Modi Govt 2.0 Budget: Taxing time for super rich class, Middle class miffed

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Winning Business Bureau

Mumbai: Four months after a pre-election populist Budget in February 2019, the Modi government on July 5 presented the union budget aiming to boost infrastructure and foreign investment at a time when the economy is showing signs of slowdown. Finance Minister Nirmala Sitharaman on Friday presented Union Budget 2019-2020 announcing bigger tax on super rich people measures in her maiden Budget speech, while she kept personal income tax slab unchanged. The middle class people who were expecting some relief was shocked as they did not find any relief.

She said the government will also provide income tax deduction of Rs 1.5 lakh on interest paid on loans taken for purchase of electric vehicles. The finance minister has also proposed investment-linked tax benefit on manufacturing of products like lithium batteries and solar chargers while lowering the fiscal deficit target to 3.3 per cent for the current fiscal from the earlier estimate of 3.4 per cent of the GDP.

Sitharaman Friday said the government will build 1.95 crore houses under the Pradhan Mantari Awas Yojna (PMAY) – Gramin over the next two years, reiterating Narendra Modi government’s focus on “Gaon, Garib and Kisan at the centre” of everything it does.

The minister further said that by 2022, every single rural family except those who are unwilling to take the connection will have electricity and a clean cooking facility.

Focusing on rural roads, Sitharaman said Pradhan Mantri Gram Sadak Yojana – Phase 3 envisaged to upgrade 1.25 lakh km of road length at an estimated cost of Rs 80,250 crore. All-weather road connectivity has been provided to more than 97 per cent of eligible and feasible habitations and it is made possible by a high pace of road construction, she said.

Few major takeaways from Sitharaman budget proposals are to launch an inter-operable ATM-like “One Nation One Card” for pan-India travel, new rental laws for affordable housing, interest subvention scheme for MSMEs and women.

In her maiden budget speech Sitharaman announced plans to sell India’s first global sovereign bonds and ease rules for overseas investors to help revive economic growth — amid much table-thumping by her party members and allies as the opposition silently looked on.

As on expected lines, hailing the Budget, Prime Minister Narendra Modi said, “It is a citizen friendly, development friendly Budget.”

However, Equity benchmark indices tumbled on Friday as panic selling weighed in after the presentation of the budget. The BSE S&P Sensex closed 395 points or 1% down at 39,513 while the Nifty 50 dropped 136 points to 11,811.

Pramod Harlalka, a sub-broker in the stock market dubbed this budget as jugglery of words and said that the first full-fledged budget of Modi government 2.0 has disappointed.

Speaking to Winning Business, Harlalka said, “These are the middle class people who had lined up in long queue and voted for Modi Sarkar. But see, what middle class have  got. Nothing. Bringing 10 per cent of tax slab was most expected thing, but government disappointed every middle class people.”

What became costly

* Petrol-Diesel
* Gold, silver
* Cigarettes
* Fully imported cars
* Automobile parts
* Optical fibre cable
* Digital camera
*Cashew
*Synthetic rubber
* Vinyl flooring
*Imported books
* Split air-conditioners
* Loudspeakers
* Digital video recorders
* CCTV cameras
* Tiles
* Imported stainless steel products etc.

What Became Cheap

*Electronic goods,
* Electric vehicles,
* Set-top box * Import of defence equipment etc.

Union Budget 2019: Here are the key takeaways from Finance Minister Budget speech.

*Economy will grow to become a $3 trillion economy in the current year itself
*You can use your Aadhaar number to file your I-T Returns soon
* Additional deduction of Rs 1.5 lakh on loans up to March 31 2020 for buying affordable houses
*Excise duty on petrol, diesel to be hiked by Rs 1
* Angel tax: Startups not be subject to any scrutiny in respect to valuation
* TDS of 2 per cent on cash withdrawals exceeding Rs 1 crore in a year
* TV channel for promoting startups

Key highlights in the railway infrastructure sector:

* 657 kilometres of Metro Rail network has become operational across the country
* Rs 50 trillion investment needed in Railway Infrastructure during 2018-2030
* Public-Private-Partnership proposed for development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services.

Other Highlights of Union Budget 2019-20:

* Rs 400 crore for world class educational institutions.
* Rs 62,398 cr outlay for health sector; Rs 6,400 cr earmarked for  Ayushman Bharat- Pradhan Mantri Jan Arogya Yojna (AB-PMJAY).
* Pension benefits to about three crore retail traders & small shopkeepers with annual turnover less than Rs. 1.5 crore.
* Enrolment to be kept simple, requiring only Aadhaar, bank account and a self-declaration.
* Rs 350 crore allocated for FY 2019-20 for 2 per cent interest subvention (on fresh or incremental loans to all GST-registered MSMEs, under the Interest Subvention Scheme for MSMEs.
* Payment platform for MSMEs to be created to enable filing of bills and payment thereof, to eliminate delays in government payments.

Winners and losers:

Let’s have a quick look on winners and losers from Sitharaman’s magic wand-

🙂 WINNERS

* State-Run Banks * Rural India * Aviation * Renters * Real Estate & Construction

🙁 LOSERS

* Jewellers, Gold Importers * Defense * High and Middle-Income Earners * Auto Parts * Rivers & environment

In Modi government 2.0 version, union Home Ministry has been allocated Rs 1,19,025 crore in the Union Budget 2019-20, which is Rs 5,858 crore more than the last fiscal. The budge size has been upped to give special focus on improving police infrastructure, border areas and modernisation of police forces.

The Home ministry is currently headed by Amit Shah, the president of ruling BJP. Notably, the Delhi Police, which maintains law and order in the national capital, has been allocated Rs 7,496.91 crore while Rs 2,129 crore has been proposed for the development of infrastructure along the Indo-Pak, Sino-Indian and other international borders.

Let’s see now that how Nirmala’s budget going to affect on different aspects …

In the over 2 hour-long speech, there were several announcements that will directly impact most citizens. Here are the top such proposals from Budget 2019:

* Super rich to pay more tax
* New tenancy law to promote rental housing
* Petrol, diesel to get costlier
* Gold to become more expensive
* Additional Income Tax deduction on affordable home loans
* Rs 1.5 lakh income tax deduction on loans taken to buy Electric Vehicles
* 2 per cent TDS on cash withdrawal of over Rs 1 crore.

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