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NDA’s Interim Budget for India – Big Bonanza for every Indian! 

It was on the 1st of February 2019, the stand-in union Finance Minister Piyush Goyal’s tabled the interim budget, which is the final budget for the country goes for polls. So many expected that it would be a lame duck budget. But the perceptions of those critics would have surely taken a backward leap after a highly rated budget presentation by the Finance Minister. 

It really had to be nothing less than a 5 star budget for the people to regain the confidence in the Govt and bring back belief in the minds of the Indians which was otherwise slowly going down on the back of unapproved Jobs Data reported by Business Standard, the Ram Mandir issue and other issues relating to the Govt. People on the left were upfront talking about a potential ‘Election Budget’ by Fin Minister Piyush Goyal, which would hurt the Indian economy but just win the voters for the NDA in the upcoming elections 2019. 

It was not a surprise to many people like me, who were thinking and expecting that the big ticket announcements will be with a connection to Farmers and Middle class of India. That’s exactly what the FM did this budget. NDA planned it in such a way that the economy is not at all hurt by the promises made in the budget, which is what is Right with the ‘Right’. 

Source: ANI – FM Piyush Goyal with the Budget Briefcase

Firstly, the highlights of Budget 2019:

1. No tax on individuals having income up to Rs.5 lac.
2. Under PM Kissan Yojana, every farmer will receive direct bank transfer of 6,000 ₹ for owning farmland 2 hectares. 
3. A Standard deduction for Salaried employees raised from Rs. 40,000 to Rs. 50,000.
4. Threshold limit for TDS on rent increased from Rs.180000 to Rs.240000.
5. Record 3 Lakh crore budget for the Indian Defence. 
6. Raising the threshold limit for earnings through investments/savings for retired/homemakers to 40,000 from 10,000. 
7. Pension scheme for the unorganized workforce of India which will give 3,000 per month after the person attains 60 years. 

My View on the interim budget presented by Finance Minister:

Firstly, Finance Minister, Piyush Goyal has given his best. This was expected to be a really different budget and Piyush Goyal’s oratory skills and presentation of the budget was really very impressive. Not to forget Piyush Goyal is the Chartered Accountant and scored 3rd rank as a student. 

The two big schemes or announcements for this budget will surely be the Income Tax rebate till 5 lakhs and the 6,000 rupees benefit to the farmers. But if asked, I would rate the tax rebate as the bigger announcement. 

With the standard deductions getting increased and with all the other available deductions one doesn’t have to pay any tax even if his income goes up to 7 lakh. Apart from this, the scheme which raised the tax rebate from earnings for non-working women/retired personnel is a welcome move. People will now don’t have to bother much till their earnings are 40,000. Finally, the defence budget has been promised at 3 lakh crore rupees which are the all-time record for the defence ministry. These are some of the real big winners from the budget! 

But how will the Govt earn revenue when he raised the tax rebate level to 5 lakh and how will they fund the other schemes like PM Kissan Yojana and 3 Lakh Finance Budget?

Source: Press Bureau of India

This is the Govt which has the studied economics well. If we think a little bit the logic is easy to understand. With a little effort, even an intermediate student whom I posed this question was able to answer. 

This Govt believes in Consumption as the key factor to drive and grow the economy. Let’s say there is an individual who earns 5,00,000 rupees, till last year he would pay the tax of amount ranging between 5000 to 10,000. But now with the rebate coming in, he doesn’t have to pay any tax. 

So what he would do is either save, consume or invest. If he invests in any kind of financial instrument he would pay either Long term capital gains tax or short term capital gains tax. If he wishes to save, then the Bank will make the tax payment to Govt for showing higher deposits. If he wishes to purchase a product or render any service he would be paying GST. This is how the Govt has well worked on the plan of raising the Tax rebate to 5,00,000. It may look so simple today, only the time will tell how will this work and how much it has really gone into the heads of Indians!