The caveat lies in whether the budget will follow the norms of an interim budget or whether it will have ingredients of a full-fledged budget, sans the economic survey that will be presented by the freshly-elected government in July.
Budget 2019: Modi Government will table its last budget for the current term before the Parliament on February 1. But with general elections few months away, analysts expect that the interim Budget 2019 will be a populist one.
The caveat lies in whether the budget will follow the norms of an interim budget or whether it will have ingredients of a full-fledged budget, sans the economic survey that will be presented by the freshly-elected government in July.
Before leaving for the US for medical treatment, Finance Minister Arun Jaitley had indicated the possibility of the latter, and that the budget may not merely be a vote-on-account one.
It's being expected that the Budget 2019 will be loaded with big announcements, providing some relief to the middle-class taxpayers. Some populist measures on farmers' income are also widely expected.
However, amidst all this, there are few questions that economists are worried about.
The big questions are: How strong a blow is the government ready to endure on the fiscal deficit front? Will it allow it to gallop from the current 3.3 per cent of the GDP to 4 per cent or above?
Meanwhile, Railways has already expressed what it wants from interim Budget 2019. Below we have listed some expectations across the sectors from Budget 2019.
1. Agriculture sector
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Given the distress in the agriculture sector, sops for farmers are expected. The budget is also expected to reflect the recent Cabinet note by the Agriculture ministry that addressed income deficit syndrome of small and marginal farmers. It proposed various steps, including a financial package and interest waiver for timely crop loan re-payers.
2. A Telangana-like scheme for farmers?
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It is speculated that — on the lines Raythu Bandhu Scheme of Telangana — the government will offer relief between Rs 4,500 to Rs 8,000 per acre annually to small and marginal farmers who have up to 5 acres of land.
3. Grievances of the salaried class
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Grievances of the salaried class are also expected to be addressed. The 2014 budget allowed for an additional tax-free income of Rs 50,000, but last year's budget reintroduced standard deduction of Rs 40,000 in place of existing exemption for transport allowance and reimbursement of miscellaneous medical expenses.
4. Expectations of Traders' body
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The traders' lobby has been demanding several sops, including Accidental Insurance of Rs 10 lakhs to those registered under GST, subsidy for the purchase of computers and allied goods to upgrade existing business formats, etc.
5. Hike in basic exemption limit for salaried class
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According to Kuldip Kumar, partner & leader, personal tax, PwC India, there could be a hike in the basic exemption limit (the limit beyond a person’s income is taxed).
“There are chances that the government will try to cheer the middle-class segment. Even in last year’s Budget the major changes were for senior citizens. The recent reduction of GST rates was targeted at businesses. The government could increase the basic exemption limit, which has not been changed since the last three years. Overall measures could be simple and straight forward ones that will affect more taxpayers,’’ Kumar said.
6. Railways
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The Railway Budget will mainly focus on three main issues. Sources told Zee Media that the Railway Budget will focus on making the railway – safer, faster and better.
Sources said that the budget will announce that it will increase the speed of existing trains along with the announcement of semi-high-speed trains.
The success of Mission Railway Electrification has given the Railways an added advantage to increase the average speed of many trains, added the source.
Meanwhile, high-speed corridors will be expedited with increased budgetary allocation.
