Prime Minister Narendra Modi-led National Democratic Alliance (NDA) government's sixth and final budget before the 2019 Lok Sabha elections is expected to be populist in its approach, however, with the Centre’s fiscal deficit target breached, the budget is going to walk a tight-rope.
Here are 5 important figures that one should take note of in Budget 2019:
Fiscal deficit for the financial year: Analysts expect the government to stick to its fiscal consolidation target, with markets keeping a close eye on the estimates of fiscal deficit — a measure of how much the government borrows to fund its expenses. However, with tax revenues expected to fall short by Rs 1.5 lakh crore than budgeted estimates, and disinvestment revenues still far lower than the targeted Rs 80,000 crore, the government also runs the risk of overshooting the 3.3 percent of GDP fiscal deficit target estimated for 2018-19.
GST collections: Revenue collection from Goods & Services Tax (GST) witnessed a substantial jump, crossing Rs 1 lakh crore mark in January from Rs 94,726 crore in December, the Finance Ministry said. The Centre has set a target of over Rs 13 lakh crore for FY19, which can only be achieved if the average monthly mop-up is around Rs 1 lakh crore, as compared with Rs 89,885 crore in 2017-18. Till date (April-January), the government has collected Rs 9.71 lakh crore revenue from GST, with the shortfall pegged at around Rs 1.4 lakh crore.
Nominal GDP assumption: The government on January 31 sharply revised its GDP growth estimates for FY18 and FY17 to 7.2 percent and 8.2 percent, making the year of demonetisation the fastest growing fiscal since 2010-11. The Ministry of Statistics and Programme Implementation pegged GDP growth during 2018-19 at 7.2 percent.
Allocation to the farm sector: The Finance Minister is likely to announce some form of direct cash transfer to farmers after the BJP’s dismal performance in three state elections – Rajasthan, Madhya Pradesh and Chhattisgarh. The package could involve a transfer of Rs 12,000 annually to all small and marginal farmer households, The Financial Express reported. The scheme could reportedly involve a flat cash transfer to all identified beneficiaries similar to Odisha's Kalia scheme, and not based on a per-acre basis like Telangana's Rythu Bandhu scheme. There are almost 12 crore small and marginal farmer households in India, which brings the cost of this scheme to Rs 1.44 lakh crore, or 0.76 percent of the projected GDP for FY19. However, sources told PTI that the farm relief package may cost anywhere between Rs 70,000 crore to Rs 1 lakh crore.
Boost to MNREGA: In his 2018-19 Budget, Finance Minister Arun Jaitley allocated Rs 55,000 crore for Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS). Interim Budget 2019 is likely to allocate an additional Rs 5,000 crore in the revised estimates for 2018-19, reports Business Standard. Through the supplementary demand for grants it has allocated Rs 6,084 crore and the revised estimates will take the total allocation for the year to over Rs 66,000 crore, it added. For FY20, officials told the newspaper that the allocation could be more than Rs 60,000 crore, or almost Rs 5,000 crore more than budget estimates for 2018-19 but Rs 6,000 crore less than the revised estimates for FY19.
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