Budget 2019 Updates: Opposition terms interim budget a 'jumla'; Congress says Narendra Modi giving a vision of 10 yrs at end of tenure

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Budget 2019 Updates: Opposition terms interim budget a 'jumla'; Congress says Narendra Modi giving a vision of 10 yrs at end of tenure
  • Corporate leaders hail interim budget which provides relief to small and medium taxpayers

    Sudhir Kapadia, National Tax Leader, EY India said: Most commentators had predicted fairly generous reliefs for farmers and lower income earners in the Interim Budget before the general elections and the Interim Finance Minister certainly did not disappoint. He seems to have managed the fiscal deficit both for 2019 as well as the next year pretty well at 3.4 percent of GDP despite a significant increase in expenditure of 75,000 crores for the farmers income support, pension scheme for unorganised workers and a 100 percent jump in the personal tax exemption threshold from 2.5 lakhs to 5 lakhs.

    It is quite possible, though, that next year’s actual fiscal deficit may end up slightly higher at 3.5 percent of GDP. There are numerous other proposals like an increase in the TDS exemption limit from 10,000 to 40,000 for bank interest, on rent from 1.8 lakhs to 2.4 lakhs, extending housing income exemption from one to two self- occupied houses etc which reveals a keen desire to significantly ease the compliance burden for small and medium taxpayers.

  • 16:40 (IST)

    Opposition leaders meet in Delhi post budget presentation

    A meeting of top Opposition leaders is underway in New Delhi under the aegis of Congress President Rahul Gandhi at the Constitution Club.

  • 16:27 (IST)

    Rajasthan chief minister Ashok Gehlot terms budget as another 'jumla' of Modi govt

    Gehlot said that Narendra Modi was showing people dreams for the next 10 years when in reality, his term is going to end soon. 

  • Bankbazaar's CEO praises budget, says it will help boost savings

    Bankbazaar's Co-Founder and CEO Adhil Shetty said that this budget has come as a bounty to the people of India. On one hand, the government has introduced the concept of the minimum income guarantee scheme of Rs 6,000 for farmers with small holdings of 2 hectares or less. On the other hand, it has increased the income tax rebate for people with income up to Rs 5 lakh, bringing in relief in the form of higher savings.

    For working professionals, the budget provided relief with the government raising the gratuity limit from Rs 10 lakh to Rs 30 lakh. The standard deduction has been increased and the TDS threshold on interest earned on bank and post office deposits is up from Rs 10,000 to Rs 40,000. All these measures, when put together, can have an impact on the total amount the average Indian manages to save in a year. This will boost spending in the economy, driving growth further, Shetty said.

  • 15:52 (IST)

    Budget only a trailer of BJP's plans for India's development: Narendra Modi

    Modi said that poverty falling at a record rate due to efforts of his government. "The PM Kisan Nidhi scheme is a historic step for farmer welfare," he added. Modi said that the Interim budget was only a trailer for what plans his government has to take India towards prosperity after Lok Sabha polls.

  • 15:46 (IST)

    Prime minister hails Ayushman Bharat scheme, package for farmers

    Calling it an important step towards "strengthening the nation", Modi reiterated the significance of the Ayushman Bharat scheme which, he said, is set to benefit nearly 50 crore people.

    "The farmers never got the benefits of PM Kisan Yojna. However, now nearly 12 crore farmers will reap the benefits of the scheme, which is one of the largest schemes," he said. 

  • 15:33 (IST)

    Narendra Modi congratulates middle-class taxpayers on exemptions; says budget will benefit farmers, labourers

    Prime Minister Narendra Modi on Friday addressed the nation after his government presented its final budget and highlighted its salient features. Modi said that under his government's proposed schemes, 12 crore farmers, 3 crore middle-class income taxpayers and 30-40 crore labourers will be benefitted
     

  • 15:23 (IST)

    Sumitra Mahajan hails the budget, says 'work will go on like this'

    Lok Sabha Speaker Sumitra Mahajan said that BJP government's last and interim budget is for everyone and that the party is expected to continue working like this. 

  • Consumption-led economic buoyancy is on the cards, says EY India's Sudhir Kapadia

    Sudhir Kapadia, National Tax Leader, EY India: "Most commentators had predicted fairly generous reliefs for farmers and lower income earners in the Interim Budget before the general election and the interim finance minister certainly did not disappoint. He seems to have managed the fiscal deficit both for 2019 as well as the next year pretty well at 3.4 percent of GDP despite a significant increase in expenditure of 75,000 crores for the farmers income support, pension scheme for unorganised workers and a 100 percent jump in the personal tax exemption threshold from 2.5 lakhs to 5 lakh. It is quite possible, though, that 2020’s actual fiscal deficit may end up slightly higher at 3.5 percent of GDP.

