Finance Minister Shri. Piyush Goyal to present the Union Budget on February 1st 2019. Typically, the last budget presented before the general elections tends to be a routine affair, done more with a perspective of keeping government revenues and expenses until a new government presents a full budget. This is typically known as an interim budget or “vote on account”. However, this time we should expect a departure from this practice.
The Indian economy is on the path to recovery. The recovery is led by a pickup in the investment cycle, which we believe is sustainable. In Q2FY2018-19, Gross Fixed Capital Formation grew by 10% YoY. However, the recent NBFC crisis and a slowing world economy are challenges for India. The upcoming budget can help sustain the momentum of growth in the face of these challenges.
However, GST revenues have been below target, and divestment target is unlikely to be met, given market conditions.
The Prime Minister has ruled out farm loan waivers. We expect some income support scheme in the budget via cash transfer or DBT, in lieu of subsidies
Crop insurance scheme such as coverage of a wider range of crops.
On the corporate tax side, the threshold for the 25% tax may be increased. Currently, 25% tax is applicable to firms with revenue less then Rs. 250 crore, this may be hiked to Rs. 500 crore.
Increased threshold limits for Direct Tax (Income Tax).
Increased budgetary allocations towards flagship infrastructure projects like Bharathmala, Sagarmala etc.
Better and a more liberal MSP scheme and zero-interest loans are also in contemplation.+
Aggressive/political targets for MUDRA and agriculture loans.+
Focus on affordable medicines under Jan Aushadhi and increase government spend on healthcare+
200% weighted deduction for research and development expenses likely to be brought back.+
Inverted duty structure to be corrected to provide level playing field to domestic industry, higher budgetary allocation to capital acquisitions in Defence.+
Clarity on Treatment of IT enabled services as intermediary services.+
Agriculture : 0
Basic Income and Taxes : 0
Infrastructure : 0