The interim budget presented by the incumbent government has been one of highlighting the fiscal prudence committed during its tenure and showing restraint it has pegged the fiscal deficit at 3.4% higher by 10 basis points which got the markets’ thumbs up by 400 points surge in the Sensex, but lowered later probably on profit booking.
As was widely expected the rural distress got much attention for our FM who has allocated Rs 20, 000 Crore towards farm support.
However, the income support to poor farmers Rs 6000 per year per 2 hectares, is not very significant given the index of cost of living, only Rs 500 hundred monthly only, but asided Rs 75, 000 Crore.
Nonetheless, it has increased allocation to MGNREGA to Rs 60, 000 which are likely to boost rural demand suffering from lower farm prices and it has pledged Rs 19, 000 Crore for road connectivity which are likely to create more employment and demand in rural INDIA.
The government has taken cognizance of landless people in rural areas which are more vulnerable due to uncertain work and wages.
Moreover, the government has increased interest subventions for farmers under few conditions and for timely repayment for agricultural loans which are likely to benefit farmers.
Nonetheless, contrary to as was widely expected FM has not indulged in too much populist measures to woo rural population vote bank.
The government has proposed pension scheme for workers in the unorganized sector.
The government has planned to build 1 lakh digital villages.
Nevertheless, the biggest announcement of the today’s budget is to exempt Rs 5 Lakh income from tax which is likely to benefit a large number of income tax payer’s population.
Once again, the government has refrained from being too much populist and has adhered to the path of fiscal prudence which is good for the industry.
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