    "The finance minister made a far-reaching and significant announcement that, in the next two years, tax returns will be selected and assessed “anonymously” without any interaction with the tax officer. If implemented well, this will a radical transformation to a fully digital tax administration. Finally, with more money made available to large sections of the population, a consumption-led economic buoyancy is on the cards."

  • Immense opportunity for Indians companies to flourish, says Syska Group director

    Rajesh Uttamchandani, Director, Syska Group: "As India is poised to become a $5 trillion economy in next five years, there is an immense opportunity for Indian organisations to develop and flourish. With the rapid proliferation of new age technologies such as internet of things, artificial intelligence and others, we welcome the government’s keen focus on building a digitally vibrant India in the next few years. This will provide an opportunity for companies such as Syska to introduce IoT (Internet of things) enabled products that are affordable in the Indian market and help in developing smart cities.

    "Additionally, as energy efficient product and solutions are seeing increased adoption, we are pleased with the government providing 143 crore LED bulbs to rural areas. This resonates with our mission of providing energy efficient LED lighting solutions that are ‘Made in India’ to every Indian household."

  • 15:04 (IST)

    Rahul Gandhi slams Centre's Rs 6,000-aid for farmers

    In a tweet, Congress president Rahul Gandhi said, "5 years of your incompetence and arrogance has destroyed the lives of our farmers. Giving them Rs. 17 a day is an insult to everything they stand and work for." The government announced cash support of Rs 6,000 per year to small and marginal farmers, that will cost the exchequer Rs 75,000 crore annually, in a bid to provide relief to distressed farm sector.

  • 14:56 (IST)

    Chidambaram slams Goyal for excluding education, jobs from Budget's 10-point vision

    "In the 10-point vision document there's not about the education or jobs. Because if they say anything about jobs, the young people of the country will dismiss it as 'pakodanomics'." senior Congress leader P Chidambaram said.

    He spoke on the NSSO report that had been reportedly led to the resignation of two members of the National Statistical Commission. "On Thursday, the NSSO revealed a document on unemployment. The NSSO data is never approved by the Centre. But the NITI Aayog vice-chairman had suddenly come up with this theory that the government should approve the data of the NSSO report. This is completely unacceptable. The data showed that the unemployment reached the highest in 45 years. The government has cheated the children and the youth of this country," he said.

  • 14:48 (IST)

    Goyal's Budget is an account for votes, says Chidambaram

    "My one line comment on the budget is that it is not a vote on account but an account for votes," said ex-finance minister P Chidambaram at a press conference.

    He added that interim finance minister Piyush Goyal "tested our patience by the longest interim budget speech in the recent memory." "It was not an interim budget, it was a full fledged budget accompanied by an election campaign speech," he said.

  • 14:43 (IST)

    Chidambaram dismisses NDA govt's claims as 'irrelevant'

    At a press conference, former finance minister P Chidambaram said, "The impression one got was that the government believed it own fake statistics. Every report (on its performance) has exposed the false claims. None of the numbers put out by the government is true. The government is not able to see that thousands of villages and millions of homes that do not get electricity.

    "No one believes this government's claims anymore. I also will dismiss all claims as irrelevant."

  • Digitisation, automation new mantra, says EY India's tax partner

    Paresh Parekh, Tax Partner, EY India: “Digitisation and automation is the new mantra — online income tax compliances, online tax assessments, automated return processing, single-point approval for carrying out manufacturing activities and processes in warehouses, Full and comprehensive digitisation export/import transactions by leveraging RFID technology, etc are highly impactful on how businesses interact with government authorities”

  • 14:33 (IST)

    Budget seeks to hike TDS threshold on interest from bank, post office deposits 

    "Earlier, the tax deducted at source (TDS) was imposed for income of over Rs 10,000. Now that limit has been pushed to Rs 40,000," Goyal said at a post-budget press conference.  The Budget has also proposed to increase the TDS limit on rent income to Rs 2.4 lakh from the current Rs 1.80 lakh.

  • 14:25 (IST)

    Budget seeks to restore dignity of farmers 

    Piyush Goyal says that the PM Kisan Scheme is the biggest one ever for farmers. "Those sitting in AC rooms cannot understand the plight of the small farmers. Keeping this in mind, we have introduced Pradhan Mantri Kisan Samman Nidhi scheme. This is a historic decision," he said at a post-budget press conference.  

