The Interim Budget 2019 was presented today by the Union Minister Piyush Goyal. The major game-changers of this Budget revolved around individual taxes, the farming sector and some major sops for the defense sector and the women. Pension scheme, income tax threshold, deductions and huge fund allocation were some of the major pros that came up.
“We have harnessed youth energy through schemes like Make in India and Mudra Yojana. The job-seeker has now become a job creator. India is now the second-biggest hub of start-ups, said Piyush Goyal.”
The Budget started with the usual listing of the fiscal and economic achievements of the Modi Government, which were interjected and followed by key announcements from time to time.
Following were the major highlights of the Budget 2019:
(A) For the Farming & Animal Husbandry Sectors:
1.Minimum support price (MSP) of 22 crops. To provide assured income to small and marginal farmers, PM Kisan prgramme has been approved under which the Govt will provide Rs 6,000 per year as income support. Cash to be transferred directly to the farmers’ bank accounts. Farmers to get cash in three equal instalments.Farms upto 2 hectare of land to come under the PM Kisan Scheme.
2.The initiative will benefit crores of small and marginal farmers, at an estimated cost of Rs. 75,000 crore. It will enable farmers to earn a respectable living.
3.Increased allocation for Rashtriya Gokul Mission to 750 crore in current year. 2% interest subvention to farmers pursuing animal husbandry and fisheries.
4. In place of rescheduling of crop loans, all farmers severely affected by severe natural calamities will get 2% interest subvention and additional 3% interest subvention upon timely repayment.
5. Our government has decided to create a separate department for fisheries.
(B) For Women , Unorganized Sector , Personal Taxes:
1. Individual taxpayers with annual income up to 5 lakh rupees to get full tax rebate. So people earning up to Rs 6.5 lakh may not have to pay tax if they make investments in specified savings. This will provide tax benefit of Rs 18,500 crore to 3 crore people. Around 3 crore middle class taxpayers will get tax exemption due to this measure, the finance minster said.
The rebate under Section 87A of the Income Tax Act has been enhanced to Rs 12,500 from Rs 2,500 earlier. The threshold has also been enhanced to income of Rs 5 lakh from Rs 3.5 lakh earlier. This will benefit taxpayers only to the extent of an annual income of Rs 5 lakh. The basic exemption limit and tax-slabs remain the same.
What this means is the benefit is applicable only to those whose earnings are under Rs 5 lakh but not more than that. Also, those earning less than Rs 5 lakh will have to pay tax initially and seek a rebate while filing their returns.
2.Standard deduction is being raised to Rs 50,000 from Rs 40,000 for salaried people. Nearly 3 crore salary earners and pensioners to benefit.
3. Announces a debt consolidation programme in addition to measures taken to curb the fiscal deficit. The SkillIndia programme is training over 1 crore youth to earn a livelihood.
4.TDS threshold on rental income raised from 1.8 lakh to 2.4 lakh rupees.
5. TDS threshold on interest on bank and post office deposits raised from 10,000 to 40,000 rupees.
6. 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; can be exercised once in a lifetime.
7. 2.50% of the GDP comes from sweat and toil of 42 crore workers in unorganized sector. Gratuity limit increased from 10 lakh to 20 lakh rupees. Bonus will be applicable for workers earning 21000 monthly.
8. Our government proposes to launch a mega pension yojna. The scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide assured monthly pension of Rs 3,000 with contribution of Rs 100 per month for workers in unorganized sector after 60 years of age.
9. Nine priority areas have been identified by the Government. Rs 1 crore loan can now be obtained under 59 minutes.
10. The National Artificial Intelligence Portal will be developed soon.
11. Within almost two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by tax officials.
12. Group of Ministers examining how prospective house buyers can benefit under GST.
13. High growth and formalization of economy have resulted in increased EPFO membership by 2 crore in last two years.
14.Our government will set up a welfare development board to help implement development programmes for nomadic and semi-nomadic communities.
15. Defence budget enhanced beyond 3 lakh crore rupees. Gone beyond incremental growth in infra, to attain transformative achievements.
16. Sagar Mala will help faster handling of import and export cars.
17. Vande Bharat Express will provide speed, service and safety to citizens and will give a boost to Make in India.
18. Haryana to get 22nd AIIMS in India. Ayushman Bharat healthcare scheme will result in 3,000 crore savings by poor families.
19. Exempt on tax on second self-occupied house for which tax on notional rent was charged previously.
20. Benefit u/s 80IB has increased to one more year i.e. 2020.
(C) Other Major Announcements:
1. Allocation for Mudra loans kept at INR 4 Lakh Crore. More than 70% of MUDRA yojana beneficiaries are women.
2. Businesses with less than INR 5 crore annual turnover, comprising over 90% of GST payers, will be allowed to return quarterly returns.
3. Govt said it will source 25% material from SMEs and 3% from only women-owned SMEs for government industries. AI-based technology to be implemented for the upliftment of the MSME sector.
