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Middle class gets tax relief, farmers assured income in election budget

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New Delhi:Finance Minister Piyush Goyal rolled out the government’s last budget ahead of this year’s national elections, announcing no tax on income up to Rs 5 lakh, a Rs 75,000 crore assured income scheme for small farmers and a mega pension scheme for workers in the unorganised sector. The initiatives are designed to woo the middle class, address farm distress and boost private investment in an effort to shore up the political base of ruling BJP-led national coalition that has been accused by the opposition of not delivering on its promises to the poor.

“India is solidly back on track and marching towards growth and prosperity,” Piyush Goyal said early in his budget speech, asserting that the government had succeeded in “we have broken the back of back-breaking inflation”.

He said the Narendra Modi government’s success in controlling inflation had put more money in the hands of people. “Inflation is a hidden and unfair tax, from 10.1 per cent during 2009-14,” he said.

 

Goyal announced exemption from tax on income of up to Rs 5 lakh per annum, which goes up to Rs 6.5 lakh if the individual tax payers invest Rs 1.5 lakh in provident fund and prescribed equities. He also proposed to increase the standard deduction from the existing Rs 40,000 to Rs 50,000. The proposal will benefit 3 crore middle class tax payers.

The TDS (tax deduction at source) threshold on interest from bank, post office deposits has been raised from Rs 10,000 to Rs 40,000. The finance minister further proposed to increase the TDS?threshold on rental income from Rs 1.8 lakh to Rs 2.4 lakh.

The BJP-led ruling National Democratic Alliance (NDA) is facing discontent over depressed farm incomes and doubts over whether his policies are creating enough jobs.

The interim budget allocates Rs 600 billion for a rural jobs programme and Rs 190 billion for building of roads in the rural areas.

Goyal said Rs 6,000 per year assured income support will be given to small and marginal farmers having less than two hectares of land. He announced a new fund, ‘Pradhan Mantri Kisan Samman Nidhi’ for disbursement of cash to “vulnerable farmers”.

Around 12 crore farmers will receive Rs 6,000 per annum under the PM Kisan scheme. The money will be transferred into bank accounts of farmers in three equal instalments. The finance minister said Rs 20,000 crore have been provided for current fiscal, 2018-19 under PM Kisaan scheme.

The government unveiled a mega pension scheme for the unorganised sector workers with an aim to benefit 10 crore people. Goyal said the beneficiaries will get assured monthly pension of Rs 3,000 after reaching the age of 60 years.

“We are launching Pradhan Mantri Shram Yogi Mandhan today. The scheme will provide assured monthly pension of Rs 3,000, with contribution of 100 rupees per month, for workers in unorganised sector after 60 years of age,” Goyal said.

The fiscal deficit would be 3.4 per cent of gross domestic product (GDP), slightly higher than the targeted 3.3 percent, said Goyal, who presented the budget as Union minister Arun Jaitley is undergoing medical treatment in the United States.

Goyal told the Lok Sabha that direct tax collections increased from Rs 6.38 lakh crore in year 2013-14 to almost Rs 12 lakh crore this year with a growth of 80 per cent in tax base. The number of income tax returns filed increased from 3.79 crore to 6.85 crore over the same period, he said.

On job creation, the finance minister said, “EPFO shows two crore accounts in two years. This shows formalisation of the economy. When there is such a high growth, jobs are created.” The government is facing sharp criticism from the opposition over a ‘leaked report’ claiming that unemployment rate is at a 45-year high.

The interim budget is likely to be followed by a full one in July after the Lok Sabha elections. The interim budget projected the economic growth for the fiscal year 2019-20 to be around 7.5 per cent.

Highlights of Interim Budget 2019-20

1. Within 2 years, Tax assessment will be done electronically
2. IT returns processing in just 24 hours
3. Minimum 14% revenue of GST to states by Central Govt.
4. Custom duty has abolished from 36 Capital Goods
5. Recommendations to GST council for reducing GST rates for home buyers
6. *Full Tax rebate upto 5 lakh annual income after all deductions.*
7. Standard deduction has increase from 40000 to 50000
8. Exempt on tax on second self-occupied house
9. Ceiling Limit of TDS u/s 194A has increased from 10000 to 40000
10. Ceiling Limit of TDS u/s 194I has increased from 180000 to 240000
11. Capital tax Benefit u/s 54 has increased from investment in one residential house to two residential houses.
12. Benefit u/s 80IB has increased to one more year i.e. 2020
13. Benefit has given to unsold inventory has increased to one year to two years.

