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Last updated: 05 Feb, 2019 Interim Budget 2019-20

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Bikky Khosla | 05 Feb, 2019

The Centre presented the Interim Union Budget for 2019-20 in Parliament last week, and as was expected, the shadow of the general election fell squarely on it. There are a number of schemes for all sections of population across social segments, and the most striking among them include, first the farm income support scheme that intends to transfer Rs 6,000 a year to farmers, and second the announcement of tax rebate for income earners below Rs 5 lakh.

No doubt, the budget clearly reflects the efforts by the government to woo rural and urban middle-class voters and farmers. But from an economic point of view too, it is good to see its efforts to support those segments, including the farm sector, which have long been reeling under pressure. Additionally, the Budget proposal to introduce a mega pension scheme for the unorganised sector workers is also a welcome one.

As far as the MSME sector is concerned, in a welcome step the Interim Budget announced a 2 percent interest subvention for loans up to Rs 1 crore for GST-registered business enterprises. No doubt, the decision will be a big support for the sector. Additionally, there is a reduction in corporate tax from 30 percent to 25 percent. Steps like 3 percent tax benefit on women-owned MSMEs and extension of maternity leaves to 26 weeks are also noteworthy.

So, the Budget--though too much politically oriented--overall seems to be good. It is pro-farmer and pro-middle class. Economy watchers view that the Budget will provide a significant impetus to consumption spending in the economy, which in turn will help demand creation, manufacturing upturn and overall economic growth. But we all know implementation of these measures depends on whether NDA will come to power again or not.

I invite your opinions.

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