4. Minimum 14% revenue of GST to states by Central Govt.
5. Custom duty has abolished from 36 Capital Goods.
6. Recommendations to GST council for reducing GST rates for home buyers were made.
7.Benefit has given to unsold inventory has increased to one year to two years.
8. PCA restriction has abolished from 3 major banks
9. Single window for approval of India film makers
However, the most expected discussion on Angel tax was not taken up.
The Govt shared a roadmap for the Indian economy in the form of its Vision 2030:
1. The Govt aspires to lead India to be a $5 trillion economy in the next five years and aspire to become a $10 trillion economy in the next eight years. Govt aims to build next-gen infrastructure – physical as well as social – for a $10 trillion economy and to provide Ease of Living.
2. Goyal underlines 10 most important dimensions that will guide the government in Vision 2030.
3. One dimension is Clean and Green India – an India that drives electric vehicles, with renewables becoming major source of energy.
4. Another 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 strength of blue economy and sagar mala.
5. Oceans and coastlines is the sixth dimension of Vision for 2030.
6. Seventh dimension is the aim to become launchpad of the world, placing an Indian astronaut in space by 2022.
7. Self-sufficiency in food and improving agricultural productivity with emphasis on organic food forms the eighth dimension of our vision.
8. The tenth dimension is Minimum Government Maximum Governance – a proactive, responsible and friendly bureaucracy.
Meanwhile, sensex has rallied over 100 points in intraday trading.
On the appraisal front, the Union Minister undertook an appraisal and highlighted various milestones that our Govt achieved in the last few years, some of which are mentioned below:
Major Achievements of the Government:
1. “Our govt has broken backbone of the bone breaking inflation”, Goyal Said. From 11th largest economy in 2013 India is now the 6th largest economy in the world.
2. GST, banking reforms, insolvency code are path-breaking moves. The fiscal deficit has been brought down. There has also been a massive surge in the FDI. India attracted $239 billion FDI in the past five years.
3. 1,70,000 crore spent for bringing food at affordable rates to poor people. Efforts taken to bring full representation for economically weak backward classes, by giving them reservation in jobs and education. The government has approved 10% quota for the economically poor, without affecting existing reservation.
4. RERA, benami act, fugitive offenders act were enacted and will ensure transparency and curb corruption. The current Govt claims to have walked the talk. Our government started the world’s largest behavioural change programme with ‘Swachh Bharat Abhiyaan’.
5. The construction of rural roads has tripled – electricity reached to some of the farthest corners of the country. LED bulbs were made available to the poor on mission mode to bring down their power bills. 1 crore 53 lakh houses have been constructed,143 crore LED bulbs distributed which will save 50,000 crores of rupees.
6. India is the fastest highway developer in the whole world, 27 kms of highways built each day. Infrastructure projects like Eastern Peripheral Expressway and the Bogibeel bridge which were stuck for years were inaugurated by our government.
7. During 2014-18, 1.53 lakh houses have been constructed under PM Awas Yojana.
8. 4R approach implemented to ensure clean banking – Recognition, Resolution, Recapitalization, Reforms.
9. Ayushman Bharat, the world’s largest healthcare programme, launched to provide medical care to nearly 50 crore people, resulting in 3,000 crore savings by families of poor sections. 21 AIIMSs operating or being established, 14 of these have been announced since 2014.
10. Over 70% beneficiaries of the Mudra yojana are women who are getting loans at low interest rates.
11. Transactions of more than 17,500 crore rupees on GeM India, has resulted in savings of 25%-28%.
12. The Union Minister also focused on the Government’s commitment towards renewable energy sources which is reflected in our initiative to set up International Solar Alliance; installed solar generation capacity has increased 10 times in last five years; lakhs of new jobs being created by the sector.
13. Mobile data have increased 50 times in the last five years. 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.
14. In the last 5 years under all categories of workers, minimum wages increased by 42% which is the highest ever.
15. 54% returns have been accepted without any scrutiny.
16. GST has been continuously reduced – resulting in relief of 80,000 crore rupees to consumers; most items of daily use for poor and middle class are now in the 0%-5% tax bracket.
17. Committed to eliminating the ills of black money; anti-blackmoney measures taken have brought undisclosed income of about 1.30 lakh crore rupees to the surface. 3.38 lakh shell companies deregistered.
18. More than 98% rural sanitation coverage has been achieved; more than 5.45 lakh villages declared ODF.
19. Our government earmarked Rs 1.7 lakh crore in 2018-19 to ensure food for all.
20. OROP (one rank, one pension) scheme was pending for 40 years, but it was our government that implemented it. Already disbursed Rs 35,000 crore for our soldiers under OROP, substantial hike in military service pay has been announced.
21. No unmanned level crossings in India anymore. Railways has witnessed safest year.
22. India provided leadership to the global climate change effort.
We will soon be releasing our Report on #Budget2019 announcements with its analysis shortly.
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