*Other Areas*

14. State share has increased to 42%
15. PCA restriction has abolished from 3 major banks
16. 2 lakhs seats will increase for the reservation of 10%
17. 60000 crores for manrega
18. 1.7 Lakh crore to ensure food for all
19. 22nd AIIMS has to be opened in Haryana
20. Approval has to be given to PM Kisan Yojana
21. Rs. 6000 per annum has to be given to every farmer having upto 2 hectare land. Applicable from Sept 2018. Amount will be transferred in 3 installments
22. National kamdhenu ayog for cows. Rs. 750 crores for National Gokul Mission
23. 2% interest subvention for farmers pursuing animal husbandry and also create separate department for fisheries.
24. 2% interest subvention for farmers affected by natural calamities and additional 3% interest subvention for timely payment.
25. Tax free Gratuity limit increase to 20 Lakhs from 10 Lakhs
26. Bonus will be applicable for workers earning 21000 monthly
27. The scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide assured monthly pension of Rs. 3,000 with contribution of Rs. 100 per month for workers in unorganized sector after 60 years of age.
28. Our government delivered 6 crores free LPG connections under Ujjawala scheme
29. 2% interest relief for MSME GST registered person
30. 26 weeks of Maternity Leaves to empower the women
31. More than 3 Lakhs crores for defence
32. One lakh digital villages in next 5 years
33. Single window for approval of India film makers.


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Business

Sensex jumps over 250 points, rupee rises 3 paise to 71.31 against US dollar

Press Trust of India

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Mumbai: The 30-share index was trading 269.24 points, or 0.76 per cent, at 35,621.85. Similarly, the 50-share NSE Nifty rose 74.40 points, or 0.70 per cent, to 10,678.75.

The Sensex had settled 145.83 points lower at 35,352.61 in the previous session, while the Nifty had fallen 36.60 points to 10,604.35.

Top gainers in the Sensex pack on Wednesday include ONGC, Vedanta, Yes Bank, Bajaj Finance, Axis Bank, Sun Pharma, L&T, Tata Steel, HDFC, Reliance and Bharti Airtel, rising up to 2.12 per cent.

 

On the other hand, HCL Tech, Hero MotoCorp, Bajaj Auto and M&M were the losers, falling up to 0.76 per cent.

According to traders, investor sentiment was positive on strong buying by domestic institutional investors (DIIs).

How India responded to Imran Khan’s ‘will retaliate’ speech on Pulwama

On a net basis, DIIs were net buyers to the tune of Rs 1,163.85 crore, while foreign institutional investors sold shares worth a net of Rs 813.76 crore on Tuesday, provisional data available with BSE showed.

Investors also took cues from other Asian equities that were trading positive on hopes of a resolution to US-China trade tiff.

US President Donald Trump Tuesday said that negotiations with China on a trade deal were going very well, but refrained from committing any extension of the March 1 deadline to arrive at such an understanding. Global markets are also eyeing minutes from the US Federal Reserve, scheduled for release later in the day, for clues on key interest rates, traders said.

Elsewhere in Asia, Hong Kong’s Hang Seng was up 0.50 per cent, Kospi jumped 1.17 per cent, and Japan’s Nikkei gained 0.70 per cent; while Shanghai Composite Index slipped 0.15 per cent in earlytrade.

On Wall Street, Dow Jones Industrial Average ended almost flat at 25,891.32 points on Tuesday. The benchmark Brent crude futures rose 0.08 per cent to USD 66.50 per barrel.

The rupee inched up 3 paise to 71.31 against the US dollar in early trade Wednesday even as foreign fund outflows continued amid firming oil prices.

At the Interbank Foreign Exchange (forex) market, the domestic unit opened strong at 71.29 but gave up the gains to trade at 71.31. The rupee had closed at 71.34 versus the greenback Monday. Money markets were closed Tuesday on account of Chhatrapati Shivaji Jayanti.

Foreign institutional investors (FIIs) remained in sell-off mode, offloading shares worth a net Rs 813.76 crore Tuesday, while domestic institutional investors (DIIs) bought equities to the tune of Rs 1,163.85 crore, provisional data showed.

Brent crude futures, the global oil benchmark, was trading 0.14 per cent higher at USD 66.54 per barrel.

