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Central; BUDGET : Indian Budget The question is, will it work?

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05 Feb, 19 07:15
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Central; BUDGET : Indian Budget The question is, will it work? Piyush Goyal leaves youth, the jobless and the women to fend for themselves
Having failed to perform in the last 58 months, the government desperate to improve its report card seems to be in denial as the ‘interim’ budget has little or nothing to enthuse the joblessThe excitement over the ‘budget’ is now over. The farmers and the middle class got Rs 17 a day from the finance minister, but young women and men of India got nothing.
Despite the word ‘jobs’ mentioned five times in the Modi government’s final budget, with unemployment at the highest level since the 1971 war, the outgoing government appears to have thrown in the towel.
Jobs was central to the political agenda in the 2014 Lok Sabha elections as Narendra Modi then promised crores of jobs and rapid economic growth. Five years later, rural unemployment is touching 18% and the government is not even attempting to respond to it. The youth are now looking up to the Congress and Rahul Gandhi to come up with an answer.
As the dust settles on the budget day, Piyush Goyal’s budget will go down in history as the single biggest act of financial impropriety as the government is now promising to spend money it does not have.
The question is if Bimal Jalan would give the government a financial lifeline by recommending a fund-transfer from the RBI? But as former Finance Minister P Chidambaram said, this was not a vote on account, it was an account for votes. The problem is, it will not work.
This budget, however, was about jobs and this is one area where the government left the answer-sheet blank. The budget speech has four main references on jobs: the first talks about how an expansion in air traffic has led to increase in jobs in the sector.The second reference spoke of Vande Bharat Express which will give an impetus to the Make in India programme and create jobs. The Finance Minister also spoke how solar generation sector is now creating lakhs of new age jobs.

But by the time he reaches the fourth reference, the Finance Minister throws in the towel and puts the onus of creating jobs on the youth themselves: “Our youth will lead us in this endeavour with innumerable start-ups creating digital India, and millions of jobs in this eco-system,” Mr Goyal said, telling the youth to basically go out there, create jobs for themselves and other young people and that the government would continue to put an Angel tax.

Unemployment would continue to be a serious issue and Modi government clearly wants to avoid the issue. It tried to brush the issue under the carpet by saying that the NSSO data was not official, but the numbers would continue to haunt the government. This is going to be a serious problem going into the elections as the government continues to live in denial.

While the government can deny the NSSO data, it cannot deny trends from the National Career Service where the number of people registered has gone up to 39 million or almost 4 Crore but only about seven lakhs have been provided jobs, which is less than 2% of the persons registered. There is nothing in the budget which tells us how the remaining 3 crore 93 lakh people are going to get jobs.

The total population of people in the 15-29 age group according to the 2011 census data is around 48 Crore and a little over 15 Crore are rural males among whom unemployment has climbed to a massive 17.4 per cent, indicating that this number would be around 3 Crore.

The government appears to have left the young women and men to fend for themselves and it would be up to the next government to come up with an effective policy.

The bigger question, however, is about the two big questions that are coming out of the budget: What happens to people who have a net taxable income of Rs 5,00,001 and the second, how the government wants to fund the Pradhan Mantri Kisaan Yojna?

The answer to the first question is that while incomes up to Rs five lakh are not going to be taxed, the additional Re 1 is going to invite a tax of more than Rs 10,000.

This is a discussion that is going to continue in middle class living rooms for the next few days, unless the government comes up with a clearer answer.

The second question, about how the government plans to fund this budget, is a far more complex one and as stated in earlier posts, this is not what this government wants to talk about.

“We would have maintained fiscal deficit at 3.3 percent for the year 2018-19 and taken further steps to consolidate fiscal deficit in year 2019-20. However, considering the need for income support to farmers we have provided Rs 20,000 Crore in 2018-19 RE (Revised Estimates) and Rs 75,000 crore in 2019-20 BE (Budget Estimates), the interim FM said, while presenting the interim budget.
The Government has already crossed the red line and would be looking to former RBI governor Bimal Jalan to provide some additional fiscal space, considering everything else has failed. While some may want to call it the Great Indian Bank Robbery, having failed to deliver in 58 months, the government is desperate to improve its report card.
Highlights Of Interim Budget 2019-20
The key highlights of the Interim Budget 2019-20 presented by the Union Minister for Finance, Corporate Affairs, Railways & Coal, Shri Piyush Goyal in Parliament today are as follows:

New Announcements

Farmers

12 crore small and marginal farmers to be provided with assured yearly income of Rs. 6000 per annum under PM-KISAN

Outlay of Rs. 75,000 crore for FY 2019-20 with additional Rs. 20,000 crore in RE 2018-19

Outlay for Rashtriya Gokul mission increased to Rs 750 crore

Rashtriya Kamdhenu Ayog to be setup for sustainable genetic up-gradation of the Cow resources

New separate Department of Fisheries for welfare of 1.5 crore fishermen

2% interest subvention to Farmers for Animal husbandry and Fisheries activities; additional 3% in case of timely repayment.

