The government on Friday raised individual Income Tax exemption limit to Rs 5 lakh per annum and announced a major financial support scheme for farmers as well as a pension scheme for the unorganised sector as it presented a 'feel-good' interim Budget ahead of the Lok Sabha polls.
Finance Minister Piyush Goyal also talked about measures to provide relief to small traders.
In his 105-minute speech, he spoke about a host of initiatives taken by the Narendra Modi government since 2014 and enlisted 10 areas, particularly focusing on infrastructure and social development, to make a 'New India' by 2022.
He said India is now the 6th largest growing economy and it will become a 5 trillion dollar economy in 5 years with aspiration of becoming 10 trillion dollar economy in 8 years.
A foundation has been laid for sustained growth and better quality of life with an aim of making a 'New India' by 2022, when the country celebrates its 75th year of Independence.
Among the major announcements, the interim budget catered to the middle class and the farmers.
He proposed Income Tax exemption on individual salaries of up to Rs 5 lakh per annum.
The exemption limit will go up to Rs 6.5 lakh per annum if a salaried person invests in specified savings, like Provident Fund, Goyal said, adding it will benefit around 3 crore small salary earners and pensioners.
The exemption limit will go up further when exemptions on aspects like home loan and medical insurance are considered, the Minister said in his speech which was marked by continuous thumping of desks by the ruling benches, led by the Prime Minister.
Exemption threshold on interest earned on deposits was increased from Rs 10,000 to Rs 40,000.
"There will be no TDS for interest up to Rs 40,000. This will benefit small depositors and small earners," he said.
He said though the regular Budget will be presented later, "small taxpayers, salary earners and pensioners need certainty in their minds. So the proposals for such class should not wait."
For the agriculture sector, which has been an area of focus because of the farmers' distress, the Finance Minister announced a new scheme called Pradhan Mantri Kisan Samman Nidhi.
Under the scheme, each marginal farmer will get Rs 6,000 annually, in three installments with effect from December 1, 2018.
The scheme, for which an annual outlay of Rs 75,000 crore was made, will benefit 12 crore marginal farmers, he said.
The payment of Rs 6,000 will be paid directly in the bank accounts of the marginal farmers, he said.
The intention is to provide assured income support for small and marginal farmers, he said.
"For welfare of farmers and for doubling their income, historic decision has been taken to increase MSP by 1.5 times the production cost for all 22 crops," the Finance Minister said.
He also announced 2 per cent interest subvention to farmers pursuing animal husbandry and fisheries.
For the unorganised sector, Goyal announced 'Pradhan Mantri Shram Yogi Mandhan' pension scheme for those with a monthly income of up to Rs 15,000.
Under the scheme, a beneficiary can deposit Rs 55 per month starting from the age of 18 years. The government will deposit the same amount and at the age of 60, the beneficiary can get Rs 3000 per month of assured income, Goyal said.
The Finance Minister also earmarked Rs 3,05,211 crore for the Defence sector.
He said it is the first time that the outlay has touched Rs 3 lakh crore mark.
He said if more funds are required, those will be made available.
The intent is to strengthen the defence of the country, Goyal said.
Talking about One Rank, One Pension (OROP), the Finance Minister said Rs 35,000 crore have already been dispersed under this scheme by the present government.
He used the occasion to target the previous UPA government, saying it had earmarked just Rs 500 crore for the purpose.
Enlisting 10 focus areas, Goyal said priority will be given to building next-generation infrastructure, both physical as well as social, and to provide 'ease of living'.
The priority areas will also include creating a digital economy, expanding rural infrastructure and generating employment, providing safe drinking water, giving boost to space programme, reforming agriculture sector and providing affordable healthcare.
The intent is to create a "proactive and responsive bureaucracy" by 2030, Goyal said.
Talking about efforts to bring about transparency, the Finance Minister spoke about "path-breaking" initiative of reforming the Income Tax return system.
In two years, almost all verifications of Income Tax returns will be done anonymously, without any human interface, he said.
Returns will be assessed within 24 hours and refunds will be issued immediately, the Finance Minister said.
"For scrutiny, you won't need to go to Income Tax office. It will be done anonymously through a computer," he added.
Talking about providing relief to small traders, he referred to the rationalisation of GST slabs.
Describing GST as the "biggest tax reform", Goyal said it has resulted in higher returns and ease for businesses.
Returns have become online, efficient and hassle-free, he said.
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