2019 Union Budget: Pradhan Mantri Saughat to Indians before Re-election

Modi government today unveiled an interim budget 2019 with mega announcements for middle class, rural citizens, farmers and unorganized sector workers. Keeping an eye on the Lok Sabha polls, government made a slew of announcements to keep everybody happy with tax sops for salaried class, direct income for farmers and other social sector schemes.

Union minister Piyush Goyal presented the election year Interim Budget in parliament on 1st February 2019 and announced major relief for farmers and individual taxpayers. This was the last Interim Budget of the NDA government led by Prime Minister Narendra Modi before the Lok Sabha elections due by May.

 Taxation

  • Tax rebate raised for income up to Rs 5,00,000
  • Individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments in provident funds and prescribed equities.
  • Standard Tax deduction for salaried persons raised from 40,000 rupees to 50,000 rupees.
  • Benefit of rollover of capital tax gains increased from one residential house to two houses
  • This roll over on capital gains up to Rs 2 crore can be exercised once in a lifetime
  • Income Tax returns to be processed within 24 hours and returns will be paid immediately in next 2 years

 Agriculture

  • Rs 6,000 per year assured income for small and marginal farmers
  • Govt to allocate Rs 75,000 crore for the scheme
  • Two percent interest subvention for farmers affected by natural disasters,additional 3 percent if they repay loans on time
  • Two percent interest subvention for farmers pursuing animal husbandry, fisheries

 Rural sector

  • Budgetary allocation of Rs 19,000 crore for construction of rural roads under Gram Sadak yojana in 2019/20
  • Government to allocate Rs 60,000 crore for a MNREGA scheme

Employment

  • New social security coverage scheme for unorganized sector workers
  • Assured monthly pension of Rs 3,000 rupees per month, with contribution of 100 rupees per month, for workers in unorganized sector after 60 years of age
  • Scheme to to benefit 10 crore workers in unorganized sector, may become the world’s biggest pension scheme for unorganized sector in five years

 GST

  • Group of Ministers to suggest ways to reduce GST for house buyers
  • Small and medium-sized businesses registered under the GST to get 2 percent interest subvention on loan of Rs 1 crore.

 Economy

  • Average monthly tax collection at Rs 97,100 crore per month so far this year
  • Gross market borrowing seen at Rs 7.04 lakh crore in 2019/20
  • Goyal says expects other banks on the central bank’s Prompt Corrective Action list to be removed soon.

 Fiscal maths

  • Fiscal deficit for 2018/19 seen at 3.4 percent of GDP
  • Fiscal deficit for 2019/20 estimated at 3.4 percent of GDP
  • Deficit for 2020/21 seen at 3 percent of GDP
  • Government’s stated commitment earlier was to bring down the fiscal deficit to 3.1 percent of GDP by the end of March 2020, and to 3 percent by March 2021
  • India’s current account deficit for 2018/19 seen at 2.5 pct of GDP
  • Debt to GDP ratio to be brought down to 40 percent by2024/25.

 Railways

  • Railway’s operating ratio seen 96.2% in FY19 Vs 95% FY20.
  • Railway capex for FY20 set at record Rs 1.6 lakh crore
  • Today there is not a single unmanned railway crossing on the broad gauge in India.

 Defence Budget

  • Govt increases defence budget to over Rs 3 lakh crore. Govt will provide additional funds for Defence, if needed.
  • Govt disbursed Rs 35,000 crore under OROP scheme in the last few years
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