BUDGET SUMMARY WITH MAJOR HIGHLIGHTS
OF THE INTERIM BUDGET 2019-20
Interim Budget 2019-20 was presented in Parliament today by the Union
Minister for Finance, Corporate Affairs, Railways & Coal, Shri Piyush
Goyal. Besides having a major Scheme for the farmers, it provides tax sops and
sets the Developmental Agenda for the years to come.
A New Deal for 12 Crore Small and Marginal farmers with direct income
support, a path breaking Pension initiative for 10 Crore unorganized sector
workers, exempting income up to Rs 5 lakhs from Income Tax, reforms in stamp duty,
highest ever budgetary allocation of Rs 3 lakh crore for Defence, record
allocation of funds at Rs 58,166 crore for North Eastern Areas, a new AIIMS for
Haryana, single window clearance for Indian film makers at par with foreigners
and higher budgetary allocations for Education, Health, Infrastructure and for
the welfare of weaker sections including Scheduled Castes and Scheduled Tribes,
a Separate Department of Fisheries for welfare of 1.5 crore fisherman are some
of the major highlights of the Interim Budget 2019-20.
Major Schemes
New Scheme- namely
“Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)” to extend direct income support at the rate of Rs. 6,000 per year to farmer families, having cultivable land
upto 2 hectares is announced.
While presenting the Interim Budget 2019-20, the Union Minister for
Finance, Corporate Affairs, Railways & Coal, Shri Piyush Goyal said that “our Government is launching a historic programme PM-KISAN with an outlay of Rs.75,000 crore for the FY 2019-20 and
Rs.20,000 crore in the Revised Estimates of FY 2018-19”.
Under this Government of India funded Scheme, Rs.2,000 each will be
transferred to the bank accounts of around 12 crore Small and Marginal farmer
families, in three equal installments. This programme would be made effective
from 1st December 2018 and the first installment for the period upto31st March
2019 would be paid during this year itself, Shri Piyush Goyal said.
To provide
sustained and focused attention towards development of Fisheries, the
Government has decided to create a separate Department of Fisheries.
Finance Minister said that through the measure, the Government wants to promote
further growth over 7% to promote livelihood of about 1.45 crore people
dependent on the sector.
The Finance Minister announced 2% interest subvention to the farmers
pursuing the activities of animal husbandry and fisheries, who avail loan
through Kisan Credit Card.
Further, in case of
timely repayment of loan, they will also get an additional 3% interest
subvention.
Allocation of
Rs.750 crore for Rashtriya Gokul Mission has been announced for the current
year itself. Setting up of "Rashtriya Kamdhenu Aayog" to upscale
sustainable genetic upgradation of cow resources and to enhance production and
productivity of cows has also been announced. The Aayog will also look after
effective implementation of laws and welfare schemes for cow.
To provide
pensionary benefits to at least 10 crore labourers and workers in the
unorganised sector a new Scheme called 'Pradhan Mantri Shram-Yogi
Maandhan' is announced. The Finance
Minister said that within next five years it would be one of
the largest pension schemes of the world. A sum of Rs.500 crore has been
allocated for the Scheme. Additional funds will be provided as needed, Shri
Goyal added. The scheme will also be implemented from the current year, he
said.
Tax Benefits
Individual
taxpayers having taxable annual income up to Rs.5 lakhs will not be required to
pay any income tax. The Finance Minister said that persons having gross income
up to Rs. 6.50 lakhs are not required to pay any income tax if they make
investments in provident funds, specified savings and insurance etc. Additional
deductions such as interest on home loan up to Rs. 2 lakh, interest on
education loans, National Pension Scheme contributions, medical insurance and
medical expenditure on senior citizens etc, are also provided for in the
Interim Budget 2019-20. Thus tax benefit of Rs. 18,500 crore is proposed to be
provided to an estimated 3 crore middle class and small taxpayers comprising
self employed, small business, small traders, salary earners, pensioners and
senior citizens.
For salaried
persons, Standard Deduction is being raised from the current Rs.40,000 to
Rs.50,000. This will provide additional tax benefit of Rs. 4,700 crore to more
than 3 crore salary earners and pensioners.
Exemption on levy
of income tax on notional rent on a second self-occupied house is also now
proposed. Currently, income tax on notional rent is payable if one has more
than one self-occupied house.
TDS threshold on interest earned on bank/post office deposits is being
raised from Rs.10,000 to
Rs.40,000.
