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Budget 2019 to be Presented Today; Grand Announcements With Focus on Farmers, Salaried Class Likely
Prime Minister Narendra Modi-led government's sixth and final budget before the polls due by May is supposed to be an interim budget or a Vote on Account.
New Delhi: The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government is all set to present the Interim Budget 2019-20 or Vote-of-Account on Friday in Parliament. The sixth and final Budget of the Narendra Modi government would be presented by Finance Minister Piyush Goyal and is likely to be focused on sops for farmers and relief for salaried class, in the form of income tax concessions. The move is being seen as a last-ditch attempt by the Centre to woo voters ahead of Lok Sabha Elections 2019.
(Here’s How a Budget is Passed in Parliament)
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As per the tradition, the outgoing government only seeks parliamentary approval for limited period spending, leaving the full Budget presentation for the new regime.
Experts believe that the Interim Budget 2019 may see Goyal announcing some form of a direct transfer of cash to farmers. The move is likely to come in the wake of steps taken by the Congress to lure voters with the promise of debt waiver for farmers and a minimum income for the poor if voted to power.
As per sources quoted by PTI, the farm relief package, if announced in the Interim Budget 2019, may cost anywhere between Rs 70,000 crore to Rs 1 lakh crore. Also being speculated are cheap loans for small businesses and increased rural spending.
Furthermore, Goyal is also expected to raise income tax exemption thresholds. As expected, the basic exemption limit may be raised from Rs 2.5 lakh to Rs 3 lakh for individuals of less than 60 years of age and from Rs 3 lakh to Rs 3.5 lakh for those aged 60 years or more but less than 80. Meanwhile, women taxpayers may get higher basic exemption of Rs 3.25 lakh or even at par with senior citizens.
The government may also take into account the delay in housing projects and rising interest rates. Deduction of interest amount on housing loan for a self-occupied house property may be enhanced to Rs 2.5 lakh from Rs 2 lakh, PTI report quoted sources as saying.
The set off cap of adjusting loss from house property against other heads of income may also be accordingly raised to Rs 2.5 lakh from Rs 2 lakh, according to sources.
For the farm sector, the possible options include direct transfer of money to farmers like in the Telangana model of Rythu Bandhu, interest free crop loan for those farmers who pay on time and zero premium for insurance of food grain crops.
Goyal may also look at higher interim dividend from RBI and deferring subsidy payouts on fertiliser as well as LPG and kerosene to provide funds for the populist schemes.
Credit rating agencies have warned that without bringing down other spending, a higher farm subsidy bill will increase future fiscal deficits.
Sources said the Interim Budget would provide an opportunity for the government to outline its medium-term economic priorities, specifically with regards to improving farm/rural incomes. It would be important to continue its focus on overall infrastructure expansion, especially as private sector investments remain tepid and a nascent recovery hinges on government spending.
The government could target the poorest of the poor (possibly 40 per cent of the BPL population) based on the 2011 census.
Some say a hypothetical Rs 700 to Rs 1,200 per month can be provided to the poorest of the population (around 12 crore people). This will entail an outgo of Rs 1 lakh crore or 0.5 per cent of the GDP.
(Inputs from PTI)
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