Union Budget 2019 was introduced on 1st February 2019 . Some Confusion was there whether it will be a complete or an Interim budget but it was a SO CALLED Interim Budget as per the rules . Railway Minister ; also designated the Interim Finance minister PIYUSH GOYAL presented the Budget as Finance minister ARUN JAITLEY was not present due to medical complications . There is no doubt in the fact that the Budget was made with the sole intention of Elections ; it was designed in NOTE for VOTE scheme that’s why it was the longest ever Interim speech in the Indian History . Opposition will criticise but there is Nothing Wrong or Unethical in it as any party works only for Power . It’s the first budget of the government which has helped the Middle class ; apart from that it has been beneficial for almost all sectors and NaMo has pulled out all Stops . One thing can be said there was actually nothing INTERIM in the budget .

Stock Market cheered the Budget , opening at 36,311.74 having some ups and downs but closing at 36,221.32 gaining 212.74 in the Day . While our honourable Prime Minister NaMo praised this Budget and called it farner friendly , and Economy strengthening and just the Trailer of the complete budget they will present after coming back in power . Opposition leader RaGa called it a Election Lollipop and said that giving 17/day(6000 in the year) to farmers is insulting them for what they do .

Various areas with their Allocations :

TAX :

Biggest highlight was the change in Tax Slab ; though there was just one slab touched and now those with yearly income of 5 lakh are outside the Tax Collection capacity ; exemption limit will go up to 6.5 lakh for salaried people who invest in some specified savings like Provident Fund or when aspects like Home Loans and Medical Insurance are considered . It’s the Biggest Lollipop which could have been presented to the Middle class before Elections . But it’s going to cost Government a high amount as almost 3 crore tax payers are now out of the equation .

• Other than that Now tax assessment will done electronically within 2 years and IT Returns will be filed within 24 hours
• Tax collection is estimated at 12 lakh crore in 2019 from 6.30 lakh crore in 2014
• Transactions wil be made Faceless so two parties don’t know each other personally , it will increase Transparency
• Total Capital spending of government is 9,53,733 crore of which 3.4 lakh crore comes from Budgetary support while balance from public enterprises and Railways .
• Loans amounting 7,23,000 crore were disbursed under MUDRA Yojana .
• Standard deduction for salaried employees has been increased by 10000 . They will be benefitting with 500-3000 a year
• In GST Filing , business has to file only after three months instead of each month as of now . It will helo them reduce their costs and ease management .
• TDS limit on Interest Rate of FIXED DEPOSITS increased from 10000 to 40000
• Minimum 14% revenue of GST will be given to states be central government
• Recommendations to GST Council for reducing GST Rates for home buyers
• Ceiling Limit of TDS u/s 195 A increased from 10,000 to 40,000 for Women
• Ceiling Limit of TDS u/s 1941 increased from 1,80,000 to 2,40,000
• Capital benefits u/s 54 increased from investment in 1 to 2 Residual Houses

AGRICULTURE :

Major headline on every News was the decison of 6000 to be deposited in the accounts of small farmers having Land size lesser than 2 Acres . Government has directly tried to reach out 12 crore families or 40 crore people . When farmers will get the first check it will be just the Election time so you can just see the Astonishing Timing here .

• The scheme is called KISAN SAMMAN NIDHI and will be taken into sccount from 1 December 2018 and the amount will come in 3 instalments of 2000
• This scheme is costing 75000 Crore to the government ; of which 20000 crore burden is just because of pushing date back to Dec 2018
• Disaster strucken Farmers will get Subsidy of 5% from 3% if he repays Loan on time but only if Loan was taken by the Kisan Credit Card
• NATIONAL KAMDHENU AAYOG for Cows with 750 crore for NATIONAL GOKUL MISSION ; I think it’s quite a waste of money and just an Appeasement for the majority community .
• These deposits will be made in JAN DHAN deposits so Banks will also reap benefits out of it .
• Interest subvention on farm loans , 3% on timely payment and extra 2% for those who pursue Animal Husbandry or Fishery throughout the year .

