Budget 2019 expectations: Farm relief package, tax exemptions, discount on loans for business; hopes abound from Piyush Goyal

FP Staff
In Union Budget 2019, the government is expected to project economic growth of around 7.5% for the next financial year, while expanding capital spending on railways, roads and ports by 7-8%

Mumbai: Union Finance Minister Piyush Goyal will present the Budget in Parliament today.  The government will unveil its budget for the 2019-20 fiscal year at 11 am on Friday, with investors expecting increased investment in areas such as agriculture, as Prime Minister Narendra Modi tries to woo voters ahead of general elections to be held by May.

The government is set to step up rural welfare spending by 16 percent for the fiscal year beginning April to 1.3 trillion rupees ($18.25 billion), two government sources said, aiming to boost support in the countryside where more than two-thirds of India's 1.3 billion people live.

The Budget, which is interim and is likely to be followed by a full one in July, is expected to project economic growth of around 7.5 percent for the next financial year, while expanding capital spending on railways, roads, ports by 7-8 percent, and estimating an increase in revenue of about 15 percent, officials said.

After a string of recent setbacks in key state elections for Modi's Bharatiya Janata Party (BJP), the government is expected to woo rural and urban middle-class voters via farm relief measures and tax cuts.

The government is expected to project economic growth of around 7.5 percent for the next financial year, while expanding capital spending on railways, roads and ports by 7-8 percent.

Below is a list of some of the items expected in the Budget, based on published media reports.

Agriculture

Farm relief package itself could run to at least 1 trillion rupees ($14.04 billion)

Set to earmark about 1.8 trillion rupees for food subsidies in the fiscal year

Expected to waive premium for taking insurance policy for food crops

Proposal for waiving interest on crop loans for farmers who pay on time

Divestment

Target of about $11 billion from state asset sales in FY 2019-20

Potential stake sales via IPOs include Telecommunications Consultants India, Indian Railways' subsidiaries IRCTC, RailTel Corp India and National Seeds Corp

Metals

Gold: Speculation around a duty cut

Health

Budget allocation for health is likely to increase by 5 percent from a year ago

Taxes

An anticipated corporate tax rate cut to 25 percent from 30 percent may be put on hold until after the elections

Higher tax exemptions for the middle class and for small businesses anticipated

Banks

Discount of 2 percentage points on loans for businesses with annual sales of less than 50 million rupees; government to compensate banks for the costs

Rs 40 billion capital infusion for public-sector general insurers

Autos

Reduction of goods and services tax (GST) on electric vehicles and batteries

IT/Telecom

Better digital infrastructure in rural areas

Abolition of the angel tax to boost start-ups

Exemption from GST for spectrum and licence fee payouts, reduction in spectrum fees and cuts in import duty on telecom equipment (currently at 20 percent).

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Also See: Budget 2019: Piyush Goyal announces structural income for farmers at Rs 6,000 per annum in 3 instalments

Budget 2019: From lowering personal income tax rate to rationalisation of GST rates, industry hopes Piyush Goyal can tackle pending issues

Union Budget 2019: Congress' Manish Tewari alleges Budget 'leak', claims govt sources sent major points to media houses

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