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New Delhi, February 1
Making a big populist push in its final Budget before the General Election, the Narendra Modi government on Friday exempted people with an earning of up to Rs 5 lakh from payment of income tax, announced an annual cash dole-out of Rs 6,000 to small farmers and provided a monthly pension of Rs 3,000 to workers in the unorganised sector.
Converting what was supposed to be an Interim Budget or a vote on account into an almost full-fledged Budget announcement in the Lok Sabha, Finance Minister Piyush Goyal proposed an array of incentives for both middle-class and farmers, whose disenchantment was said to have cost the BJP dearly in recent assembly elections.
Over 3 crore salaried class, pensioners, self-employed and small businesses with total income of up to Rs 5 lakh will save Rs 10,900 in income tax annually after considering the relief Goyal provided in form of a ‘rebate’. For those making investments of Rs 1.5 lakh in tax saving instruments, the tax-free income would be Rs 6.5 lakh.
The rebate will cost the government Rs 18,500 crore in revenue.
He also raised standard deduction by Rs 10,000 to Rs 50,000 which would translate into a saving of Rs 2,000 to Rs 3,000 in taxes for those with taxable income of Rs 7.5 lakh and Rs 20 lakh in a year.
Also, exemption from deduction of tax at source for interest income earned from deposits in banks and post offices has been increased to Rs 40,000 from current Rs 10,000. This would help all salaried taxpayers who lost out last year due to the removal of medical reimbursement and transport allowance exemptions.
As was widely anticipated, Goyal announced an income support scheme for 12 crore small and marginal farmers by providing Rs 6,000 in their bank accounts in three equal installments in a year, which will cost Rs 75,000 crore a year to the government.
The eligibility for the scheme, called Pradhan Mantri Kisan Samman Nidhi, will be ownership of less than 2 hectares of cultivable land.
Though the Finance Minister said the scheme will be implemented from the current fiscal year, where it will cost Rs 20,000 crore, it wasn’t clear how the beneficiaries would be identified.
A mega pension scheme was introduced to provide a monthly pension of Rs 3,000 with a contribution of Rs 100 per month for workers in the unorganised sector after 60 years of age.
The farm income support scheme will result in the government breaching its 3.3 per cent fiscal deficit target from the current year and slipping on 3.1 per cent target for the next. Fiscal deficit for both the years has been put at 3.4 per cent of the GDP.
Wooing farmers, an interest subvention of 2 per cent to those pursuing animal husbandry and fisheries and to farmers hit by natural calamities was announced. An additional 3 per cent interest subvention will be given to farmers for timely repayment of loans.
In a boost to housing sector, he announced no notional taxation on second house purchase, raised threshold of TDS on rent from Rs 1.8 lakh to Rs 2.4 lakh and allowed capital gains of up to Rs 2 crore made from sale of immovable property to be invested in two residential houses as against current practice of exempting such income if invested in one house within a year.
While defence allocation has been raised by 7 per cent to over Rs 3 lakh crore, subsidy bill has gone up to Rs 2.97 lakh crore from Rs 2.66 lakh crore. Target for revenue from disinvestment of government stake in PSUs has been raised to Rs 90,000 crore from Rs 80,000 crore and dividend from RBI and other banks has been pegged at Rs 82,900 crore.
The relief in income tax for the middle class came in the form of a rebate. A rebate is different from a general exemption which would have meant income up to Rs 5 lakh for all would have been exempt from taxes and taxes would have to be paid only on income in excess of that.
For anyone earning more than Rs 5 lakh annually will continue to pay taxes at the prevailing rates — no tax on first Rs 2.5 lakh, 5 per cent on income between Rs 2.5 and 5 lakh, 20 per cent on income between Rs 5 lakh and Rs 10 lakh and 30 per cent on earnings of over Rs 10 lakh.
Justifying inclusion of tax proposals in an Interim Budget, which normally is only to seek approval of Parliament for spending for an interim period until a new government is sworn in, he said, “Though as per convention, the main tax proposals will be presented in the regular Budget, small taxpayers especially middle class, salary earners, pensioners and senior citizens need certainty in their minds at the beginning of the year about their taxes.”
“Therefore, proposals, particularly relating to such class of persons should not wait.”
Goyal, who was made the interim Finance Minister after Arun Jaitley had to rush to New York for medical treatment last month, said what he presented was not merely an Interim Budget, but a medium of the country’s development journey.
