Union Budget 2019 Is Pradhan Mantri Re-Election Yojana

K Ramachandra Murthy

Call it opportunistic or deceptive, but the so called interim budget presented in Parliament on Friday by the interim Finance Minister Piyush Goyal was entirely election-oriented. There was no hesitation or inhibition. It was out and out an election budget wooing almost every section of the society, particularly the farmers, women and the employed. In fact, it cannot be described as interim budget or vote-on-account which it is supposed to be. It crossed the borders of constitutional propriety when Goyal made a speech for more than an hour making sweeping proposals of taxation and expenditure. The Finance Bill has to be altered accordingly.

This kind of thing has never happened in the history of independent India. The budget proposals were on the expected lines offering sops to as many poor people as possible in rural and urban India. The slogan coined was ‘Jai Kisan, Jai Jawan, Jai Garib Insaan.’ The farmers were sought to be given some relief. The Defence spend would be enhanced (to Rs 3 lakh crore) and the employees in the lower strata would be getting pensions.

Prime Minister Modi appears to have decided to go the whole hog in offering welfare schemes to the people soliciting their votes. The first ten minutes of the longest interim budget speech was spent glorifying the leadership of Prime Minister Narendra Modi while berating the previous government headed by Manmohan Singh and accusing it of policy paralysis and lacklustre performance. This could have been avoided particularly after staying in power for more than four and half years. The economy has been doing fairly well and the government could afford to offer a bonanza of sops to various sections. The finance minister did not forget the cow. He has made a proposal to protect and improve the productivity of cows in the country.

Budget 2019 can be described as the most attractive budget ever presented in Indian parliament. Crores of farmers, employees, workers, anganwadi workers, women entrepreneurs and many more sections will be benefited from the proposals. The main game-changer would be the move to provide relief to the farmers and employees in organised and unorganised sectors.

The direct cash transfer scheme which means granting of Rs 6,000 per year to every farmer owning less than five acres of land in three equal instalments is expected. This is the real icing on the cake. The small and marginal farmers would be happy if not elated. The amount would be deposited in the account of 12 crore farmers across the country. The scheme, called PM Kisan Yojana, would come into force from 1 December 2018. The first transfer of Rs 2,000 would be made immediately. Rs 75,000 crore was allocated for this scheme.

The NDA government appears to have taken the cue from the chief ministers of Telangana and Odisha. Telangana’s K Chandrasekhar Rao (KCR) started paying well before the assembly elections, in 2018, Rs 8,000 per year per acre to all categories of farmers in two instalments. He made the ‘Rythu Bandhu’ scheme a prohibitively expensive package since there is no cap on the extent of agricultural land owned by a farmer. Goyal’s proposal, however, is meant only for the farmer who owns less than five acres. Naveen Patnaik, chief minister of Odisha, was careful in this aspect providing Rs 10,000 per year for farmers and tenant farmers. There was a limit on the extent of land. He also included the agricultural labourers in his scheme. The Union budget proposal for farmers was not clear whether the tenant farmers and farm labourers would be taken care of. The crop insurance to cover the farmers affected by natural calamities has also been proposed.

The farm loan waiver that was promised by KCR and many other chief ministers, including that of the BJP, was not offered by Modi government which has been against subsidies in the first four years. The land records are not properly maintained in most of the States. How many Jan Dhan accounts are active at present is anybody’s guess. Even if everything is in order, the net benefit would be Rs 500 per month for an agriculture household. The farmers might appreciate the concern shown by the government but the relief offered is not comparable to their misery. The fact that the Minimum Support Price (MSP) has not been adequately enhanced in order to keep the rate of inflation under check had made farming community utterly unhappy. It is more talk and less walk as far as the proposed measures for the benefit of farmers are concerned.

The most vocal section to be benefited from the budget proposals would be the employees. Piyush Goyal has proposed that individuals with annual income up to Rs 5 lakh will get full tax rebate under section 87A. If the total income of an employee is even Rs 6.5 lakh a year and if he/she goes for a fixed deposit of 1.5 lakh under Section 80C, he/she will not have to pay any tax. For the employees who get meagre wages, the ESI limit has been raised from Rs 15,000 to Rs 21,000. The huge relief given to about 3 crore middle class tax payers who invest in banks and bonds would also make them happy. Standard deduction is sought to be raised from Rs 40,000 to Rs 50,000. An exemption has been made under Section 54 on long-term capital gains. The proceeds accrued from sale of one house can now be invested in buying two houses provided the capital gains do not exceed Rs 2 cr.

The finance minister said Anganwadi workers would be getting 50 per cent raise in their income. Another game-changer is the proposal to grant a monthly pension of Rs 3,000 to ten crore workers in the unorganised sector on attaining 60 years of age. Rs 500 cr has been allocated for this scheme. Eight crore people would be getting free LPG connections under Ujjwal Yojana. PM Maatru Vandana Yojana also will be allocated more funds. 70 per cent of PM’s Mudra Yojana are women. The food subsidy also is expected to be doubled. Gratuity limit is sought to be increased from 10 lakh to Rs 20 lakh. A three per cent tax benefit was proposed for women-owned MSMEs. Another three per cent relief for timely payment would be there.

There is not much to talk in the budget about education and job creation. Goyal said that the job seekers would become job creators by virtue of Pradhan Mantri Kaushal Vikas Yojana where skill development training is being imparted. His claims such as open defecation has been almost eradicated, urban-rural divide has been reduced, next-generation structural reforms have been introduced and higher economic growth has created greater job opportunities, have to be taken with a pinch salt.

Whatever the NITI Ayog officials might say, the unemployment today is at a 45-year high. The GDP numbers provided by the government are not being trusted by international experts. The revised estimate of expenditure on MNREGA of Rs 60 cr is less than the amount spent till the end of last year. Over all, the well established conventions have been violated in order to propose a budget with sops to every section hoping to walk laughing to the vote bank.

For Andhra Pradesh, which has been hoping that there would be some redemption on the part of the union government, there is absolutely nothing. No word on special category status or railway zone. There was no mention of resolving problems of bifurcation faced by the residual State. There is no mention of Polavaram project or Amaravati or steel plant at Kadapa. The details may be there in the budget. But nothing extraordinary was proposed although the situation warrants it. The interim budget is disappointing to the people of Andhra Pradesh by all means. It is only ‘Pradhan Mantri Re-election Yojana,’ as one journalist in Delhi quipped.

Also Read: Union Budget 2019