Archive February 2019

Key Highlights of Interim Budget 2019

The key highlights from Interim Finance Minister Piyush Goyal of Interim Budget 2019-20:

Changes in Tax
– No income tax for income up to Rs 6.5 lakh    (Rs 5 lakh + Rs 1.5 lakh under 80C of the            Income Tax Act)

– Full tax rebate for income up to Rs 5 lakh        per annum

– No tax on notional rent on second self-       occupied house

– Capital Gains exemption under Section 54 to be available on two house properties
– The tax benefit of Rs 18,500 crore given to three crore middle-class taxpayers
– Standard deduction raised to Rs 50,000 from Rs 40,000
– TDS limit hiked from Rs 10,000 to Rs 40,000 on post-office savings

– Group of Ministers looking at ways to ease GST burden on homebuyers

 FY20 fiscal deficit target set at 3.4 per cent
– Expenditure target for FY20 set at Rs 27.84 lakh crore
– Capital expenditure for FY20 set at Rs 3.36 lakh crore

– FY19 fiscal deficit pegged at 3.4 per cent of GDP; current account deficit at 2.5 per cent of GDP


– Farmers with less than two hectares to be offered Rs 6,000 per year as a direct transfer under PM Kisaan Samman Nidhi. The benefit will be transferred directly into the bank account of beneficiary farmers in three instalments of Rs 2,000 each. Around 12 crore farmers to benefit from the scheme. This scheme will cost the government around Rs 75,000 crore

– Mahatma Gandhi National Rural Employment Guarantee program’s allocation increased by Rs 5,000 crore to Rs 60,000 crore for FY20

– Farmers struck by natural calamities will now receive 2-5 per cent interest subvention under the insurance scheme

– 2% interest subsidy to be given to farmers involved in animal husbandry activities via kisaan credit card scheme. An additional 3% subsidy will be paid on timely payment of loans

– Government announces setting up of Rashtriya Kamdhenu Aayog to enhance the productivity of cows

Rural infrastructure

– Pradhan Mantra Gram Sadak Yojana         allocation set at Rs 19,000 crore, the same as     FY19


– The monthly pension of Rs 3,000 for workers in the unorganised sector to be paid out after retirement. Pension scheme to benefit 10 crore workers in the unorganised sector. Those who join at 18 years of age will have to contribute a mere Rs 55 per month. The government will contribute equal matching share in the pension account. This scheme will cost the government Rs 500 crore

– Employees’ State Insurance eligibility cover limit has been raised to Rs 21,000 per month from Rs 15,000 per month

– Gratuity limit increased from Rs 10 lakh to Rs 30 lakh

– Workers who suffer grievous injuries will now receive Rs 6 lakh from Rs 2.5 lakh through the Employee Provident Fund Organisation (EPFO)


– Rs 38,572 crore allocated for the National Education Mission


– Another All India Institutes of Medical Sciences to be set up in Haryana

– Rs 76,800 crore allocated for the welfare of Scheduled Castes (SCs) and Scheduled Tribes (STs)

– Centre to implement a special strategy for the uplift of nomadic tribes


– Single window clearance for film-makers. Anti-camcording provision to be introduced to the Cinematograph Act to combat film privacy


– Railway capital expenditure raised to Rs 64,586 crore in FY20 from Rs 53,060 crore in FY19


–The defence budget for FY20 raised to Rs 3 lakh crore

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Interim Budget 2019, Hopes and Expectations

Mutual Fund Industry hoping for relief in Interim Budget 2019


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Mutual Fund Industry hoping for relief in Interim Budget 2019

This interim budget, quite a few industries are expecting relief, specifically for the Mutual fund industry, there is a hope that the government may rollback long term capital gains tax on equity funds. Piyush Goyal, the interim finance minister is scheduled to present the budget today.

The finance minister Arun Jaitley had re-introduced LTCG tax on equity funds last year. He taxed long term capital gains of over Rs 1 lakh at a flat rate of 10 per cent.

There is a view that the government may rollback LTCG tax since the amount collected is not significant,” says a senior official at a private sector mutual fund as per media reports.

