1. The Interim Union Budget for the year 2019-2020 was presented in parliament by the Minister of Finance, Shri Piyush Goyal on 01 Feb 2019. This is the last budget presented by the current govt, as the general elections are planned in Apr/ May of this year. No economic survey was tabled in the parliament this year unlike the previous years. Full budget is expected to be presented by the new Govt in June/July.
2. All the facts and figures brought out in this analysis are taken from the official website of Ministry of Finance. Facts and figures taken from any other sources have been quoted wherever applicable. This analysis is broadly divided into two parts as given below :-
(a) Part I. Union Budget and Macro Economic Parameters.
(b) Part II. Defence Budget.
PART I. UNION BUDGET AND MACRO ECONOMIC PARAMETERS
3. Budget Speech by Finance Minister. The performance/ major achievements of the present govt during the last five years along with the comparative data of previous govt were brought out in the budget speech by the Finance Minister. Some of the major achievements/ announcements brought out in the speech are placed at Appendix. The three significant announcements are given below :-
(a) Pradhan Mantri Kisan Samman Nidhi (PM-KISAN). A new scheme (effective from 01 Dec 2018) announced, with a direct income support of ` 6,000 per year for farmers having cultivable land upto 2 hectares. This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of ` 2,000 each. Around 12 Cr small and marginal farmer families are expected to benefit. Towards this programme, ` 20,000 Cr have been allocated in RE 2018-19 and ` 75,000 Cr in BE 2019-20.
(b) Pradhan Mantri Shram-Yogi Maandhan. A new pension scheme for the unorganised sector workers with monthly income upto ` 15,000 has been announced. This scheme provides a monthly pension of ` 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age.
(c) Income Tax. Individual taxpayers having taxable annual income up to ` 5 lakhs will get full tax rebate and therefore will not be required to pay any income tax. This will provide tax benefit of ` 18,500 Cr to an estimated 3 Cr middle class taxpayers.
4. GDP. GDP for BE 2019-20 has been projected at ` 2,10,07,439 Cr in the budget assuming 11.5% (Nominal) growth over the estimated GDP of ` 1,88,40,731 Cr for RE 2018-19. The GDP is projected to grow at nominal rates of 12.1% in 2020-21 and at 12.3% in 2021-22. Indian economy is estimated (as per CSO data) to achieve a growth of 7.2 percent (Real at 2011-12 prices) in 2018-19, higher as compared to 6.7 percent recorded in 2017-18. UN in its report released in Jan 2019, expects Indian GDP to grow at 7.6% (Real) in 2019-20. IMF projected India’s GDP growth to be 7.5% in 2019-20. Crisil has projected a figure of 7.3%. World Bank has projected a figure of 7.5%. RBI has projected a growth rate of 7.4%. The prospects for Indian economy for the year 2019- 20 need to be assessed in the light of emerging global and domestic 3 INTERIM BUDGET 2019-20 ANALYSIS developments. The global economy faces certain challenges due to the emerging trade tensions. There is a revival of investment activity in the Indian economy and the recent pick up in the growth of fixed investment can be expected to maintain momentum in the coming year. Majority of the forecasts point to a marginal increase in GDP growth rate for India in 2019-20 ranging from 0.1% to 0.4%. Indian economy is projected to be the fastest growing large economy of the world in 2018-19 and 2019-20. The variation of GDP over the years is given below :-