Pankaj Pandey
The Interim Budget 2019 was a pragmatic one, despite the populist undertone of the election year, as the mode of benefits/sops were democratically spread across the diverse strata of population viz. middle-class salaried, rural masses and unorganised sector labourers. The overall theme was of “maximum benefits with minimum fiscal stress”.
Key positive was capping the overall fiscal deficit at 3.4 percent (in FY19 and FY20) despite generous spending. Moreover, most of the allocations to the infra heads (railways, NHAI, rural roads etc.) have not seen a cut in budgeted expenditure levels for FY20 despite higher allocation to rural segments.
The announcement of a direct transfer of Rs 6,000/ annum, to marginal farmers (12 crores) under the scheme Pradhan Mantri Kisaan Samman Nidhi, is better than erstwhile farm waivers and will go a long way in alleviating rural distress.
Another impactful move was mega pension Yojana namely 'Pradhan Mantri Shram-Yogi Maandhan' for the marginal unorganised sector workers with an assured monthly pension of Rs 3,000 from the age of 60 years.
Additionally, the Finance Minister also proposed to raise the rebate limit on income tax to Rs 5 lakh. The inclusive approach to address poverty at both urban and rural level was commendable.
Focus on disclosures and transparency formed the core of Budget and consumption leg of the economy is expected to receive a boost and regain the growth momentum with the set of announcements, done in the Budget.
The consumption-based companies (largely FMCG & discretionary) would be beneficiary of the government announcements. With major focus on housing and sops related to the same, it could revive the housing segment and ancillaries (cement, building materials etc).
On the infra front, key government scheme such as Railways and Roads allocation has witnessed double-digit growth in expenditure allocation and we remain constructive on the same.
The author is Head – Research, ICICIdirect
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