Budget 2019 is in full swing with several key changes being introduced. The Finance Minister Piyush Goyal has on February 1, 2019 introduced the National Democratic Alliance’s (NDA) sixth and final Interim Budget 2019. The Union Ministry of Finance has presented a clarification that this budget would be called as the ‘Interim Budget’ and not ‘Full Budget’ while media reports and speculations were rife that the government could present a full budget.
Notably, Income Tax and the Farm Packages were being eyed very closely. Piyush Goyal presented the Budget 2019 in place of Arun Jaitley, who is currently away on medical leave. This is, however, Goyal’s first Budget speech, but he has taken reigns of the interim charges of the second time under the Ministry of Finance.
Here is all you need to know about the Interim Budget:
What is Interim Budget?
An Interim Budget is basically a budget prepared by the government which is going through a transitional period. It is not very different from a Full Budget as the government through it presents expenditure for the ongoing fiscal and projections for the upcoming fiscal year.
An Interim Budget is a complete set of accounts, including both expenditure and receipts, and gives the complete financial statement.
How is the Interim Budget Different from Regular/Budget?
In an Interim Budget, the vote-on-account seeks Parliament’s approval for incurring expenditure for part of a fiscal year. Like Regular Budget, in an Interim Budget also, estimates are presented for the entire year, the case with the Regular Budget. The new government has full liberty to change the estimates completely when the Final Budget is presented.
Interim Budget is presented when the government requires time for a new government to create its own fiscal plan. The Budget for the said year, in this case Budget 2019, is subsequently approved by the Parliament and gives the government spending rights only till March 31, the end of the financial year.
The government requires parliamentary authority for incurring expenditure in the new fiscal year until a full Budget, just in case it is not able to present one before the financial year ends.
The Parliament passes a vote-on-account through the Interim Budget, which allows the government to meet expenses of the administration, such as paying salaries and for its programmes. This is until the new Parliament considers and passes the Budget for the whole year. In an election situation, the vote-on-account is usually for a four-month period.
Additionally, the Union Government can introduce tax changes but during an Election year. However, successive governments usually avoid making any major changes in the Income Tax laws during the Interim Budget.
Budget 2019: Key Announcements
The Interim Budget 2019 was widely looked upon as giving a boost to sectors like investment in Agriculture, Health sectors and Small and Medium Industries. (SMEs).
|Sr. No||Budget 2019 Key Announcements|
|1.||No income tax on income upto Rs. 5 lakh|
|2||Persons earning upto Rs. 6.5 lakh may not have to pay tax, if they invest money in specified savings.|
|3.||Standard deduction for salaries increased from Rs. 40,000 to Rs. 50,000|
|4.||Fiscal deficit for 2018/19 seen at 3.4% of GDP|
|5.||Poor farmers to get Rs. 6,000 per year under PM Kisaan scheme|
|6.||Unorganised labour to get Rs. 3,000 per month after the age of 60 under Mega Pension scheme|
|7.||Capital gains from residential property sale will be eligible for exemption under Section 54 for 2 properties bought.|
|8.||No income-tax on notional rent on second self-occupied home|
Budget 2019: Chain of Events
The 10-year Roadmap
The government has laid out a 10-year roadmap, in order to improve the ease of living and make India a pollution-free country by leading the world in transport and energy storage devices.
$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.
Indian Railways get ₹1.58 trillion
The Union Budget 2019 has allocated ₹1.58 trillion for Indian Railways for expansion of the Railway infrastructure in the country. Goyal, during his interim speech stated that the Indian Railways had its safest year in the history in 2018-19, as the national carrier was able to remove all unmanned railway crossings across all the broad gauge tracks in the country. He also praised the achievements of his government, adding that Indian people would soon enjoy a world-class train experience through semi-high speed train Vande Bharat Express which is a product of Indian engineering. Goyal also hopes that the Railways would improve its operating ratio and try to improve it from 98.4% to further 95%.
Income Tax Refunds in 24 hours
Now, all income tax returns will be processed in 24 hours. Refunds will also be issued simultaneously. Within the next two years, returns chosen or scrutiny will also be done digitally with anonymity.
Want GST burden on homebuyers lessened and we have formed a group of ministers (GoM) to look into it: Piyush Goyal
PM Kisaan Scheme to cost Rs. 75,000 crore
Farmers, both small and marginal, owning less than 5 acres of land will receive the first instalment soon,said Piyush Goyal in his budget speech. As per him, the scheme will run from December 1, 2018. 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. This income support will help them in leading a life of dignity and respect. According to the Budget speech, around 120 million farm households will receive income support of ₹2,000, thrice a year.
Tax collections doubled to ₹12 lakh crore
Tax collections increased ₹6 lakh crore to 12 lakh crore, return filings have also gone up.
Mega pension scheme for unorganized sector workers under Budget 2019
Targeting a huge electorate ahead of 2019 Polls, Finance Minister Piyush Goyal on Friday announced a Mega Pension scheme under the Budget 2019. This would provide assured pension of Rs. 3000 rupees every month to nearly 10 crore people working in largely fragmented informal sector.
“(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.
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.
Sum of ₹3 lakh Crore recovered from big corporate loan defaulters
Finance Minister Piyush Goyal Friday stated that ₹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 the culture of phone banking”. He was reportedly referring to allegations of giving of “rampant loans over the phone” during the UPA regime.
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 NDA Government boosted allocation for the rural employment guarantee programme by₹5000 crores to ₹55,000 crores in the Interim Budget 2019-20. 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.
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.
Boost for SMEs
Govt projects to source 25% material from SMEs, 3% from only women-owned SMEs
Gratuity cap doubled to ₹20 lakh
Gratuity exemption limit doubled to ₹20 lakh from 10 lakh
₹750 crore for protection of cows
Allocation of ₹750 crore under Rashtriya Gokul Yojana for the protection of cows. The government will create a separate department for fisheries.
Other key highlights in the Budget 2019 includes 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 treated 1 million people so far and 22nd AIIMS to come up soon.
Verdict on the Budget 2019
Finance Minister Piyush Goyal, with tax relief for the middle classes and mega schemes for farmers. has presented a please-all Interim Budget 2019. It has shed light on the healthcare system in India and towards creating a distress-free healthcare system. The financial health of the poor and the middle class in taken into consideration, hence the income tax-free income upto Rs. 5 lakhs.
As per Prime Minister Narendra Modi, the Budget 2019 for New India will take care of everyone.