Budget 2019 Live Updates: Piyush Goyal woos middle class, farmers with tax break, sops
- Team registrationADVISER
- Feb 1, 2019
- 10 min read
As finance minister Piyush Goyal presents the National Democratic Alliance’s (NDA) sixth and final budget, an interim one, all eyes are on two key areas — income tax and farm package — in the pre-election season. Standing in as finance minister as Arun Jaitley is on medical leave, this is Goyal’s first budget speech, though it is the second time that he is holding interim charge of the finance ministry. Catch all the budget 2019 live updates, announcements, analysis and expert views here.
No tax on notional rent on second house
Capital gains tax exemption under Section 54 raised to ₹2 crore
Tax on notional rent on unsold inventory to not be paid for 2 years
TDS threshold for bank and post office deposit increased
No TDS on post office savings up to ₹40,000
No TDS on rental income up to ₹2,40,000 per year
Standard deduction limit increased
Standard deduction to be raised from Rs. 40,000 to Rs. 50,000
No tax if you own second house
Tax free income of up to ₹6.5 lakh
Salary earners of up to ₹6,50,000 income to not pay tax if they make tax related investments
Income tax exemption limit raised
Salary earners up to ₹5,00,000 annual income to get full tax rebate.
Total expenditure rose by 13%
Total expenditure rose by 13%
FY20 total expenditure seen at Rs. 27.84 trillion
FY20 capital expenditure seen at Rs. 3,36,292 crore
"We maintained the path to establish 3% fiscal deficit by 2020," Piyush Goyal said.
Fiscal deficit at 3.4% for FY20
Fiscal deficit pegged at 3.4% of GDP for FY20
10-year roadmap for ease of living
Government lays out a 10-year roadmap to improve ease of living and make India a pollution-free country by leading the world in transport and energy storage devices,
bringing down dependency on imports for energy needs. The roadmap also envisions people traveling in electric cars.
India wants to be a $10 trillion economy in 8 years
Finance minister Piyush Goyal announced that India is poised to become a $5 trillion economy in 5 years and aspires to become a $10 trillion economy in the next 8 years.
Railways get ₹1.58 trillion
The Union budget has allocated ₹1.58 trillion for Indian Railways to expand the railway infrastructure in the country.
In his interim-budget speech on Friday, the finance minister Piyush Goyal said Indian Railways has witnessed its safest year in the history in 2018-19 and the national carrier has been able to remove all unmanned railway crossing across all the broad gauge tracks in the country.
He also outlined the achievements of his government stating that the people of India would soon have world-class train experience through semi-high speed train Vande Bharat Express which is a product of Indian engineering. The minister also hoped that Indian Railways would improve its operating ratio and try to improve it from 98.4% to further 95%.
ITR refunds to come in 24 hours
All income tax returns will now be processed in 24 hours and refunds issued simultaneously. Within next 2 years, returns chosen for scrutiny will also be done digitally with anonymity.
Govt trying to reduce GST burden on homebuyers
Want GST burden on homebuyers lessened and we have formed a group of ministers (GoM) to look into it: Piyush Goyal
PM Kisan scheme to cost ₹75,000 crore
Small and marginal farmers owning less than 5 acres of land will receive the first instalment soon, finance minister Piyush Goyal said in his budget speech. According to Goyal, the scheme will run from 1 December 2018 and towards this the budget has allocated an additional ₹20,000 crore in the revised estimates for 2018-19.
For 2019-20, the Prime Minister Kisan Samman Nidhi or PM-Kisan scheme received a budgetary allocation of ₹75,000 crore.
Announcing the scheme, finance minister Goyal said the direct income support which farmers will receive in their bank accounts shortly will help them lead a life of dignity and respect.
According to the budget speech, about 120 million farm households will receive an income support of ₹2,000, thrice a year.
Apart from the income transfer scheme, the budget also approved doubling the interest subsidy on crop loans, and also raised the interest subvention when farm loans are restructured in times of natural calamity.
Defence outlay increased for 2019-20
The defence budget, interim finance minister Piyush Goyal announced, was increased for the first time to three lakh crore in 2019-20 “for securing our borders and to maintain preparedness of highest order and if necessary additional funds will be provided."
Last year, out of total allocation of Rs295,511 crore for defence budget, only Rs99,947 crore was set aside for capital outlay to purchase of new weapons, aircraft, warships and other military hardware. The allocation has been estimated at around 1.58% of the GDP and 12.10% of the total budget of Rs2,442,213 crore for 2018-19.
Tax collections doubled to ₹12 lakh crore
Tax collections increased ₹6 lakh crore to 12 lakh crore, return filings have also gone up. All returns will now be processed in 24 hours and refunds issued simultaneously. Within next 2 years, returns chosen for scrutiny will also be done digitally with anonymity.
Budget 2019 announces mega pension scheme for unorganized sector workers
Targeting a huge electorate ahead of the 2019 polls, Finance Minister Piyush Goyal Friday announced a mega pension scheme to provide assured pension of Rs. 3000 rupees per month to nearly 10 crore people working in largely fragmented informal sector.
