Budget 2019 – Here are the key expectations of India’s four core sectors

The recently re-elected Narendra Modi government is all set to present the Union Budget for the full year on July 5, 2019. The budget will be presented by Finance Minister, Nirmala Sitharaman, who happens to be the first full-time women finance minister of the country. The last interim budget was presented by Piyush Goyal on February 1, 2019 in the absence of then Finance Minister, Arun Jaitley. This being BJP’s second term at the Centre, the Modi government has a huge task at hand of fulfilling the hopes of the various sectors and industries, and driving the economy towards the $5 trillion mark. The expectations from the budget are simple – one that is inclusive and assures growth across sectors.

Here, we will be focusing on the budget expectations of some of the key sectors that contribute substantially to the country’s progress.

Real estate – The sector, which is one of the major contributors to the country’s GDP, has a strong wish list for the finance minister (FM). According to experts, the budget should address the issue of bank funding to developers. If developers get access to funds, delayed projects will pick up pace. Additionally, home buyers and investors are hoping for tax benefits to be announced. The benefits can be in the form of reduction in income tax slabs, better housing loan rates, and an increase in the deduction limit under Section 80C from the current Rs. 1.5 lakh a year.

Infrastructure sector – The infrastructure sector, comprised of transportation, communication, sewage, water and electric systems, forms the backbone of any economy. It contributes to the creation of employment and is also intrumental in propelling the country’s development. Given that the recent crisis in the banking system has affected the sector, it will be crucial for the FM to announce measures that boost investment in the capital intensive sector. Both rural and urban infrastructure development are expected to be major points of consideration in this year’s budget. The budget may have a focus on the government’s flagship initiatives – Bharatmala, Sagarmala, affordable housing, sanitation and water needs.

MSME sector – Lack of funds has always been the biggest concern for the Micro, Small and Medium Enterprises (MSME) sector, which has tremendous potential in India. The sector is looking forward to tax exemptions being announced in this year’s budget. Tax exemptions will encourage the sector to undertake research and development, which, although the need of the hour, is time consuming and requires large investment. According to some experts, it would be beneficial if the government makes a provision in the budget to tax MSMEs on their profits rather than the turnover.

Agriculture sector – The agri sector expects a slew of land and labour reforms from Nirmala Sitharaman’s maiden budget to boost agricultural growth and investment, and to reduce the burden on farmers. According to experts, an increased spending on rural infrastructure and irrigation, along with a push to agricultural credit flow would be the major asks from the third largest sector of the country. It is worth mentioning that, in the interim budget, the government had announced an income support scheme under which farmers with small landholdings – up to two hectares – will be provided with direct income support of Rs. 6,000 per year.

Interestingly, this is the first time that the finance minister has sought the expectations of the masses from the budget, through the digital media platform. Nirmala Sitharaman’s tweet asking the citizens of India for their ideas is a step towards engaging the people of the country in the budget decision-making. In fact, it has drawn diverse responses. Let’s wait and watch how many of these ideas actually make their way to the budget 2019 document.