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Union Budget 2019: An election package with sops aplenty for the salaried middle class, farmers and rural poor

Union Budget 2019: An election package with sops aplenty for the salaried middle class, farmers and rural poor

Union Budget 2019: An election package with sops aplenty for the salaried middle class, farmers and rural poor
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By CNBC-TV18 Feb 2, 2019 7:03:43 AM IST (Updated)

Finance minister Piyush Goyal presented an interim budget stuffed with largesse targeted at the salaried middle class and rural poor, in what is being seen as an exercise clearly aimed at wooing these sections ahead of the general elections due in May.

Finance minister Piyush Goyal presented an interim budget stuffed with largesse targeted at the salaried middle class and rural poor, in what is being seen as an exercise clearly aimed at wooing these sections ahead of the general elections due in May.

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The income tax exemption limit for the salaried middle class has been raised to Rs 5 lakh for 2019-20. The government will launch a social security coverage for workers in the unorganised sector and - vulnerable farmers will receive Rs 6,000 rupees a year from December 2018 under a new scheme titled PM Kisaan Samman Nidhi.
A direct consequence of this spending spree coming against insufficient tax collections is that the fiscal deficit will be breached. The government has set a fiscal deficit target of 3.4 percent of gross domestic product (GDP) for 2019-20.
In many ways, the giveaways did not surprise given that the government is facing anger over depressed farm incomes and unemployment. A Business Standard report on Thursday said unemployment rate in India is at a four-decade high, causing the government much embarrassment.
The deficit for the year ending on March 31 was expected to come in at 3.4 percent of gross domestic product (GDP), slightly higher than the targeted 3.3 percent, the country's acting finance minister Piyush Goyal told the Lok Sabha.
The higher 2019/20 fiscal deficit target is due to "need for income support for farmers", Goyal said, delivering the Narendra Modi government's last budget before the election.
The deficits were widely expected to be higher than targeted due to a combination of revenue shortfalls and increased spending ahead of the election.
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