The NDA government, he said, has laid the foundation for India’s growth and development for times to come. India is poised to become a USD 5 trillion economy in the next five years.
HIGHLIGHTS
*Healthy India is ninth dimension of our vision for India: FM Goyal
*Persons with gross income of Rs 6.5 lakh annually will not have to pay any tax after considering investments of Rs 1.5 lakh in tax saving schemes: FM
*Rs 76,800 crore allocated for welfare of SCs/STs for 2019-20, up from Rs 62,474 crore in 2018-19: FM
*Individuals with income up to Rs 5 lakh will not have to pay any income tax
*India is on the way of becoming global manufacturing hub, including automobiles, electronics and defence
*Building physical and social infrastructure for USD10 trillion economy, says FM outlining 10 year vision in the Interim Budget speech
*We are poised to become a USD 5 trillion economy in next five years and aspire to become USD10 trillion economy in next 8 yrs
*NDA govt has laid foundation for India’s growth and development for times to come
*More than 1.06 crore people filed I-T returns for first time in 2017-18, the year after demonetisation
*Anti-black money measures, including demonetisation, led to discovery of undisclosed income of Rs 1.3 lakh cr, seizure of Rs 50,000 cr
*Govt committed to eliminating ills of black money
*Fiscal deficit for 2018-19 to be 3.4 per cent as against 3.3 per cent targeted; breach primarily because of farm income support
*GST has continuously reduced, relief of Rs 80,000 cr to consumers; most items of daily use for poor and middle class are now in 0-5% tax bracket: FM
*India will be modern, technology driven, equitable and transparent society by 2030
*As many as 34 cr Jan Dhan accounts opened in 5 years, Aadhaar ensured benefits reach poor, says FM
*Impactful steps taken to reduce tax, bring benefits for middle class citizens
*Single window clearance for film-making to be made available to Indian film-makers, anti-camcording provision to be introduced to Cinematography Act to combat privacy
*Cost of data, voice calls in India is now possibly lowest in world; mobile and mobile part manufacturing companies have increased from 2 to 268
*Budget allocation to North East region increased by 21 per cent to Rs 58,166 crore for 2019-20
*1 lakh digital villages to be created in next five years
*In last 5 years under all categories of workers, minimum wages increased by 42 per cent which is the highest ever
*India leading world in mobile data consumption; mobile consumption data has risen by 50 times
*Construction of rural roads tripled; 15.8 lakh out of total 17.84 lakh habitations connected with pucca roads under PMGSY. PMGSY allocated Rs 19,000 crore in 2019-20
*Average monthly GST tax collection Rs 97,100 cr as compared to Rs 89,700 cr last year
*Govt to launch mega pension yojana for 42 cr unorganised sector workers; assured monthly pension of Rs 3,000 after reaching the age of 60
*Vande Bharat Express will provide speed, service and safety to citizens and will give boost to Make In India: FM
*Urgent steps needed to boost domestic oil and gas production to cut imports: FM
*99.54 per cent of all returns were accepted without scrutiny, transforming I-T department, return to be processed in 24 hours, processed simultaneously
*Capital expenditure programme of Railways at all-time high of Rs 1.58 lakh cr in next FY: FM
*We have eliminated all unmanned railway crossings in the country: FM
*In next two years even tax returns selected for scrutiny will be done without any personal interface, electronically, says FM
*Simplification of direct tax system to benefit taxpayers; direct tax reduced and tax interface made simpler and faceless to make life easier
*Substantial hike in military service pay has been announced
*Tax collection increased to Rs 12 lakh crore this year, returns filed to 6.85 crore
*Rs 35,000 cr given under OROP in last three years
*Defence budget increased to over Rs 3 lakh cr in 2019-20
*27 km of highways built each day, projects stuck for decades completed; SagarMala will help faster handling of import and export cars
*Nine priority areas identified; National Artificial Intelligence Portal to be developed soon
*Indian Railways has witnessed its safest year in history; all unmanned crossings on broad gauge network have been eliminated
*India is fastest highways developer in the world, says FM
*Rs 1 crore loan can now be obtained under 59 minutes: FM
*Country now has 100 operational airports; passenger traffic has doubled in last five years
*Over 1 crore youth trained under skill initiatives of government, says FM
*India has become second largest hub of startups
*Under the Mudra scheme, govt has sanctioned 15.56 lakh loans amounting Rs 7.23 lakh crore