For all those who think this scheme is a sure shot masterstroke , just practically think that giving money to Farmers ; is it a solution . That money has to be used in the best way possible only then it can be helpful . Also the scheme for enriching COWS is a Blunder as if you will make Unskilled and Unsmart people own Cows who don’t know the correct way to nourish them not only it will be bad for the Cows but also the farmers will incur Losses inspite of Gain . Just giving Money to your children doesn’t prove that Parents are very nice and caring ; they also have to ensure that they spend it Intelligently and know the value of what they are spending .

OTHER AREAS :

• MGNREGA has been allocated 60,000 crore and through UJJWALA YOJANA 8 Crore LPG Connections have been established .
• 1,36,072 crore have been budgeted as dividends amd profits means government expects a significant payout from RBI
• SHRI PRADHAN MANTRI SHRAM YOGI MANDHAN YOJANA . Monthly pension of 3000 with contribution of 100/month (aged 29 or more) and 55/month (aged 18) for workers in Unorganised sector for workers earning 15000 a month after they reach 60 years of age ; it was a Masterstroke move for unorgansied workers as it constitutes a high number . 500 crore have been allocated for this Budget
• If a worker dies during work ; amount to be given through EPFO has been increased from 2 lakh to lakh . Now those earning 25000 will get ESI and government will add 14% in the NEW PENSION SCHEME (NPS) of workers and now even Household workers are being planned to bring under the Bracket .
• Standard Deduction Limit has beem increased from 40000 to 50000 . Interest on deposits upto 40000 in POST OFFICE have been made Tax Free ; earlier it was 10000 . GRATUITY Payment limit has been raised from 10000 to 20000 .
• DIVESTMENT Limit has been set to 90000 crore for 2020 being confident that 80000 will be achieved this year only .
• In government sector , Output from small producers will be purchased by the government (25%)
• 7.23 lakh crore loan given under MUDRA YOJANA
• Allocation to North East states have been increased to 58166 lakh crore
• Minimum bonus has been kept at 7000 per year and more peope are being planned to be included in this category even those with income of 21 thousand
• Free gratuity limit increased to 30 lakh from 20 lakh . Gratuity refers to ; after first 5 years of service per year last month income added with Dearance Allowance , divided by 15 and then further by 26 , the obtained amount is Gratuity . It is given in all institutions involving 10 or more workers to give assurance to them after retirement .
• Bonus will be applicable for workers earning 21000 monthly and Labour Bonus will be upto 7000
• 2% Interest relief for GST registered MSMEs
• 36 Capital Goods have been made Duty free
• Lower costs of STENTS and KNEE IMPLANTS have benefitted people
• 14 new AIMS have been announced since 2014
• Plan has been set for 1 lakh Digital Villages in next 5 years , only NaMo knows about the Smart Cities declared with so much Enthusiasm and Energy
• Single window for approval of filmmakers , anti-camcording provisons to control Piracy . Indian media and entertainment industry is estimated to touch $52,683 million .

HOUSING :

• TDS on income from rented house had been raised from 1.80 lakh to 2.40 lakh
• If having more than one House , owner received relaxation only for one house and had to pay tax on one house . Now , they will get Tax concessions on interest of both House Taxes .
• No need to pay Long Term Capital Gain Tax on the purchase of two houses by sellimg of one house .
• Builders making House under Section 1BA will get full rebate from Taxes till 31st march 2020 .
• Government is planning that those who want to purchase Houses have less burden of GST in Future
• Income tax relief on notional rent from unsold houses extended from 1year to 2years

HUMAN RESOURCE DEVELOPMENT :

Though this sector seeked 4200 crore but it was allocated only 2100 crore . Also the Nonsense idea of reserving 10% seats for Economically Backwards will add additional burden on the state governments will force it to add up to 25% more seats . National education mission allocation increased by about 20% to 38572 crore . Not just in this sector but mainly as a whole Government’s receipts seemed to be based on Hope and Prayer . Also keeping in mind the promise of 10 10 World Calss universities each of 1000 crore .

WOMEN and CHILDREN :

Minister highlighted UJJWALA YOJANA as move to secure health of all home makers . 29,164 crore have been allocated for schemes beneficial to women and children . 1.31 lakh crore has also been allocted for GENDER BUDGET .

