Budget addresses both the current challenges faced by the economy and outlines the vision for the future: Sandip Somany, President, FICCI

NEW DELHI, 1 FEBRUARY 2019: Reacting to the Interim Budget 2019-20 presented in Parliament today, Mr. Sandip Somany, President, FICCI said, “It is a progressive budget that addresses both the current challenges being faced by the economy as well as presents an outline of the vision the government has for the future of India ten years ahead. FICCI compliments the Government for its clear focus on the agriculture sector, particularly the small and marginal farmers, the middle class, senior citizens, small-savers and workers in the unorganised sector. The budget contains several comprehensive proposals that would benefit each of these sections of our society and this is in line with government’s philosophy of ‘sabka saath, sabka vikas’.”

Our farmers have been facing a series of challenges. To alleviate some of the hardships being faced by small and marginal farmers, the government has announced a Direct Income Support scheme under which an amount of Rs 6000 per annum will be provided to farmers having cultivable land of up to 2 hectares. This would benefit 12 crore farmer families. “FICCI had suggested the need for Direct Income Support for farmers and is happy to see its inclusion in the budget. This is critical as through this measure the government will be able to cover all the small and marginal farmers as compared to the MSP scheme which benefits just about 30% of such farmers. By also committing funds upfront from the central pool, any resistance from states will be avoided,” added Mr. Somany.

Another high point of the budget is the announcement of a mega pension program to provide social security to workers engaged in the unorganised sector. “This very well complements the support rendered to them through the healthcare and life insurance schemes already announced earlier and completes the social safety net which is so essential for crores of workers in the informal sector. Through this scheme the government has pushed the financial inclusion agenda forward and underlined its commitment to promote the welfare of those who need it the most”, said Mr. Somany.

The proposals related to direct tax now offer a full tax rebate to individuals having an annual taxable income of up to Rs 5 lakh. This would be extremely beneficial for the lower middle-class taxpayers comprising self-employed, small businesses, small traders, salary earners, pensioners and senior citizens. In addition to this, the increase in the standard deduction limit, the threshold for TDS on interest income from bank and post office deposits, upward revision of TDS threshold for tax on rental income, exempt of levy of income tax on notional rent on second self-occupied house and extension of exemption of capital gains to second residential property of up to Rs 2 crore, are all noteworthy measures.

“The above, we feel, would improve demand in the economy and support investments going ahead. We see a positive momentum building for the housing and real estate sector which has major forward and backward linkages. All of these are positive for growth, will have a multiplier impact and improve the outlook for the economy in the coming years,” said Mr. Somany

The budget proposals included a series of initiatives for the rural economy, which is the mainstay of India. We saw the allocation for MNREGA for 2019-20 go up to Rs. 60,000 crore. A lot of emphasis was placed on the animal husbandry, dairy and fisheries industry through measures including extension of interest subvention to these sectors. This will help diversify livelihood opportunities in the rural sector and encourage households to look at these activities in a more favourable manner for supplementing their incomes.

FICCI looks forward to the deployment of technology in the next two years in the income tax department to make the assessment more friendly, physical-interface-fee and jurisdiction-free.

FICCI would also like to highlight that there has only been mild variation in the fiscal deficit target. The extra allocation of resources is for causes that are of national importance.

FICCI also aligns itself completely with the vision laid out by the government for the next decade. The ten critical dimensions laid out in the budget are the foundation of our future growth and development and will help India achieve its target of becoming a US$10 trillion economy by 2030.FICCI would work alongside government to realise this national mission and support it in all its endeavours such as Ayushman Bharat, Make in India, Digital India, Clean India and Green India.

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June 2021