Interim Budget highlights: A recap of Piyush Goyal’s key announcements : 26-06-2019

The first full budget of Modi government 2.0 will be here in a matter of days. Speculations on what Nirmala Sitharaman may or may not do in her maiden budget are hitting fever pitch. To get a sense of the broad policy trajectory that Sitharaman may opt for, here’s a recap of the template set by stand-in finance minister Piyush Goyal in the February interim budget. 

Goyal’s budget had proposed tax breaks for the middle class, besides a host of sops for farmers and millions of employees in the unorganised sector. Taxable income up to Rs 5 lakh per year was proposed be exempted from tax. Farmers owning up to 5 hectares were to get income support of Rs 6,000 per year. Informal sector employees were proposed to be given Rs 3,000 per month pension. 

A look at the proposals Goyal’s budget speech had made:

Income Tax reliefs:
* Full exemption for those whose taxable income is less than Rs 5 lakh a year 
* Standard deduction to be increased to Rs 50,000 from Rs 40,000 for the salaried 

Tax exemptions for investors:
* Those with gross income up to Rs 6.5 lakh won’t need to pay any tax if they make investments in provident funds and prescribed equities

* TDS threshold for house rent to be increased from Rs 1.8 lakh to 2.4 lakh 
* Interest income up to Rs 40,000 in post offices and banks to be made tax-free 
* Capital gains tax exemptions under Section 54 to be available up to Rs 2 crore. Capital gains exemption to be available on 2 house properties 
* Income tax relief on notional rent from unsold houses extended to 2 years from 1 year earlier 

Other tax related reliefs:
* Income Tax returns to be processed within 24 hours and refunds to be paid immediately 
* Within two years, almost all assessment/verification of IT returns to be done electronically by an anonymised tax system without any intervention by officials 

For farmers: 
* Rs 6,000 a year assured income support for small and marginal farmers 
* Under the scheme to be effective from 1 December 2018, farmers having up to 2 hectares of land to get Rs 6,000 per year in three equal instalments 
* Interest subvention on farm loans; farmers affected by natural calamities to get 2% interest subvention and additional 3% interest subvention upon timely repayment 
* 2% interest subvention to farmers who pursue animal husbandry, fisheries jobs through Kisaan credit cards 
* Kamdhenu scheme for animal husbandry 

GST: 
* Group of Ministers to suggest ways to lessen GST for homebuyers 
* Direct tax mop-up increases from Rs 6.38 lakh crore in 2013-14 to almost Rs 12 lakh crore; tax base increases from Rs 3.79 crore to 6.85 crore 
* Businesses with annual turnover of less than Rs 5 crore — who account for over 90% of GST payers — to be allowed to file returns quarterly 
* Customs to fully digitise exim transactions and leverage RFID for logistics; Duties on 36 capital goods abolished 
* GST collections in January 2019 at over Rs 1 lakh crore 

Sops for workers:
* Pension of Rs 3,000 a year for workers in the unorganised sector 
* New Pradhan Mantri Shram Yogi Maandhan Yojana for unorganised sector workers with income up to Rs 15,000 per month; beneficiaries to get Rs 3,000 per month pension with a contribution of Rs 100 per month after retirement. Rs 500 crore allocated for the scheme 
* Gratuity limit raised to Rs 30 lakh 

Rural allocations:
* Rs 60,000 crore earmarked for MNREGA 
* Rs 19,000 allocated to Gram Sadak yojana for constructing rural roads 

Defence:
* Defence budget increased to over Rs 3 lakh crore; govt to provide additional funds if needed. 
* Disbursals under OROP at Rs 35,000 crore in the last few years 

Railways:
* Railways operating ratio seen at 96.2% in FY19 Vs 95% FY20. 
* Capex for FY20 pegged at a record Rs 1.6 lakh crore 
* Not even a single unmanned railway crossing on broad gauge lines anywhere 

Fiscal Deficit: 
* FY19 fiscal deficit target revised to 3.4 per cent of GDP; the target for 2019-20 pegged at 3.4 per cent (The commitment earlier was to bring down the deficit to 3.1 per cent by the end of March 2020, and to 3 perc ent by March 2021) 
*Current account deficit at 2.5% of the GDP 

Entertainment
* A single window clearance for filmmakers 
* Anti-camcording provision to be introduced in Cinematography Act to fight piracy 

Nine priority sectors for govt
* To build next-gen infrastructure – physical as well as social 
* To build a Digital India that reaches every citizen 
* Clean and Green India 
* Expanding rural industrialization using modern industrial technologies 
* Clean Rivers – with safe drinking water to all Indians 
* Oceans and coastlines 
* India becoming launchpad of the world 
* Self-sufficiency in food and improving agricultural productivity with emphasis on   organic food 
* Healthy India 
* Minimum Government Maximum Governance, with proactive, responsible and friendly bureaucracy 

Social schemes:
* 1 lakh digital villages to be built 
* In a historic decision with regard to welfare of farmers and for doubling their income, MSP to be raised by 1.5 times the production cost for 22 crops 
* Pradhan Mantri Ujjwala Yojana, a programme to give 8 crore free LPG connections to rural households, to ensure cleaner fuel and health assurance; 6 crore connections already given 
* A committee to be set up under NITI Aayog for denotifed nomadic & semi-nomadic communities 

State of the Economy:
* India is poised to become a $5 trillion economy in next 5 years, $10-trillion economy in the next eight years 
* Committed to eliminating black money; anti-black money measures taken have unearthed undisclosed income worth about Rs 1.30 lakh crore; 3.38 lakh shell companies deregistered .

* GST being continuously reduced, resulting in relief of Rs 80,000 crore to consumers; most daily-use items for poor and middle class brought down to 0%-5% tax bracket 
* Rs 3 lakh crore recovered via Insolvency and Bankruptcy Code; Govt expects banks on RBI’s Prompt Corrective Action list to be removed soon 
* GDP growth in last 5 years higher than that during any other earlier govt; Rs 2.6 lakh crore spent in recap of PSU banks 
* Inflation brought down to 4 per cent from average 10% inflation under UPA. Inflation in December 2018 stood at 2.1%; families now spending 35-40 per cent less on daily-use items 
* Transparent auctioning of natural resources like coal and oil 
* Domestic air traffic doubled in last 5 years .

* More than 90 per cent of India now under sanitation coverage; it’s now a social revolution, with more than 5.45 lakh villages declared Open Defecation Free 
* Targeted expenditure happening on all dimensions, unlike false promises made in the past 
* Everybody to get electricity connection in near future; 143 crore electricity bulbs already provided to the poor 
* Ayushman Bharat, the world’s largest healthcare programme, launched to provide medical care to almost 50 crore people, has helped save Rs 3,000 crore 
* Lower costs of stents & knee implants benefiting people; 14 new AIIMS announced since 2014 
* Loans worth Rs 7.23 lakh crore disbursed under Mudra Yojana 
* Monthly mobile data consumption up 50 times in last 5 years; cost of data and voice calls in India possiblly the lowest in the world now 

Source : Financial Express