Interim Budget 2019: What to expect from Modi govt

New Delhi, Feb 1: Finance Minister Piyush Goyal will on 1 February present Narendra Modi government's sixth and final Budget, which will be an interim one, keeping up with established tradition. This will be the last Budget of the BJP-led NDA government ahead of the General Election. The session will start tomorrow with an address by President Ram Nath Kovind to both Houses of Parliament and conclude on February 13.

The Budget will seek Parliament's nod for spending for four months till a new government is sworn-in.

While it is widely expected that Income tax concessions for individuals, a farm relief package, support for small businesses and possible populist spending measures may be part of the Budget, there will be no Economic Survey detailing the state of the economy.

[Middle class, farmers on mind as Govt gets set to present interim budget]

The session is expected to be stormy with the government planning some big-ticket announcements in the Interim Budget to be presented by interim Finance Minister Piyush Goyal besides pushing the controversial Citizenship Amendment Bill in the Rajya Sabha after it was passed by the Lok Sabha in the last session.

[Budget 2019: Modi govt likely to increase spending on rural development by 16%]

The NDA government assumed office in May 2014 and presented a Budget for financial year 2014-15 followed by Budgets for financial years 2015-16, 2016-17, 2017-18 and 2018-19. It can't present a sixth full Budget because financial year 2019-20 would commence on April 1, 2019, and continue till March 31, 2020, whereas the tenure of the government would end on May 26, 2019

Here's what to expect from 2019-20 Interim Budget:

Agriculture

- Farm relief package itself could run to at least Rs. 1 lakh crore ($14.04 billion)
- Set to earmark about Rs. 1.8 lakh crore for food subsidies in the fiscal year
- Expected to waive premium for taking insurance policy for food crops
- Proposal for waiving interest on crop loans for farmers who pay on time

Divestment

- Target of about $11 billion from state asset sales in FY 2019-20
- Potential stake sales via IPOs include Telecommunications Consultants India, Indian Railways' subsidiaries IRCTC, RailTel Corp India and National Seeds Corp

Metals

- Gold - Speculation around a duty cut

Health

- Budget allocation for health is likely to increase by 5 per cent from a year ago

Taxes

- An anticipated corporate tax rate cut to 25 per cent from 30 per cent may be put on hold until after the elections
- Higher tax exemptions for the middle class and for small businesses anticipated

Banks

- Discount of 2 percentage points on loans for businesses with annual sales of less than Rs. 5 crore; government to compensate banks for the costs
- Rs. 4,000 crore-rupee capital infusion for public-sector general insurers

Autos

- Reduction of goods and services tax (GST) on electric vehicles and batteries

IT/Telecom

- Better digital infrastructure in rural areas
- Abolition of the angel tax to boost start-ups
- Exemption from GST for spectrum and licence fee payouts, reduction in spectrum fees and cuts in import duty on telecom equipment (currently at 20 per cent)