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Reliance Group stocks under pressure; tank up to 10.3% on SC move

Press Trust of India

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New Delhi: Shares of Reliance Group companies tumbled up to 10.3 per cent Wednesday after the Supreme Court held RCom chairman Anil Ambani guilty of contempt of court for willfully violating its order and not paying Rs 550 crore dues to telecom equipment maker Ericsson.

Reliance Capital tumbled 10.26 per cent, Reliance Communications tanked 9.46 per cent, Reliance Infrastructure 8.75 per cent, Reliance Power 5.52 per cent and Reliance Home Finance 5 per cent on BSE.

The Supreme Court on Wednesday held RCom chairman Anil Ambani and two others guilty of contempt of court for violating its order by not paying dues of Rs 550 crore to Ericsson, and said they faced a three-month jail term if Rs 453 crore was not paid to Ericsson in four weeks.

 

The apex court said Ambani and the others will have to purge contempt by paying Rs 453 crore to Ericsson in four weeks.

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Sops for all in Gujarat’s Interim Budget, focus on fishermen, farmers

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Gandhinagar: After presenting a surplus budget of 12,241 crore in the Assembly, Deputy Chief Minister Nitin Patel said that perks announced for various communities in the Interim Budget were part of the existing schemes of the government. He also said that he decided not to increase tax because of the jump in the state’s “own tax income”that shot up by over 11 per cent in 2017-18.

“We have increased allowances provided for various schemes that are already operational… New schemes or items can also be introduced while presenting a full budget. Whatever we have done here — for instance, widow pension, allowances of aanganwadi workers — are all part of the current schemes,” Patel, who holds the Finance portfolio, told mediapersons after presenting the budget in the House.

Sops for all in Gujarat’s Interim Budget, focus on fishermen, farmers

 

Finance Department officials said that of the total provisions made in the Interim Budget of Rs 1,91,817 crore, the government plans to spend Rs 63,939 crore in the four months, between April and July, 2019.

“The House will be able to discuss the demand for the whole year when the modified budget will be presented,” Patel said, indicating that Assembly will hold a special session after the Lok Sabha elections.

With an eye on the Koli community votes, the BJP government increased the VAT (Value Added Tax) subsidy in diesel, used in fishing boats, by Rs 3. This is expected to benefit nearly 10,600 boatmen in the state.

The government also doubled the daily livelihood allowance — from Rs 150 to Rs 300 — provided to the families of fishermen held captive in jails of Pakistan. At present, there are about 503 Indian fishermen in Pakistani custody, as per the figures shared in Lok Sabha in February 2019. Most of them are from Gujarat. The government has also decided to allot an additional 5,000 hectares of land to encourage prawn culture in the state. This land is in addition to the 7,500 hectares and will generate employment of 25,000 aqua-culturalists, said Patel in his budget speech. The government also announced setting up new fish landing centres in Valsad which has a population of 23,000 fishermen.

Explained: Govt’s attempt to keep everyone happy ahead of Lok Sabha polls

While the government did not announce any farm-loan waiver as demanded by the Opposition Congress, it announced to set up a Rs 500 crore “revolving fund” to provide crop loans at zero percent interest to farmers in the state.

Patel, however, reiterated on the floor of the House that his government will waive of Rs 691 crore of outstanding dues of 6.74 lakh farmers, poor and medium class power consumers under a one-time waiver scheme.

“The state government has decided to waive of principal and interest and penalty amount of electricity bills of all eligible domestic power connections of BPL consumers of urban areas, all agricultural power connections, power connections of all residences of rural areas, commercial power connections of small traders of rural areas,” the Deputy CM said.

Talking about the vote on account presented by the state government, Patel said, “This year, the Union Government has presented a vote on account. Therefore it is befitting that the state’s economic approach is shaped in accordance with the policies of Union of India. We have accordingly decided to present and seek vote on account for the period of four months, ie up to July 31, 2019.”

Chief Minister Vijay Rupani termed the Interim Budget “progressive and sensitive”. “This vote-on-account has been prepared and presented keeping in mind the well-being of all sections of society, be it backward communities, tribals, Dalits, youth, women and minorities. This is a progressive and sensitive budget which takes care of even the last man in the last line,” Rupani said.

Listing the schemes, he said, “This vote-on-account reflects our sensitiveness, transparency, progressiveness and decisive approach. There is something for everyone in this,” the CM said.

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