    "A holistic approach has been taken by the Government for the welfare of all sections of citizenry"

  • 14:16 (IST)

    'Only new govt schemes directed at poor farmers, labourers'

    Piyush Goyal said that the government's hands were tied since this was an Interim Budget. However, the government still tried to reach out to the two poorest sections of society, ie small farmers and labourers in unorganised sector. He said that the Rs 6000 annual income support will really help the small farmers who are cash strapped for smallest of their needs. 

    He also claimed that the pension scheme for labourers in unorganised sector will help these people who are otherwise not protected under any state funded scheme. 

  • 14:09 (IST)

    Budget sought to deliver holistic growth to all sections of society

    Piyush Goyal said that the government is committed to think about the poor and middle class families. He claimed that the interim Budget was aimed at delivering holistic growth to all sections of society. 

  • 14:06 (IST)

    Piyush Goyal addresses his post-Budget press conference

  • 14:05 (IST)

    Best Budget in history of India, says Yogi Adityanath; Congress' Shashi Tharoor calls it a damp squib

  • 14:04 (IST)

    Amit Shah lauds interim Budget, says middle class, farmers benefitted most by govt policies

    BJP president Amit Shah weighed in on the Budget stating that it was a big move to offer relief to poor and farmers. He also lauded Prime Minister Narendra Modi and finance minister Piyush Goyal. 

  • 13:52 (IST)

    NDA claims banks recover Rs 3 Lakh crores in outstanding loans

    Finance Minister Piyush Goyal claimed that the banks have managed to recover Rs 3 Lakh crores in outstanding loans. However, the Congress called it a lie citing media reports.

  • 13:47 (IST)

    Congress gives a 'reality check' to Modi government on Budget

    The Budget presented in Parliament is BJP's election manifesto. The money being doled out by government is for elections. I say directly that they are paying bribe to voters," Congress leader Mallikarjun Kharge alleged. The Opposition party also put out a series of tweets on its Twitter handle claiming that most of development claims made by Goyal were a lie. 

  • 13:33 (IST)

    Budget 2019 a taxpayers' budget?

    Finance Minister Piyush Goyal on Friday doled out tax sops to middle class including doubling of income tax exemption limit to Rs 5 lakh, raising standard deduction to Rs 50,000 and provided concessions on interest income from bank deposits and rent. 

  • 13:29 (IST)

    Defence outlay highest ever in interim Budget 2019-20

    The defence budget, Finance Minister Piyush Goyal announced, was increased for the first time to three lakh crore in 2019-20 “for securing our borders and to maintain preparedness of highest order and if necessary additional funds will be provided."

    Last year, out of total allocation of Rs295,511 crore for defence budget, only Rs99,947 crore was set aside for capital outlay to purchase of new weapons, aircraft, warships and other military hardware. The allocation has been estimated at around 1.58 percent of the GDP and 12.10 percent of the total budget of Rs2,442,213 crore for 2018-19.

  • 13:12 (IST)

    Sensex surges post-Budget 

    Benchmark equity indices held on to gains Friday morning even as the Budget overshot the fiscal deficit target for the current financial year. The 30-share BSE Sensex was trading 456 higher at 36,713. Similarly, the 50-share NSE Nifty rose 138 points at 1.28 percent to 10,969 at 1.10 PM.

    Presenting the budget for 2019-20, Finance Minister Piyush Goyal said the fiscal deficit for the current financial year is expected to be 3.4 per cent of GDP. As per the Budget estimate, the fiscal deficit for 2018-19 was pegged at 3.3 percent.

  • 13:05 (IST)

    Piyush Goyal's post-Budget presser at 1.30 pm

    Finance Minister Piyush Goyal will hold a post-Budget press conference at 1,30 pm

  • Budget has neglected trading community, says traders' body

    The Union Budget, though seems to be overall good has utterly neglected the trading community and it has highly disappointed the traders of the country, said the Confederation of All India Traders (CAIT). CAIT national president BC Bhartia and Secretary General Praveen Khandelwal said that every other section of the economy has been given relief in the Budget except the trading community which is the backbone of the economy.

    After renaming DIPP as Department for Promotion of Industry and Internal Trade and  giving no extension to FDI policy in e commerce, the traders were hopeful that they will get due attention in the Budget but with totally left out from the Budget, the traders feel aggrieved. However, the CAIT has said that it will send a fresh memorandum to prime minister and finance minister urging them to take care of the trading community.

