BJP came in power in 2014 on the back of a failing government and what can be best described as “Modi Wave”, and as it was probable, it was a convincing win. However, fast forward 5 years, the Union Elections are around the corner and the “wave” has died, and predicting the results would be a tougher task than it was during the last elections.
Amidst the political uncertainty, it was a crucial task to present an interim budget that would sway the public opinion in the favour of the ruling party. The responsibility was handed over to Piyush Goyal, who is managing the responsibilities in absence of our Finance Minister, Arun Jaitley, who is undergoing recovery from kidney transplant surgery.
Here are the key takeaways from the Budget-
Agricultural and Rural Sector
- ₹7,000 crores allocated to MNREGA.
- ₹19,000 crores allocated to PM Gram Sadak Yojana.
- ₹6,000 per year to be transferred to small farmers holding less than 2 hectares of land under Pradhan Mantri Kisan Samman Nidhi.
- Interest subvention of 2% for farmers affected by natural calamities, 3% in case of timely repayment.
- Self-sufficiency in food and improving agricultural productivity with an emphasis on organic food.
- Minimum Support Price fixed at 50% more than the cost for all the 22 crops.
- Healthcare Programme, by the name of Ayushyaman Bharat, which will be the world’s largest programme of its kind. It will provide free medical care to those in reduced circumstances.
- The 22nd AIIMS to come up in Haryana.
- Max limit for Gratuity exemption increased from ₹10 lakhs to ₹20 lakhs.
- 99.54% of All Income Tax Returns were accepted without scrutiny.
- All returns to be processed in 24 hours.
- Within 2 years, all scrutiny Assessments to be done online.
- 80% increase in direct tax collections in 2017-18.
- Rebate u/s 87A increased to ₹12,500 and threshold limit enhanced to ₹5,00,000. This will effectively extinguish the tax liability for individuals with annual income up to ₹5 lakhs.
- Deemed let out property exempt for second self-occupied house property.
- Standard deduction increased to Rs.50,000.
- The limit for TDS on rental income increased to ₹2,40,000.
- The limit for TDS on FD in Bank and Post office from ₹10,000 to ₹40,000 u/s 194A.
- The benefit of section 54 extended investment in two residential houses for capital gains up to 2 crore rupees. Can be exercised only once.
- 80IBA extended to all housing projects approved to 31.3.2020.
- 2% interest concession on loans for GST registered SMEs.
- Most items of daily use for the lower and middle class are now in the 0%-5% tax bracket.
- For SMEs having an annual turnover of less than ₹5 crores, an option to avail composition scheme and file quarterly return instead of monthly returns.
- 14% growth in state tax collections guaranteed by the GoI.
- All unmanned level crossing on broad gauge network completely eliminated.
- Vandey Bharat Express- High-speed train project under Make in India.
- Fiscal deficit brought down to 3.4% in the revised estimate of 2018-19.
- 34 Crore Jan Dhan Bank Accounts opened.
- Stamp Duty in Financial Security Transaction to streamline the process at Stock Exchange.
- Under the clean banking initiative, the 4R approach i.e. Recognition, Resolution, Recapitalisation and Reforms is being followed.
- 3 banks namely Bank of India, Bank of Maharashtra and Oriental Bank of Commerce are out of Prompt Corrective Action.
- A sum of ₹2.6 lakh crore allocated towards recapitalisation of PSBs.
- Allocation for North-Eastern region proposed to be increased to ₹58,166 crore.
- National Artificial Intelligence Portal to be developed soon.
- Installed solar energy generation capacity increased by 10 times.
- Workers bonus increased from ₹3,500 p.m to ₹7,000 p.m.
- NPS scheme contribution increased to 14%.
- ESI limit raised from ₹15,000 p.m to ₹21,000 p.m
- Unorganized sectors workers to get ₹3,000 pm as the pension.
- 10% reservation for economically backward sections of the society in educational institutions and the government jobs.
- Single window clearance for filmmaking to be made available to Indian filmmakers.
- Anti-camcording provision to be introduced to the Cinematography Act to combat film privacy.
The market reacted slightly positively to the budget as the Sensex surged 500 points to 36,778 points and closed at 36,469 points, while the Nifty touched the day high at 10,983 points and closed at 10,893 points.
The budget clearly targeted towards benefits for the lower and middle class of the society and will definitely enhance the chances of the ruling party retaining the control in the coming elections.
Source- The Budget Speech and various sources.