Narendra Modi government's interim-budget was on expected lines . The direct money transfer scheme targets 120 million farmers; while another 100 million labourers in the unorganised sector get the benefit of a new pension scheme. An estimated 30 million taxpayers in the lowest tax bracket - with a taxable income of up to Rs 5 lakh - will see their income tax liability (of a maximum of Rs 12,500 each) getting waived off through a rebate scheme.
The budget proposes to put more money into the hands of farmers, labourers, self employed, small businesses, small traders, salary earners, pensioners and senior citizens. When coupled with the already existing schemes that provide health insurance and job guarantee, the budgetary sops will give enough ammunition for BJP for the election campaign. The question is, how much of these promises will be left to the next government to fulfill and how much of these will actually reach the beneficiaries in the next three to four months before India votes to decide who heads the next Central Government.
First instalment of money transfer to happen
One section of the beneficiary group, which will definitely see some money reaching their accounts in the next one or two months, is the farmers. The government has set aside Rs 20,000 crore in the revised Budget 2018-19, to pay the first instalment of Rs 2,000 each, to each of the 120 million farmers that qualify for the support provided under the new scheme Pradhan Mantri Kisan Samman Nidhi.
Pension enrolment to begin
The second scheme-Pradhan Mantri Shram-Yogi Maandhan-to provide pensionary benefits to at least 10 crore labourers and workers in the unorganised sector, will also be implemented before March 2019.
Though a complete roll out will not be possible within such a short time, enrolments can go hand in hand with election campaign.
Also read: What did the budget say about jobs?
Interest subvention can piggy back on existing schemes
Many of the interest subvention schemes can also be implemented. For instance, Piyush Goyal, Finance Minister-in-charge who presented the Budget announced 2 per cent interest subvention to farmers pursuing activities of animal husbandry and fishery, who avail loan through Kisan Credit Card. Further, in case of timely repayment of loan, they will also get an additional 3 per cent interest subvention. The interest subvention scheme for rescheduling loans of calamity struck farmers, is also a provision that does not need additional budgetary allocation at the moment, as the government has tweaked the already existing benefit of interest subvention of 2 per cent by adding a prompt repayment incentive of 3 per cent for the entire period of re-schedulement of their loans.
Tax sops kicks in only next year
The sops for low income and marginal groups, especially all tax sops, will impact the fiscal resources of the next government. Tax exemption for people with an income of Rs 5 lakh or less is one such example. The increase in standard deduction from Rs 40,000 to Rs 50,000 for salaried persons is another such promise. Increase in TDS threshold on interest earned on bank/post office deposits from Rs 10,000 to Rs 40,000 is a third tax related announcement.
The voter, however, can rest assured that none of these populist schemes are easy to be revoked by a new government and hence here to stay.
Vision is a long term goal
As Goyal himself mentioned in his speech, majority of the grandiose plans whether it is to provide millions of jobs through Digital India initiative, or to develop grass-roots level clusters, structures and mechanisms encompassing the MSMEs, village industries and start-ups in every nook and corner of the country are goals for future.
What the government has done is to announce populist schemes without committing to spend beyond its means. Due to the same reason, many of these schemes - including the Rs 6,000 a year (in three instalments) support to the farmer - may not sound too populist. If the government has not gone overboard, the only reason can be their optimism to return back to power for another term.