New Delhi: Just a few months ahead of the Lok Sabha elections, the Government is set to present its Interim Budget today. This would be the current Government’s sixth and last budget. (Also read: Here’s How Budget is Passed in Parliament) Also Read - Railways Minister Piyush Goyal to Undergo Surgery to Remove Kidney Stone, Says 'Will Be Back Soon’
On Thursday, PM Narendra Modi clarified that it would an Interim Budget that Finance Minister Piyush Goyal would be presenting at 11 AM. With general elections looming, the Centre is likely to announce sops for people across the spectrum. Also Read - After Ram Vilas Paswan's Demise, Piyush Goyal Gets Additional Charge of Consumer Affairs, Food and Public Distribution
While some relief in income tax exemption to the salaried and middle-class people is expected, the Centre may also come up with some measures to beat unemployment which has reportedly risen to a 45-year high in the current financial year. Also Read - Kolkata Metro East-West Corrider: Railway Minister Piyush Goyal Inaugurates First Train From Phoolbagan Station
Income tax exemption thresholds could be raised; 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 over 60 but less than 80 years of age. Women taxpayers may get a higher basic exemption of Rs 3.25 lakh or even at par with senior citizens.
With the Goods and Services Tax (GST) in force now, there is not much scope for the government to offer in terms of relief as far as indirect taxes go.
Meanwhile, the Government is expected to announce some measures to tide over the agrarian crisis. Experts predict a direct transfer of cash to farmers, like Telangana’s Rythu Bandhu or even an interest-free crop loan for those farmers who pay on time. The move is likely in the wake of the Congress implementing farm loan waiver in its states with the promise of farm debt waiver and a minimum income for the poor if voted to power.
Goyal may also look at deferring subsidy payouts on fertiliser as well as LPG and kerosene to provide funds for the populist schemes. But credit rating agencies have warned that if the other expenditure is not brought down, a higher far subsidy bill will increase the future deficit.
A farm relief package may cost anywhere between Rs 70,000 crore and Rs 1 lakh crore. Moreover, cheap loans for small businesses and increased rural spending could also find a mention in the Interim Budget.
Deduction of interest amount on housing loan for a self-occupied house may be increased to Rs 2.5 lakh from Rs 2 lakh. Also, the set-off cap of adjusting loss from house property against other heads of income may be accordingly raised to Rs 2.5 lakh from Rs 2 lakh.
The government could target the poorest of the poor (possibly 40 per cent of the BPL population) based on the 2011 census. Anything between Rs 700 and Rs 1,200 per month may be provided to the poorest of the population (around 12 crore people) but it would mean an outgo of Rs 1 lakh crore or 0.5 per cent of the GDP.