What to expect from Nirmala Sitharaman's Union budget 2019

Finance Minister Nirmala Sitharaman during the Budget Session, in New Delhi.Photo/Arun Sharma)(
The 2019 budget to be announced on July 5, 2019 will be the first full budget of its second term in the country’s governance. Incidentally this budget will also be the first one to be presented by the new woman Finance Minister Nirmala Sitharaman. Strong expectations are on the rise that this budget will outline what Narendra Modi’s government has on its priorities. In the first place, the union budget that will be presented by the first full-time woman finance minister of India is expected to boost up spending and bring in some relief to the taxpayers. Some of the immediate challenges to be addressed by the NDA Government include a slowdown in the economy, shrinking tax collections, and a weak consumption. The economists are advising to introduce measures that will encourage growth without placing a strain on the spending. Here are a few things we can expect from the union budget 2019.

Corporate taxes could be lowered for MSME businesses. Measures could be in place to encourage consumption by the middle class through some tax exemptions.

During the recent past, Indian has lost its place amidst the fastest growing economies of the world. The GDP of Indian slipped down to the lowest in the last 20 quarters touching 5.8 percent in the March quarter. Hence the budget could announce ways to boost up the economic growth.

As per the expectations of a number of analysts, the income tax structure might not be tweaked as it must support the government’s effort to grow the number of tax payers. Some people anticipate that the inheritance tax abolished long back might appear now having severe implications for the super-rich.

The government is expecting to generate Rs.90,000 crores from disinvestment which is about 5.88 percent that was received during the last year. Hence the budget 2019 might work with a tough disinvestment target in an economy that has slowed down.

Measures could be in place to boost up exports and employment. Small businesses could expect some benefits like subversion of interest rate and lowering of tax rates up to a particular turnover.

The government might continue sticking on to a modest increase in the defence budget due to the tight financial position. Hence the long pending modernization program for the military could be delayed for some more time.

Talking to the press recently, the BJP party’s spokesperson for economic affairs Gopal Krishna Agarwal said, "The focus of the budget will be to boost domestic consumption, address the rural crisis and support small manufacturers."

Analysts are of the opinion that those announcements that are aimed at remedying the crisis in the non-banking financial companies (NBFC) sector will be deemed very important now. During last year, the government took a total control over the Infrastructure Leasing and Financial Services since the sector’s raised concerns that the financial sector could be infected.

Through some big ticket announcements featured in the latest interim budget like the Rs. 75,000-crore income guarantee scheme for the small farmers in the country and a complete tax rebate for the persons earning up to Rs. 5 lakh a year, the government had already raised strong expectations from these circles.

In the interim Budget announcements in May, the government made a number of big ticket announcements to build public perception. Those measures included a Rs. 75,000-crore income guarantee scheme from small farmers and a full tax rebate to individuals earnings up to Rs. 5 lakh a year.
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