NEWS
01/02/2019 1:12 PM IST

Interim Budget 2019 Highlights: Big Giveaways For Middle Class And Farmers

From tax exemption to people who earn Rs 5 lakh a year to Rs 6,000 per year for farmers under new scheme, here's what you need to know.

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The BJP government on Friday unveiled an interim budget with giveaways for rural citizens and the middle class, in what is being seen as a critical test for Prime Minister Narendra Modi, who is facing anger over depressed farm incomes and unemployment with a general election just months away.

Here are the highlights of interim Finance Minister Piyush Goyal’s budget for the 2019/20 fiscal year beginning 1 April.

Taxation/Banking

- Income tax exemption limit raised to Rs 5 lakh in 2019/20

- Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 20 million rupees; can be exercised once in a lifetime

- Average monthly tax collection at Rs 971 billion per month so far this year

- Gross market borrowing seen at Rs 7.04 trillion in 2019/20 - traders citing agencies

- Small and medium-sized businesses registered under the Goods and Services Tax to get 2 percent interest subvention on loan of Rs 10 million - finance minister

- Goyal says expects other banks on the central bank’s Prompt Corrective Action list to be removed soon

Farming/Rural Affairs

- India to allocate Rs 750 billion  ($10.56 billion) per year to support farmers’ incomes

- Impact of Rs 200 billion in current fiscal year

- Vulnerable farmers to receive Rs 6,000 per year under new scheme

- Farmers affected by natural disasters to receive 2% interest subvention, additional 3 percent if they repay loans on time

- Government to provide 2% interest subvention for farmers pursuing animal husbandry, fisheries

- India to allocate Rs 190 billion for construction of rural roads in 2019/20

Employment

- India to launch social security coverage for workers in unorganised sector

- New scheme to provide assured monthly pension of Rs 3000 per month, with contribution of Rs 100 per month, for workers in unorganised sector after 60 years of age 

- Scheme will benefit 100 million workers in unorganised sector, may become the world’s biggest pension scheme for unorganized sector in five years - Goyal

- Government to allocate Rs 600 billion for a rural employment scheme in 2019/20

Expenditure

- Total expenditure in 2019/20 budgeted at Rs 27.84 trillion

- Capital expenditure for 2019/20 seen around Rs 3.36 trillion in centrally sponsored schemes

- Defence budget raised to beyond Rs 3 trillion in 2019/20

- To allocate 645.87 billion rupees for railways capital expenditure in 2019/20

- Allocation to India’s northeast region proposed to be increased by 21% over previous fiscal year

Deficit/Growth

- Fiscal deficit for 2018/19 seen at 3.4% of GDP

- Fiscal deficit for 2019/20 estimated at 3.4% of GDP

- Fiscal deficit for 2020/21 seen at 3% of GDP

- Government’s stated commitment earlier was to bring down the fiscal deficit to 3.1 percent of GDP by the end of March 2020, and to 3 percent by March 2021

- India’s current account deficit for 2018/19 seen at 2.5% of GDP

Finance Minister’s comments 

- “We are poised to become a 5 trillion dollar economy in the next five years, we aspire to become a 10 trillion dollar economy in the next eight years”

- “India is now on the way to becoming a global manufacturing hub in several sectors”