These informal workers joining the pension scheme at 18 years will pay Rs. 55 per month and Rs. 100 if joining at the age of 29. The pension will be paid once they reached the age of 60.
“(We are starting) Mega Pension Yojana, namely Pradhan Mantri Shram Yogi Mandhan, to provide assured monthly pension of 3000 rupees per month, with contribution of 100 rupees per month, for workers in unorganized sector after 60 years of age," Goyal said in his Budget speech.
“Will benefit 10 crore workers in unorganized sector, may become the world's biggest pension scheme for unorganized sector in five years," he added.
Domestic workers, beedi workers , small shop workers among others may benefit from the announcement but the details on how it will be implemented and how the government will calculate the income threshold is yet to be spelt out.
Railways to get ₹64,587 crore in FY20
Budgetary support for Railways has been fixed at ₹64,587 crore for FY20
Railways' operating ratio seen at 96.2% in FY19 and 95% in FY20
₹3 lakh crore recovered from big corporate loan defaulters: FM
Finance Minister Piyush Goyal Friday said ₹3 lakh crore have been recovered from big corporate loan defaulters. Presenting the Interim Budget for 2019-20 in the Lok Sabha, Goyal said, "We have stopped culture of phone banking".
He was referring to allegations of giving of "rampant loans over phone" during the UPA regime.
Goyal, stepped in as interim finance minister after Arun Jaitley had to fly to New York for medical treatment, further said Bank of India, Oriental Bank of Commerce and Bank of Maharashtra have been removed from the PCA (prompt corrective action) framework of the RBI.
"I hope other banks too would soon come out of PCA framework," he said.
The finance minister also said, "Our government had the guts to ask RBI to look at bad loans and present correct picture to nation".
He said the Insolvency and Bankruptcy Code was helping in recovery of non-performing loans. "Even big businessmen are now worried about loans," Goyal said.
Defence budget crosses ₹3 trillion mark
Defence Budget crosses ₹3 lakh crore mark in FY20 Budget
Rural employment guarantee programme gets a ₹5,000 crore push
The National Democratic Alliance government boosted allocation for the rural employment guarantee programme by₹5000 crores to ₹55,000 crores in the 2019-20 interim budget. The scheme that is seen as a lifeline for small farmers and agricultural labourers in times of rural distress given that it provides 100 days of unskilled employment to them.
Boost for SMEs
Govt projects to source 25% material from SMEs, 3% from only women-owned SMEs
8 crore LPG cylinders under PM Ujwala Yojana
Total of 8 crore cooking gas cylinders to be distributed by next year under PM Ujwala Yojana
Mega Pension Scheme announced
Govt launches mega pension scheme for social security coverage of unorganised labour
Unorganised labour to get ₹3,000 per month after age of 60 under mega pension scheme
Govt to contribute equally in pension accounts under mega pension scheme
Gratuity cap doubled to ₹20 lakh
Gratuity exemption limit doubled to ₹20 lakh from 10 lakh
₹750 crore for cow protection
Allocation of ₹750 crore under Rashtriya Gokul Yojana for protection of cows. The government will create a separate department for fisheries.
Fiscal deficit target missed
The Narendra Modi government missed its fiscal deficit target for the second consecutive year in 2018-19 with Finance minister Piyush Goyal telling the Parliament during his Interim Budget speech that revised estimate of fiscal deficit in 2018-19 stands at 3.4% of GDP against the target of 3.3% of GDP.
In 2017-18, government had missed the budget target of 3.2% with fiscal deficit rising to 3.5% of GDP.
Lower than expected GST collections and tardy progress in the disinvestment process are considered to be the main reasons for the miss in fiscal deficit target in 2018-19.
According to the Controller General of Accounts (CGA) data up to November, 2018, fiscal deficit in the first eight months stood at 114.8% of the full year target against 112% during the same period a year ago.
₹19,000 crore for Pradhan Mantri Gram Sadak Yojana
Pradhan Mantri Gram Sadak Yojana road scheme to get₹19,000 crore in FY20
Electricity for all households to be a reality by end of next month
Ayushman Bharat has treated 1 million people so far
22nd AIIMS to come up soon
Reversed the policy paralysis: Piyush Goyal
Finance minister Piyush Goel highlighted a host of achievements claiming that the Modi government has walked the talk. "We have reversed policy paralysis...India is solidly back on track," he said. However, Goyal's remark on doubling farmer income by 2022, was received with boos from the opposition bench.
"If we had not controlled inflation, our families would have been spending 35-40% more on basic amenities today. It's like an additional tax for the poor and the middle class. At 2.9% inflation is at its lowest, says Goyal, adding that the 2018-19 revised fiscal deficit target is at 3.4%, and even the current account deficit target for FY19 - 2.5% of GDP.
The FM also claimed that the foundation has been laid by the government with structural reforms for strong economic growth.
