The last budget presented by the Modi government in its first tenure has made some sweeping announcements that are likely to have a great impact, both electorally and on the lives of all Indians. Considering the fact that the importance of the 2019 General Elections is being equated with the Third Battle of Panipat, it’s hardly any surprise.
Here’s a round-up of the key points of the Acting Finance Minister Piyush Goyal’s Budget speech.
1. Sops for Farmers
The most significant announcement was that structured income support will be provided to farmers through the Pradhan Mantri Krishan Samridhi Yojana. Rs. 6000 will be provided to farmers with less than 2 hectares of land annually in three instalments. It will cost the state Rs. 75,000 crores per year.
In addition, a 2% interest subvention has been provided to farmers who practice animal husbandry and fisheries. An additional 1% interest subvention will be given if loans are repaid on time. Farmers who have been severely affected by natural calamities will receive a 2% interest subvention on loans and additional 3% subvention on timely repayment.
2. Mega Pension for workers in Unorganized Sector
The NDA government has now launched a new pension scheme called ‘Pradhan Mantri Shram Yogi Mandhan‘, to provide assured monthly pension of Rs.3000 per month for workers in unorganized sector after 60 years of age, with the maximum contribution of just Rs.100 per month. Any worker in the unorganised sector earning less than Rs 15,000 a month will be covered under the first phase of the scheme, said Piyush Goyal.
The acting Finance Minister Goyal said that the mega pension scheme for unorganised sector workers is set to benefit 10 crore workers, adding that the government has allocated Rs 500 crore for the new scheme. Any worker working in the unorganised sector can avail the benefits of this scheme. Workers between 18-28 years of age have to pay Rs 55 per month, while workers above 29 years will be paying Rs 100 per month to avail the benefits. The union government will also contribute an equal share every month, said the Finance Minister.
3. The Fight Against NPAs, Black Money and Corruption
Goyal stated that Rs 3 lakh crore has already been recovered in favour of banks and creditors. He also spoke about recapitalisation of banks to the tunes of Rs 2.6 lakh crores.
The Finance Minister said that the years between 2008 and 2014 witnessed a high credit growth, which also took the NPA level from Rs 18 lakh crore to a whopping Rs 54 lakh crore. He added that till 2014 many lakh crores of NPAs were not even identified properly or were re-written so as to hide them. But, Piyush Goyal said that after Modi government was voted to power, it constructed Asset Quality review to weed out the bad loans. He said that NPAs were a consequence of giving loans to those firms which failed to work properly or showed poor performance.
Piyush Goyal praised the initiative of Insolvency and Bankruptcy code, which has helped the government to curb the NPA menace.
He also stated that the anti-Black Money drive has brought an undisclosed income of Rs. 1.30 lakh crore rupees to the fore and over 3 lakh shell companies have been deregistered as a consequence.
4. Respite for the Middle Class
Goyal also thanked the taxpayers in the Budget 2019 speech of the country for their contribution to nation-building and for providing a better quality of life to the poor and marginalized sections of society. He also said that their taxes help provide for the gas connections in the households of poor and healthcare to marginalized sections of society. He also said it was the taxpayers who help pay for the OROP for Army men.
The budget announced a full rebate of income tax for income up to ₹5 lakh. This will mean that individual taxpayers up to a gross income of ₹6.5 lakhs will need not pay any income tax if they make investments in provident fund and prescribed equities. Around 3 crore middle-class taxpayers will get tax exemption due to this measure.
The standard deduction for salaried income has also been raised to ₹50,000 from current ₹40,000. The finance minister also announced tax relief on interest income, as TDS threshold on interest on bank and post office deposits raised from ₹10,000 to ₹40,000. This means if the interest earned on deposits made at banks and post offices remain below ₹40,000, there will no TDS deduction on the interest paid.
Similarly, TDS threshold on rental income raised from ₹1.8 lakh to ₹2.4 lakh. Benefits under section 80(i)BA is also being extended for one more year, for all housing projects approved till the end of 2019-2020.
5. Nomadic and semi-nomadic tribes to be included in social welfare schemes
Acknowledging the remoteness of nomadic and semi-nomadic tribes and their exclusion from the economy, Piyush Goyal declared that the government will identify such tribes and extend the welfare schemes to them.
