In light of the upcoming elections, the Interim Budget demonstrated the good intentions of the government to relieve the tax burden on the nation. As promising as this sounds, some loopholes remain, which may attract scepticism in the long run. Budget 2019 significantly increased expenditure in the defence, agriculture, social, health and education sectors.
More money was allocated to the defence sector — it crossed the mark of ₹3 lakh crore. A rise in the Military Service Pay (MSP) of all the persons serving the country was announced. A hike was announced in the special allowances provided to Naval and Air Force personnel deployed in high-risk operations. However, this good intention doesn’t resolve the issue of defence pensions entirely.
The SMEs enjoyed a 2 per cent interest rebate on incremental loan of ₹1 crore. It is necessary to strengthen the MSME sector as it provides employment to over a crore people and helps increase the GDP of our economy. This can increase the borrowing by the SMEs in the long run owing to the interest rebate, which will help the circulation of money within the economy, but I hope the MSMEs do not turn into NPA assets.
The government has assured income support of ₹6,000 annually to farmers having up to 2 hectares of cultivable land, in three equal instalments of ₹2,000 starting December 1, 2018. This makes March 31 the date for the first instalment. This is an attempt by the government to calm the distressed farmers, who might support the Opposition in the upcoming election.
Along with tax benefits for the middle class, the Budget talked about the success of Ayushman Bharat, which has provided medical treatment worth ₹3 crore to over 10 lakh people. The Budget also witnessed a rise in expenditure in the education sector.
The recent election losses of the NDA in Madhya Pradesh, Chhattisgarh and Rajasthan have put the government under a magnifying glass — the pressure to win in the upcoming general elections is immense. This budget may be viewed as populist and a desperate attempt to gain votes. Though the Budget attracts some speculations about its intention, it is in line with the NDA’s agenda to promote domestic growth and infrastructure.
(The writer is a PGPM student at Great Lakes Institute of Management.)