Union Budget 2019: What To Expect From Finance Minister Nirmala Sitharaman's Maiden Budget Speech For Modi Government 2.0

Union Budget 2019

In her maiden Union Budget on Friday, Finance Minister Nirmala Sitharaman does a tightrope walk while balancing the needs of the economy and fiscal constraints.

Written By Digital Desk | Mumbai | Updated On:

In her maiden Union Budget on Friday, Finance Minister Nirmala Sitharaman does a tightrope walk while balancing the needs of the economy and fiscal constraints. The Union Budget 2019, to be presented by the Prime Minister Narendra Modi-led NDA government after coming to power in its second term, is expected to boost spending at the cost of short-term slippage in fiscal deficit targets with the aim to lay down the road map of the Modi government 2.0 for the economy and the nation in the next five years.

While there are high expectations among the common man for a relief with the rise in personal income tax threshold for certain categories, there are expectations on the increase in expenditure on agriculture, healthcare and social sectors at the same time for other section of society. 

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A big push for infrastructure spending including on roads and railways to drive growth is also expected in Nirmala Sitharaman's maiden budget speech. 

Here's What To Expect From Union Budget 2019:

In the 2019 edition of the Union Budget, there are announcements expected that more directly impinge on people's incomes. 

Agriculture: 

  • Agricultural reforms with the motive to achieve the objective of doubling farmer income by 2022 as proposed by the Government. 
  • Farm relief package 
  • Expected to waive premium for taking insurance policy for food crops
  • Proposal for waiving interest on crop loans for farmers who pay on time

Telecom:

  • Better digital infrastructure in rural areas
  • Abolition of the angel tax to boost start-ups
  • Exemption from GST for spectrum and licence fee payouts, reduction in spectrum fees and cuts in import duty on telecom equipment (currently at 20 per cent)

Health care: 

  • Health budget in 2018 was Rs 52, 800 thousand crore which is 2.16 per cent of total budget. A modest rise in the health budget is expected with the increase in the cases of medical-related crisis in various states in the country. 
  • Insurance companies also expect the Modi Government 2.0 to increase its overall allocation in the health sector in order to 

Banks: 

  • Government to compensate banks for the costs
  • Rs. 4,000 crore-rupee capital infusion for public-sector general insurers

Defence: 

As per reports, a modest rise in defence spending is expected in the Union Budget 2019 due to the tight government finances. In the interim budget announced in February ahead of the General Elections, the government allocated Rs 4.31 lakh crore ($62.27 billion) for defence, a 6.6 percent rise over the previous year, which notably raised concerns over its lack in the attempt to modernise the defence sector. 

For Sitharaman, the biggest constraining factor is lower-than-expected growth in tax revenues, particularly those of the goods and services tax (GST), something she may look to bridge through aggressive stake sale in PSUs, higher dividend from the RBI, rollover of some FY20 expenditure to FY21, cut back in plan expenditure and increase in off-balance sheet expenditure with portion of subsidies being transferred to state-owned enterprise balance sheet.

The scope of the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) was also recently expanded to cover all farmers which would lead to an increase in outlays from the earlier budgeted Rs 75,000 crore to Rs 90,000 crore along with a new pension scheme. At the same time, she has to live up to the relief promised to small taxpayers in the Interim Budget in February.

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(With PTI inputs)

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