What to Expect from the Union Budget 2019 in India: A Comprehensive Guide
The Union Budget 2019, to be presented by Finance Minister Nirmala Sitharaman, is expected to address several critical economic and social concerns in India. As the nation navigates through a period of slowdown, the budget aims to stimulate growth, create jobs, and support various sectors through targeted measures.
1. Job Creation and Economic Growth
Job creation and economic growth will be the primary focus of the Union Budget 2019. With unemployment rates at a 45-year high, the government aims to provide a roadmap for improving job figures over the next five years. Additionally, the budget is expected to include measures to boost investments in employment-heavy sectors such as auto and micro, small, and medium-sized enterprises (MSMEs).
2. Additional Income Tax Benefits
While sweeping changes in personal income tax are not expected, the government may increase income tax deductions under specific sections of the Income Tax Act. It is anticipated that the basic tax exemption limit will be raised from Rs 2.5 lakh to Rs 3 lakh. Such measures are intended to boost consumer demand and stimulate economic growth amid the current slowdown.
3. Reviving the Banking Sector
Recapitalisation of banks will be a major focus in the Budget. Nirmala Sitharaman is expected to present a long-term plan to revitalise the ailing banking sector, along with relaxations for non-banking financial companies (NBFCs) to ensure a healthier financial ecosystem.
4. Boosting Agricultural Growth
The budget will introduce a long-term roadmap to revitalise the agricultural sector. Apart from the PM-KISAN scheme, the government may introduce additional incentives for farmers to enhance their income. A stress fund could also be introduced to provide a short-term boost to the sector, ensuring that farmers are better equipped to deal with economic challenges.
5. Lending Relaxation for MSMEs
Increasing investments in MSMEs is another critical area of focus. The government is likely to ease lending norms and introduce special measures to support small and medium-sized enterprises (SMEs) that have faced a slowdown due to the liquidity crisis. These measures aim to revitalize the SME ecosystem, which is vital for economic growth.
6. Tax Concessions for Women
In line with its vision, the government may offer additional tax concessions to empower women. This includes introducing long-term plans to increase labour participation among women, particularly those in rural areas. Such measures are expected to address gender disparities and improve the overall economic landscape.
7. Special Focus on Healthcare
There will be a significant emphasis on healthcare during the budget. Industry bodies have called for tax concessions in this sector, and the government is likely to increase income tax deductions under Section 80D of the Income Tax Act. The finance minister's speech is expected to outline a detailed long-term plan for the modernisation of healthcare equipment, ensuring better health outcomes for the Indian population.
8. Roadmap on Defence Modernisation
The Narendra Modi government has consistently increased budgetary allocations for defence since coming to power in 2014. However, modernisation remains a critical issue. The budget is expected to present a roadmap for boosting indigenous defence industries and include decisions on incentives for research and development (RD) projects.
9. No Relief for Stock Markets
While the stock markets hope for tax concessions for investors, the government is likely to prioritize increasing tax collections. Long-term capital gains (LTCG) and short-term capital gains (STT) are unlikely to feature prominently in the finance minister's speech. Instead, a roadmap for making stock market operations more transparent for investors will be provided.
10. Focus on Allied Tourism Sector
The allied transport and tourism sector is set to become a major source of income. The government is likely to introduce a special plan with incentives for companies in the broader tourism and transport sector. This includes boosting regional connectivity schemes such as the UDAN scheme. A detailed roadmap for modernising Indian Railways may also be announced, aiming to improve infrastructure and services.