  • 13:00 (IST)

    Mahindra Group's Anand Mahindra reacts to Budget speech

  • 12:59 (IST)

    Piyush Goyal proposes raising income tax exemption limit to Rs 5 lakh, leaves implementation to next govt

    Dangling a pre-poll carrot for the middle class, Finance Minister Piyush Goyal says the government proposes to raise the income tax exemption limit to Rs 5 lakh, but left the implementation to the next government in the full-fledged budget. It has also proposed to raise the standard deduction to Rs 50,000. Among the major sops, Piyush Goyal has announced Rs 6,000 per annum direct cash transfer to farmers owning less than 2 hectares of land. 

  • 12:55 (IST)

    Will mouth-watering Budget translate into votes, asks journalist

  • 12:54 (IST)

    'Budget speech turns into election rally'

  • Expert Opinion: Tax exemption great for middle class but will pressurise fiscal revenues 

    Income Tax exemption threshold has been hike to Rs 5 lakh is good for middle class but is an election-oriented announcement. However, it will create stress for fiscal condition going forward. The government’s stake in public sector units have been put up for sale. For instance, Air India. It has also asked profit-making PSUs like ONGC to buy government stakes in HPCL. Telecom revenues are down. In these circumstances, lower tax revenues will also create more pressure on fiscal conditions in the medium-long-term, says G Chockalingam, Founder and MD, Equinomics Research & Advisory.

  • 12:47 (IST)

    Expert Opinion: Income support scheme tepid, won't hamper fiscal deficit target

    The new income support scheme is tepid in terms of actual numbers. It should not lead to a blowout in the fiscal deficit if it indeed is part of the Budget when it is finally announced in full form, says Abheek Barua, chief economist, HDFC bank told Reuters.

  • 12:43 (IST)

    'Interim Budget India's growth vehicle'

    This is not just an Interim Budget, this is a vehicle for the developmental transformation of the nation: Piyush Goyal

  • 12:42 (IST)

    Exemption benefit on one residential property extended to two residential properties for income groups under Rs 2 crore

    "Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crore rupees. This can be exercised once in a lifetime," Piyush Goyal said. 

  • 12:40 (IST)

    Exemption on bank interest, income from post office savings see massive hike

    Exemption on tax deducted at source on interest earned from bank, post office savings raised to 40,000 rupees from 10,000 rupees

  • 12:38 (IST)

    P Chidambaram to hold press conference over Budget 2019 at 2 pm

  • 12:37 (IST)

    Sensex jumps nearly 400 points as Finance Minister Piyush Goyal announces tax rate cuts

  • 12:36 (IST)

    Piyush Goyal announces massive tax relief for middle class

    Piyush Goyal announced that individual tax payers with annual income under Rs 5 lakh, Finance Minister Piyush Goyal said. He claimed that with the current provision for rebates and exemptions, people with salaries up to 6.2 lakhs will be effectively exempted from tax.  

  • 12:31 (IST)

    Piyush Goyal's Budget found lacking on relief for middle class tax payers

    With sops for farmers, traders, youths and even gau mata, finance minister Piyush Goyal's interim Budget seems lacking only on the front of giving relief to salaried class honest tax payers. Apart from a 'big thanks' to tax payers and a minimal increase in cap for gratuity along with raising the minimum tax free income, Piyush Goyal's Budget speech hasn't mentioned anything for direct tax payers. 

  • 12:27 (IST)

    Fiscal Expenditure to rise by 13 percent from RE 2018-19 to BE 2019-2020

  • 12:26 (IST)

    Finance Minister underlines 10 dimensions that will guide govet vision in 2030 in Interim Budget

    Even as his government has few months left to conclude its term, Finance Minister Piyush Goyal unveiled 10 dimensions that will guide the government's vision till 20130. 

    • To build next-gen infrastructure for a 10 trillion dollar economy and to provide ease of living
    • To build a Digital India that reaches every citizen
    • Clean and Green India - an India that drives electric vehicles, with renewables becoming major source of energy, bringing down import dependence and increasing energy security for our people
    • Expanding rural industrialization using modern industrial technologies using grassroot MSMEs and startups across the country.
    • Clean Rivers - with safe drinking water to all Indians, sustaining and nourishing life, using micro-irrigation techniques
    • Development of oceans and coastlines is the sixth dimension of our vision for 2030
    • India becoming launchpad of the world, placing an Indian astronaut in space by 2022
    • Self-sufficiency in food and improving agricultural productivity with emphasis on organic food
    • Healthy India, with distress-free and comprehensive wellness system for all is the ninth dimension of our vision for 2030
    •  Minimum Government Maximum Governance, with proactive, responsible and friendly bureaucracy: Electronic governance is the 10th dimension of our vision for India for 2030

  • 12:20 (IST)

    Rs 750 crore for cow protection
     

    Rs 750 crore have been allocated in the interim Budget under Rashtriya Gokul Yojana for protection of cows. The government will create a separate department for fisheries.  