The government will set up a committee under NITI Aayog to identify the nomadic and semi-nomadic tribes who have not benefitted from the government welfare schemes owing to their isolation. Welfare development board will be set up under the Ministry of Social Justice and Empowerment to reach out to these faraway tribes and develop tailored strategic interventions for providing them with social and economic assistance.
6. OROP and the Defense Budget
Piyush Goal has announced that the government has released funds to the tune of ₹35,000 crores to Army personnel as part of the One Rank One Pension (OROP) scheme. The One Rank One Pension (OROP) demand by the former defence personnel had been ignored by the previous government for almost 40 years now. The previous Congress government headed by had allocated just Rs.500 crore for the implementation of the OROP.
In addition to the OROP, Finance Minister Piyush Goyal also said that the Centre has also enhanced the Defence spending to ₹3 lakh crore. “The Defence Budget has crossed Rs. three lakh crore for the first time. Additional funds will be provided, if necessary,” said Piyush Goyal.
“The previous governments announced it in 3 budgets but sanctioned a mere Rs 500 crore in the interim budget of 2014-15. This had been pending for 40 years but has been implemented by us. In contrast, we have already disbursed over ₹35,000 crores as part of OROP after implementing it in the true spirit,” Goyal said.
7. GST and the MSMEs
A 2% interest subvention was announced for MSMEs that have taken a loan of upto Rs. 1 crore. Goyal stated that the government had also increased the share of government procurements from MSMEs through Government eMarketplace (GeM) to 25 per cent, including 3 per cent from MSMEs run by women.
It was also announced that businesses with an annual turnover of upto Rs. 5 crores, comprising over 90% of GST payers, will be allowed to file quarterly GST returns. The Government also abolished duties on 36 capital goods.
The GST council has also been asked to devise ways to reduced GST for homebuyers.
8. Vision 2030
Finance Minister, Piyush Goyal while rolling out the interim budget 2019 in the parliament today, underlined 10 important dimensions for ‘Vision 2030’, the reforms the government would implement that could build a developed India by 2030.
- Talking about the first dimension, the government aims to build next-gen infrastructure, physical as well as social, for a $10 trillion economy and also provide ease of living.
- The Government aims to build a digital India and creating innumerable startups and job opportunities through the same it aims to reach every citizen of the country.
- The third dimension the FM spoke about is Clean and Green India – an India that drives electric vehicles, with renewables becoming a major source of energy.
- The government aims to expand rural industrialization using modern industrial technologies, based on Make In India approach.
- The FM announced that the fifth dimension is Clean Rivers – with safe drinking water to all Indians, sustaining and nourishing life, using micro-irrigation techniques; long coastline can be pivotal for the economy, using the strength of the blue economy and Sagar mala.
- Oceans and coastlines are the sixth dimensions of the government’s vision for 2030
- Our seventh dimension is the aim to become launchpad of the world, placing an Indian astronaut in space by 2022, said FM Piyush Goyal
- By giving emphasis on organic food forms and improving agricultural productivity along with providing self-sufficiency in food is the eighth dimension of the government’s vision.
- Creating a healthy India, with distress-free and comprehensive wellness system for all became the ninth dimension to the vision 2030.
- Finally, the Finance minister spoke about the tenth dimension which is ‘Minimum Government Maximum Governance’, a proactive, responsible and a friendly bureaucracy.
9. Goyal’s Introductory remarks
In his initial remarks ahead of Budget 2019, Acting Finance Minister Piyush Goyal illustrated the achievements of the Modi government. He said India is marching towards growth and prosperity.
Goyal also remarked that the goal was to have a New India by 2022 where everyone had a house, where everyone has access to toilets and basic healthcare. He also asserted that under the Modi government, India had risen from being the 11th largest economy in the world to being sixth.
Goyal also remarked that due to the policies implemented by the Modi government, India is now the fastest growing major economy in the world. He also boasted about the manner in which the government has drastically brought down the rate of inflation in the country.
Verdict
The Interim Budget presented by the Acting Finance Minister Piyush Goyal has certainly delivered on the massive expectations that were building on it. Most of the speculations ahead of the budget came true as it contained numerous sops to address Farmer Distress. The issue of middle-class disenchantment with the party was also addressed with providing income tax rebates to the salaried class. Small businesses too received a variety of concessions as speculated. It was certainly a populist budget as was expected in the Election year.
