Interim Finance Minister Piyush Goyal on Friday presented the Prime Minister Narendra Modi-led government's sixth and final budget before the Lok Sabha polls with a firm eye on income tax reductions and the effect they would have on middle-class voters.
Traditionally, in situations where a government may not be in power for the full duration of the budget period, a full Union Budget is not presented. Instead, the finance minister announces what is called a vote-on-account " a much simpler plan with no major tax or scheme announcements in it.
Goyal, however, went beyond seeking just a formal Parliament nod for government expenditure for the months remaining of the next fiscal and instead went on to point out the government's notable achievements, fiscal reforms and quite a few tax exemptions, a move no doubt aimed to woo rural and urban middle-class voters. He called the budget not an "interim" one but a "roadmap for development".
Ahead of the 2019 Lok Sabha elections, speculations are rife in the media on what's likely to be the trump card of the Narendra Modi government in this final Budget.
Goyal, notably, announced that Rs 60,000 crore has been allocated for MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) to fight the unemployment crisis in the country.
Here are the highlights of the Budget 2019 speech announced by Interim Finance Minister Piyush Goyal:
- The standard deduction for the salaried is raised to Rs 50,000 from Rs 40,000. Exemption of tax deducted at source on interest earned from bank or post office savings is raised to Rs 40,000 from Rs 10,000.
- Once in a lifetime, the benefit of rollover of capital tax gains can be increased from investment in one residential house to that in two residential houses, for a taxpayer with capital gains of up to Rs 2 crore rupees.
- No income tax for an individual earning up to Rs 5 lakh per year. No tax for individuals with gross income of upto Rs 6.5 lakh if they make investments.
- Customs duty will be lowered to 10-15 percent on import of parts and components of vehicles, to promote domestic assembling of electric vehicles.
- Tax collection has increased to Rs 12 lakh crore this year. As much as Rs 6.85 crore of income tax returns have been collected.
- Rs 1,30,000 crore of black money has been returned thanks to demonetisation.
- Businesses with less than Rs 5 crore of total turnover will need to file income tax returns every three months.
- Monthly consumption of mobile data increased by over 50 times. Cost of data and voice calls is perhaps the lowest in the world in India.
- International Solar Alliance was set up, the first treaty-based international organisation, headquartered in India. India's solar energy output has seen 10 percent increase. But there is an urgent need to increase hydrocarbon production.
- Indian Railways has experienced the safest year in its history. No unmanned level-crossing exists on the broad gauge network any longer.
- India is the fastest highway developer in the world.
- Defence budget has increased to Rs three lakh crore for the first time. More than 100 airports are operational in the country and domestic passenger traffic has doubled in last five years.
- "One Rank One Pension", a promise that has been pending for the last forty years, has been brought by the government which has announced Rs 35,000 crore for the purpose. A substantial hike for military personnel deployed in high risk areas has been affected.
- The government has set aside at least Rs 500 crore for a mega pension scheme. The Pradhan Mantri Shram Yogi Mandhan will provide assured monthly pension of Rs 3000 per month for workers in the unorganized sector after 60 years of age.
- A national programme on artificial intelligence will be set up.
- Over 1 crore youth are being trained. Mudra, StartUp India, and StandUp India will lead the country into a path of employment.
- Allocation to the North East is to be increased by 21 percent over the previous fiscal year.
- The government will earmark Rs 75,000 crore for income support for distressed farmers who have seen their earnings stagnate because of plunging prices which have proven insufficient to pay for loans and input costs.
- Rashtriya Kamdhenu Ayog to look after effective implementation of policies and schemes for the welfare of cows.
- Rs 60,000 crore has been allocated for MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act).
- The current account deficit is likely to be only 2.5 percent of the GDP this year.