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February 02, 2019

Click here for Interim Budget 2019

Why in news?

Interim Finance Minister Piyush Goyal presented the Interim Budget on 1st February 2019.

What are the positives?

  • Small taxpayers - Various proposals announced in the interim Budget are aimed to ease tax burden on salaried class, small taxpayers as well as passive income earners such as senior citizens.
  • In the absence of a social security net or unemployment benefits for unorganised sector workforce, the new pension scheme will be of significant advantage.
  • Tax net - The limit of Income-tax Rebate has now been increased to Rs.12,500 from Rs.2,500 for taxpayers having income up to Rs.5 lakh.
  • But people will have to file returns to earn a rebate, thus enlarging the tax base.
  • Reduced red tape - The complicated filing forms, elaborate disclosures, demand notices and scrutiny assessments have been concerns for individual taxpayers.
  • The 2019 Budget has now promised to process tax returns within 24 hours with quick refunds and move scrutiny assessments wholly to the electronic mode.
  • Real Estate - Tax policies of governments in recent years have controlled the Indian investors' obsession for real estate, and have directed them towards financial investments.
  • But signalling a change of stance, the 2019 Budget has proposals that would work as significant incentives for home buyers.

What are the criticisms?

  • There has been a general perception that this elaborate interim Budget is aimed at seeking votes.
  • e.g PM-KISAN will benefit over 120 million farmer families, among which a third of these families live in UP and Bihar. The electoral benefit of such a scheme is very evident.
  • Schemes towards benefitting middle class is also seen as identifying and targeting the sections of population that are in distress and unhappy with the Centre.
  • No Interim Budget in the past announced a new programme with as huge an annual expenditure outlay as the Rs.75,000 crore, thus breaking precedence of minimum spending during election years.
  • No Interim Budget in the past also announced as big an income-tax concession.
  • So it is not right for a government that will be in power for few months to constitute a financial burden for the coming years as well.

 

Source: Business Line, Business Standard

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