The Government sought to address some of the core issues faced by citizens and has laid the vision for the country’s development
The dilemma of the 2019 budget was between biting the bullet on more tough economic reforms or bestowing a bonanza of ballot freebies for every section of society with special focus on the farm sector and rural areas. As expected, the ballot seemed to have won; buoyed as it was by a healthy economic scorecard. The Reserve Bank of India projected an economic growth rate of 7.4 per cent for the next year, fiscal deficit came down to 3.4 per cent, Foreign Direct Investment worth $239 billion was received in the last five years and inflation came down to as low as 2.19 per cent in December 2018. Interim Finance Minister Piyush Goyal announced a slew of schemes and enhanced allocations for pensioners, healthcare, education, infrastructure, weaker sections of society, women and small-scale industries.
On the agriculture front, the stand-out initiative was the announcement of the Pradhan Mantri Kisan Samman Nidhi scheme that would provide direct income support of Rs 6,000 per year to 12 crore small and marginal farmers holding cultivable land up to two hectares. Indeed, this is a welcome step as it marks a departure from the practice of granting subsidies to farmers. This scheme will instead help them buy quality products and increase overall productivity and income. Yet another major announcement pertained to the proposal to provide two per cent interest subvention to farmers pursuing activities of animal husbandry and fisheries. Further, in case of timely re-payment of loan, they would avail an additional three interest subvention. This scheme will help the farmers rein in the vicious cycle of droughts, floods and El Nino due to which they suffered heavy losses. Further, the agricultural budget has been increased two-fold over a period of five years to Rs 57,600 crore in 2018-19. The Budget amount can, hopefully, translate into more schemes to build more infrastructure by way of storage facilities as well as public private partnerships for the adoption of newer technologies. A long-term plan to accelerate infusion of new technologies like Artificial Intelligence and digitisation of villages can spur agricultural growth.
However, for the common man, the most anticipated announcement related to the exemption of income tax for individual tax payers with an annual income of Rs 6.5 lakh if they have additional deductions on home loans, interest on education loans, pension scheme contributions and medical insurance among others.This, coupled with a raise in standard deduction, will benefit three crore salary earners and pensioners. The decision to exempt levy of income tax on notional rent on a second self-occupied house is also welcome. With these announcements, the Government has sought to address some of the core problems faced by the common man and will put more disposable income in their hands.
On the industry front, the only notable mention was made with respect to reducing customs duties on 36 capital goods to promote ‘Make in India’ and the manufacturing sector. One only hopes that this decision has been properly thought through as the domestic capital goods industry has faced a lot of angst in the past. It must be ensured that a level-playing field is given to the domestic industry. The dreaded inverted duty structure of inputs becoming higher than finished goods must not creep back into our tariff books. Listening to the Budget speech, one might have mistaken it to be an election manifesto of the ruling Government but for the most part, the Finance Minister’s speech dwelled on the achievements it made in the past four years. Like the launch of the Ayushman Bharat programme that seeks to benefit 10 lakh patients, making medicines available at affordable prices through the Pradhan Mantri Jan Ashadhi kendras, fall in the prices of essential medicines and cardiac stents and knee implants among others.
As if to send the message that the first term of the Government was just a ‘trailer’ and that ‘the entire picture is yet to come’, a 10-year vision till 2030 was outlined that included building world class physical as well as social infrastructure to make India a $10 trillion economy, a digital India reaching every sector, a pollution-free nation, rural industrialisation using modern digital technologies, clean rivers, a booming blue economy, technological advancements in outer skies, self-sufficiency in food, a healthy India and minimum Government maximum governance nation. On the whole, to the credit of the Finance Minister, this was one of the better drafted speeches in a long time.
(The writer is president, Public Affairs Forum of India and head — business sustainability — Syngenta India Limited)