Interim Budget 2019: Economy caught in a 3.5%/7.5% trap?

The notion of the fiscal deficit falling steadily and making way for a rise in private investment and faster growth is beginning to look doubtful

The interim Budget for 2019-20 has “general elections” writ all over it. The big ticket item is, of course, the cash transfer scheme for farmers that will cost Rs 75,000 crore. There is also an interest subvention of 5 per cent on timely repayment of farm loans. The middle class is being wooed just as assiduously. There is a doubling of the income tax exemption limit to Rs 5 lakh. The standard deduction for salaried employees goes up from Rs 40,000 to Rs 50,000. These two proposals themselves amount to giveaways of Rs 23,200 crore. 

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