  • 12:18 (IST)

    India poised to become largest global economy

    Finance Minister Piyush Goyal said, "We are poised to become a 5 trillion dollar economy in the next five years, we aspire to become a 10 trillion dollar economy in the next eight years."

  • 12:17 (IST)

    A farmers' Budget? 

    We combined an infographic to list out sops announced for the farm sector so far. 

  • 12:16 (IST)

    Mobile Data usage improved under Modi govt

    "Cost of data and voice calls in India is now possibly the lowest in the world; mobile and mobile part manufacturing companies have increased from 2 to 268. SCs are creating digital infra in villages, to convert them into digital villages," Finance Minister Piyush Goyal said.

  • 12:12 (IST)

    GST rationalistaion helped middle class 

    GST has been continuously reduced, resulting in relief of 80,000 crore rupees to consumers, Finance Minister Piyush Goyal said. He claimed that most items of daily use for poor and middle class are now in the 0%-5% tax bracket. 

  • 12:07 (IST)

    Budget Highlights

    From a boost in defence budget to tall claims on rural development, here are some of the highlights of interim Budget listed out. 

Budget 2019 LATEST Updates: Rajasthan chief minister Ashok Gehlot termed the budget as another 'jumla' of the Narendra Modi government. The Opposition has been targeting the interim budget calling it an exhibition of hollow dreams. Gehlot said that Narendra Modi was showing people dreams for the next 10 years when in reality, his term is going to end soon.

Prime Minister Narendra Modi on Friday addressed the nation after his government presented its final budget and highlighted its salient features. Modi said that under his government's proposed schemes, 12 crore farmers, 3 crore middle-class income taxpayers and 30-40 crore labourers will be benefitted.

At a press conference, former finance minister P Chidambaram said, "My one line comment on the budget is that it is not a vote on account but an account for votes."

Every report (on its performance) has exposed the false claims. None of the numbers put out by the government is true. The government is not able to see that thousands of villages and millions of homes that do not get electricity.

Piyush Goyal said that the government's hands were tied since this was an Interim Budget. However, the government still tried to reach out to the two poorest sections of society, ie small farmers and labourers in unorganised sector. He said that the Rs 6000 annual income support will really help the small farmers who are cash strapped for smallest of their needs. 

Piyush Goyal said that the government's hands were tied since this was an Interim Budget. However, the government still tried to reach out to the two poorest sections of society, ie small farmers and labourers in unorganised sector

BJP president Amit Shah weighed in on the Budget stating that it was a big move to offer relief to poor and farmers. He also lauded Prime Minister Narendra Modi and interim finance minister Piyush Goyal.

Union Minister Arun Jaitley Friday complimented Piyush Goyal for delivering an excellent pro-farmer, pro-poor budget which will also strengthen the purchasing power of middle class. However, Congress alleged that the Budget was more like an election manifesto read out from the floor of the House.

Benchmark equity indices held on to gains Friday morning even as the Budget overshot the fiscal deficit target for the current financial year. The 30-share BSE Sensex was trading 456 higher at 36,713. Similarly, the 50-share NSE Nifty rose 138 points at 1.28 percent to 10,969 at 1.10 PM.

Dangling a pre-poll carrot for the middle class, Finance Minister Piyush Goyal says the government proposes to raise the income tax exemption limit to Rs 5 lakh, but left the implementation to the next government in the full-fledged budget. It has also proposed to raise the standard deduction to Rs 50,000. Among the major sops, Piyush Goyal has announced Rs 6,000 per annum direct cash transfer to farmers owning less than 2 hectares of land.

At the end of his address, Piyush Goyal puts forth BJP's election pitch. Exalting the government's job and congratulating the Indian electorate, Goyal said, "We have only build the foundation. The plan is to build a grand India on this strong foundation. Intention is clear, policies are transparent and dedication is unwavering."

Noting that middle class tax payers should be exempted from income tax, Finance minister Piyush Goyal says, "Full tax rebate on income up to 5,00,000 rupees per annum." Exemption on tax deducted at source on interest earned from bank, post office savings raised to 40,000 rupees from 10,000 rupees. Standard deduction for salaried class raised to 50,000 rupees from 40,000 rupees, says Goyal.

Goyal says he is confident that disinvestment proceeds will cross 800 billion rupees this year. "Capital expenditure for 2019-20 seen around Rs 3.36 trillion on centrally sponsored schemes. Fiscal deficit would have been less than 3.1 percent in 2019-20 without farm income benefit scheme," says Goyal.

