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Highlights of Interim Budget 2019

The interim Budget 2019 is the last budget of the Narendra Modi government and was presented in the Lok Sabha by Shri Piyush Goyal on February 01, 2019. It contains many populist measures in view of coming Parliamentary and some state assembly elections. The major takeaways of the interim budget 2019 include exemption of people with an earning of up to Rs 5 lakh from payment of income tax, announcement of an annual cash dole-out of Rs 6,000 to small farmers and provision of a monthly pension of Rs 3,000 to workers in the unorganised sector, among others.

Following are the key highlights of the interim Budget 2019-20 presented by Finance Minister Piyush Goyal in the Lok Sabha on February 1, 2019.

  • Income up to Rs 5 lakh exempted from income tax

  • Standard deduction raised to Rs 50,000 from Rs 40,000

  • Direct tax proposals to provide Rs 23,000 cr relief to 3 crore taxpayers

  • Persons with gross income up to Rs 6.50 lakh not required to pay any income tax if they make investments in provident funds, specified savings and insurance.

  • 12 crore small, marginal farmers to be provided assured yearly income of Rs 6,000 under PM-KISAN scheme

  • TDS threshold raised to Rs 40,000 from Rs 10,000 on interest earned on bank/post office deposits

  • Tax exempted on notional rent on a second self-occupied house

  • TDS threshold for deduction of tax on rent to be increased to Rs 2.40 lakh from Rs 1.80 lakh

  • Tax benefits for affordable housing extended till March 31, 2020

  • Tax exemption period on notional rent on unsold inventories extended to two years from one year

  • Allocated Rs 20,000 crore in 2018-19, Rs 75,000 crore for FY2019-20 for PM-KISAN scheme

  • Interest subvention of 2% during disaster to be provided to farmers for the entire period of reschedulement of loan

  • 2% interest subvention to farmers for animal husbandry and fisheries activities; additional 3% in case of timely repayment

  • Rs 3,000/month pension for 10 cr unorganised sector workers with contribution of Rs 100/55 per month under PM Shram Yogi Maandhan scheme

  • Fiscal deficit pegged at 3.4% of GDP for 2019-20; target of 3% of fiscal deficit to be achieved by 2020-21

  • Current Account Deficit pegged at 2.5% of GDP for FY20

  • Total expenditure to rise by 13 pc to Rs 27.84 lakh cr in FY20

  • National Education Mission allocation increased by about 20% to Rs 38,572 cr

  • Allocation for Integrated Child Development Scheme increased by over 18% to Rs 27,584 cr

  • Disinvestment target of Rs 80,000 cr in 2018-19 likely to be met; Target for FY20 set at Rs 90,000 cr

  • 25% additional seats in educational institutions to meet the 10% reservation for the poor

  • Defence budget to cross Rs 3,00,000 cr for the first time

  • Allocation for North East increased by 21% to Rs 58,166 cr in FY20

  • Railways to get capital support of Rs 64,587 cr in FY20

  • Indian filmmakers to get access to single window clearance for ease of shooting films; regulatory norms to rely more on self-declaration

  • 2% interest subsidy for MSMEs on an incremental loan of Rs 1 crore for GST-registered entities

  • At least 3% of the 25% sourcing for the government undertakings to be from women-owned SMEs

  • One lakh villages to be transformed into digital ones in 5 years

  • New portal to support national programme on Artificial Intelligence

  • Reforms in stamp duty; amendments to ensure streamlined system for levy of stamp duties to be imposed and collected at one place

  • A separate Department of Fisheries to be created for welfare of 1.5 crore fisherman

  • 22nd AIIMS to be setup in Haryana

  • Rs 60,000 crore allocation for MGNREGA in 2019-20

  • India poised to become USD 5 trillion economy in next 5 years; aspires to become USD 10 trillion in the subsequent 8 years

What is budget?

Budget is an annual account of government’s receipts and expenditure. The Union Budget of India is also referred to as the Annual Financial Statement in the Article 112 of the Constitution of India. The Government presents it on the first day of February so that it could be materialized before the commencement of new financial year in April. Till 2016 it was presented on the last working day of February by the Finance Minister of India in Parliament. The budget, which is presented by means of the Finance bill and the Appropriation bill has to be passed by Lok Sabha before it can come into effect from April 1, the start of India’s financial year.

Interim budget and vote on account

An Interim Budget is not the same as a ‘Vote on Account’. While a ‘Vote on Account’ deals only with the expenditure side of the government’s budget, an Interim Budget is a complete set of accounts, including both expenditure and receipts. An Interim Budget gives the complete financial statement, very similar to a full Budget. While the law does not debar the Union government from introducing tax changes, normally during an election year, successive governments have avoided making any major changes in income tax laws during an Interim Budget.

The Indian budget: Who presented first and who more times

The first Union budget of independent India was presented by R. K. Shanmukham Chetty on November 26, 1947.

As of September 2017, Morarji Desai has presented 10 budgets which is the highest followed by P Chidambaram’s 9 and Pranab Mukherjee’s 8. Desai presented budgets that included five annual budgets and an interim budget during his first stint and three final budgets and one interim budget in his second tenure when he was both the Finance Minister and the Deputy Prime Minister of India.

Yashwant Sinha, Yashwantrao Chavan and C.D. Deshmukh have presented 7 budgets each while Manmohan Singh and T.T. Krishnamachari have presented 6 budgets.

After Desai’s resignation, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become the only woman to hold the post of the Finance Minister.

What is an interim budget?

An Interim Budget is not the same as a ‘Vote on Account’. While a ‘Vote on Account’ deals only with the expenditure side of the government’s budget, an Interim Budget is a complete set of accounts, including both expenditure and receipts. An Interim Budget gives the complete financial statement, very similar to a full Budget. While the law does not debar the Union government from introducing tax changes, normally during an election year, successive governments have avoided making any major changes in income tax laws during an Interim Budget.

Appropriation and Finance Bill

An appropriation bill, also known as supply bill or spending bill, is a proposed law that authorizes the expenditure of government funds. It is a bill that sets money aside for specific spending. In most democracies, approval of the legislature is necessary for the government to spend money. There is little difference between the two. A bill, which solely deals with the matters prescribed in Article 110 clause 1 of the Constitution, is considered as a Money Bill. While a finance bill is a bill proposed in the parliament that contains provisions relating to revenue and expenses.

What is Money Bill?

A Money Bill refers to a draft law introduced in Lok Sabha. The Bill deals with issues such as receipt and spending of money, such as tax laws, laws governing borrowing and expenditure of the government, prevention of black money etc. Instead of being a separate Bill in itself, a money bill is more like a category. The Speaker has the power to decide whether a bill is a money bill or ordinary bill. The examples of Money Bills are Finance Bill and Appropriation Bill.

Article 110 of Indian constitution talks about Money Bill.

Under Article 110(1) of the Constitution, a Bill is deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters:
(a) the imposition, remission, abolition, alteration or regulation of any tax;(b) regulation of borrowing by the government;(c) custody of the Contingency Fund or Consolidated Fund of India, and payments into or withdrawals from these Funds;(d) appropriation of money out of the Consolidated Fund of India;(e) declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;(f) receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or (g) any matter incidental to any of the matters specified in sub-clauses (a) to (f).

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