Standard deduction limit increased to Rs. 50,000 from Rs. 40,000
Allocation for rural employment guarantee programme hiked to Rs. 60000 crore
New Delhi: Finance minister Piyush Goyal proposed an increase in the income tax exemption limit to ₹5 lakh per year in the 2019-20 interim budget. He also proposed increase in the standard deduction limit to ₹50,000, from ₹40,000. At present, income up to ₹2.5 lakh is exempt from personal income tax. Income between ₹2.5 and ₹5 lakh attracts 5% tax, while that between ₹5 lakh and ₹10 lakh is taxed at 20%. Income above ₹10 lakh is taxed at 30%.
The National Democratic Alliance (NDA) government also announced a mega pension scheme to provide assured pension of ₹3,000 per month to nearly 10 crore people working in the informal sector. The informal workers joining the pension scheme at 18 years will pay ₹55 per month and those at 29 years will pay ₹100. The pension will be paid once they reach the age of 60.
"Keeping in view the distress in the farm sector, we revised MSP (minimum support price) in favour of our hardworking farmers. Small and fragmented land holding has led to decline in farm income. To provide support to small and marginal farmers and improve their income, the Pradhan Mantri Kisan Samman Nidhi yojana has been introduced," finance minister Piyush Goyal said while presenting the interim budget.
“There is a need for structured income support to poor landholders to procure seeds, equipment and other needs. To support them we have formed PM KISAN. Under this, farmers, with up to 2 hectares, will get direct income support of ₹6,000 per year. The amount will be transferred directly into bank accounts of farmers in three installments. About 12 crore farmers will benefit from it. The scheme will kick off from 1 December."
The government is expected to spend ₹75,000 crore on this scheme, he added.
Goyal, standing in for Union minister Arun Jaitely who is in the US for medical treatment, also announced a hike in the rural roads programme to connect farms and villages to state capitals, schools and markets. The government allocated ₹19,000 crore for the programme for 2019-20.
In the last budget, ₹55,000 crore was allocated for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), while the government had announced another ₹6,082 crore earlier this month for the rural jobs programme. In his speech, Goyal also promised more funds over and above ₹60,000 crore, if required.
The budget presented on Friday comes against the backdrop of a protracted crisis in rural India led by a sharp fall in crop prices and stagnating wages.
Ahead of the budget, speculation had been rife that the government would announce a slew of measures, including a direct income transfer scheme for farmers, potentially as a pilot project, to counter the farm loan waiver promised by Congress president Rahul Gandhi.
Hailing the government's marquee Pradhan Mantri Sahaj Bijli Har Ghar Yojana, or the Saubhagya scheme, aimed at household electrification, Goyal said free connections have been provided to almost all 'willing' households, and all targeted households will be covered by March 2019.
The government also sought to showcase its success in providing round-the-clock power across the country in the run-up to the 2019 Lok Sabha elections. With the government’s focus on providing “24x7 clean and affordable power to all" by March 2019, for which the states are on board, the Bharatiya Janata Party (BJP) is looking to reap political dividends out of these schemes.
Under the Saubhagya scheme, the government had planned to provide electricity connections to 40 million homes by March 2019. However, it had revised the deadline to December 2018, three months ahead of schedule. The target, however, was reduced to 30 million rural and urban households after it was found that some households did not exist, or had already been electrified, according to government officials. Now, the target is down to 24.847 million households, out of which 24.819 rural and urban households have already been electrified.