While there is no cheer for the middle class in income tax slabs, the government has made filing returns easier, said finance minister Piyush Goyal, and claimed that it will be processed within 24 hours. Within nearly two years, almost all assessment and verification of IT returns will be done electronically by an anonymised tax system without any intervention by officials, he promises.

India poised to become $5 trillion economy in next five years, says finance minister Piyush Goyal. Speaking of northeastern states, Goyal said, "Allocation to India's northeast region proposed to be increased by 21 percent over previous fiscal year."

India's fiscal deficit this financial year would be 3.4 percent of gross domestic product (GDP), slightly higher than the targeted 3.3 percent, the country’s acting finance minister said on Friday while presenting an interim budget. All income tax returns to be processed within 24 hours, says Goyal. "Tax collection is at 12 trillion rupees," claimed Goyal.

Piyush Goyal highlights Modi government's rural outreach programme: Centre to allocate Rs 75,000 crore per year to support farmers' incomes; Impact of Rs 20,000 crore in current fiscal year; Vulnerable farmers to receive Rs 6,000 per year in three equal instalments; Government to allocate Rs 60,000 crore for UPA's flagship MNREGA in 2019/20; Allocation of Rs 19,000 crore for construction of rural roads in 2019-20.

Finance Minister Piyush Goyal says more than 70 percent of the beneficiaries of the PM Mudra Yojana are women and it additionally helps them set up businesses and other entrepreneurship related activities.

our soldiers are our pride and honour. "One Rank One Pension', which was pending for the last 40 years, was implemented by us. We have already disbursed Rs 35,000 crore for our soldiers under 'One Rank One Pension', substantial hike in military service pay has been announced."

Government will set up a national centre for artificial intelligence to look into AI programmes. It will also provide two percent loan relaxation for businesses registered as SMEs, says Piyush Goyal.

Goyal says that the 'job seeker is now a job creater'. "India is among the youngest nations of the world. PM Kaushal Vikas Yojana is training over 1 crore youths. More than 70 percent of the beneficiaries of the PM Mudra Yojana are women to help them set up businesses and other entrepreneurship related activities. Job seeker is now a job creator. Now, government offices and factories are not the only employers. The definition of employment and self employment is changing now. India is the hub of second largest start up," he says.

The Modi government has decided to set up 'Rashtriya Kamdhenu Aayog' for implementation of policies and schemes for welfare of cows. "We are committed to the cause of gaumata," says finance minister. "Increase in allocation for fisheries and husbandary sector for GOKUL scheme. Government has decided to create a separate department for fisheries. Two percent relaxation in credit for will be given to farmers who are in animal husbandary," says Piyush Goyal.

"Farmers earlier did not get full cost for their produce. Farmers income has reduced over the years. Income support to farmers small and marginal faers Pradhan Mantri Kisan Samman Nidhi (KISAN) has been approved. Farmers owning 2 hectares and less will be provided with Rs 6,000 per annum directly into their accounts. There are nearly 12 crore such farmers,' says Piyush Goyal in a major incentive for farmers in Budget 2019.

Exalting Modi government's contribution to "farmers' welfare", finance minister Piyush Goyal says. "For the welfare of farmers and for doubling their income, historic decision was taken to increase MSP by 1.5 times the production cost for all 22 crops."

Among the first major announcements in budget speech 2019, Finance Minister Piyush Goyal says Rs 60,000 crore has been set aside for MGNREGA, the rural employment scheme, adding that the allocation can be increased further. Expectations are running high across demographics from the Narendra Modi government's Budget 2019, with the finance exercise expected to be a little more robust than the traditional election-year vote-on-account.

Amid Opposition ruckus, Piyush Goyal says, "Rs 3 lakh crore has been recovered in favour of banks, creditors and big defaulters have also not been spared." "From from 10.1 percent in the period 2009-14, we have brought it down to 2.12 percent. We have broken the back of back-breaking inflation," says finance minister.

Budget 2019 Updates: Opposition terms interim budget a jumla; Congress says Narendra Modi giving a vision of 10 yrs at end of tenure File image of Prime Minister Narendra Modi. Reuters

"We are moving to realising a new India by 2022. In the last 5 years India has emerged a major economy in the last year. Our GDP numbers are higher than any developing economy," says Finance Minister Piyush Goyal. Inflation is a hidden and unfair tax, says Goyal.

Finance minister Piyush Goyal starts presenting the interim budget. Goyal began with wishing early recovery to Arun Jaitley. People of India gave a strong mandate to our government. Under Narendra Modi, we have given more decisive, stable and clean government," says Goyal.

