DECODING THE BUDGET
20,19...MODI GOES FULL STEAM
Ahead Of Polls, NDA Woos Both Urban & Rural India—Middle Class, Unorganised Workers, And Farmers
TEAM TOI 02.02.2019
Finance minister Piyush Goyal on Friday served out sops to large sections of the population with a sense of purpose you normally witness at railway station tea stalls. With Lok Sabha elections due to be announced in a few weeks, the urgency was understandable, particularly after the Congress fired an opening salvo with its farm loan waivers in three states and the promise of a minimum income guarantee scheme across the country.
The Modi government responded with a budget that was interim only in name. It had a Rs 6,000 per annum direct income transfer for small and marginal farmers – those with holdings below 2 hectares or about 5 acres – drawing largely from a scheme in Telangana. The tax liability on those with incomes up to Rs 5 lakh was cut to zero. And there was plenty more for other segments that matter when it counts, in the big daddy of elections come April-May.
Prominent among these was the promise of a Rs 3,000 per month pension for those working in the unorganised sector when they reach 60 in return for a monthly contribution of Rs 55 to Rs 100 depending on their age when they join the scheme. Coming after three large medical, life and accident insurance schemes, these represent a conscious approach to leverage Aadhaar and Jan Dhan to widen the social security net.
In a departure from the past, the government decided to immediately roll out the schemes. While the pension plan will be launched on February 15, the income support for farmers is effective December 2018. The break from the tradition of outgoing governments not making major tax changes was justified by Goyal who argued that relief for certain sections could not wait. Besides, he maintained, this was no more than a continuation of the NDA government’s policies.
The interest subvention scheme currently available to farmers has been extended to fisheries, poultry and dairies. That means they can get up to 5% off on their interest rate if they repay loans on time. The coastal regions and eastern India, many of which have not been BJP strongholds but are very much on the party’s radar for 2019, were clearly the focus of this measure.
No word on unemployment
Unsurprisingly, the cow figured, too, with the promise of a Kamdhenu (the mythical cow that never ran out of milk) board to deal with everything to do with cattle from productivity to their welfare. Later, at a press conference, Goyal invoked the directive principles in the Constitution to deflect any possible criticism that this was part of a saffron agenda.
The relatively well-off middle class wasn’t entirely overlooked either with standard deduction on income tax being hiked from ₹40,000 to ₹50,000. Within the middle class, there was something for senior citizens – by raising the TDS limit on bank and post office deposits as well as rental income, the FM hoped to make their life easier by reducing paperwork. The budget also gave homeowners much to be happy about.
The budget speech, which lasted about an hour and 45 minutes, saw the treasury benches led by Modi repeatedly thumping their tables while the opposition, Rahul Gandhi in particular, wore a sullen look.
It wasn’t just about goodies for specific constituencies. Much of it was a showcasing of five years of the Modi government – from low inflation rates and high growth rates to toilets, gas connections and bijli for the masses.
The farm crisis was implicitly acknowledged and sought to be addressed in the form of the income support scheme for farmers. Interestingly, for the other big problem that many consider the Achilles heel of the government – lack of jobs – the approach was to assert that new sectors were creating jobs.
Like Niti Aayog CEO Amitabh Kant a day earlier, Goyal said it simply wasn’t possible that the world’s fastest growing large economy wasn’t creating enough new jobs.
The budget speech also contained an enumeration of the government’s 10-point vision for the next decade. Whether this was meant to convey the confidence that the NDA would be back in office come May or to use the occasion to highlight its manifesto is anybody’s guess.
What’s clear is that the government believes it has moved a step closer to securing sabka saath for its reelection bid.
20,19...MODI GOES FULL STEAM
Ahead Of Polls, NDA Woos Both Urban & Rural India—Middle Class, Unorganised Workers, And Farmers
TEAM TOI 02.02.2019
Finance minister Piyush Goyal on Friday served out sops to large sections of the population with a sense of purpose you normally witness at railway station tea stalls. With Lok Sabha elections due to be announced in a few weeks, the urgency was understandable, particularly after the Congress fired an opening salvo with its farm loan waivers in three states and the promise of a minimum income guarantee scheme across the country.
The Modi government responded with a budget that was interim only in name. It had a Rs 6,000 per annum direct income transfer for small and marginal farmers – those with holdings below 2 hectares or about 5 acres – drawing largely from a scheme in Telangana. The tax liability on those with incomes up to Rs 5 lakh was cut to zero. And there was plenty more for other segments that matter when it counts, in the big daddy of elections come April-May.
Prominent among these was the promise of a Rs 3,000 per month pension for those working in the unorganised sector when they reach 60 in return for a monthly contribution of Rs 55 to Rs 100 depending on their age when they join the scheme. Coming after three large medical, life and accident insurance schemes, these represent a conscious approach to leverage Aadhaar and Jan Dhan to widen the social security net.
In a departure from the past, the government decided to immediately roll out the schemes. While the pension plan will be launched on February 15, the income support for farmers is effective December 2018. The break from the tradition of outgoing governments not making major tax changes was justified by Goyal who argued that relief for certain sections could not wait. Besides, he maintained, this was no more than a continuation of the NDA government’s policies.
The interest subvention scheme currently available to farmers has been extended to fisheries, poultry and dairies. That means they can get up to 5% off on their interest rate if they repay loans on time. The coastal regions and eastern India, many of which have not been BJP strongholds but are very much on the party’s radar for 2019, were clearly the focus of this measure.
No word on unemployment
Unsurprisingly, the cow figured, too, with the promise of a Kamdhenu (the mythical cow that never ran out of milk) board to deal with everything to do with cattle from productivity to their welfare. Later, at a press conference, Goyal invoked the directive principles in the Constitution to deflect any possible criticism that this was part of a saffron agenda.
The relatively well-off middle class wasn’t entirely overlooked either with standard deduction on income tax being hiked from ₹40,000 to ₹50,000. Within the middle class, there was something for senior citizens – by raising the TDS limit on bank and post office deposits as well as rental income, the FM hoped to make their life easier by reducing paperwork. The budget also gave homeowners much to be happy about.
The budget speech, which lasted about an hour and 45 minutes, saw the treasury benches led by Modi repeatedly thumping their tables while the opposition, Rahul Gandhi in particular, wore a sullen look.
It wasn’t just about goodies for specific constituencies. Much of it was a showcasing of five years of the Modi government – from low inflation rates and high growth rates to toilets, gas connections and bijli for the masses.
The farm crisis was implicitly acknowledged and sought to be addressed in the form of the income support scheme for farmers. Interestingly, for the other big problem that many consider the Achilles heel of the government – lack of jobs – the approach was to assert that new sectors were creating jobs.
Like Niti Aayog CEO Amitabh Kant a day earlier, Goyal said it simply wasn’t possible that the world’s fastest growing large economy wasn’t creating enough new jobs.
The budget speech also contained an enumeration of the government’s 10-point vision for the next decade. Whether this was meant to convey the confidence that the NDA would be back in office come May or to use the occasion to highlight its manifesto is anybody’s guess.
What’s clear is that the government believes it has moved a step closer to securing sabka saath for its reelection bid.
No comments:
Post a Comment