- Total allocation for the Agriculture sector has seen an increase of 73% over2018-19 (Revised estimate).
- The Government announced the Pradhan Mantri Kisan Samman Nidhi (PMKISAN) scheme, which will provide a guaranteed income of INR 6,000 per year to small and marginal farmers.
- Interest subvention of 2% was announced for farmers affected by natural calamities. An additional 3% relaxation will be given for timely repayment of loans. This scheme has also been extended to farmers engaged in animal husbandry and fishery-related activities, and availing loans through Kisan Credit Cards.
The announcement about financial support will provide some relief to farmers and will address to some extent issues faced in the farm sector. Interest
subvention schemes will improve the credit uptake and address farmers’ loanrelated stress. Overall, the announcement for the farm sector is expected to
boost rural consumption and demand.
MICRO, MEDIUM AND SMALL ENTERPRISES (MSMES)
- 2% interest rebate for MSMEs registered under GST for loans up to INR 1 crore
- Requirement of sourcing by government enterprises from SMEs increased up to 25%, of which, at least 3% to be sourced from women-led SMEs
- Government E-procurement Marketplace (GeM) platform extended to CentralPublic Sector Enterprises
Provisions relating to interest rebate will encourage more MSMEs to registerunder GST, which will promote compliance under GST, expand the tax base and boost formalization of the economy. Improved access and the reducedcost of credit will lower organization’s production costs and make them morecompetitive. With the implementation of the GeM platform, MSMEs will haveaccess to a larger market.
While the global economy is battling with strong headwinds, India’s economy isseeing a robust growth and is on the path to emerging as one of the fastest growingeconomies in the world. The Finance Minister has presented the Interim Budget2019.
SOCIAL SECURITY FOR WORKERS IN THE UNORGANISED SECTOR
- The Pradhan Mantri Shram-Yogi Maandhan Yojana has been announced forworkers in the unorganised sector with a monthly income upto INR 15,000. Thescheme will provide them with an assured monthly pension of INR 3,000. Thescheme is contributory and the government will make a matching contribution.
The scheme will provide old age social security and encourage savings among unorganized sector workers. Increased enrolment should lead to further formalization of the economy.
- In the Affordable Housing sector, benefits under Section 80-IBA of the IT Actwere extended by a year for projects approved till March 2020. This will allowReal Estate developers to deduct 100% of profits derived from development ofaffordable housing projects.
Extension of benefits in the real estate sector will give a boost to constructionactivity, particularly in affordable housing. Exemption from levy of taxon inventories is likely to encourage investment in the sector. From theconsumers’ point of view, benefits of rollover in capital gains and exemptionson income tax on rent will boost housing demand, and is also expected toincrease investments in a second house.