The Modi Government have played their masterstroke in the form of interim Union budget ahead of 2019 Lok Sabha Elections. Finally, a budget has been introduced that actually has considerations towards the middle-class strata of the population as well.
Early in the day, on February 1st, Finance Minister Piyush Goyal announced the interim budget and outlined the Government's development road map till 2030.
While presenting the budget the Finance Minister also talked about past schemes by NDA. "Our government has initiated the world's largest behavioural change movement with the Swachh Bharat Mission. India has achieved 98% rural sanitation coverage and as many as 5.45 lack villages have been declared open defecation free. A holistic approach has been taken by the government for the welfare of all sections of the citizenry. The government wants to take development to every individual" he said.
Highlight of Key Features of the Interim Budget
The Finance Minister said, "This is not just an Interim Budget, but a medium for country development. The country is changing because of the 'josh' of the Indian citizens. Development has become a movement in our government”.
Here are certain important things about the budget you should know:-
- The income tax exemption has been raised from 2.5 lacs to 5 lacs. Also, people with annual income of 6.5 can also be exempted from any tax if they invest in particular savings as provided in the budget.
- Income Tax returns will be processed within 24 hours and returns will be paid immediately in the next 2 years.
- Rs 75,000 Crore to be allocated for the scheme, which shall provide Rs. 6000 to all small and marginal farmers annually.
- For farmers who suffer any natural calamity, interest on the loan shall be subverted by 2% and if the loan is replayed on time, subvention of 3% interest on shall be provided.
- 19,000 Crore for construction of rural roads, and 60,000 Crore under MNREGA scheme.
- Assured monthly pension of Rs 3,000 rupees per month, with a contribution of 100 rupees per month, for workers in the unorganized sector after 60 years of age.
- Govt increases defence budget to over Rs 3 lakh crore. Govt will provide additional funds for Defence, if needed.
Other than the above stated features, 1.6 lac crore have been allocated for the development of Railways, Debt to GDP ratio to be brought down to 40 percent by 2024/25, along with other fiscal deficit math.
What do the Experts say?
Garima Kapoor, economist and vice president, Elara Capital, Mumbai:
"The budget is clearly farm-focused, with elections on the mind. Farmers, age-old, unorganised sector, MSME and middle class - they're all finding favour, with the agricultural sector getting the biggest support."
Yogesh Mehta, MOSL:
“Pro poor and low income group will be biggest beneficiaries, farm equipment, consumer, few auto could be in focus.”
Sanjay Sanghvi, Khaitan & Co.:
“Tax assessments to be done electronically without interface with tax administration is a very good move. Full tax rebate for income up to 5 Lakhs helpful for small taxpayers.
For people earning up to 6.50 lakhs a year also fully tax free if Rs 1.50 lakhs invested in prescribed tax saving avenues.”
Nilesh Shah, Envision Capital:
“This budget will increase income of farmers and middle-class Indians and will help boost consumption.”
With the elections only a few months away this budget by the Modi Govt is surely a nail in the coffin. While the opposition was busy trying malign the Government by way of finding loopholes in the Rafael Deal, the Govt has sought to turn it around by way of the interim budget.
Many experts have expressed their views on the budget and most have agreed that the budget is surely going to benefit the middle class in a huge way.
This move is expected to pay dividends for the BJP government, which has historically banked on the middle class as its voter banks.
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