Interest subvention of 2% during disaster will now be provided for the entire period of reschedulement of loan

Labour

Pradhan Mantri Shram Yogi Maandhan scheme to ensure fixed monthly pension to 10 crore unorganized sector workers

Rs 3000 per month after 60 years of age with an affordable contribution of only Rs 100/55 per month

Health

22nd AIIMS to be setup in Haryana

MGNREGA

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

Direct Tax proposals

Income upto Rs. 5 lakh exempted from Income Tax

More than Rs. 23,000 crore tax relief to 3 crore middle class taxpayers
Standard Deduction to be raised to Rs. 50,000 from Rs. 40,000
TDS threshold to be raised from Rs. 10,000 to Rs. 40,000 on interest earned on bank/post office deposits
Existing rates of income tax to continue
Tax exempted on notional rent on a second self-occupied house

Housing and real estate sector to get boost-

TDS threshold for deduction of tax on rent to be increased from Rs. 1,80,000 to Rs. 2,40,000
Benefit of rollover of capital gains increased from investment in one residential house to two residential houses for capital gains up to Rs. 2 crore.
Tax benefits for affordable housing extended till 31st March, 2020 under Section 80-IBA of Income Tax Act

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

Fiscal Programme

Fiscal deficit pegged at 3.4% of GDP for 2019-20

Target of 3% of fiscal deficit to be achieved by 2020-21.
Fiscal deficit brought down to 3.4% in 2018-19 RE from almost 6% seven years ago
Total expenditure increased by over 13% to Rs.27,84,200 crore in 2019-20 BE
Capital Expenditure for 2019-20 BE estimated at Rs. 3,36,292 crore
Centrally Sponsored Schemes (CSS) allocation increased to Rs. 3,27,679 crore in BE 2019-20
National Education Mission allocation increased by about 20% to Rs. 38,572 crore in BE 2019-20
Allocation for Integrated Child Development Scheme (ICDS) increased by over 18% to Rs. 27,584 crore in BE 2019-20
Substantial increase in allocation for the Scheduled Castes and Scheduled Tribes -
Allocation for SCs increased by 35.6% - from Rs. 56,619 crore in BE 2018-19 to Rs. 76,801 crore in BE for 2019-20
Allocation for the STs increased by 28% - from 39,135 crore in BE 2018-19 to Rs. 50,086 crore in 2019-20 BE
Government confident of achieving the disinvestment target of 80,000 crore
Focus now on debt consolidation along with fiscal deficit consolidation programme

Poor and Backward Classes
“First right on the resources of country is that of the poor”: FM
25% additional seats in educational institutions to meet the 10% reservation for the poor
Targeted expenditure to bridge urban-rural divide & to improve quality of life in villages
All willing households to be provided electricity connections by March 2019

North East
Allocation to be increased by 21% to Rs. 58,166 crore in 2019-20 BE over 2018-19 BE
Arunachal Pradesh came on the air map recently
Meghalaya, Tripura and Mizoram came on India’s rail map for the first time
Container cargo movement through improved navigation capacity of the Brahmaputra

Vulnerable sections
A new committee under NITI Ayog to identify all the remaining De-notified nomadic and semi-Nomadic tribes.
New Welfare development Board under Ministry of social justice and empowerment for development and welfare of De-notified nomadic and semi nomadic tribes
Defence
Defence budget to cross Rs 3,00,000 crore for the first time ever
Railways
Capital support of Rs.64,587 crore proposed in 2019-20 (BE) from the budget
Overall capital expenditure programme to be of Rs. 1,58,658 crore
Operating Ratio expected to improve from 98.4% in 2017-18 to 96.2% in 2018-19 (RE) and to 95% in 2019- 20 (BE)

Entertainment Industry
Indian filmmakers to get access to Single window clearance as well for ease of shooting films
Regulatory provisions to rely more on self-declaration
To introduce anti-camcording provisions in the Cinematograph Act to control piracy
MSME and Traders
2% interest subvention on an incremental loan of Rs 1 crore for GST registered SMEs
Atleast 3% of the 25% sourcing for the Government undertakings will be from women owned SMEs
Renewed Focus on Internal trade ; DIPP renamed to Department for Promotion of Industries and Internal trade
Digital Villages
The Government to make 1 lakh villages into Digital Villages over next five years

Other Announcement(s)
New National Artificial Intelligence portal to support National Program on Artificial Intelligence
Government has considered all the sections and this will create comprehensive benefit to economy

The budget has been indeed surprising as it’s different from the predecessors. A lot of rebates and good news on tax front for middle class. Income tax rebate for individuals earning till 5 lakhs is going to prove beneficial to the middle class and something that they have surely wished for. It is infact beyond their expectation. Apart from this lot of other reforms have been proposed to support the Taxpayer like increase in standard deduction for salaried individuals, raising the TDS limits, Exemption from tax on Second Self occupied house etc

Then the government has also planned to give 12 crore farmers 6000 rupees. This is another silver lining in the budget and a big move which will uplift their current condition.

Even on the security front they have spent 3,00,000 crore which is again a gigantic and a much needed move.

So be it escalating living standards by their cleanliness drive, providing benefit to the common man, the farmers or strengthening security, all in all the government is surely far sighted. It is working at the root level for that.

यह खबर निम्न श्रेणियों पर भी है: National News
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