With an eye on upcoming Lok Sabha polls, the 2019 Union interim Budget had big sops for three specific groups – farmers, middle class and unorganised labourers. For small farmers with land holdings less than two hectares, the Budget announced income support of Rs 6,000 per year to be transferred directly to farmers’ bank accounts in three instalments.
For the middle class, it provides that tax payers with annual income up to Rs 5 lakh will get full tax rebate. Additionally, it raised the standard tax deduction for salaried persons from Rs 40,000 to Rs 50,000. And for unorganised workers, the Pradhan Mantri Shram Yogi Mandhan will provide assured monthly pension of Rs 3,000 per month after contribution of Rs 100 per month.
Piyush Goyal during his intermin budget speech. (PTI)
Clearly, the Narendra Modi government has tried to address agrarian distress and woes of common workers by putting more money in their hands. This is a smart move as direct cash transfers are more efficient than byzantine social welfare schemes where little trickles through, even if there are complications in identifying who the genuine beneficiaries of these schemes, other than the tax cuts to the salaried, can be. The measures will be seen as welcome relief for many people in both rural and urban areas.
It’s not an accident that they come just before the elections, and may be able to arrest negative perceptions of BJP that are taking hold in certain sections of the electorate, as exemplified by the party’s assembly poll losses in Rajasthan, Madhya Pradesh and Chhattisgarh.
That said, BJP will still head into the Lok Sabha polls with a weak record on job creation. With the leaked NSSO jobs data showing unemployment at a 45-year high and opinion polls highlighting joblessness as a key issue for voters, BJP will have its task cut out to convince the electorate that it can grow the real economy. But this interim Budget should help the party in upcoming Lok Sabha polls. Whether it will be enough to get NDA over the finishing line remains to be seen.
Budget 2019: Full tax rebate for income up to Rs 5 lakh, Piyush Goyal says