Interim finance minister Piyush Goyal reaches Parliament to present 2019-20 budget.
Though touted as an “interim” budget, let’s be clear: this was a full budget proposal with fiscal implications that the next government taking charge in May after the Lok Sabha elections may have to shoulder. Piyush Goyal’s first budget speech and the Modi government’s sixth budget had two big bang announcements: an assured income support scheme to small and marginal farmers entailing an expenditure of Rs.95,000 crore (Rs.20,000 crore of this slotted in 2018-19) and income tax sops to the middle class.
Income taxpayers have benefitted in the form of a full income tax rebate for those with annual income less than Rs.5 lakh. Goyal expects that benefits to the tune of Rs.18,000 crore will have been passed on to 3 crore taxpayers through these measures.
With the government taking a hit of nearly Rs.1.15 lakh crore through these measures targeting farmers and middle class, it has slightly revised the fiscal deficit target for 2018-19 to 3.4% of GDP from the budget target of 3.3% last year. Earlier reports about government planning to raid RBI reserves to fund election sops had raised concerns. But Goyal has done well to refrain from frivolous spending and targeting just a few schemes for extra spending.
However, the last word on this “interim” budget has not been said. A new government coming in after the elections may have another budgeting plan for 2019-20.
Budget 2019: Rs 6,000 per year for farmers with less than 2 hectares of land, says Piyush Goyal