Budget 2019: Union Minister Piyush Goyal presented the interim budget in parliament on Friday.
- Those who earn upto Rs. 5 lakh a year do not have to pay tax
- Small farmers will get Rs. 6,000 in their bank accounts
- Government announced pension scheme for workers in unorganised sector
The government on Friday reduced taxes for the middle class and pledged a Rs 75,000 crore assured income scheme for small farmers in the last budget before it seeks re-election in May. "The interim budget is a trailer for what will take India towards prosperity after the Lok Sabha polls," said Prime Minister Narendra Modi after Minister Piyush Goyal made a slew of big ticket announcements in parliament. Heading into the national election, the government has been facing farmer anger and doubts over job creation. Farm distress was among the factors seen to cost the ruling BJP the heartland states of Madhya Pradesh, Rajasthan and Chhattisgarh in polls in December.
Here are the top 10 updates from Budget 2019:
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Those who earn upto Rs. 5 lakh a year do not have to pay Income Tax, minister Piyush Goyal said, doubling the exemption cap. Effectively, those earning upto Rs. 6.5 lakh per year with investments to make savings will pay no tax, he said, to loud desk-thumping by BJP members and chants of "Modi, Modi".
Piyush Goyal also unveiled direct cash support of Rs. 6,000 for small farmers in a scheme called the "Pradhan Mantri Kisan Samman Nidhi'' or PM-Kisan scheme at the cost of Rs. 75,000 crore to the government. Small and marginal farmers who have less than two acres land will get cash in three instalments of Rs. 2,000 in their accounts. The first instalment, said Mr Goyal, would be in by March.
The government also said it would launch a pension scheme for workers in the unorganised sector, which employs some 420 million people. Those with a monthly income of up to Rs. 15,000 will have an assured pension of Rs. 3,000.
The minister said the tax proposals would translate to a Rs. 18,500 benefit to some three crore middle class taxpayers, self-employed and senior citizens.
The government also allocated Rs. 60,000 crore for the rural job scheme, Mahatma Gandhi National Rural Employment Guarantee (MNREGA).
The big giveaways resulted in fiscal slippage, for a government that has been seeking to drag down its deficit. The budget would put the fiscal deficit for the year ending on March 31 at 3.4 percent of gross domestic product (GDP), slightly higher than the targeted 3.3 percent.
Piyush Goyal set a deficit target of 3.4 percent for 2019/20, instead of the earlier target of 3.1 per cent, citing "revenue shortfalls and increased spending ahead of the Lok Sabha election".
On Thursday evening, the government revised upwards its growth estimates for the two years since the notes ban -- 2017-18 and 2016-17 -- to 7.2 per cent and 8.2 per cent.
This was hours after the details of a yet-to-be-released report showed unemployment was at a four-decade high in 2017-18. Two non-government members of the National Statistical Commission, which vets the report, quit on Tuesday accusing the centre of withholding its release.
As some union ministers praised the budget and called it a "surgical strike" on the opposition, Congress president Rahul Gandhi commented that surgical strikes "will happen on the government on issues like the Rafale deal, jobs and demonetisation during the general election".