*75 pc of women beneficiaries under Mudra Yojana, 26 weeks’ maternity leave and Pradhan Mantri Matritva Yojana are all empowering women
*Out of 8 cr free LPG connections under Ujjwala, 6 cr connections to poor women have already been provided
*Ujjwala Yojana providing free cooking gas connection is a remarkable success story
*More than 70 per cent of MUDRA yojana beneficiaries are women
*Gratuity limit increased from Rs 10 lakh to Rs 30 lakh
*High growth, formalisation of economy has resulted in increased EPFO membership by 2 cr in last two years
*Farmers affected by severe natural calamity will get 2 pc interest subvention on all rescheduled crop loans and additional 3 per cent on timely repayment
*High growth and formalisation of economy has led to rise in EPFO membership by 2 cr in last two years
*Farmers hit by natural calamities to get 2 per cent interest subvention; 3 per cent more on timely repayment of loans
*2 pc interest subvention to farmers involved in animal husbandry and fishery
*Govt to provide Rs 750 crore in FY to support animal husbandry and fishing
*There is need for structured income support for poor, landless farmers to meet input cost
*Govt to implement special strategy for uplift of nomadic tribes
*Govt has fixed MSP for 22 notified crops at 50 per cent higher than cost of production
*Pension scheme for unorganised sector workers to be implemented from this fiscal
*Cheaper drugs being provided through Jan Aushadi stores: FM
*AIIMs established or operating in country, of which 14 sanctioned since 2014. Another to be set up in Haryana
*10 lakh patients have been treated so far under Ayushman Bharat scheme, world’s largest health care programme
*Use of LED bulbs saved power bill of about Rs 50,000 crore, says FM
*As many as 1.53 crore houses constructed during 2014-18 under Pradhan Mantri Awaas Yojana
*143 crore LED bulbs were made available for lower and middle class families
*Farmers to be provided Rs 6,000 per year in three instalments, to be fully funded by the central government
*We plan to provide urban facilities in rural areas while preserving ‘soul of village’, says FM
*Construction of rural roads tripled under Pradhan Mantri Gram Sadak Yojana: FM
*2.5 cr families were without electricity in 2014; we have provided power to almost all families: FM
*Govt spent Rs 1.7 lakh crore to supply food grains at cheaper price to poor in 2018-19 as against Rs 92,000 crore in 2013-14
*Allocation to MNREGA hiked to Rs 60,000 crore for 2019-20
*Govt announces the Pradhan Mantri Samman Nidhi for small and marginal farmers; farmers to get Rs 6,000 per year
*Govt has provided 10 per cent reservation for economically weaker section; job quota to provide 2 lakh seats in educational institutes
*We have worked to bridge the urban-rural divide
*About 5.4 lakh villages made open defecation-free
*Poor have the first right over nation’s resources
*I hope other banks too would soon come out of PCA framework
*Realty Law RERA has helped in bringing transparency in real estate sector
*India has achieved over 98 per cent rural sanitation coverage: FM
*We have run a corruption-free government
*Insolvency and Bankruptcy Code helping in recovery of non-performing loans. Even big businessmen are now worried about loans: FM
*BoI, OBC and Bank of Maharashtra have been removed from the PCA framework of RBI
*3 lakh crore recovered from big corporate loan defaulters: FM
*Our govt had the guts to ask RBI to look at bad loans and present correct picture to nation: FM
*We have stopped culture of phone banking, says FM referring to allegations of rampant loans over phone during UPA regime.
*We have liberalised FDI allowing more investment through automatic route
*We have undertaken path-breaking structural reforms by introducing GST and other reforms
*Fiscal deficit will be 3.4 per cent of GDP; Current Account Deficit to be 2.5 per cent of GDP
*Current Account Deficit likely to be 2.5 pc of GDP this year
*India attracted USD 239 bn in FDI in last five years
*If we had not controlled inflation our families would have been spending 35-40 per cent more on daily use items
*NDA govt contained double digit inflation; Govt has broken the back of high inflation
*India is fastest growing major economy in world; GDP growth in last 5 yrs higher than under any previous govt
*India has been recognised as brightest spot in the world in the past 5 years
*We have got decisive mandate to continue structured reforms. We have reversed policy paralysis
*We are moving towards realising New India by 2022: FM
*Goyal begins interim budget speech, wishes Union minister Arun Jaitley speedy recovery and good health
*Finance Minister Piyush Goyal rises to present Interim Budget for 2019-20
*Cabinet approves Interim Budget for 2019-20. PTI
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