The Interim Budget 2019–2020 has stirred both good and bad emotions equally. Some opine it as a politician’s budget, whereas others believe it to be financially prudent. Barring the Opposition, the ruling party, at the verge of General Elections, is singing hosannas about it.
The hackneyed themes of farmers’ welfare, middle classes’ development, and financial inclusion were dealt well by the Finance Minister Piyush Goyal. Refreshed promise of prosperity (Achhe Din) was again highlighted by Prime Minister Narendra Modi, who referred the benefits ushered in by the annual financial statement as a “trailer”, thus hinting towards a great movie.
With grand schemes like the Pradhan Mantri Kisan Samman Yojana Nidhi (PM-KISAN), an assured income support scheme for small and marginal farmers across the country (for those having cultivable land of up to 2 acres); relief for small taxpayers (with income of up to INR 5 lakh is exempted); bank interest (exempted from TDS); and pension scheme for the unorganized sector (with INR 30,000 per month envisaged after 60 years of age) the question is how to manage the fiscal deficit.
Goyal said that fiscal deficit would remain at 3.4% of the GDP in FY’19 and FY’20. Thus, India is perhaps on a “glide path” to achieve the original target of 3%. On assuming office in 2014, the BJP had promised to hit 3% by FY’18. So, a politician may give 10/10 to this budget, but an economist would hesitate to do so.
Also, the PM-KISAN scheme is applicable only for landowners and not for tenant farmers. Although, the tax and expenditure reforms are a new beginning with direct income support to the Indian farmers, the reforms are delayed—and perhaps marred—due to apprehension regarding the upcoming elections. These positive changes should have come earlier, with more focus on their implementation.
Therefore, even though it is a reformist budget, it is being debated as ‘Populist’, ‘Propaganda’, and ‘The Mother of Election Budgets’.
Sherry A Singh
Product Anchor, Civil Services, Career Launcher