A brief overview of interim Budget 2019-2020
In his interim Budget speech on Friday, February 1, 2019, Finance Minister Piyush Goyal announced a slew of measures to boost the economy and to provide tax reliefs to the common man.
This is the last Interim Budget of the Narendra Modi-led NDA government before the general elections due by May.
Here is a brief overview of claims and comments made by Goyal during his interim Budget FY20 presentation to the Parliament.
- The Finance Minister started off with a claim that the NDA government has brought inflation down to 4.6%; however, the revised fiscal deficit estimates stand at 3.4% of GDP vs the target of 3.3%; and the current account deficit to 3.4% of the GDP.
- The Pradhan Mantri Gram Sadak scheme will receive Rs19,000cr in FY20.
- Ayushman Bharat has treated 1mn people so far.
- The 22nd All India Institutes of Medical Sciences (AIIMS) to come up soon.
- ?750cr will be allocated under Rashtriya Gokul Yojana for the protection of cows. The government will also create a separate department for Fisheries.
- Gratuity exemption limit has been tripled to Rs30 lakh from Rs10 lakh at present.
- The government has launched a mega pension scheme for social security of the unorganized labor. The unorganized labour will get Rs3,000 per month after age of 60 under the scheme. It will contribute equally in pension accounts under the scheme.
- ~8cr LPG cylinders will be distributed under the PM Ujwala Yojana by next year.
- Government projects will source 25% material from SMEs and 3% from only women-owned SMEs.
- Boost in allocation for the rural employment guarantee programme by Rs5,000cr to Rs55,000cr.
- Defence budget allocated over Rs3 lakh cr in FY20; railways to receive Rs64,587cr; operating ratio of Indian railways seen at 96.2% in FY19 and 95% in FY20.
- Rs3 lakh cr in bad debts recovered from big corporate loan defaulters.
- Tax collections rise from Rs6 lakh cr to Rs12 lakh cr; furthermore, all returns will now be processed in 24 hours and refunds will be issued simultaneously.
- For 2019-20, the Pradhan Mantri Kisan Samman Nidhi has received budgetary allocation of Rs75,000cr. Goyal said the government has allocated an additional ?20,000cr in the revised estimates for 2018-19. He said about 12cr farm households will receive an income support of Rs2,000, thrice a year. The budget has also approved doubling the interest subsidy on crop loans, and also raised the interest subvention when farm loans are restructured in times of natural calamity.
- The GST Council is yet to decide on the GST rates for homebuyers.
- Goyal announced that India is poised to become a $5tn economy in 5 years and aspires to become a $10tn economy in the next 8 years.
- The government has also laid out a 10-year roadmap to improve the ease of living and make India a pollution-free country by leading the world in transport and energy storage devices.
- Taxpayers earning up to Rs5 lakh annually will get full tax rebate. Those earning Rs6.5 lakh will also get a full rebate if they invest Rs1.5 lakh in tax-free investments. These are just proposals at present and need to be cleared by the Cabinet.
- Standard deduction will be raised from Rs40,000 to Rs50,000. Post-office deposits tax limit to be raised from Rs10,000 to Rs40,000.
- No tax on notional rent on second self-occupied home. Income tax on notional rent on unsold inventory extended from one to two years. Rent TDS limit raised from Rs1,80,000 to Rs2,40,000. Affordable housing - benefits u/S 81 of the IT Act extended for one more year. Capital gains u/S 54 up to Rs2cr will be available for two residential houses instead of one earlier.
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