New Delhi: Going against convention, the Narendra Modi government on Friday presented a full-fledged election Budget targeting farmers, unorganised labourers, and the middle class to swing the Lok Sabha poll results in its favour.
Presenting his first interim Budget, finance minister Piyush Goyal went all out to woo farmers by announcing direct income support of Rs 6,000 a year to small farmers with two hectares of land. The payment of Rs 2,000 will be made three times in a year directly in the bank account of the farmers, costing exchequer Rs 75,000 crore.
The scheme ‘Pradhan Mantri Kisan Samman Nidhi’ is proposed to start retrospectively from December 1, 2018. The first payment of Rs 2,000 will be deposited in farmers’ bank accounts this year before the elections.
While Rs 500 per month is not significant amount, experts believe that the BJP could reap electoral benefit from it as it is “more progressive” than TS Rythu Bandhu.
In an attempt to bring back the middle class back in the BJP fold, Mr Goyal announced that those having a net income of up to Rs 5 lakh per annum will not have to pay income tax as they will be given a full tax rebate of Rs 12,500.
People having an income of Rs 10 lakh can avail the full tax rebate by bringing down the taxable income to Rs 5 lakh after accounting for a standard deduction of '50,000 and specified investments of Rs 4.5 lakh.
This proposal triggered chants of “Modi Modi Modi” — the first time ever in Parliament — and thumping of desks by charged BJP MPs as it is expected to win over the BJP’s traditional vote bank — the middle class. Experts, however, claim that Mr Goyal has broken the convention that a government facing re-election does not make any major taxation and spending proposals in an interim Budget which will tie the hand of the next government.
“The interim finance minister’s budget doesn’t seem to be interim,” said Abheek Barua, chief economist, HDFC Bank.