DEFENCE :

The sector has received it’s highest ever allocation with 3.05 Lakh Crore , with assurance of additional funds to be pumped if required (4.2 lakh crore to be precise if Pensions are added too) . It is 4 times the allocation to Eduaction and 7 times to that of Health . In MINSTRY OF HOME AFFAIRS also 99034 crore has been allocated . Apart from it higher than past allocations were also made in OROP(One Rank One Pension) and Military Service Pay (MSP) . Though still the Defence Budget is not at the level of what Superpowers right now allocate and with two arch Enemies on our two sides we have to be strong in this sector . But still the rise is appreciable keeping in mind the Crisis and Deficit we are running through ; we can expect such further hikes in future . Also , India is the only major Military in the world that has seen a growth in it’s standing strength in the last decade .

INFRASTRUCTURE and RAILWAYS :

1.93 lakh crore were allocated for transport infrastructure to push construction and expansion of Highways , Railways , Waterways , rural roads and Metro . Railway budget increased 21% while Aviation sector has been cut from 9700 crore to 4500 crore . Road scheme under PRADHAN MANTRI SADAK YOJANA gets a 22.5% boost with 19000 crore . Also a 4.9% Hike is given in the Border Infrastructure with 1,03,927 crore for ministry of Home Affairs

NEGLECTED AREAS :

There was no big announcement for employment . Though government says that jobs will emerge due to development . But in reality , employment is 53% less than what it used to be under UPA government

POLLUTION BUDGET was slashed by 50%

SMART CITIES have been shelved it seems ; 7000 crore were allocated for it in 2014 of which only 2% was released and in these 5 years mere 6% of this Nonsense have been completed

Nothing new for Businessmen and Corporates ; much like Repetition of previous old schemes . No new announcement for MSMEs though Budget rose by 7% .

Long Term Capital Gain Tax (LTCG) on Share Market and Mutual Funds which was enacted from last budget had been kept intact . There were high demands to struck it off but no such action seems coming in near future .

10% Import Tax on Gold and Commodity Transaction Tax were two taxes in demand to put down but no action has been taken here

VISION 2030 :

• Next generation roads , railways , seaports , airports , urban transport , gas and electric transmission and inland waterways
• Digital infrastructure to be built on the basis of successes of digitisation of government processes and private transactions
• EVs and renewable energy to be promoted
• Modern digital teach to be used for generation of employment
• Beyond GANGA all rivers to be cleaned
• Coastline , ocean waters and inland waterways to power our growth
• Global launch pad of satellites . Mission GAGANYAN to send an Indian in space by 2022 .
• Becoming self sufficient in Food and exporting as well meeting Oragnic needs
• Distress free helathcare , functional and comprehensive wellness system for all
• A Minimum Government Maximum Governance approach with proactive and responsible Bureaucracy will be viewed friendly by people .

BUT …..

GST Collections have grown even slower than 7% over Centre’s collections are budgeted to grow at 25% to 12 lakh crore and no. of tax payers have also risen by 80% . After DEMONETIZATION , 1.06 lakh crore people filed tax for the first time bringing 1.30 lakh crore to the government . Government will earn 13.80 lakh crore in year 2019-20 from Income and Corporation Tax . Also with the new RBI Governor being a Parrot of the government it must have had got the Hands of the RESERVES other Governors were reluctant to open up ; if at RBI Meeting on Feb 2018 interim dividend of 30000-40000 is transferred to Centre 2018-19 transfers will add up to 70000-80000 crores .

Only Ruling party knows who is gonna benefit from the Budget ; I found some interesting stories regarding this

Minister NAMO BAMBANI came for the speech and asked from public “Do you know what I am gonna say now” answer came “No” , he went of the stage saying if they don’t even know what is going to be said what is the need of saying . Then he was again called and he again asked the same question , but this time answer came “Yes” , again he went off saying if they already know what I am gonna say now then what is the need to tell them . Then he was called once again for the speech , when he asked the question , people had already decided so some said Yes and some No to give out a mixed reaction . Netaji said “Those who know make them know who don’t know and he walked off finally .

SIMMBA shopkeeper was selling Sweets and PINKI was standing nearby . SIMMBA came and asked her to pay the money , she asked she hadn’t ate anything but he said you have smelt . She started Crying . Then PETER came and made the shopkeeper listen the sound of Coins by shaking the packet of coins . Shopkeeper asked Only the Sound ? PETER and PINKI laughed and sarcastically said Only the Smell ?

