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It is an election budget! There is no doubt on that! And who said that it was an interim budget? It was a full budget!

The Budget has tried to keep all the voters happy – farmers, middle class, home owners, corporate India. At the moment it is a little difficult to see who among them is happier.  

But in all this huge chanting of “Modi, Modi” the fact that fiscal deficit has slipped has not gone down too well with the FIIs and the bond market.

Yet, all in all, looking at the way in which the market is jumping, almost like on a trampoline, this can be termed as a fantastic budget as all these sops to rural and middle class population will give impetus to consumption.

The good news here is that despite any Govt coming to rule at the center, these tax reliefs will stay, there will be no discontinuity.  In fact the Finance Secretary clarified that once the Finance Bill is passed in this Budget session, these proposals will be effective 1st April’19.

In all this euphoria, the BJP Govt has issued an almost surgical attack on the opposition; the middle class is happy and in that shout of joy, all worries of fiscal deficit and jugglery of data, silence on unemployment and lack of job creation; everything is drowned.

The Govt’s move to do a money transfer to the rural landless was a no-brainer as there was really no growth in rural wages. We are talking about 250 million voters here, mainly from the Hindi heartland.

Yet, the niggling question about jobs remains. The FM, very smartly sidestepped everything on the jobs controversy by talking only about high growth creating jobs.

The Govt has set the divestment target for FY20 same as the one in current fiscal at Rs.80,000 crore. Though as of now, of this Rs.80,000 crore, Govt has garnered only close to Rs 33,000 crore from stake sales in REC, BHEL and NTPC. But the FM is not too perturbed as the Specified Undertaking of the Unit Trust of India sales could help fill the gap.

The only thing which will matter as of now is the sop given to farmers and middle class. The welfare schemes to rural India were not as high as expected and is estimated to be at 0.3% of GDP of FY20 and the middle class tax sop will cost 0.1% of GDP in FY20.

We are collectively talking about Rs.75,000 crore giveaway to rural India and Rs.22,000 crore via tax rebates. Will the Govt be able to meet these expenses when revenue streams are clearly not visible? But the one thing which the Govt is probably banking on is consumer demand driving growth and in turn, giving impetus to revenue.

The Govt has also announced a 10-point Vision for 2030 but these long term plans read more like an election manifesto and mere slogans. So for now, lets ignore these 10-points Vision altogether!

Without getting into the fine print of the Budget, on the face of it, this is a Budget which has made everyone happy. The middle class always rues that they get nothing but this time around, they are big gainers. For the moment, there is great joy but let’s remember this is an election year…..



Fiscal deficit target for FY20 set at 3.4 percent, higher than the 3.3 percent target set for the current fiscal.

Divestment target set at Rs 80,000 crore for FY20, same as that set for the current fiscal.

To receive Rs 74,100 crore this year and Rs 82,900 crore in next year as dividend from RBI and state-run banks in FY20.

No allocation of any sum to recapitalise banks in FY20.

FY20 fertilizer subsidy seen at Rs 74,990 crore versus Rs 70,080 crore (YoY)

Food subsidy at Rs 1.84 lakh crore v/s Rs 1.71 lakh crore (YoY)

Gross tax revenue at Rs 25.52 lakh crore

Petroleum subsidy seen at Rs 37,480 crore v/s Rs 24,830 crore (YoY)

Total capital expenditure outlay pegged at Rs 3,36,292 crore for FY20.

Total outlay for centrally sponsored schemes at Rs 3,27,679 crore.

In all the total expenditure is to increase from Rs.24,57,235 crore in 2018-19 to Rs.27,84,200 crore in 2019-20, an over 13% rise.

Defence spend raised to Rs3 lakh crore

Current account deficit to be contained at 2.5%



MNREGA allocation for FY20 to be at Rs60,000cr, up from Rs.55,000 crore in FY19

Gram Sadak Yojana budget to be Rs19,000cr 

Farmers owning up to 2 hectares to get Rs 6,000 per year; amount will be transferred in installments of Rs 2,000 crore under the PM Kisaan Samman Nidhi scheme

PM Kisaan scheme to cost govt Rs75,000cr in FY20, to be given health cards too

Increased allocation for Gokul scheme to Rs 750 crore

Govt to create separate dept of fisheries

In place of rescheduling of crop loans, all farmers severely affected by severe natural calamities will get 2% interest subvention and additional 3% interest subvention upon timely repayment

2% interest subvention to farmers pursuing Animal Husbandry via Govt's Kisaan credit scheme

To set up Rashtriya Kaamdhenu Aayog - protection of cow health

8 crore free LPG connections under the Ujjwala Yojana



Pradhan Mantri Shram Yogi Maandhan Yojana for organised sector worker with income up to Rs 15,000 per month. Beneficiaries will get Rs 3,000 pension after the retirement

Mega pension scheme for the unorganized sector ; allocation of Rs.500 crore - assured monthly pension of Rs 3000, with contribution of 100 rupees per month, after 60 years of age. 

Gratituty limit raised to Rs30 lakh from Rs10 lakh

EPFO insurance increased from 2.5 lakh to 6 lakh for death.



No tax till Rs 5 lakh income for individuals tax payers; this is in addition to the Rs1.5 lakh 80C deduction - those who earn a gross income of Rs 6.5 lakh will not have to pay tax.

Tax slab remains same

Standard reduction for salaried raised from Rs 40,000 to Rs 50,000

Post-office deposits tax limit raised from Rs.10,000 to Rs.40,000

Direct Tax collections up over Rs.12 lakh crore in FY19, up from 6.38 lakh crore in FY14

Within nearly two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by officials

All tax returns to be scrutinized within 24 hrs and refunded immediately

Tax rate for firms upto Rs.250cr turnover reduced to 25% from 30%; also applicable to new manufacturing companies without turnover limit.



Capital gains u/S 54 up to Rs2cr will be available for two residential houses instead of one earlier.

Income tax on notional rent on unsold inventory extended from one to two years.

No TDS on house rent upto Rs.2.4 lakh/year

No tax on notional rent on second self-occupied house

Benefits under Sec 80(i)BA being extended for one more year, for all housing projects approved till end of 2019-2020



Indian Railways Budget Outlay Rs 1,58,658 Crore

Capital support for Railways at Rs 64,587 crore for FY20

Railway operating ratio at 95% for FY20



To set up 1 lakh digital villages in next five years

Single window clearances for film makers

Allocation for NE states increased by 21%

Container cargo movement to be extended to North-east.

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