The first full budget of Narendra Modi 2.0 government will be presented on July 5. Amid mounting speculation of what Nirmala Sitharaman will announce in her maiden budget, here's a recap of the template set by stand-in finance minister Piyush Goyal in February's interim budget to get a sense of the broad policy trajectory she may opt for.
Goyal had announced a slew of measures in the Interim Budget, the last Budget presented by the NDA government before the Lok Sabha elections. Those measures included a major relief for farmers in the form of a PM Kisan scheme and for individual taxpayers with the increase in rebate applicable under Section 87A of the Income Tax Act.
Here are the key highlights from Finance Minister Piyush Goyal Interim Budget 2019-20:
Tax changes
- No effective income tax for income up to Rs 6.5 lakh (Rs 5 lakh + Rs 1.5 lakh under 80C of the Income Tax Act) through the increase in rebate
- Full tax rebate for income up to Rs 5 lakh per annum
- No tax on notional rent on second self-occupied house
- Capital Gains exemption under Section 54 to be available on two house properties
- Tax benefit of Rs 18,500 crore given to three crore middle-class tax payers
- Standard deduction raised to Rs 50,000 from Rs 40,000
- TDS limit hiked from Rs 10,000 to Rs 40,000 on post-office savings
- Group of Ministers looking at ways to ease GST burden on homebuyers
Economy
- FY20 fiscal deficit target set at 3.4 percent
- Expenditure target for FY20 set at Rs 27.84 lakh crore
- Capital expenditure for FY20 set at Rs 3.36 lakh crore
- FY19 fiscal deficit pegged at 3.4 percent of GDP; current account deficit at 2.5 percent of GDP
- FY20 gilt repayment pegged at Rs 2.36 lakh crore
Farmers
- Farmers with less than two hectares to be offered Rs 6,000 per year as direct transfer under PM Kisaan Samman Nidhi. The benefit will be transferred directly into the bank account of beneficiary farmers in three instalments of Rs 2,000 each. Around 12 crore farmers to benefit from the scheme. This scheme will cost the government around Rs 75,000 crore
- Mahatma Gandhi National Rural Employment Guarantee program’s allocation increased by Rs 5,000 crore to Rs 60,000 crore for FY20
- Farmers struck by natural calamities will now receive 2-5 percent interest subvention under insurance scheme
- Two percent interest subsidy to be given to farmers involved in animal husbandry activities via kisaan credit card scheme. An additional three percent subsidy will be paid on timely payment of loans
- Government announces setting up of Rashtriya Kamdhenu Aayog to enhance productivity of cows
Rural Infrastructure
- Pradhan Mantra Gram Sadak Yojana allocation set at Rs 19,000 crore, the same as FY19
Fishermen
- Separate Department of Fisheries created, two percent interest subvention for those in fisheries
- To provide Rs 750 crore in FY19 to support animal husbandry and fishing
Workers
- Monthly pension of Rs 3,000 for workers in the unorganised sector to be paid out after retirement. Pension scheme to benefit 10 crore workers in the unorganised sector. Those who join at 18 years of age will have to contribute a mere Rs 55 per month. The government will contribute equal matching share in the pension account. This scheme will cost the government Rs 500 crore
- Employees' State Insurance eligibility cover limit has been raised to Rs 21,000 per month from Rs 15,000 per month
- Gratuity limit increased from Rs 10 lakh to Rs 30 lakh
- Workers who suffer grievous injuries will now receive Rs 6 lakh from Rs 2.5 lakh through Employee Provident Fund Organisation (EPFO)
Education
- Rs 38,572 crore allocated for the National Education Mission
Medical
- Another All India Institutes of Medical Sciences to be set up in Haryana
Society
- Rs 76,800 crore allocated for welfare of Scheduled Castes (SCs) and Scheduled Tribes (STs)
- Centre to implement special strategy for uplift of nomadic tribes
Filmmakers
- Single window clearance for film-makers. Anti-camcording provision to be introduced to Cinematography Act to combat film privacy
Railways
- Railway capital expenditure raised to Rs 64,586 crore in FY20 from Rs 53,060 crore in FY19
Defence
- Defence budget for FY20 raised to Rs 3 lakh crore
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