Finance Minister Piyush Goyal rolled out the government’s last budget ahead of this year’s national elections, announcing no tax on income up to Rs 5 lakh, a Rs 75,000 crore assured income scheme for small farmers and a mega pension scheme for workers in the unorganised sector. The initiatives are designed to woo the middle class, address farm distress and boost private investment in an effort to shore up the political base of ruling BJP-led national coalition that has been accused by the opposition of not delivering on its promises to the poor.
“India is solidly back on track and marching towards growth and prosperity,” Piyush Goyal said early in his budget speech, asserting that the government had succeeded in “we have broken the back of back-breaking inflation”.
He said the Narendra Modi government’s success in controlling inflation had put more money in the hands of people. “Inflation is a hidden and unfair tax, from 10.1 per cent during 2009-14,” he said.
Goyal announced exemption from tax on income of up to Rs 5 lakh per annum, which goes up to Rs 6.5 lakh if the individual tax payers invest Rs 1.5 lakh in provident fund and prescribed equities. He also proposed to increase the standard deduction from the existing Rs 40,000 to Rs 50,000. The proposal will benefit 3 crore middle class tax payers.
The TDS (tax deduction at source) threshold on interest from bank, post office deposits has been raised from Rs 10,000 to Rs 40,000. The finance minister further proposed to increase the TDS threshold on rental income from Rs 1.8 lakh to Rs 2.4 lakh.
The BJP-led ruling National Democratic Alliance (NDA) is facing discontent over depressed farm incomes and doubts over whether his policies are creating enough jobs. The interim budget allocates Rs 600 billion for a rural jobs programme and Rs 190 billion for building of roads in the rural areas.
Goyal said Rs 6,000 per year assured income support will be given to small and marginal farmers having less than two hectares of land. He announced a new fund, ‘Pradhan Mantri Kisan Samman Nidhi’ for disbursement of cash to “vulnerable farmers”.
Around 12 crore farmers will receive Rs 6,000 per annum under the PM Kisan scheme. The money will be transferred into bank accounts of farmers in three equal instalments. The finance minister said Rs 20,000 crore have been provided for current fiscal, 2018-19 under PM Kisan scheme.
The government proposed to set up a national commission, the Rashtriya Kamdhenu Aayog with the initial capital of Rs 500 crore for the welfare of cows. “Happy to announce setting up of Rashtriya Kamdhenu Aayog. Government will never step back from protection of the Gau Mata,” said Goyal.
The government unveiled a mega pension scheme for the unorganised sector workers with an aim to benefit 10 crore people. Goyal said the beneficiaries will get assured monthly pension of Rs 3,000 after reaching the age of 60 years.
“We are launching Pradhan Mantri Shram Yogi Mandhan today. The scheme will provide assured monthly pension of Rs 3,000, with contribution of 100 rupees per month, for workers in unorganised sector after 60 years of age,” Goyal said.
The fiscal deficit would be 3.4 per cent of gross domestic product (GDP), slightly higher than the targeted 3.3 percent, said Goyal, who presented the budget as Union minister Arun Jaitley is undergoing medical treatment in the United States.
Goyal told the Lok Sabha that direct tax collections increased from Rs 6.38 lakh crore in year 2013-14 to almost Rs 12 lakh crore this year with a growth of 80 per cent in tax base. The number of income tax returns filed increased from 3.79 crore to 6.85 crore over the same period, he said.
On job creation, the finance minister said, “EPFO shows two crore accounts in two years. This shows formalisation of the economy. When there is such a high growth, jobs are created.” The government is facing sharp criticism from the opposition over a ‘leaked report’ claiming that unemployment rate is at a 45-year high.
The interim budget is likely to be followed by a full one in July after the Lok Sabha elections. The interim budget projected the economic growth for the fiscal year 2019-20 to be around 7.5 per cent.
Source: Hindustan Times
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