However, unlike the previous budgets, the mutual fund industry is not expecting any big sops from the government. “It is not clear whether the government would make any big announcement since it is going to be an interim budget. Anyway, we are not expecting any major announcement for the mutual fund industry this time,” said the mutual fund official as per ET report.

However, many industry players believe that they might indirectly benefit from a likely basic tax exemption limit in the budget. The basic tax exemption limit is currently Rs 2.5 lakh. They also believe that the government may offer some tax reliefs in the form of increasing basic exemption limit or enhancement of tax slabs to lure the middle-class voters in its last budget.

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Interim Budget 2019, Hopes and Expectations


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Interim Budget 2019, Hopes and Expectations

Interim Budget 2019, Hopes and Expectations
  1. Finance Minister Piyush Goyal in absence of Arun Jaitley will present the Interim Budget in the Lok Sabha on 1st Feb that will be a full-fledged budget of the BJP led Government ahead of the upcoming Lok Sabha Polls in which tax benefits for the working class and the corporates are expected along with relief packages to farmers and the small scale sector.

Goyal was given charge of the finance portfolio in place of Arun Jaitley who is in the US for medical treatment, is expected to make this budget a “please all” budget considering the elections just around the corner.

Traditionally, in the run-up to the general elections, an Interim Budget is presented primarily to seek a vote-on-account for a few months to keep the official expenditure running for existing programmes so that a new government could present a full budget.

The income tax benefits are rumoured to include an increase in the threshold exemption limit for middle-class taxpayers, considered loyal voters of Modi. The exemption threshold may go up from the present Rs. 2.5 lakh to Rs. 5 lakh per annum as per media reports. The corporates have also been expecting a reduction in the peak rate from 30 to 25 per cent.

Farmers are also expected to receive good attention from the BJP Govt after the recent election defeat of the BJP in the Hindi heartland states of Madhya Pradesh, Rajasthan and Chhattisgarh on the back of stress.

Direct investment support up to Rs. 15,000 per hectare for small and marginal farmers along with interest-free loans and nominal premium on the crop insurance scheme are expected to be announced by Goyal.

Micro, small and medium enterprises (MSME) sector which was hit badly by the demonetisation decision of 2016 and GST implementation last year, the budget could incentivize this sector and may ease their flow of credit.

There are concerns that the expected giveaways could lead to ballooning of the fiscal deficit, especially in the wake of the shortfall in tax collections, particularly GST revenue.

These goodies may pose a major challenge to the government meeting its fiscal deficit target of 3.3 per cent of the GDP as the GST revenue targets have also not been met by the government this year.

Although Modi Government has been known as a government which do not believe in taking only populist measures to woo voters, this interim budget may be aimed at defying this logic due to upcoming Loksabha elections.

Related Chanda Kochhar Ex-MD ICICI Bank grounded by Retired Judge’s Report


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Why Chanda Kochhar is Fired by ICICI Bank?

Why Chanda Kochhar is Fired by ICICI Bank?

ICICI Bank has fired Ex-MD Chanda Kochhar with retrospective effect and also revoked her stock options currently valued around ₹346 Crore. The bank will also reclaim from her bonuses worth ₹10 Crore for the last 9 years.


This decision came after Retired Judge BN Srikrishna’s report which says that Kochhar had violated the bank’s code of conduct in approving loans to Videocon group and failed to make proper disclosures.

Allegations of conflict of interest against the Kochhar first arose in October 2016. At the heart of the scandal was a 32.5 billion rupee ($456 million) loan sanctioned to Videocon Group. Kochhar’s husband had beneficial business dealings with Videocon Managing Director Venugopal Dhoot, yet the CEO didn’t recuse herself from the credit committee that sanctioned the loan in 2012.

When the inquiry was initiated Kochhar only agreed to go on leave. It’s only now when report concluded that there was a violation of the bank’s code of conduct that ICICI has decided to treat her October resignation – tendered while she was on leave – as a termination. Kochhar says she is “utterly disappointed, hurt and shocked” by the decision.

This leaves a huge question mark on Indian Banking System how once an Invincible CEO of the largest private bank has been caught misusing her chair for her own benefits and played with public money.

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