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Interim Budget 2019: Farm relief package on cards? Here's what to expect

Govt is expected to project economic growth of around 7.5% for the next financial year, while expanding capital spending on railways, roads and ports by 7-8%

Reuters 

Interim Budget 2019: Farm relief package on cards? Here's what to expect

The government will unveil its budget for the 2019-20 financial year on Friday, with investors expecting increased investment in areas such as agriculture, as Prime Minister tries to woo voters ahead of general elections to be held by May.

After a string of recent setbacks in key state elections for Modi's Bharatiya Janata Party (BJP), the government is expected to woo rural and urban middle-class voters via farm relief measures and tax cuts.

The government is expected to project economic growth of around 7.5 per cent for the next financial year, while expanding capital spending on railways, roads and ports by 7-8 per cent.

Below is a list of some of the items expected in the budget, based on published media reports.

AGRICULTURE

- Farm relief package itself could run to at least 1 trillion rupees ($14.04 billion)

- Set to earmark about 1.8 trillion rupees for in the fiscal year

- Expected to waive premium for taking insurance policy for food crops

- Proposal for waiving interest on crop loans for farmers who pay on time
 

DIVESTMENT

- Target of about $11 billion from state asset sales in FY 2019-20

- Potential stake sales via IPOs include Telecommunications Consultants India, Indian Railways' subsidiaries IRCTC, India and National Seeds Corp
 

METALS

- Gold - Speculation around a duty cut


HEALTH

- Budget allocation for health is likely to increase by 5 percent from a year ago


TAXES

- An anticipated corporate tax rate cut to 25 percent from 30 percent may be put on hold until after the elections

- Higher tax exemptions for the middle class and for small businesses anticipated
 

BANKS

- Discount of 2 percentage points on loans for businesses with annual sales of less than 50 million rupees; government to compensate banks for the costs

- 40 billion-rupee capital infusion for public-sector general insurers


AUTOS

- Reduction of goods and services tax (GST) on electric vehicles and batteries


IT/TELECOM

- Better in rural areas

- Abolition of the angel tax to boost start-ups

- Exemption from GST for spectrum and licence fee payouts, reduction in spectrum fees and cuts in import duty on telecom equipment (currently at 20 pct)

($1 = 71.2410 Indian rupees)

First Published: Thu, January 31 2019. 13:15 IST