BUDGET WOOS WOUNDED VOTERS, GOVT JUSTIFIES TAX PROPOSALS

TT, New Delhi: Making a big populist push in its final budget before elections, the Narendra Modi government on Friday exempted people with an earning of up to Rs 5 lakh from income tax, announced an annual cash dole of Rs 6,000 to small farmers and provided a monthly pension of Rs 3,000 to workers in the unorganised sector.

Converting what was supposed to be an interim budget or a vote on account into an almost full-fledged budget announcement in the Lok Sabha, finance minister Piyush Goyal proposed an array of incentives for both middle-class and farmers, whose disenchantment was said to have cost the BJP dearly in recent assembly elections.

At a post-budget media conference, Goyal promised to look into giving relief to taxpayers with an income of over Rs 5 lakh in the main budget to be presented in July.

Goyal announced an income support scheme for 12 crore small and marginal farmers by providing Rs 6,000 in their bank accounts in three equal installments in a year, which will cost Rs 75,000 crore a year to the government.

The eligibility for the scheme, called Pradhan Mantri Kisan Samman Nidhi, will be ownership of less than two hectares of cultivable land. Although the finance minister said the scheme will be implemented from the current fiscal year, where it will cost Rs 20,000 crore, it wasn't clear how the beneficiaries would be identified.

A mega pension scheme was introduced to provide a monthly pension of Rs 3,000 with a contribution of Rs 100 per month for workers in the unorganised sector after 60 years of age.

Goyal justified the inclu- sion of tax proposals in an interim budget which normally is only to seek approval of Parliament for spending for an interim period until a new government is sworn in.

"Though as per convention, the main tax proposals will be presented in regular budget, small taxpayers especially middle class, salary earners, pensioners and senior citizens need certainty in their minds at the beginning of the year about their taxes," Goyal said. "Therefore, proposals, particularly relating to such class of persons, should not wait." While Prime Minister Narendra Modi said the interim budget was merely a "trailer" of what will guide India towards prosperity after the Lok Sabha polls, Congress president Rahul Gandhi said that the government was giving Rs 17 a day to farmers after "destroying" their lives in the past five years.

Former finance minister P. Chidambaram termed the union budget as an "account for votes" and not a "vote on account".

The farm income support scheme will result in the government breaching its 3.3 per cent fiscal deficit target from the current year and slipping on 3.1 per cent target for the next. The fiscal deficit for both the years has been put at 3.4 per cent of the GDP.

Wooing farmers, an interest subvention of 2 per cent to those pursuing animal husbandry and fisheries and to farmers hit by natural calamities was announced in the budget.

An additional 3 per cent interest subvention will be given to farmers for timely repayment of loans. While defence allocation has been raised by 7 per cent to over Rs 3 lakh crore, the subsidy bill has gone up to Rs 2.97 lakh crore from Rs 2.66 lakh crore. PTI FROM FARM TO HOME Income-tax exemption limit remains Rs 2.5 lakh Rebate raised from Rs 2,500 to Rs 12,500, which means those with taxable income up to Rs 5 lakh will not be liable to pay income tax. (The interim budget said people with a gross income up to Rs 6.5 lakh may not be required to pay income tax if they invest in provident funds, specified savings, insurance schemes, etc) Standard deduction up from Rs 40,000 to Rs 50,000 TDS exemption for interest earned from deposits in banks and post offices raised from Rs 10,000 to Rs 40,000 Rs 6,000 annual dole for small farmers (those owning less than 2 hectares of cultivable land) Rs 3,000 monthly pension for unorganisedsector workers above 60 years against a monthly contribution (if the worker joins the scheme at 29, she will have to contribute Rs 100 a month till she is 60). 2% interest subvention for farmers pursuing animal husbandry and fisheries or hit by natural calamities 3% interest subvention for farmers who repay loans on time No tax on notional rent income on purchase of second house STAINS ARE SHOWING: An official holds a sealed bag containing the budget papers on the Parliament premises on Friday. What was described by the government as an "interim budget" turned out to be a full budget without the explanatory note. Prime Minister Narendra Modi him self referred to the general election when he said in a video statement that "the interim budget is a trailer for what will take India towards prosperity after the Lok Sabha polls". While former finance minister P. Chidambaram described the budget as "not a vote-on-account but account for votes", Congress veteran Mallikarjun Kharge was more blunt, saying: "I directly charge them with paying bribe to voters."