Fiscal deficit down to 3.4% in FY19
Fiscal deficit has been brought down to 3.4% in FY19, Piyush Goyal said. "Massive surge in Foreign Direct Investment. The last five years have witnessed a wave of structural reforms. The GST, banking reforms, insolvency code are path-breaking moves," he said
Broken the back of inflation: Goyal
Govt has broken the back of inflation, bringing it down to average 4.6%, Goyal said.
Piyush Goyal presents budget
Piyush Goyal presents budget in Parliament and begins speech by saying that he is deeply concerned by Arun Jaitley's absence. "Under the leadership of PM Narendra Modi, we have given the most stable and clean government. We have moved ahead of the policy paralysis that had engulfed the nation under the previous government," he said.
Markets stay firm ahead of interim budget, fiscal prudence key
The market continues to stay firm as investors keep a cautious eye as interim finance minister Piyush Goyal prepares to presents his first and the government's last budget ahead of the general election.
Equity indices open in green ahead of interim budget
Indian markets were off to positive start on Budget day, with Sensex up over 100 points and Nifty trading above 10,850. At 9.19 a.m., the Sensex traded at 36,378.91, higher by 122.22 points or 0.34 per cent from the previous close of 36,256.69 points.
What to expect from an interim budget in election season
Don’t be surprised if Piyush Goyal presents to you a full-fledged budget and gives you all those tax breaks that you prayed for in the last four years. Another announcement could be on universal basic income or a minimum wage scheme for the poor.
The minds behind the interim budget
Here are the key officials who fitted the nuts and bolts of the interim budget that Union finance minister Piyush Goyal presents in Parliament today: Finance secretary Ajay Narayan Jha, Revenue secretary Ajay Bhushan Pandey, Department of economic affairs secretary Subhash Chandra Garg, Department of investment and public assets management secretary Atanu Chakraborty, CBDT chairperson Sushil Chandra and chief economic advisor Krishnamurthy Subramanian.
Populist interim budget to further accelerate fiscal slippage: Fitch
Global ratings agency Fitch has warned against higher pre-election spending announcements in the upcoming interim budget which could risk a second consecutive year of fiscal slippage. According to a note prepared by Fitch Ratings, pressure for new expenditure to attract votes, particularly among rural and small-business owner voters, has increased as polls have shown the ruling Bharatiya Janata Party (BJP) is becoming "less assured of victory in the general elections".
Import duty in healthcare may be rationalised: Tax expert
With all the modifications under GST requiring a nod of the GST Council first, the budget from an indirect tax perspective is essentially expected to only cover announcements on customs and on duties, taxes applicable on GST excluded sectors, said Abhishek Jain, Tax Partner, EY India. He said there is a general expectation of some customs duty rationalization on imports by the healthcare sector, rectification to amplify the ‘Make in India’ leitmotif and launch of schemes like E-Wallet, etc.
Economic growth projection likely 7.5%
The budget, which is interim and is likely to be followed by a full one in July, is expected to project economic growth of around 7.5 percent for the next financial year, while expanding capital spending on railways, roads, ports by 7-8 percent, and estimating an increase in revenue of about 15 percent, a Reuters report said.
What to watch for in the interim budget 2019-20
As Finance minister Piyush Goyal readies to present his first and the government's last Budget ahead of the general election, Mint takes a look at the things to watch out for in the interim budget: Farm package, universal basic income, sops for MSME and small traders, fiscal consolidation and changes in direct taxes.
5 income tax changes expected in Budget 2019
The government may announce some tax relief for the middle or lower income groups. But some tax experts don’t expect the finance minister to announce sweeping changes on the income tax front, especially before the release of Direct Tax Code report, due on February 28. “It is important to notify the tax rates because without notifying tax rates, the government cannot collect taxes during the intervening period—from April 1 to the next full-scale budget after the new government is sworn in," says Divya Baweja, partner at Deloitte India.
PM has told opposition that interim budget will be presented: Azad
The Opposition Thursday made it clear to the government at an all-party meeting here that it will not allow passage of any contentious bills in the Budget Session of Parliament that started with President Ram Nath Kovind's address to a joint sitting of both the houses.
The opposition parties have said they will await the response of the government on whether it would take up the contentious bills during the brief Budget Session and are in a "wait and watch" mode on how the government moved forward in taking the opposition together.
Prime Minister Narendra Modi conveyed to the opposition parties during the all-party meeting in Parliament Library building that his government will present an interim budget, much to the relief of many among the opposition who feared that government will present a "full-fledged" budget Friday.
Full budget likely after new govt
As per practice, a Vote-on-Account or approval for essential government spending for a limited period is taken in an election year and a full-fledged budget presented by the new government.
While P Chidambaram had presented the previous UPA government's Vote-on-Account in February 2014, Jaitley presented a full budget in July that year.
Last year, Narendra Modi-led government scrapped a colonial-era tradition of presenting the Budget at the end of February and it is now presented on February 1, so as to allow Parliamentary approvals to be completed before the start of the next financial year.
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