Budget 2019: Piyush Goyal’s Interim Budget may place heavy focus on farmers, say analysts
Union minister Piyush Goyal will shortly present the Budget 2019 of the NDA government led by Prime Minister Narendra Modi. He has arrived at the Finance Ministry building carrying the Budget briefcase. This is the Modi government’s last Union Budget before the Lok Sabha elections due by May. Analysts say Piyush Goyal may announce massive relief for farmers and small industries who are still feeling the aftershocks of demonetisation and the Goods and Services Tax (GST). With the Lok Sabha election just months away, the government is likely to keep the budget focussed on immediate relief such as easing income tax rules, favourable loan terms for small businesses, farm loan waiver and even direct cash transfers to farmers who are under debt. The farm loan waiver may reach up to Rs 1 lakh crore, according to some reports. The Modi government is also likely to waive off premium on crop insurance. Piyush Goyal’s turn to reveal the contents of the Union Budget briefcase in the crucial national election year came after Finance Minister Arun Jaitley had to go on leave and fly to the US for treatment. Yesterday, the government said its estimate of Gross Domestic Product (GDP) growth for fiscal 2018 was 7.2 per cent, significantly higher than 6.7 per cent earlier. The Railway Budget for 2019 will also be presented today.
Here are the live updates of Union Budget 2019 to be presented by Union Minister Piyush Goyal:
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Union Budget 2019: Central Board Of Direct Taxes Team With Piyush Goyal
The income tax department tweeted a photo of its officials with Union Minister Piyush Goyal as he prepares to present the Interim Budget shortly.
Union Budget 2019: A Closer Look At Farm Crisis
Farmers in Punjab’s Bathinda are hoping for the announcement of a comprehensive policy to make agriculture more profitable. Known as the country’ food bowl, Punjab has historically produced the highest yields of any Indian farm belt, but a run of crop failures due to whitefly attacks and other natural calamities has pushed scores of farmers to the edge of despair.
Though the state government had rolled out a debt waiver scheme last year, farmers continue to commit suicide.
P Chidambaram was the first finance minister to make significant tax changes in an interim budget. In his February 17, 2014 speech, Mr Chidambaram stated that the economic situation at the time demanded interventions that could not wait for a regular budget.
In the interim budget for 2009-10, the then finance minister Pranab Mukherjee announced a six-month extension to a 2 per cent interest subvention on shipment credit for employment-oriented sectors. That involved an additional financial outgo of Rs. 500 crore.
Budget 2019: The Markets Scene
On Budget day, as the markets opened, the top gainers are:
Hero MotoCorp, Bharti Infratel, Power Grid and M&M
The top losers are:
Vedanta, JSW Steel, ICICI Bank and Sun Pharma
State Bank of India will declare its results this afternoon
Union Budget 2019: Live From Parliament House
Bags containing documents of the Union Budget 2019 being arranged outside Parliament House. Union Minister Piyush Goyal will read out the Budget speech at 11 am. The Interim Budget is the last by the NDA government led by Prime Minister Narendra Modi before the Lok Sabha elections due by May.
Union Budget 2019: Focus On Rural Spending
The Modi government is set to step up rural welfare spending by 16 per cent for the fiscal year beginning April to Rs 1.3 lakh crore, news agency Reuters reported citing two government sources, aiming to boost support in the countryside where more than two-thirds of India’s 1.3 billion people live.
The Union Budget 2019, which is interim and is likely to be followed by a full one in July, is expected to project economic growth of around 7.5 per cent for the next financial year, while expanding capital spending on railways, roads, ports by 7-8 per cent, and estimating an increase in revenue of about 15 per cent, officials said.
Budget 2019: Markets Likely To Open On Higher Note
Domestic stock markets are likely to open on a higher note with the SGX Nifty trading 43.5 points, or 0.4 per cent, higher at 10,898.55 on the Singapore Exchange. The SGX Nifty is an early indicator of the NSE (National Stock Exchange) Nifty in India. On Thursday, the Sensex and Nifty closed 1.87 per cent and 1.68 per cent higher respectively.
Union Minister Piyush Goyal has reached the Ministry of Finance. Mr Goyal is widely expected to replicate a full budget with big announcements to win over the masses ahead of the national election, due by May.
MoS (Finance) Shiv Pratap Shukla seen praying at his residence.
“It is a popular government. It has kept everyone in mind whole making the budget. Being an interim budget, the government will do whatever is possible,” he said.
The budget is likely to focus on immediate relief such as easing income tax rules, favourable loan terms for small businesses, farm loan waiver and even direct cash transfers to farmers who are under debt.
This is the Modi government’s last Union Budget before the Lok Sabha elections due by May.
The Modi government has said it is not averse to taking risk with fiscal deficit management; in other words, Piyush Goyal may announce heavy cuts in interest rates and favourable loans for small businesses, in addition to a massive farm loan waiver.
These election-year measures are, however, likely to have a ripple effect on fiscal deficit, or the difference between total revenue and total expenditure of the government.
Economists caution that farm loans waivers would widen a fiscal deficit the government has aimed to cap at 3.3 per cent of its Gross Domestic Product (GDP) or Rs 6.24 lakh crore. Even without the farm loan waiver, some credit rating agencies have estimated India’s fiscal deficit at Rs 6.67 lakh crore or 3.5 per cent of the GDP, on muted tax collections.
Last week, Moody’s Investors Service, which has already forecast a slippage in fiscal deficit to 3.4 per cent in the current fiscal against the budgeted target of 3.3 per cent, warns of further slippage in the fiscal consolidation roadmap that the Modi government has planned.
A year before the Lok Sabha elections in 2019, then finance minister P Chidambaram had announced a massive loan waiver of Rs 60,000 crore, which on hindsight election analysts say was a key factor that helped the UPA under then prime minister Dr Manmohan Singh retain power for another five years. A similar move by the NDA government today cannot be ruled out.
Analysts appear to concur that in the Interim Budget 2019, the NDA government led by Prime Minister Narendra Modi is likely to announce loan waivers worth at least Rs 1 lakh crore. Keeping farmers happy would be a key focus area of the government as it presents its last budget before the Lok Sabha elections due by May. Chances of the government easing income tax rules
are also high.
The Railway Budget 2019 is likely to include major announcements on allocation for high-speed trains. India is moving towards deploying more high-speed trains in busy routes, especially those connecting major cities where revenue potential is very high. New trains may be announced, as has been the practice in every Rail Budget every year.
Advanced railway station facilities such as Wi-Fi connectivity and hygienic catering services are the soft upgrades the government may consider in the Rail Budget.