With the Lok Sabha elections 2019 due this year, the Budget to be presented today by Finance Minister Piyush Goyal will by referred to as an 'Interim' Budget.
This Budget will essentially be the government's financial plan for three-four months before the government that takes office after the elections prepares a full Budget for 2019-20. The new government will have the freedom to change the Interim Budget estimates when it presents the final Budget. The convention is that in Interim Budgets, presented before the country goes to the polls, the governments of the day avoid major policy announcements or taxation proposals.
Ahead of Interim Budget 2019, let's recap the highlights of the Modi government's last full Budget, presented by then Finance Minister Arun Jaitley in 2018:
Middle-class hopes from a "poll-bound" Budget 2018 had been dashed with no change in the personal income tax structure. Jaitley announced a standard deduction of Rs 40,000 for salaried employees in lieu of transport and medical expenses.
LTCG: Jaitley announced the levy of a long-term capital gains tax (LTCG) of 10% on gains exceeding Rs 100,000 from sale of equity shares.
Employees Provident Fund
In a bid to boost women’s participation in formal sector jobs, Jaitley announced in Union Budget 2018 a lower rate of contribution of 8 per cent towards schemes under the Employees’ Provident Fund Organisation (EPFO) for women workers.
So, at present, employers pay 8 per cent as the employee’s share and 9.49% as employer’s share from the former's monthly salary towards various schemes under the EPFO. Formal sector workers are entitled to insurance, pension, and provident fund benefits from the EPFO which cover all establishments hiring at least 20 workers. For male workers, employers contribute 12 per cent from their pockets.
Arun Jaitley had announced an allocation Rs 1.48 trillion for railway capital expenditure in Budget 2018-19.
The railway budget was subsumed into the general budget two years ago.
Keeping its promise of providing safe rail travel, the Indian Railways has achieved its target of eliminating all unmanned level crossings, Railway Minister Piyush Goyal said on Thursday. Jaitley had in his Budget speech last year announced that all such crossings would be eliminated.
Sharing the news of elimination of all the 3,479 unmanned level crossings across the country, Goyal tweeted in Hindi, "Today during his address in Parliament, President Ram Nath Kovind said that almost all unmanned level crossings has eliminated in the country. I am proud to say that the last unmanned level crossing of the country has also been eliminated this evening."
- New LPG connections were announced for 8 crore poor women.
- 40 million poor people were to get power connection according to PM Saubhagya Yojana: A budget of 16,000 crore is allocated.
- Swachh Bharat Mission planned to construct 2 crore toilets by this year.
- Government planned to construct 51 lakh affordable houses in rural areas and 50 lakhs affordable houses in urban areas.
- Pradhan Mantri Awas Yojana was to build 1 crore houses in rural areas under this scheme.
- National livelihood scheme was allocated Rs 5750 crores in this budget.
- The government planned to spend Rs 14.34 lakh crores for creating livelihood in rural areas.
- The government allocated 9975 crore for social security.
- Farmers to be given 1.5 times the production cost, and 1.5 times of the production price has been set for Kharif crops.
- Rs 2,000 crore fund for agricultural market and infra-fund was to be set up to strengthen the market connectivity.
- Finance Minister, Arun Jaitley, in his previous budget accorded priority to agriculture and the rural economy, with increase in MSP and launch of Operation Green, National Health Protection Scheme and thrust on rural infrastructure. Further, the government allocated a total of Rs 2 lakh crore to agriculture and rural ministries.
- Fisheries and animal husbandry were to be extended the facility of Kissan credit card.
- Fisheries and Aquaculture Development Fund was given 10, 000 crores of budget.
- Animal husbandry infra fund was allocated Rs. 10, 000 crore
- Proposed to launch a restructured bamboo mission with a fund of Rs 1200 crore . "Bamboo is green gold," Jaitley said.
- The credit target for Agriculture was increased from Rs 8.5 lakh crore to Rs 11 lakh core
Corporations and industry
Jaitley extended the reduced corporation tax rate for companies with a turnover of up to Rs 250 crore in his speech for Budget 2018-19 in the Lok Sabha. The then FM had claimed 99 per cent of the companies filing their tax returns belonged to the Rs 250-crore turnover bracket.
To boost domestic manufacturing, Jaitley had announced a customs duty hike on mobiles to 20 per cent from 15 per cent. Duty on TVs was hiked to 15 per cent.
"Towards fulfilment of my promise to reduce corporation tax in a phased manner, I now propose to extend benefit of reduced corporation tax rate of 25 per cent to companies which have reported a turnover of up to Rs 250 crore in financial year 2016-17," Jaitley had said.
The government had reduced the corporation tax to 25 per cent from 30 per cent in the Union Budget of 2017-18 for companies with a turnover of Rs 50 crore in the financial year 2015-16.
In Union Budget 2018-19, an outlay of Rs 2.95 trillion (Rs 2.95 lakh crore) was set aside for defence.
Out of the total allocation, the capital outlay for the three defence services for purchase of new weapons, aircraft, warships and other military hardware had been pegged at Rs 99,947 crore.
The outlay for defence budget amounted to 12.10 per cent of the total budget of Rs 24.42 trillion (Rs 24,42,213 crore) for 2018-19.
“Infrastructure is the growth driver of economy,” Jaitley had said in his Budget speech last year. “Our country needs massive investments estimated to be in excess of Rs 50 lakh crore in infrastructure to increase growth of GDP, connect and integrate the nation with a network of roads, airports, railways, ports and inland waterways and to provide good quality services to our people.”
The transport sector received an “all-time high allocation” of Rs 1.35 trillion (Rs 1.35 lakh crore) in last year's budget.
The government had maintained its allocation to the Pradhan Mantri Gram Sadak Yojana – Prime Minister’s Rural Roads Programme — at Rs 19,000 crore, the same as in 2016-17.