Budget 2019: Key Priorities of Modi Government Before Elections?

On 1st February 2019, Arun Jaitley, the Finance Minister of India would be presenting budget 2019 for the country. It is rumored that it will be a full budget instead of Vote on Account which is generally presented prior to General Elections.

As the government is planning to present budget 2019, speculations and rumors have started to float on what exactly the government is planning for this year’s budget. Every sector is eyeing that the budget may benefit them. Here is a general prediction on what this budget may prioritize.

Focus on Farmers

The last elections in the four states and especially in MP, Rajasthan and Chhattisgarh showed that farmers will be the key factor in deciding who will come into power. The election was fought on loan waiver and Congress swept the 3 states on the same promise. If BJP learns the lessons right then it is expected that budget 2019 will focus on farm distress.

The government and especially the FM has made it clear that they are in no mood to waive loans because of fiscal deficit but one can expect some other advantages to farmers. It is widely speculated that the government is planning to provide incentives to farmers on per acre basis.

The government will pay Rs 4000 per acre under DBT schemes for each season and a 0% interest loan in order to woo them. This will cost a total of Rs 2.3 lakh crores and is expected that many other subsidies and schemes will be submerged into one to meet the cost expense.

Focus on Unemployment

The state election loss was also the result of employment which resulted in anger among the youths. DeMo also caused job loss to the unorganized sector thus government plans to woo them as well. It is speculated that this budget, the government may bring the Universal Basic Income Scheme that will provide a certain amount to unemployed people on monthly basis. The government is willing to bet on this game changer policy as it will touch the unemployed in rural areas. This will also target the farmers who may get a healing touch from this.

Such socialist schemes may badly impact the pocket of the government but it has high political dividends that may help the government come back to power again.

Budget 2019 for MSME

Though Demonetization won elections of UP but its impact led to loss in jobs and slowdown of economy which was later felt by the informal sector and especially the MSME. Now the government has to provide incentives to insure that MSME sector comes back on track. Reduction in interest rates, ease in starting business, easy sanctions of loan and some monetary incentives is what one can expect in the upcoming budget.

Lastly, the middle class also expects from this government who has been severely ignored by the government whose core voter base was MC. A reduction in income tax rate or removal of tax slabs may work in favor. On Feb 01, things will be crystal clear.