were allocated for MNREGA.
- Rs 19,000 were allocated for construction of rural roads under Gram Sadak yojana.
- Govt has increased the defense budget to over Rs 3 lakh crore. Additional funds will be provided for defense if needed.
- The F.M also told that the government has disbursed 35,000 crore rupees under OROP scheme in the last few years.
- Indian railway’s operating ratio expected to improved from 96.2% in FY19 to 95% FY20.
- It was also presented now there is not a single unmanned railway crossing on the broad gauge in India.
- For the current financial year, the government has set the target for financial deficit to 3.4 percent. Fiscal deficit for 2019/20 is estimated at 3.4 percent of GDP.
- The Finance minister re iterated Government’s stated commitment earlier was to bring down the fiscal deficit to 3.1 percent of GDP by the end of March 2020, and to 3 percent by March 2021.
- Current account deficit at 2.5% of the GDP.
A single window clearance for filmmakers
- Government will provide a single window clearance to the filmmakers. In addition , anti-cam cording provision will also be introduced in Cinematography Act to fight digital piracy.
Finance Minister also spoke about the schemes of social welfare launched by the government that are already functioning.
- The government is working to build 1 lakh digital villages.
- Government took a historic decision to improve the income of farmers . The government increased the MSP by 1.5 times of the production cost for all 22 crops.
- The government aimed to provide access to clan fuel to all. For this they launched the Pradhan Mantri Ujjwala Yojana, a programme and gave 8 crore free LPG connections to rural households, 6 crore connections have been given already.
- The committee under NITI Aayog will be set up for denotifed nomadic & semi nomadic communities
State of Economy:
India is poised to become a $5 trillion economy in next 5 years, $10-trillion economy in the next eight years
- Committed to eliminating the scourge of black money; anti-black money measures taken have brought an undisclosed income of about 1.30 lakh crore rupees to the fore; 3.38 lakh shell companies were deregistered.
- GST has been continuously reduced, resulting in relief of 80,000 crore rupees to consumers; most items of daily use for poor and middle class are now in the 0%-5% tax bracket.
Fiscal deficit is seen at 3.4 percent in FY 19 and Current account deficit at 2.5% of the GDP.
We have recovered Rs 3 lakh crore through Insolvency and Bankruptcy Code. Govt expects banks on the central bank’s Prompt Corrective Action list to be removed soon.
Here is what the Finance minister had to say about the growth and challenges of the Indian GDP:
- Growth in the last 5 years has been higher than that by any other govt. Spent Rs 2.6 lakh crore in the recap of PSU Banks.
- Average inflation in UPA government was 10% and we have brought that down to 4 percent. Inflation in December 2018 was 2.1%. If we had not controlled inflation our families would have been spending 35-40 percent more on daily use items.
- Transparent auctioning of natural resources like coal and oil.
- Domestic air traffic doubled in the last 5 years.
- Over 90 percent of the country covered under sanitation coverage. People have made this a social revolution and i thank the 130 crore people of the country. More than 5.45 lakh villages have been declared Open Defecation Free.
- In the past, false promises were made but we have taken targeted expenditure on all dimensions.
- Everybody will get an electricity connection in the near future. We have provided 143 crore electricity bulbs to the poor.
- Ayushman Bharat, the world’s largest healthcare programme, was launched to provide medical care to almost 50 crore people, resulting in Rs 3,000 crore savings by poor families.
- Lower costs of Stents & Knee implants have benefited people. The government has announced 14 new AIIMS since 2014.
- Loans worth Rs 7.23 lakh crore have been given under Mudra Yojana.
- Monthly mobile data consumption has increased 50 times in the last 5 years; the cost of data and voice calls in India is possibly the lowest in the world.