The “Vote on Account” as is traditionally known was presented on 1st February 2019, by the central government. It was more of full-fledged budget rather than an interim one. In that context it was neither an interim nor the presenter Shri Piyush Goel was found to be interim finance Minister.
Last two general elections were held in the month of May 2009 and 2014. It has been disadvantage INDIA as far as interim budgets are concerned, since six to seven months of the financial year are lost in the indecisiveness. Since the budget was presented on the eve of ensuing general elections, it was pitted that it would be a populist one. But in a democracy it has to be a budget for the people as well as of the people. As far as the budget presented in the last week is concerned it had a promise for the large section of people in the country- farmers. In a way this budget had lot for the rural poor as well as the urban poor.
First things first, in spite of adverse impact of rise in the cruel and weakening of rupee visvavis us dollar government has committed to maintain fiscal deficit a t 3.4 % of GDP. The financial discipline has been hallmark of this government since 2014.
1. The budget has allocated Rs 60,000 Crores towards the Mahatma Gandhi National Rural Employment Guarantee Scheme for 2019-20.
2. Besides it has provided 19,000 crores for PradhanMantri Gram SadakYojana (PMGSY).
3. Major thrust is to fill the pockets of farmers owning land up to 2 hectares by way of Direct Transfer of Rs.6000 per annum (assured income support )under PM KissanYojna which will cause Rs75000 crore per year to the exchequer. It would have been better if the same could have been at least Rs 1000/ per annum. However cash of Rs 500 per month for rural poor does matter.
4. This budget proposes to enhance honorariumto be paid by about 50 per cent for all categories of workersAnganwadi and AshaYojana.
5. With a view to upscale sustainable genetic up gradation of cow resources and to enhance production and productivity of cows, government has decided to set up ‘RashtriyaKamdhenuAayog’ .
1. In similar way Finance Minister Piyush Goel brought cheers to urban poor by proposing to increase the limit of rebate from a taxable income of Rs 3.5 lakh to Rs 5 lakh. However there is no change in the slab meaning a person earning taxable income of Rs 5,00,00 would have to pay tax on an amount exceeding Rs 2,50,000.
2. Besides FM also proposed standard deduction to be raised to Rs50,000.
3. Confident with the tax compliance budget also proposed to increase the TDS threshold on interest from 10,000 to 40,000.
4. With an eye to provide social security in unorganized sector this budget has proposed to the workers with income below 15,000 rupees,pension of Rs.3,000 per month under PradhanMantriShram Yogi MaandhanYojana.
5. Another relief for urban population is that the provision regarding deemed rent which was treated as income against unoccupied second house is done away. This will provide big relief to lot of urban assesses.
Overall outlay for the next year is pegged at Rs 27.5 lakh crores. Government expects Rs 53,000 crores as divedend from PSUs and a dividend of Rs 83,000 crores from the Reserve Bank Of India. It has set a stiff target of Rs 90,000 crores from disinvestments. It is proposing to collect 5,40,000 from direct taxes another 6,52,000 crores from corporate taxes and 1,30,000 from customs while GST collection is expected at Rs7,61,000crores. Nothing is visible in terms of bringing petrol under GST as per the numbers presented. Meaning Central and State governments would merrily continue to milk .Thus it intends to borrow Rs 7 lakh croresout of which 2’37’000 crores is for redemption, which may put pressure on rupee in the coming year.In spite of stable US Dollar and comparatively stabilized prices of crudeRupee has weakened in the last month. Also additional cash to the tune of Rs 75,000 crores in rural hands and approximately 15, 000 crors in the urban hands by way of rebate for assesses earning less than five lakh annual income would boost consumption but may put inflationary pressure.
On the eve of the Loksabha elections this Budget has succeeded in maintaining perfect balance between fiscal prudence and populist measures albeit necessary and in line with the government’s overall policy.The budget avoided any temptation of big ticket reforms and proposed to increase the outlay of existing schemes and ensure to implement the same. The main opposition was baffled so much that Former FM criticized on the ground of length of the speech and its bilingual presentation.
- UDAY TARDALKAR
CORPORATE CONSULTANT AND TRAINER