In this edition of The Big Story podcast, we discuss the key takeaways from what is being considered a ‘populist’ interim Budget, presented by the interim Finance Minister Piyush Goyal on Friday, 1 February.
In the discussion, market analysts and experts will also express their views about the crucial Budget ahead of Lok Sabha elections.
Tune in to the podcast for more!
The interim Budget is not the same as a full-fledged Union Budget. It is presented by the incumbent government in the year general elections are to be held. According to norm, the annual Budget will be presented by the government that comes to power after winning the people's mandate.
That being said, the interim Budget 2019 is likely to benefit the middle class and the farmers, who constitute a key voter base ahead of polls.
Here are some concessions given to the middle class:
- Full tax rebate for those with an annual income up to Rs 5 lakh.
- Standard deduction has been raised from Rs 40,000 per annum to Rs 50,000 per annum.
Real estate buyers and sellers have plenty to be happy about.
- TDS won’t be deducted for rental income of up to Rs 2.4 lakhs per year. Presently, the limit is Rs 1.8 lakhs.
- Benefit of self-occupied houses will be extended to two, if the properties are vacant. Currently, an individual can only do this with one unit.
- If you sell a house and buy two new houses with the proceeds of the sale, then it will be exempt from capital gains tax.
For farmers and the unorganised sector, the government announced:
- A monthly pension of Rs 3,000 for workers employed in unorganised sector after the age of 60.
- Pradhan Mantri Kisan Yojana – a scheme that will help vulnerable farmers get direct income support of Rs 6,000 per year. It will benefit the farmers who own less than two hectares of land.
- Those farmers who are severely affected by natural calamities will get government grants at 2% interest.
Apart from this, we’ve also discussed benefits for GST-registered MSME units, which will get 2 percent interest subvention on loans of Rs 1 crore, and the increase in defence budget to beyond Rs 3 lakh crore.
It’s evident from this interim Budget that the government is catering to specific constituencies ahead of the elections, but how much of it will really matter to the voter?