TDS threshold for
deduction of tax on rent is proposed to be increased from Rs. 1,80,000 to
Rs.2,40,000 for providing relief to small taxpayers.
The Finance
Minister says that the Government wants the GST burden on home buyers to be
reduced and accordingly the GST Council was moved to appoint a Group of
Ministers to examine and make recommendations in this regard at the earliest.
Shri Goyal said that soon, businesses comprising over 90% of GST payers
will be allowed to file quarterly return.
Inflation
The Finance
Minister said that the Government has been successful in bringing down average
inflation to 4.6% over last five years, which is lower than the inflation
during the tenure of any other Government. In fact Inflation in December 2018 was
down to 2.19% only. Shri Goyal said if we had not controlled inflation, our
families would have been spending around 35-40% more today on basic necessities
such as food, travel, consumer durables, housing etc. The average rate of
inflation during previous five years 2009-2014 was a backbreaking 10.1%, he
pointed out.
Fiscal Deficit
The fiscal deficit
has been brought down to 3.4% in 2018-19 RE from the high of almost 6% seven
years ago, the Finance Minister mentioned. He said, the Current Account
Deficit (CAD), against a high of 5.6% six years ago, is likely to be only 2.5%
of GDP this year. “We contained the fiscal deficit notwithstanding the Finance
Commission's recommendations increasing the share of the States from 32% to 42%
in central taxes, which we accepted in the true spirit of cooperative
federalism, thereby transferring significantly higher amounts to the States”,
Shri Goyal said.
Growth and FDI
The Finance
Minister Shri Piyush Goyal stated that a stage for high growth in decades to
come, has now been set, after a wave of next generation path breaking
structural reforms over the last five years, including introduction of Goods
and Services Tax (GST) and other taxation reforms.
The country witnessed its best phase of macro-economic stability during
the last five years. “We are the fastest growing major economy in the world
with an annual average GDP growth during last five years higher than the growth
achieved by any Government since economic reforms began in 1991. From being the
11th largest economy in the world in 2013-14, we are today the 6th largest
in the world”, the Finance Minister asserted in his Opening Remarks of his
Budget speech.
Shri Goyal said
that due to such a stable and predictable regulatory regime, growing economy
and strong fundamentals, India could attract massive amount of as much as $239
billion of Foreign Direct Investment (FDI) during the last 5 years, when most
of the FDI was allowed to come in through the automatic route.
Enhanced
allocations for major Schemes
Announcing an
allocation of Rs.60,000 crores for MGNREGA for Budget Estimates 2019-20,
the Finance Minister said that additional allocations will be made, if
required.
Pradhan Mantri Gram
Sadak Yojana (PMGSY) is being allocated Rs.19,000 crore in BE 2019-20 as
against Rs.15,500 crore in RE 2018-19. During the period 2014-18, a total number of 1.53 crore houses have been built
under the Pradhan Mantri Awas Yojana, he announced.
By March, 2019, all
households will be provided with electricity connection. Till now, 143
crore LED bulbs have been provided in a mission mode which has resulted in
saving of Rs.50,000 crore for the poor and middle class.
He said through the
world’s largest healthcare programme, Ayushman Bharat, to provide medical
treatment to nearly 50 crore people in the country, around 10 lakh
patients have already benefited through free treatment for medical treatment
which would have otherwise cost them Rs. 3,000 crore. Lakhs of poor and middle
class people are also benefiting from reduction in the prices of essential
medicines, cardiac stents and knee implants, and availability of medicines at
affordable prices through Pradhan Mantri Jan Aushadhi Kendras, the Finance
Minister added.
Shri Goyal also
said that 14 of the 21 AIIMS operating or being established in the country
presently have been announced since 2014. He also announced setting up of a new
- the 22nd AIIMS in Haryana.
Allocation for
Integrated Child Development Scheme (ICDS) is being increased from Rs.23,357
crore in RE 2018-19 to Rs.27,584 crore in BE 2019-20.
A substantial
increase is proposed in the allocation for welfare of the Scheduled
Castes and Scheduled Tribes. The allocation of Rs.56,619
crore made in BE of 2018-19 for Scheduled Caste, further increased to
Rs.62,474 crore in RE is proposed to be enhanced to Rs.76,801 crore in BE for
2019-20, an increase of 35.6% over BE of 2018-19. For the Scheduled Tribes
also, proposed allocation in 2019-20 BE is Rs.50,086 crore as against Rs.39,135
crore in BE 2018-19, an increase of 28%.
