Budget 2019 News : Will the 2019 Budget Benefit Banks, NBFC’s and the Consumer sector?
Finance Minister Piyush Goyal announced various schemes and tax benefits for farmers and salaried employees.
In an attempt to woo the middle-income group of people, especially the farmers and probably the aam aadmi the Government of India under the Modi influence has promised numerous credit schemes and tax benefits in the coming 2019 budget.The step has driven a momentum to the consumer space that is going to drive the economy during the election period.
Maintaining a financial discipline he announced two key sops for the middle-class citizens with some of the major benefits going in the hands of the farmers of the country. The step has been a drastic one in order to bribe the masses. For mid-income groups, the Finance Minister announced full tax rebate, for individuals with net taxable income up to Rs 5 lakh along with raising standard deduction limits being set for salaried individuals.
In a country like India, the farmers are considered to be the biggest and perhaps the most important component of the vote bank. A PM Kisan Yojana was also announced by Goyal under which the farm loan waiver has been raised to 8 percent.
There have also been other schemes that would be benefiting banks, NBFC’s and the consumer sectors. The list is as follows;
The government of India has spent over Rs 2.6 lakh crore for re-capitalization of PSU banks. This has enabled banks to recognize stressed assets, make provisions, create capital investments and strengthen balance sheets. The schemes will also be working on the improved health of PSU banks to facilitate increased lending to high grade corporate, mortgages and the MSME sectors.
The government has also increased rate subvention from 2 percent to 5 percent depending upon the timely payments of the interests and principal amount for recovering farmers losses due to natural calamities. A further 2 percent interest subvention has been set for farmers involved in animal husbandry and fisheries.
Exemption of income tax for second self-occupied house and tax holiday on notional rent on unsold real estate increased from one year to two years, which will ease the pressure on real estate, in turn, helping NBFCs that we're dealing with asset quality and growth issues.
Consumer Sector (including FMCG):
The Finance Minister also announced the PM Kisan Samman Nidhi package, under the influence of which farmers possessing 2 hectares of land will be provided Rs 6,000 annually. Also under the mega pension scheme, Rs 3,000 will be offered to those who are involved in an unorganized sector post their retirement. Also, the Standard deduction has been raised from Rs 40,000 to Rs 50,000 for salaried employees and TDS has been increased from Rs 10,000 to Rs 40,000 on post office savings.