Highlights of Interim Budget 2019

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February 1, 2019

Highlights of Interim Budget 2019

Finance minister Piyush Goyal presents the National Democratic Alliance’s (NDA) sixth and final budget. Standing in as finance minister as Arun Jaitley is on medical leave, this is Goyal’s first budget speech, though it is the second time that he is holding interim charge of the finance ministry.

An Interim Budget comes into existence only when the central govt does not have the time to present full-budget. Traditionally, a year in which general elections are scheduled, the outgoing government presents the Interim Budget.

Tax Benefits

Individual taxpayers having taxable annual income up to Rs.5 lakhs will not be required to pay any income tax. 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, 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.
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.
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

Farmers

Government is launching a historic programme namely “Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)”. Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs 6,000 per year. This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs2,000 each.
The programme would be made effective from 1st December 2018 and the first instalment for the period upto 31st March 2019 would be paid during this year itself.
Proposed outlay for PM-KISAN for the FY 2019-20 is Rs75,000 crore.Government increased the allocation for Rashtriya Gokul Mission to Rs 750 crore in the current year and announce setting up of “Rashtriya Kamdhenu Aayog” to upscale sustainable genetic up-gradat.
Farmers affected by severe natural calamities, where assistance is provided from National Disaster Relief Fund (NDRF), will be provided the benefit of interest subvention of 2% and prompt repayment incentive of 3% for the entire period of reschedulement of their loans.

Labour and Workers

Government embarked upon a programme to deliver 8 crore free LPG connections under the Ujjwala Yojana. More than 6 crore connections have already been given and the remaining will get free gas connections by next year.
More than 70% of the beneficiaries of Pradhan Mantri MUDRA Yojana are women who are getting affordable and collateral-free loans to start their own businesses.

Poor and backward classes

60,000 crores are being allocated for MGNREGA in BE 2019-20.
To provide food grains at affordable prices to the poor and middle classes, about 1,70,000 crores were spent in the year 2018-19.
Pradhan Mantri Gram Sadak Yojana (PMGSY) is being allocated 19,000 crore in BE 2019-20 as against 15,500 crore in RE 2018-19.
The Government have now ensured 10% reservation in educational institutions and Government services for poors. In these institutions, around 25% extra seats (approximately 2 lakh) will be provided .
By March, 2019, all willing families will get electricity connection, Under ‘Saubhagya Yojna.

Defence and National Security

Defence Budget will be crossing ` 3,00,000 crore for the first time in 2019-20. For securing our borders and to maintain preparedness of the highest order, if necessary, additional funds would be provided.
Disbursed 35,000 crore rupees under One Rank One Pension(OROP) scheme in the last few years .

Infrastructure

The number of operational airports has crossed 100 with the commissioning of the Pakyong airport in Sikkim.
The flagship programme of Sagarmala along the coastal areas of the country will develop ports for faster handling of import and export cargo.
Capital support from the budget for railways is proposed at ` 64,587 crore in 2019-20 (BE). The Railways’ overall capital expenditure programme is of ` 1,58,658 crore. 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).
Allocation for the North Eastern Areas is being proposed to be increased by 21% to ` 58,166 crore in 2019-20 BE over 2018-19 BE.

GST Reforms

Most items of daily use of the poor and middle class are now in the 0% or 5% tax slab. Cinema goers who were subjected to multiple taxes up to 50% are mostly paying much lower tax at 12% now.
Exemptions from GST for small businesses has been doubled from `20 lakh to `40 lakh. Further, small businesses having turnover up to ` 1.5 crore have been given an attractive composition scheme wherein they pay only 1% flat rate and have to file one annual return only.
Small service providers with turnover upto `50 lakhs can now opt for composition scheme and pay GST at 6% instead of 18%.
Businesses comprising over 90% of GST payers will be allowed to file quarterly return.
The average monthly tax collection in the current year is ` 97,100 crore per month as compared to ` 89,700 crore per month in the first year.
The State revenues are improving with guaranteed 14% annual revenue increase for the first five years.