Mallikarjun Kharge says, "They'll try to introduce populist schemes in the Budget keeping an eye on Lok Sabha polls. Budgets they've presented so far haven’t really benefitted general public. Only ‘Jumlas’ will come out today. They've only 4 months when will they implement the schemes?" Meanwhile, the Narendra Modi Cabinet has approved the Budget 2019. Piyush Goyal, who is filling in for Arun Jaitley, will present the Budget at 11 am. Ministers in the Modi government dropped ample hints to suggest that the interim Budget 2019 will be a populist one. Union minister for Parliamentary Affairs Narendra Singh Tomar said that it will be in line with the government's motto of Sabka Sath Sabka Vikas,while MoS Railways Manoj Sinha said that the focus will be on youth and farmers, MoS Civil Aviation Jayant Sinha said that a policy response to the unemployment crisis is likely in this Budget.  

The BSE benchmark Sensex Friday jumped over 100 points ahead of the Budget presentation amid heavy buying by foreign portfolio investors. The 30-share index was trading 119.01 points, or 0.33 per cent, higher at 36,375.70. Similarly, the 50-share NSE Nifty rose 34.15, or 0.32 per cent, to 10,865.10.

The electoral compulsions mean that major economic reforms, such as tax cuts for bigger companies and plans to bring down the Budget deficit, could be put on hold at least until after the election, government sources said. However, there is a chance that the government could take corrective action in March, with an expectation that the election schedule will be settled by that time and that public focus will shift to campaigning.

Finance Minister Piyush Goyal has arrived at the Finance Ministry ahead of the Budget presentation. His speech is expected to start at 11 am and will last roughly two hours, as the minister covers key highlight points of the Interim Budget.

Goyal is expected to come up with a populist measure in the Interim Budget such as a minimum income guarantee or universal basic income. The figure may vary in accordance with the plan but it won't be anything less than 1.6 percent to even 4 percent of the GDP. It is difficult to understand how the government will fund the scheme.

Finance Minister Piyush Goyal declared at an all-party meeting Wednesday that a “Budget is a Budget” and not an Interim Budget or a Vote-on-Account, which is the norm with just a few months to go for the general elections, sending alarm bells in the Opposition camp. Meanwhile, Congress has declared that it will oppose the move in the Lok Sabha when the Budget is presented.

A lot will be expected from Finance Minister Piyush Goyal who will present the Narendra Modi-led NDA government's sixth and last budget before the Lok Sabha elections due in a couple of months. Income tax concessions for individuals, a farm relief package, support for small businesses and possible populist spending measures may be part of Goyal's budget on 1 February, as the government makes a last-ditch attempt to woo voters ahead of the general elections. Meanwhile, Fitch Ratings on Thursday warned of a second consecutive year of fiscal slippage in the event of Goyal resorting to populist spending to win over lost vote base.

"Higher pre-election spending could risk a second consecutive year of fiscal slippage relative to the government's targets and would further delay plans to reduce the high general government fiscal deficit and debt burden," it said.

This budget is supposed to be an interim budget or a 'Vote on Account'. But it is widely expected that Goyal may go beyond seeking Parliament nod for government expenditure for four months of next fiscal and announce sops to woo rural and urban middle-class voters, industry sources and experts said. As per convention, the outgoing government only seeks parliamentary approval for limited period spending, leaving the full Budget presentation for the new regime in July.

Under pressure from a resurgent Congress which is going all out to lure voters with the promise of debt waiver for farmers and a minimum income for the poor if voted to power, Goyal may announce some form of a direct transfer of cash to farmers. This may or may not replace subsidies that farmers get but will certainly be aimed at addressing rural distress, which was primarily blamed for BJP's defeat in recent Assembly elections in three states — Rajasthan, Chhattisgarh and Madhya Pradesh. The farm relief package may cost anywhere between Rs 70,000 crore to Rs 1 lakh crore, according to sources.

Goyal, who was given the additional charge of the finance ministry after former finance minister Arun Jaitley had to fly to New York for medical treatment, is widely expected to raise income tax exemption thresholds. 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 aged 60 years or more but less than 80. Women taxpayers may get a higher basic exemption of Rs 3.25 lakh or even at par with senior citizens, as per sources.

An alternative to raising the exemption limit is to raise the 80C deduction to Rs 2 lakh from Rs 1.5 lakh to encourage taxpayers to save more for their future.

