Pro-poor and pro-farmer policies have earned the Interim Budget 2019, unveiled on Friday, February 1, a lot of praise. This is the last interim Budget before the general elections in April.
Finance Minister Arun Jaitley, who has presented the last five Budgets, had to go to the US for a medical check. He was expected to return in time to present the Budget, but he couldn’t. Hence, Minister of Railways Piyush Goyal presented it.
NDTV reported that because the Lok Sabha elections are nearing, the Budget focuses on quick-relief policies — for farmers through loan waivers and direct cash transfers, and for small businesses through favourable loan terms and income tax.
Jaitley said, “The Budget is unquestionably pro-growth, fiscally prudent, pro-farmer, and pro-poor, and strengthens the purchasing power of the middle class.”
Goyal said the government will initiate a Rs 75,000-crore scheme, the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), which will allow transfer of an annual sum of Rs 6,000 directly to “landholding farmer families with cultivable land up to two hectares”.
Goyal added that the NDA government has increased the loan amount for farmers to Rs 11.68 lakh crore, provided them with Soil Health Cards, irrigation schemes and facilities, as well as reduced shortage of fertilisers.
The minimum support price for 22 crops will also increase by at least 50% more than their cost, Goyal said in his speech. Farmers impacted by natural disasters will receive an incentive of 3% from the National Disaster Relief Fund for repaying their loans in a timely manner, and this will be in addition to the 2% interest subvention available through Kisan Credit Card.
Goyal also announced the creation of a new programme, which is called Rashtriya Kamdhenu Aayog and is expected to increase the scale of “genetica upgradation of cow resources and enhance production and productivity of cows”.
The Budget welcomed a new Department of Fisheries and stated that India has become a top producer of seafood with exports worth Rs 45,000 crore. President of Society of Aquaculture Professionals, S Chandrasekhar, who has long demanded this development, said, “It will help in quicker decisions at an administrative level, and fisheries and seafood, being an export-oriented industry, will definitely benefit.”
Budget’s pro-poor policies
The government has also raised the zero tax slab for an annual income of up to Rs 5 lakh and announced a monthly pension scheme of Rs 3,000 for labourers in the informal sectors after they retire at 60.
Firstpost reports other proposals believed to benefit the poor and middle class: increase in TDS limit, from Rs 10,000 to Rs 40,000 for bank interest, and from Rs 1.8 lakh to Rs 2.4 lakh on rented properties, and “extending the housing income exemption from one to two self-occupied houses”.
In terms of infrastructure, the government has allocated Rs 60,000 crore for an employment programme in rural areas, and Rs 19,000 crore for road construction.
The Wire reported another tax benefit of Rs 4,000 crore to three crore salaried people and pensioners.
Reactions to the Budget
Chief Financial Officer of RPG Group, Pramod Menon said, “This Budget should enable the GDP to grow at over 7.5%; it blends consumption-led growth (through increased disposal income with the low and middle class) with investment-driven growth (through expenditure in infrastructure, railways and roadways, ports and airports, housing and real estate, and digital initiatives).”
Congress leaders P Chidambaram and Rahul Gandhi addressed the pro-farmer policies. Chidambaram spoke about fish farmers receiving a specialised department but no funding, and Gandhi highlighted an “insult” to the farmers — although Modi said more than 12 crore farmers and their families would benefit from the PM-KISAN scheme, the annual remuneration of Rs 6,000 translates to only Rs 17 a day.
Shashi Tharoor commented, “The whole exercise has turned out to be a damp squib. We’ve seen one good thing, that is tax exemption for the middle class. Rs 6,000 in income support for farmers boils down to Rs 500 per month. Is that supposed to enable them to live with honour and dignity?”
This scheme along with the income tax exemption could push next year’s fiscal deficit to 3.5% of the country’s GDP. The Wire added, “Goyal said the fiscal deficit target of 3.3% couldn’t be met because of the farmer income support scheme, which will cost Rs 20,000 crore in the current financial year. However, what he left out is that GST collections, too, have not been good. If they had, perhaps, the fiscal deficit could have been contained.”
CNBC reported that this interim Budget will be followed by a full one in July, projecting a growth rate of 7.5%.
Rhea Arora is a Staff Writer at Qrius