GUWAHATI: The Bharatiya Janata Party (BJP) led Narendra Modi government has not left any stone unturned to woo the voters ahead of the 2019 Lok Sabha elections and the interim budget which was presented by interim Finance Minister Piyush Goyal looks like the BJP’s Brahmashtra. However, the budget lacks specific measures to control inflation.
A Guwahati-based chartered accountant, Manoj Nahata said, “Though the interim budget will woo many sections of people, the government will lose a huge amount of money. The budget fails to explain how that loss will be recovered by the government.” He explained that with decisions like Rs 6,000 annual dole to farmers, income tax rebate up to income of Rs 5 lakhs per annum and tax deduction at source (TDS) exemption the government will have to invest a huge amount of money which will affect the inflation and there would be an unprecedented price rise in the market.
Asserting that inflation is a hidden and unfair tax on the poor and middle class, Piyush Goyal said during budget presentation that the government has restrained the “back-breaking” inflation and brought it down to an average of 4.6 per cent. The average rate of inflation during 2009-2014 was a back-breaking 10.1 per cent, Goyal claimed, while presenting the budget for 2019-20 in the Lok Sabha.
Though the inflation control mechanism was not explained well the middle class and rural citizens were happy with the interim budget. A city-based private sector employee said, “I am happy that I will not have to pay any income tax as I earn less than Rs 5 lakhs per annum.”
A farmer based in Silchar, talking to G Plus said, “Many times because of floods I am unable to grow any crop but now I can expect getting Rs 6,000 from the government every year which never happened earlier.”
Leader of Opposition in the Assam Assembly, Debabrata Saikia, talking to G Plus expressed that it is a gimmick as he doesn’t know how the government will pay the first instalment of Rs 2,000 before 31st March 2019 as the budget is for the next financial year.
Tax relief but no change in slab
Though the individual tax payers who earn up to Rs 5 lakhs per year will get a bit of relief with the tax rebate announced by the government, the government has not tweaked the income tax slab.
A city-based chartered accountant said, “Those who are earning more than Rs 5 lakhs will have to shell out the tax at the same rate as they were paying before.”
The current tax slabs of 20 percent tax on income between Rs 5 lakhs to Rs 10 lakhs and 30 percent tax on earnings of over Rs 10 lakhs would continue in the next fiscal year beginning 1st April 2019.
Even for people earning between Rs 2.5 lakhs to Rs 5 lakhs, it is not a direct exemption. Instead of giving straight exemption on income up to Rs 5 lakhs, the finance minister twisted the situation by giving rebate under section 87A of Income Tax Act. Thus if income is more than Rs 5 lakh, the tax payer cannot claim rebate under section 87A.
No specific budget announcement for Northeast
In the interim budget presented on 1st February in the Lok Sabha, there were no specific announcements on northeast other than a proposal to increase the allocation to the region by 21 per cent to Rs 58,166 crores in the interim budget for 2019-20. But it was not specific that which states will get it and when.
Assam Congress leader Debabrata Saikia questioned when will the allocation be made and where.
Interim finance minister Piyush Goyal, during the budget session said, “The allocation for the northeastern areas is being proposed to be increased by 21 per cent to Rs 58,166 crores in 2019-20 budget estimates over 2018-19.”
Later he only narrated what all has happened in northeast. Goyal said Arunachal Pradesh has come on the air map recently and Meghalaya, Tripura and Mizoram have come on India's rail map for the first time.
The finance minister said the government will introduce container cargo movement to the northeast by improving the navigation capacity of the Brahmaputra River, but he did not announce any specific project.
Major budget announcements
• Individuals earning taxable income up to Rs 5 lakhs will be exempted from paying income tax
• Exemption limit for tax deducted at source in bank interest and post office savings has been raised to Rs 40,000 from Rs 10,000
• Farmers owning land less than two hectares will get Rs 6,000 per annum in their bank accounts by direct benefit transfer
• Pension scheme targeted to benefit workers in the unorganised sector with income of up to Rs 15,000 per month
• It will provide monthly pension of Rs 3,000 to unorganised sector workers after they reach 60 years of age
• All farmers affected by natural disaster will get an interest subvention of up to 2%, and adding to that a 3% interest subvention will also be given for timely loan repayment
• Grant worth Rs 60,000 crores has been given to Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA).
• Rashtriya Kamdhenu Aayog to be set up to enhance productivity of cows
• Gratuity limit increased from Rs 10 lakhs to Rs 30 lakhs
• Allocation for the northeast was proposed to be increased by 21% from the previous year
