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Who Could Be The Next Finance Minister of India? Research Team | Posted On Friday, April 19,2019, 05:42 PM

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Who Could Be The Next Finance Minister of India?



After much waiting, the time has arrived when the whole of India is going to choose their leaders at the center. Elections are finally here! This time, the Election Commission of India (ECI) is staging a seven-phase poll. The first two phases have concluded on 11th April and 18th April, the remaining five phases would be staged on 23rd April, 29th April, 6th May, 12th May and 19th May. The new members of the parliament (MPs) would be announced on 23rd May 2019.

The chief contenders, NDA and UPA have included a lot of financial schemes in their manifesto. Political parties are over-stressing on offering support to the poor. Arun Jaitley is likely to be the Finance Minister if NDA wins and in all likelihood, P Chidambaram would become the Finance Minister if UPA comes to power. If Arun Jaitley is offered another important role in the Government (if NDA wins) then, Piyush Goyal is expected to take over the Finance Ministry. There are reports that Raghuram Rajan was consulted by Congress to come up with NYAY scheme. So, it wouldn’t be a surprise if Raghuram Rajan becomes the Finance Minister if UPA wins, in which case, P Chidambaram would be offered another important role in the Government.

What to Expect if NDA Comes Back to Power?

Piyush Goyal, the then Finance Minister, proposed in his 2019 budget speech, to exempt income tax on individuals earning less than Rs 5 Lakhs. He also proposed to increase the standard deduction to Rs 50,000 from existing Rs 40,000. The 2019 interim budget is touted be the manifesto of BJP, which is the leader of NDA. Following are the highlights of the proposed 2019 interim budget:

  • Income of up to Rs 5 lakhs exempted from income tax.
  • Standard deduction hiked to Rs 50,000 from Rs 40,000.
  • Direct tax proposals to offer Rs 23,000 crores relief to 3 crore taxpayers.
  • Individuals with a gross income of up to Rs 6.50 lakhs are not required to pay income tax, considering they invest in provident funds, specific saving schemes and insurance.
  • Around 12 crore small and marginal farmers would be paid a yearly income of Rs 6,000 under PM-KISAN scheme.
  • TDS threshold hiked to Rs 40,000 from the existing threshold of Rs 10,000 on interest earned on bank and post office deposits.
  • Allocated Rs 20,000 crores for 2018-19, Rs 75,000 crores for FY2019-20 for PM-KISAN scheme
  • Interest subvention of 2% during disaster to be paid out to farmers for the entire period of loan reschedulement.
  • 2% interest subvention to farmers for animal husbandry and fishing, an additional 3% in case of timely repayment.
  • Rs 3,000 a month as pension for 10 crore workers in the unorganized sector, with a contribution of Rs 100/55 from PM Shram Yogi Maandhan scheme.
  • Fiscal deficit pegged at 3.4% of GDP for 2019-20; target of 3% of fiscal deficit to be achieved by the assessment year 2020-21.
  • Current Account Deficit pegged at 2.5% of the GDP for the financial year 2020.
  • Overall expenditure to rise by 13% to Rs 27.84 Lakh Crores in FY20.
  • National Education Mission allocation rose by 20%, amounting to Rs 38,572 Crores.
  • Allocation for Integrated Child Development Scheme rose over 18% translating to Rs 27,584 Crores.
  • Disinvestment target of Rs 80,000 Crores in 2018-19 likely to be met; Target for FY20 is set at Rs 90,000 crores.
  • Additional seats of 25% in educational institutions to meet the 10% reservation for the poor.
  • Defense budget exceeded Rs 3,00,000 crores for the first time.
  • Allocation for North East increased by 21% to Rs 58,166 crores in Financial Year 2020 and is likely to increase in the upcoming years.
  • Railways to get a capital support of Rs 64,587 crores in FY20.
  • Filmmakers to get access to single window clearance for ease of shooting; regulatory norms to rely more on self-declaration.
  • Interest subsidy of 2% for MSMEs on an incremental loan of Rs 1 crore for GST-registered bodies.
  • Minimum 3% of the 25% sourcing for the government undertakings to be from women-owned SMEs.
  • One lakh villages to be digitally transformed over the next 5 years.
  • New website to facilitate national programme on Artificial Intelligence
  • Stamp duty is set to undergo various reforms; amendments to make sure streamlined system is in place for stamp duties to be imposed and collected at one place.
  • A separate department concerned only with fisheries to be set up for welfare of 1.5 crore fishermen across the country.
  • 22nd AIIMS to be opened in Haryana.
  • Rs 60,000 Crores allocation for MGNREGA in 2019-20.
  • Indian economy is touted to be of worth USD 5 trillion in next 5 years and aspires to become USD 10 trillion in the subsequent 8 years.

If NDA comes back to power, then passing and implementing what was proposed in the interim budget would be easy and hassle free. If UPA topples NDA and comes to power, then they would come up with their own budget and we can expect a lot of new schemes to be implemented. UPA has announced various schemes in their manifesto and their most popular scheme is NYAY, which offers Rs 72,000 a year, for households under the bottom 20% of the income distribution.

What to Expect if UPA Comes Power?

The Indian National Congress (INC), which is the leader of UPA, has included many schemes that would surely be popular if implemented. Following are the highlights of INC’s manifesto:

  • Implementation of Nyuntam Aay Yojana (NYAY). As per Rahul Gandhi, the president of INC, NYAY would eliminate poverty. NYAY would pay out Rs 72,000 a year for households falling under 20% of the income distribution in India. As per reports, the INC has consulted various global economists while framing the blueprint of NYAY.
  • Creation of new Ministry of Industry, Service and Employment in a bid to underline the connection between the growth of the industry and service sectors, and rapid creation of jobs.
  • INC has promised to fill vacant 22 lakh jobs in the Government services by 2020. They have also promised to create 10 lakh jobs in Gram Sabhas.
  • They have further promised to create about 10 Lakh Seva Mitra positions in each Gram Panchayat and urban local bodies.
  • The INC has guaranteed to fillip private sector by rewarding businesses for job creation and employing more women.
  • The INC has promised to launch Water Bodies Restoration Mission and Wasteland Regeneration Mission, aimed at creating at least 1 crore jobs.
  • The party has assured to exempt new businesses from applicable laws and regulations for a period of 3 years.
  • The INC has promised to increase the number of employment days under MGNREGA to 150 days from existing 100 days.

Raghuram Rajan has confirmed that he was consulted by the INC to frame NYAY. He also said that he would support the implementation of NYAY in his capacities. If UPA comes to power, Raghuram Rajan becoming the  Finance Minister wouldn't be a surprise.

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