The Finance Minister said that a Welfare Development Board to frame
special strategies for the benefit of the hard-to-reach De-notified,
Nomadic and Semi-Nomadic communities will be set up under the Ministry of
Social Justice and Empowerment. He said that a Committee under NITI Aayog will
also be set up to complete the task of identifying De-notified, Nomadic and
Semi-Nomadic communities not yet formally classified.
Shri Goyal said
under the Ujjwala Yojana aiming delivery of 8 crore free LPG connections,
more than 6 crore connections have already been given and the remaining will
get free gas connections by next year.
The Finance
Minister announced that a National Artificial Intelligence Portal will also be
developed soon as a part of the National Programme on 'Artificial
Intelligence'.
The Department of
Industrial Policy and Promotion will now be renamed as the Department for
Promotion of Industries and Internal Trade.
The Finance
Minister stated that the Government e-Marketplace (GeM), created by the present
Government two years ago, resulted in average savings of 25-28% and the
platform will now be extended to all CPSEs. Transactions of over Rs. 17,500
crore have taken place so far.
The Finance
Minister announced that for the first time, the country’s Defence Budget will
be of over Rs.3 lakh crore.
The Finance
Minister, Shri Piyush Goyal pointed-out that domestic air traffic passengers
have doubled during the last five years, leading to large number of jobs also
being created. The number of operational airports has crossed 100 with the
commissioning of the Pakyong airport in Sikkim. Arunachal Pradesh came on
the air map recently and Meghalaya, Tripura and Mizoram have come on India’s
rail map for the first time.
Capital support
from the budget for Indian Railways is proposed at Rs.64,587 crore in 2019-20
(BE). The Railways’ overall capital expenditure programme is of Rs. 1,58,658
crore. The Finance Minister, who is also holding the portfolio of Railway
Ministry, announced that the Operating Ratio is expected to improve from 98.4%
in 2017-18 to 96.2% in 2018-19 (RE) and further to 95% in 2019-20 (BE).
India’s installed
solar generation capacity has grown over ten times in last five years. Stating
this, Shri Goyal said that “our commitment to promote renewable energy is
reflected in setting up the International Solar Alliance, the first treaty
based international inter-governmental organisation headquartered in India.
This sector is now creating lakhs of new age jobs, he added.
The Finance Minister
announced that in Entertainment industry, which is a major employment
generator, regulatory provisions will now rely more on self-declarations. To
promote entertainment industry, the Single window clearance for ease of
shooting films, now available only to foreigners, will also be made available
to Indian filmmakers. “We will also introduce anti-camcording provisions in the
Cinematograph Act to control the menace of piracy”, he said.
Saying that “We are
poised to become a Five Trillion Dollar Economy in the next five years and
aspire to become a Ten Trillion Dollar Economy in the next 8 years thereafter”,
Shri Piyush Goyal said that there has been a Growth of 18% in Direct Tax
Collections in 2017-18 and increase in tax base by as many as 1.06 crore people
filing income tax returns for the first time in FY 2017-18, mainly on account
of demonetization.
Shri Goyal said that he is proposing, through the Finance Bill,
necessary amendments to levy Stamp duties on one instrument relating to one
transaction and get collected at one place through the Stock Exchanges. The
duty so collected will be shared with the State Governments seamlessly on the
basis of domicile of buying client, he said.
In all the total expenditure is to increase from Rs.24,57,235 crore in
2018-19 RE to Rs.27,84,200 crore in 2019-20 BE. A rise of Rs.3,26,965
crore or approximately 13.30%. This reflects a high increase considering low
inflation. The fiscal deficit of year 2019-20 is estimated to be 3.4% of GDP.
The Finance
Minister pointed out that after completion of the fiscal deficit consolidation
programme, the Government would now focus on Debt consolidation. He said “We
have maintained the glide path towards our target of 3% of fiscal deficit to be
achieved by 2020-21. India’s Debt to GDP ratio was 46.5% in year 2017-18. The
FRBM Act prescribes that the Debt to GDP ratio of the Government of India
should be brought down to 40% by 2024-25. “Along with completion of the fiscal
deficit consolidation programme, we will now focus on Debt consolidation”, he
added.
Regards!
Librarian
Rizvi Institute of Management
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