This is how this Budget is Friends no one knows who is gonna benefit and who is gonna Save but ….. Just the NaMo way … !!!!!

But this Budget also deserves appreciation on certain fronts and one of those being it will help to enhance the CONSUMPTION and PURCHASING POWER and RAGHURAM RAJAN had also once said that India needs Consumption based Growth more than Investment based Growth . Inflation the most Pernicious tax on consumers was 10.1 in 2013-14 and has fallen to 2.2 in 2018 which has enhanced the purchasing power of consumers by 28% . Apart from that lower inflation consumers also enjoy benefits of low interest rates on car loans and home loans . As now Banks are recovering from NPA problem and inflation tamed government has decided to give a Top-Up to compensate for the price stagnation . Help for farmers was Essential as they have long suffered from perennial problems such as Drought , Floods and poor infrastructure . Now the new problem Killing out their Sleep is STRUCTURAL OVERPRODUCTION ; the sector recorded record Output in recent years but in spark contrast the demand for food is slowing as the rate of population growth is declining (less than 1% now) . Instead of MSP and Subsidies a much cleaner approach is Direct Income Transfer ; though of identification of recipients may be problematic but still with the Technical Advancement we can definitely do so

But the other side of the story is not that simple ; Fiscal Deficit in 2019-20 is held at 3.4% much to the target of 3.3% teaching countrymen how to stay within Constraint ; but at the same time neither it includes OIL BONDS paid to Oil Distribution comapnies for Energy Subsides (Though it has paused after oil prices fell) . Also Net market Borrowing has been kept at 4.73 crore for 2020 12% higher than revised 2019 target . Also it doesn’t have the account that FOOD CORPORATION OF INDIA (FCI) borrowed 1.3% of GDP in 2017-18 apart from budgetary allocation it received and 1% from outside this year . If FCI borrowing and underlying deficit is added this no. will go towards 4.4 – 4.8 . Also Budget borrowing by various PSU has rose to 8.5% of GDP which crowds out positive investment . Household financial savings were less than 7% of GDP IN 2017-18 . In response government is absorbing entire savings from corporations and financial schemes . We should also keep in mind that GST Collections dipped a bit below 25% target by 1 Trillion ; but in this Budget government has easily assumed that colections gonna rise by 18% . This KISAN NIDHI and Tax Rebate are going to cost the Economy Hard as it’s extremely surprising that a government is running deficit of 8.5% when Growth is above 7% (7.2 pegged for this year with Nominal being at 11.5%) . India’s household savings have declined to 17% from 23% and excluding housing and other investments it is mere 7% of GDP . If public sector takes away 8.5% of GDP right at the start then private sector isn’t left with any option other than foreign funding exerting further widening the pressure on India’s current account deficit . So even with inflation running below target and the rate cut be RBI government bonds are sold and Currency continues to flounder (Worst performer in Asia the past year) with chances . An important point is while fall in food and fuel prices have made the cost of living look Beneign , core inflation has already hit 5.4% and will rise Faster with this Budget . Even with 222 Billion dumped in our Sovereign debts by foreigners India looks financially Vulnerable to investors .

This Budget proved as a life saving Drug for the government as it came exactly the next day before the report broke out that Unemployment is at a 45 year record high of 6.1% breaking all records from 2.0% in 2012-13 ; if further investigated we will find that Unemployment among Youth is even high in urban areas (18% for male and 27% for female) than rural areas . This data has a huge significance because it’s been published by NATIONAL SAMPLE SURVEY OFFICE (NSSO) a branch under Ministry of Statistics which collects data and conducts Surveys on various topics across the country . Earlier unemployment report was published per 5 years but later government decided to publish it every year as the Frequency of data is found to be very low , the latest data is based on July 2017-18 . NSSO’s data are the most trustworthy as they are Household data brought by surveying over 1 lakh Households . Another notable point is that in our country 90% jobs are in the informal sector . BIBEK DEBROY and ex- Vice Chairman of NITI AAYOG ARVIND PANAGARIYA had also called NSSO as the most Trustable source . In 2017 NaMo decided to change the methodology of calculating Unemployment , the task force was led by the latter name above .

