Relief for small taxpayers could not have waited till the full Budget, said Union Minister Piyush Goyal after presenting the election-year Interim Budget today. The minister who filled in for Finance Minister Arun Jaitley, recuperating from an illness in the US, said it was only an Interim Budget and the main Budget to be presented after the Lok Sabha elections would likely look into the rest.
“I had the constraint of this being an Interim Budget. However, there were many things which could not have been waited for the final Budget, particularly relief for small taxpayer, which I have passed on. The rest is for the then finance minister to decide in July 2019,” he told reporters in New Delhi, hours after presenting the Budget in Parliament.
The Interim Budget has given heavy weightage to relief for farmers, with the government willing to spend Rs. 75,000 crore to run a scheme that will directly credit Rs. 6,000 a year in four instalments into the bank accounts of small farmers who own less than two hectares of farmland.
For millions of middle class taxpayers, however, the income tax slab remains unchanged and only those whose income is Rs. 5 lakh a year will be spared from paying full tax.
“This neo-middle class required certainties about their future tax liabilities and to save them from the refund process, we have given benefit to this category,” said the union minister who is also a chartered accountant and has served on the boards of top public sector banks.
Prime Minister Narendra Modi is looking to win a second term on the back of policies that he maintains have benefitted the country, such as demonetisation, Goods and Services Tax (GST and several people-centric schemes like free cooking gas, housing for all and the Ayushman Bharat health insurance scheme.
The opposition Congress says the Interim Budget was short on substance and was meant to woo voters. “It was not a vote on account but an account for votes,” former finance minister P Chidambaram told reporters. “It was not an Interim Budget. It was a full-fledged Budget accompanied by an election campaign speech. By doing so, the government has trampled on time-honoured conventions,” Mr Chidambaram said.
Apart from relief for farmers – which the opposition says is not significant – the other announcements that could have a positive ripple effect on industry include easing capital gains tax rules for home buyers to enable them to save tax on the profit they get from selling property, and raising the ceiling of payment of gratuity from Rs. 10 lakh to Rs. 20 lakh. These measures are likely to boost spending in the short run, say analysts.