Every business person worth his salt would dedicate the due time to understand the fiscal union budget of the nation because of how crucial it is to drive the economy of country, and influence their business itself.
As the elections are just around the corner and everyone was glued to the tabloids so they can know each and every aspect of the budget. And for the right reasons, the interim budget somewhat lived up to the hype that had been created before it was presented by Piyush Goyal, Minister of Finance.
While the government was commended for its step to exempt taxes on the middle-class and even welcomed by the public, the announcement of ₹6000 in income support for the farmers was criticised for being insensitive by the pundits as well as the public too.
However, there are gazillions of other things that the people should know about the interim budget. In this post, we are going to do just that. This post will be a comprehensive and detailed highlights of interim budget 2019. Let’s have a look:
Let’s talk the numbers: Breakdown of Budget.
The total union budget for this year was amounted to be Rs. 27,84,200, which has seen a clear increase if we compare it to Rs. 24,42,000 of the year 2018-19. Out of this Rs 27 lakh crore rupees, only Rs 20 lakh crore has been the revenue for the government while the rest of Rs 7 lakh crore rupees will be either borrowings or liabilities. Here’s a breakdown of the money received for the total budget that the government will be spending this year:
21% – Corporation tax
17% – income Tax
4% – Customs
3% Capital Receipts
8% – Non-tax revenue
7% – Union Excise tax
21% – GST Collection
19% – Borrowings and Liabilties
If you notice, the collection from the GST has already started making an impact. Many factors such as steps taken by government and ease of paperwork due to products such as cloud GST software and billing software can be given the credit for this.
Tax Proposals for 2019-2020.
Here’s a list of notable announcements regarding the tax proposals made in the interim budget:
- Contrary to the popular belief, the tax slabs will remain the same for the year 2019-20.
- The tax on the second house rent of second occupied house shall be exempted.
- The tax rebate limit under Section – 87A shall be increased from Rs 3.5 lakhs to a whopping Rs 5 lakhs. This move has been appreciated by public on a wide scale.
- TDS limit for post-office and bank savings has been increased along with the TDS threshold on rent.
- For the housing projects approved before 31st March, 2020, the benefits under Sector 80-IBA shall be extended for one more fiscal year.
- SMEs that earn less that Rs 5 crores will have to file GST only once in 3 months.
- The sourcing of SMEs by Government enterprises has been increased to 25%, out of which a 3% is reserved for SMEs owned by women.
Reforms in the Banking and Financial Sector.
The increasing number of outstanding loans in the public sector was one of the major considerations in the interim budget. The total amount for these outstanding loans increased from Rs 18 lakh crores to a magnanimous Rs 52 lakh crores. Prompt corrective action (PCA) is being implemented and only 3 public banks are kept out of this as of now. Insolvency and Bankruptcy code (IBC) has devised a resolution-friendly mechanism to speed-up the recovery of NPAs.
Recapitalisation of public sector banks will be done too in this fiscal year. A sum of Rs 2.6 lakh crores has been assigned for this very purpose.
As the pressure from various fronts was mounting, the government made an attempt at wooing the farmers too. However, it didn’t receive the response that they’d expected. Pradhan Mantri Kisan Samman Nidhi has been introduced with a promise to pay Rs 6,000 annually to the farmers. Minimum Support Price (MSPs) has been introduced with rates 50% more than the cost for all the 22 crops which can be a major relief for the farmers.
So, these were the highlights from the interim budget 2019. Have any questions? Feel free to ask us in the comment box