NATIONAL STATISTICAL COMMISSION (NSC) was formed in 2005 to unbiasedly and independently check and approve the data and surveys conducted by NSSO without government intervention TILL NOW . But this time when Government came to know that the data which is going to be released will expose the Real ACCHE DIN of Modi Government . So even when it was finaliser government didn’t allow it to be released . But a Journalist SOMESH JHA wgo deserves Credit for it used his own sources to access this data and make it public . The independent members of NSC were very angry as whole of their Hardwork was being Dumped just due to political insecurity . Two of the independent members resigned following this Attitude of government . NSC consists of 7 posts of which 3 were anyway empty , 2 resigned now and rest are SHRI AMITABH KANT the CEO of NITI Aayog and SHRI PRAVIN SRIVASTAVA the chief statistician and secretary of MOSPI ; ie , both are members of the government so NSC is not an independent institution anymore and after SUPREME COURT , CBI and RBI another institution is destroyed by Modi Government . The 2 resigned members also claim that they had disagreements with Centre regarding data on GDP and Labour Force survey . So now NSC is also a government body which can be easily used to give results as they want US to see .

Even when this data was published the members of government were shamelessly defending . First person sent for the rescue was NITI Aaypg vice chairman RAJIV KUMAR who seemed highly confused in giving statements ; saying “Maybe ….. the government will approve it ….. I don’t know” . Do you expect such statements from a person holding such a high Economic position . Then came NITI Aayog CEO AMITABH KANT who gave lame excuses like OLA and UBER have seen a high growth so it implies that Employment has also risen . Even intelligent people like PIYUSH GOYAL and ARUN JAITLEY gave Foolish statements . Former said that the nature of Jobs have changed so NSSO data is not a credible source anymore and latter said that it’s only a Draft report not yet finalised which is Big Lie ; other BJP members also urged everyone ; instead of NSSO look at the data of EPFO , MUDRA loans , etc . Now NaMo comes on the crease and smashes it out of the park with one after the other Sarcastic statements trolling Opposition . But I not at all expected it from a prime minister to speak a LIE just to hide his failure . He also gave examples of MUDRA loans , investment schemes and other Irrelevant aspects relaing them illogically and repeating same line again and again “YE SAB BINA NAUKRI KE HOTA HAI KYA” … ????? But for all I would again repeat that this NSSO is a household survey as I said above and it includes all the sectors and kinds of employment ; YES also their OLA , UBER , MUDRA , EPFO and even self employed . Now it’s being said that a new report will be presented by NSSO which will show that high growth in employment has taken place despite the fact that outlr country is going through one of the WORST ever job crisis . For those who are employed and think that it’s not a problem for them , think using your Brain that if you demand for proper working conditions , Harassment and price hike when too many Unemployed are sitting outside , Employer will say that “You have problem in working get out , I have many praying for the job you have” .

Government has also given a Vision upto 2030 to eradiacte Poverty and Illiteracy and instill Cleanliness . India will be a modern and transparent society determined on it’s path of 10 Crore Dollar Economy . PIYUSH GOYAL gave a 1 hour 42 minute long speech with URI : THE SURGICAL STRIKE dialogue also a part and he concluded it with a Poem . The full budget is expected to come in July which will further clear the Vision of our country’s advancement . It is very easy to shout and criticise sitting outside but extremely difficult to actually run the Country on the correct path which in my opinion this government has failed to do . Inspite of these 4 years the focus is still on Votes instead of Real progress . If they would have really worked perfectly these 4.5 years there wouldn’t have been any need to bring this kind of Election Budget whose only and only aim is to gain the VOTE at any cost .

This budget lays foundation of a new Approach on the path of development which doesn’t seem Easy but only then it’s worth doing . All the actions are from the long run point of view having target of achieving 10 Trillion economy and becoming 2nd largest Economy by 2030 . The earlier gains in macro stabilty need to be maintained but a lot more is to be done specially the upcoming full budget needs to showcase a more structural view of fiscal management . But India can be in the Line of Fire if global conditions reverse and we don’t have much Assurance for that by this Budget . However Risky the budget is , it reflects the confidence of MODI Government to return back to power and further intensify this Budget which has a high possibility ; as not only this Budget but also many other Petty political matters are turning the Tide in their favour and bringing momentum under their Belt . Talking about the Budget , as a common man or a politician I could have easily given it 8 or 9 out of 10 but as an Economist I can only give it 6 on 10 .

JAI HIND

ARUNESH SINHA