Amidst speculations and heated debates on the country’s economic priorities, India’s first female Finance Minister, Nirmala Sitharaman will present the full Union Budget on July 5. As part of preparations for the impending action, the new finance minister held a pre-budget consultation meeting with stakeholders from industry, services and trade. Notably, unprecedented high unemployment and sluggish GDP growth have posed great challenges to the Indian economy in recent years.
While issues plaguing the economy are most anticipated to become top priorities in Budget 2019, experts list the top five expectations from the awaited financial plan.
1. Tax Reforms
Piyush Goyal, the incumbent Railways and Commerce Minister, and also a former finance minister, had claimed if the Modi government remains at the helm after the 2019 general elections, then taxes would be slashed for the middle class. This is likely to be one of the Budget 2019 highlights.
Experts opine that the direct tax structure will be overhauled. In 2017, Prime Minister Narendra Modi had constituted a task force to look into the Income Tax Act and its failings so that new direct tax legislation can be drafted. Therefore, chances are that the old IT Act will be scrapped.
During its previous term, the government had taken a determined stand on black money and introduced measures to combat tax evasion. And, the 2019 budget will possibly witness a continuation of this trend.
With regards to Goods and Services Tax (GST), India’s rates are still amongst the highest in the world. There are hopes that the government will remove many goods/services from the top two GST slabs.
2. Relief for Farmers
Experts have attributed the challenges that have cropped up in the rural scene to the slump in domestic demand. To address this issue, the government might implement measures to prop up the agricultural sector that in turn will boost demand in the rural sector.
3. Pension Scheme is Likely to be extended
The maximum investment cap under the Pradhan Mantri Vaya Vadhana Yojana was set at Rs 15 lakh until March 31, 2020, by the NDA government in the 2018 Union Budget. The upcoming budget will in all probability prolong the scheme beyond 2020.
4. Solution for Slumping Economy
Measures to boost growth across sectors are expected to be one of the principal Budget 2019 highlights. To this effect, the government is believed to be considering pumping Rs 40,000 crore into public sector banks to enhance liquidity.
Another item on the government’s agenda is introducing measures to stem the fiscal deficit and resolving the Non-Performing Assets crisis of banks.
5. Change in Food Subsidy
It is widely speculated that the 2019 Budget will include a 20% hike in food subsidy. This will take India a long way in combating hunger, malnutrition and illnesses born out of contaminated food, and a step closer to attaining food security.
With a resounding victory of over 55% (303 out of 545) seats in the Lok Sabha elections 2019, the Modi-led government needs to live up to the unprecedented mandate given to it. An actionable budget that comprehensively and steadily addresses the flagging Indian economy is a powerful way of ensuring that the public’s faith does not waver.