Here are a few highlights of the Interim Budget 2019-20. Clearly, as anticipated it was an Interim Budget for the farmers and common man. Let's see some of the highlights:
1) For individual income tax payers and employees
a) Income tax rates
No income tax is now payable for those who earn an income below Rs 5 lakhs.
b) Apart from this there is standard deduction, which has been raised from Rs 40,000 to Rs 50,000, which is another big positive.
c) The government has also announced a mega pension scheme named as Pradhan Mantri Shram Yogi Mandhana Yojna, aimed at covering employees who are employed in both the unorganized as well as organized sector and having a monthly income of Rs 15,000. The scheme assures a monthly pension of Rs 3,000 post-retirement at the age of 60 years.
2) For farmers
a) Indubitably, it was a farmers budget. Finance Minister on Friday announced a relief package of Rs 75,000 crore under a new scheme titled, PM Kisaan Samman Nidhi. This was for distressed farmers who have seen their incomes stagnate because of plunging prices, barely enough to pay for loans and input costs.
As part of the package, which includes an income support scheme, the government will transfer a sum of Rs 6,000 per year to farmers who own upto 2 hectares of land.
b) Finance Minister Piyush Goyal has also announced a 2-5% interest subvention for farmers struck by natural calamities.
a) The clamor from the MSME sector has also been heard. MSME units will get 2% interest subvention on loans of Rs 1 crore.
b) The MSME sector also got a big boost with the FM announcing that would be sanctioned quickly by the Public Sector banks.
4) Fiscal deficit: Worrisome
The fiscal deficit number for FY 2019-20, has been pegged at 3.4 per cent. This is a slightly worrisome number and analysts may want to take this number with a pinch of salt.
It is likely that the government may not be able to meet the fiscal deficit targets.
5) Goods & Services Tax
a) For the Goods and Services tax the group of Ministers has suggested ways to reduce GST for house buyers.
b) Businesses with less than Rs 5 crore annual turnover, comprising over 90% of GST payers, will be now be allowed to file quarterly returns.
6) Defence Budget:
Finance Minister, Piyush Goyal said that the defence budget has been increased to over Rs 3 lakh crore. The Government will also provide additional funds for Defence, if needed. It has also disbursed Rs 35,000 crores, under OROP scheme in the last few years.
The railways capital expenditure for FY 2020 has been set at a record Rs 1.6 lakh crores. The Railway's operating ratio was seen at 96.2% in FY19 Vs 95% FY20.
Some steps for digitization of signals at the railway crossings have also been implemented.