Digital India Revolution

More than 3 lakh Common Service Centres (CSCs) employing about 12 lakh people, are digitally delivering several services to the citizens.
The Government will make 1 lakh villages into Digital Villages over next five years.
In the last five years, nearly 34 crore Jan Dhan bank accounts were opened.

MSMEs and Traders

Government e-Marketplace (GeM), created by Government two years ago, has transformed public procurement by making it fully transparent, inclusive and efficient.
MSMEs have an opportunity to sell their products through GeM. Transactions of over ` 17,500 crore have taken place, resulting in average savings of 25-28%. The GeM platform is now being extended to all CPSEs.
GST registered SME units will get 2% interest rebate on incremental loan of ` 1 Crore. The requirement of sourcing from SMEs by Government enterprises has been increased to 25%. Of this, the material to the extent of at least 3% will be sourced from women owned SMEs.

Cleanliness

As a tribute to Mahatma Gandhi’s 150th birth anniversary in 2019, Government initiated the world’s largest behavioural change movement with the Swachh Bharat Mission.
India has achieved 98% rural sanitation coverage and as many as 5.45 lakh villages have been declared “Open Defecation Free.

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.
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.

Other Highlights of Interim Budget 2019-20

The government has allocated Rs 93,848 crore-3.3 per cent of the total budget expenditure-for the education sector, over Rs 10,000 crore hike from the revised estimate Rs 83,626 last year.
Current account deficit for 2018/19 seen at 2.5% of GDP
Farmers up to 2 hectare of land to come under PM Kisan scheme
Government launches mega pension scheme for social security coverage of unorganised labour
Fiscal deficit for 2018/19 seen at 3.4% of GDP
Recovered Rs 3 lakh crore via bankruptcy code
Poor farmers to get Rs 6,000 per year under PM Kisan scheme
Poor farmers to get cash in three equal installments under PM Kisan scheme
Tax on notional rent on unsold inventory to not be paid for 2 years
Standard deduction raised to Rs 50,000 from Rs 40,000 now.
TDS threshold on interest from bank deposits, postal savings raised to Rs 40,000 from Rs 10,000.
TDS threshold on rental income raised to Rs 2.4 lakh from Rs 1.8 lakh.
Capital gains from residential property sale will be eligible for exemption under Section 54 for 2 properties bought.
No income-tax on notional rent on second self-occupied home
No TDS on post office savings up to Rs40,000
All farmers affected by natural disasters to get 2-5% interest subvention
Gratuity cap doubled to Rs20 lakh
Unorganised labour to get rs3,000 per month after age of 60 under mega pension scheme
Mega pension scheme is for people with income up to Rs15,000 per month
PM mega pension scheme to benefit 10 crore people
Government to contribute 14% under New Pension Scheme
India is the second biggest hub for start-ups
Government projects to source 25% material from SMEs, 3% from only women-owned SMEs
SME loans with ticket size of Rs1 crore to get 2% interest subvention
Defence Budget crosses Rs3 lakh crore mark in FY20 Budget
Average GST collection Rs 97,100 crore
Government lays out 10-year roadmap to improve ease of living
FY20 total expenditure seen at Rs 27.84 trillion rupees
FY20 capital expenditure seen at Rs 3,36,292 crore
Central schemes to get Rs 3,27,679 crore FY20
National education mission to get Rs 38,572 crore FY20
Integrated child development scheme to get Rs 27,584 crore FY20
SC, ST welfare to get Rs 76,800 crore FY20
22nd AIIMS has to be opened in Haryana
One lakh digital villages in next 5 years
The scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide assured monthly pension of Rs. 3,000 with contribution of Rs. 100 per month for workers in unorganized sector after 60 years of age.
Under MUDRA Yojana 15.56 crore loans have been disbursed amounting to rs.7,23,000 crore.
State share has increased to 42%
PCA restriction has abolished from 3 major banks
26 weeks of Maternity Leaves to empower the women