Considering delay in housing projects and also rising interest rates, deduction of interest amount on housing loan for a self-occupied house property may be enhanced to Rs 2.5 lakh from Rs 2 lakh. The set-off cap of adjusting loss from house property against other heads of income may also be accordingly raised to Rs 2.5 lakh from Rs 2 lakh, according to sources. The increase in personal income tax exemption limit is unlikely to meaningfully reduce collections unless the successive tax slabs are also changed. Also, being speculated are cheap loans for small businesses and increased rural spending.

For the farm sector, the possible options include the direct transfer of money to farmers like in the Telangana model of Rythu Bandhu, interest-free crop loan for those farmers who pay on time and zero premium for insurance of food grain crops. The measures, industry and informed sources say, could include those to create employment as the government faces a tag of giving a jobless high GDP growth.

For investors, these sops may translate into another breach in the budget deficit target of 3.3 percent of GDP for the current fiscal and a possible record borrowing in the coming financial year.

In 2018-19, the largest downside to revenues has been from the GST collections with the shortfall likely at around Rs 1.4 lakh crore. Goyal may also look at higher interim dividend from RBI and deferring subsidy payouts on fertiliser as well as LPG and kerosene to provide funds for the populist schemes. Credit rating agencies have warned that without bringing down another spending, a higher farm subsidy bill will increase future fiscal deficits.

Sources said the interim budget would provide an opportunity for the government to outline its medium-term economic priorities, specifically with regards to improving farm/rural incomes. It would be important to continue its focus on overall infrastructure expansion, especially as private sector investments remain tepid and a nascent recovery hinges on government spending. There is also a talk of the government looking at the idea of a Quasi-Universal Basic Income Scheme (QUBI). The concept of a Universal Basic Income (UBI) in the context of India was outlined in the Economic Survey 2016-17.

However, a UBI for the entire population (and even for the BPL population) will entail a prohibitively high fiscal outgo. In fact, without a commensurate reduction in various transfers (subsidies and social programmes), it might not be feasible to implement a UBI for the entire population. However, the government could target the poorest of the poor (possibly 40 percent of the BPL population) based on the 2011 census. Some say a hypothetical Rs 700 to Rs 1,200 per month can be provided to the poorest of the population (around 12 crore people). This will entail an outgo of Rs 1 lakh crore or 0.5 percent of the GDP.

The interim budget to be presented could give some indication of the government's commitment to fiscal consolidation, which is one of the main sensitivities in the sovereign ratings, Fitch said. "Pressure for new expenditure to attract votes, particularly among rural and small-business owner voters, has increased as polls have shown the ruling Bharatiya Janata Party (BJP) is becoming less assured of victory in the general elections.

"The BJP has reportedly lost votes in some recent state elections due to rural distress and public concerns over job creation. Targeted cash programmes appear the most likely form of support, as they would avoid downside risks of alternatives, such as the farm loan waivers that undermined the loan repayment culture in the past," it said.

Populist spending, it said, would aggravate fiscal pressures, which are already building due to revenue shortfalls. "Higher pre-election spending could risk a second consecutive year of fiscal slippage relative to the government's targets and would further delay plans to reduce the high general government fiscal deficit and debt burden," it said. Fitch said longer-term trends are more important to the sovereign rating profile.

"We believe the Central Government may still be able to meet its fiscal deficit target of 3.3 percent of GDP for FY19, which would help support its fiscal credibility, although this may be achieved by deferring capital expenditure and postponing bill payments until after March," it said. The final budget for the fiscal year ending in March 2020 (FY20) will be presented soon after the next government takes office following general elections, which are due by May 2019. Revenue from the new GST is well below target, Fitch said citing it as a reason for revenue falling short of the target so far in the current fiscal year that ends on 31 March, 2019.

"Officially, the government still aims to adhere to a debt ceiling of 60 percent of GDP by March 2025, as adopted under the Fiscal Responsibility and Budget Management Act. However, this would require significant and politically difficult fiscal consolidation. The newly elected government's final budget, likely to be presented around July, should provide more meaningful guidance on the medium-term fiscal outlook," it said.

Fitch's base-case scenario is that general government debt will remain close to 70 per cent of GDP in the next few years and will constrain India's sovereign rating (BBB-/Stable). Indian budgets normally offer guidance on plans for structural reforms and tax changes. "The current government could choose in its interim budget to signal the reform direction it would adopt in a possible second term, but we believe it is more likely to include such plans in the final budget...," it said.

The government's reform efforts have led to a strong improvement in the World Bank's Ease of Doing Business ranking in recent years, but FDI inflows have remained roughly stable as a percentage of GDP over the past five years, as there are lingering difficulties, such as in enforcing contracts and the functioning of the labour market.

With inputs from PTI

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Updated Date: Feb 03, 2019 07:47:30 IST

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