India's newly appointed first women Finance Minister Nirmala Sitharaman is all set to present the Budget 2019 on July 5 under Modi 2.0 government, which we expect to be a populist one. In February, followed by Modi government the interim budget had presented by Piyush Goyal who had managed to left goodies on common men’s pocket.
Dalal Street along with Aam-aadmi of India have optimistic expectations from Sitharaman to lift up the economy as it has been facing a slowdown in last five years with the March quarter of FY19 coming down to 5.8%. Recent, WPI data in May came down to 3.1% from provisional 3.18%. The reason for contraction in the index is due to falling in price of food articles, fuel and power, and uncertain monsoon. While CPI stood at 3.05% in May compared to 2.92% in April 2019.
However, this budget is likely to focus on infrastructure development, tax relief to common man, resolving the agrarian crisis, adding more jobs to the economy, disinvestment and to improve the fiscal health of India or to reduce the fiscal deficit.
Key points are the major expectations from Nirmala Sitharaman:
- Tax Rebate- There are expectations that government may increase the taxable limit to Rs 5 lakh, raise the 5% tax slab to Rs 5 lakh to the Rs 7.5 lakh bracket, 20% to Rs 7.5 lakh to Rs 12 lakh bracket and 30% to beyond Rs 12 lakh limit.
- Benefits in 80C tax limit- Salaried people are more interested in the tax deduction u/s 80C, if the government may increase the tax deduction limit u/s 80C to Rs 3 lakh as it considered one of the saving tools for taxpayers.
- Affordable housing- Affordable housing has already got feathers in the market, however actual sales according to demand remained slow. The real estate sector is hoping that on this budget the government may cut GST rate on affordable housing projects from an effective 8% to 1% so that the sector would boost which has been struggling till now.