Piyush Goyal’s interim budget can be summed up as a series of sops for the middle class, farmers and millions of employees in the unorganised sector.
Finance minister Piyush Goyal’s interim budget 2019 can be summed up as a series of sops for the middle class, farmers and millions of employees in the unorganised sector. Not only does he promise to put more disposal income in the pockets of middle-class India, he is also seeking to improve the quality of life of people at the bottom of the pyramid, particularly the small and marginal farmers, and unorganised sector workers. In short, it a great budget for that should spur consumption.
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The government’s decision to allocate Rs 60,000 crore for Mahatma Gandhi National Rural Employment Gurantee Act (MGNREGA) and another Rs 19,000 for construction of rural roads under Gram Sadak Yojana, coupled with the increased interest subvention scheme for distressed farmers and the modest farm support scheme offering income support for marginal farmers tick all the right boxes when it comes to fueling the rural and agrarian economy.
The minister also announced a social security coverage for workers in the unorganised sector. These are steps in the right direction and would go a long way in improving their quality of life. But the biggest beneficiary this year is middle-class India. The government decision to exempt tax on an income of up to Rs 5 lakh for individuals tax payers and an increase in standard deduction to Rs 50,000, the hike in tax deducted at source (TDS) threshold for home rent and higher capital gains tax exemptions under Section 54 are big-ticket reliefs for the aam aadmi. I am confident this budget would boost overall consumer confidence and play a catalyst for demand generation for branded consumer staples and consumer products.
What’s also heartening to see is the government’s commitment to long-term reforms, while addressing a changing international tax landscape. The decision to process income tax returns within 24 hours and immediate payment of refunds, in addition to anonymising tax scrutiny within the next two years to beat corruption and increase ease of process are steps that will create the foundation for a new-age India.
The interim budget, I feel, has successfully laid down the blueprint for creating an enabling framework that would promote growth. However, the upward revision in fiscal deficit target to 3.4 percent of GDP for 2018-19 and 2019-20 remains an area of concern. Also, there is not much clarity on the government vision and strategy for improving infrastructure and job creation.
Sunil Duggal is chief executive officer of Dabur India Ltd.
First Published: Feb 1, 2019 4:26 PM IST