Economy

Budget 2019: Spotlight will be on farmers, middle class and youth

Richa Mishra New Delhi | Updated on January 23, 2019 Published on January 22, 2019

The last Budget of the Modi government is likely to be people-friendly; have measures to indicate its reforms agenda, present its vision for the next five years

 

As Finance Minister Arun Jaitley sets out to present his sixth Budget and the last of this government on February 1, he and his team have a tough task ahead. Jaitley not only has to woo back the voters who seem to have moved away from the Narendra Modi-led government if the recent three States elections are an indicator, but silence the Opposition as well.

‘People-friendly’

While there are debates on whether it will be an Interim Budget or a regular Budget, the buzz is that, in whatever form it is presented in, it will indeed be “people-friendly” with announcements for farmers, housewives, middle-class, SMEs, and youth, among others.

“It should not be seen as a populist Budget, but more as how life can be made better for the poor, the unemployed and the farmers, among others. It is likely to have something for everyone based on the fiscal space that the government has,” said a senior BJP member.

Economists believe that since it is a pre-election Budget, populist policy measures may be announced, but fund allocations may not be done. Therefore, it will be in keeping with the tradition of not making any financial commitments till a new government is in place.

Particularly after the recent three-state elections results some measures such as cash transfers for farmers, incentives for MSMEs, and booster for middle-class — doubling income tax exemption threshold from ₹2.5 lakh to ₹5 lakh and lowering the highest personal income tax rate from 30 per cent to 25 per cent — are expected.

Income tax

Said NR Bhanumurthy, an economist at think-tank NIPFP, “Announcements on the income tax front has been in the offing for sometime. So it wouldn’t come as a surprise, if the Finance Minister says something about it.”

As far as fiscal deficit, GDP, and other numbers are concerned that will show the state of the economy, they are still work in progress, he said adding that “final numbers will come much later and whatever will come it will be reflected in the revised estimates.”

 

According to Ashwani Mahajan, National Co-Convener of Swadeshi Jagaran Manch, affiliated to the Rashtriya Swayamsewak Sangh, “FDI is not a solution and neither do GDP numbers work. What is needed is proposal and schemes for the welfare of the people. Everywhere farm sector is given sops and here also it — subsidy from the government — is needed. The government needs to ensure minimum assured income for the farmer. There is also a need to create reservations for SMEs, though not sure how much the government can do on this front.” “Why should big firms compete with small enterprises?” he said adding, “measures are also needed to create employment and incentivise those who generate jobs.”

Cash transfer schemes

If Jaitley listens to the expectations then this time the Budget will have something on quasi-universal basic income scheme to address rural distress.

Something on the lines of cash transfer schemes such as the Rythu Bandhu in Telangana and the Krushak Assistance for Livelihood and Income Augmentation in Odisha.

Expectations are that the government will take some strong and directional measures to indicate its reforms agenda and present its vision for the next five years on rural and agriculture development, infrastructure, land and labour laws and overall job creation.

Opposition stance

Gourav Vallabh, spokesperson, All India Congress Committee, which is the central decision-making assembly of the Indian National Congress, said, “Even as the Narendra Modi-government enters its last lap, it is crystal clear that it has unleashed an ‘Economic Anarchy of Jumlanomics’ and wreaked havoc in the lives of the people.”

Published on January 22, 2019
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