A Budget For Every Indian

The Budget was presented in the backdrop of two major issues — agrarian distress and demand slowdown. While these issues were duly addressed by providing support primarily to farmers and middle class, they were done in a measured way, obviating the need for loan waivers and also without any significant breach on the fiscal front. A direct income support of Rs 6,000 per year to 12 crore farmer families, amounting to Rs 75,000 crore under PM-Kisan is a boost to the rural economy through consumption. A 100 per cent tax rebate to those earning up to Rs 5 lakh, about 3 crore taxpayers, and mostly belonging to the middle class can result in over Rs 25,000 crore of additional purchasing power (tax savings). These two segments cumulating of over 15 crore persons / families, with likely benefits of over Rs 1 lakh crore will provide a consumption boost to the economy, approximately 0.7 per cent of GDP.

Unorganised workers, mostly without any social security cover, will now be provided assured pension of Rs 3,000 per month, and almost 10 crore people with monthly income up to Rs 15,000 will be benefitted from this. The extension of Kisan Credit Card Scheme (KCC) to fisheries farmers, which provides livelihood to about 1.45 crore people, will benefit from the additional sops under interest subvention scheme. Animal husbandry/ dairy sector is allocated Rs 750 crore to set up Rashtriya Kamdhenu Aayog to enhance productivity of cows, leading to higher milk production and thus income for dairy farmers.

A higher allocation of Rs 19,000 crore has been made towards Pradhan Mantri Gram Sadak Yojana, under which construction of rural roads has already tripled and almost 90 per cent of rural habitations have been connected with pucca roads.

The Budget has also tried to empower MSMEs by making it easier for them to do business, where businesses, comprising over 90 per cent of GST payers will be allowed to file quarterly returns. The requirement of sourcing from MSMEs by government enterprises has been raised to 25 per cent, besides extending the government e-marketplace (GeM) to all CPSEs. Also, MSME loans with ticket size of Rs 1 crore will get 2 per cent interest subvention.

The infrastructure sector will continue to be the focus area, and a big part of the capital expenditure of Rs 3.36 lakh crore is earmarked for it. Housing, especially that under affordable housing, has been a major thrust area, where there is a five-fold jump in housing construction. For making more homes available, benefits under Sec 80 (i) BA are being extended for one more year, for all housing projects approved till end of 2019-20. Real estate will be benefitted by the rollover of capital gains under section 54, of up to Rs 2 crore, to two residential houses. Moreover, there will be no tax on house rents up to Rs 2.4 lakh from the previous limit of Rs 1.8 lakh, which can attract more investors to buy second homes for earning rental income. These measures are likely to revive overall construction sector.

While there were no explicit measures announced, but simplifications in procedures for direct taxes and greater ease of compliance under GST should make things better for corporate India. Moreover, the government has also laid out a 10-year road map for a new India to improve ease of living and make India a pollution-free country, bringing down import dependency for energy needs by focusing more on renewable, leading the world in greener transport options and energy storage devices.

On the whole, the Budget has reached out to a significant part of India, approximately 30-35 crore people, and indirectly to even more.