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.
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.
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.
(With PTI inputs)