Interim Budget 2019: Fiscal deficit pegged at 3.4% of GDP for 2019-20

The monthly assistance to farmers have led to raising the fiscal deficit target.

New Delhi: Announcing the Interim Budget 2019, Finance Minister Piyush Goyal has pegged the fiscal deficit for the year 2019-20 at 3.4 percent of GDP.

Goyal said, “The estimate of incomes and expenditure which I am presenting today, pegs the fiscal deficit of year 2019-20 at 3.4 percent of GDP.”

“We would have maintained fiscal deficit at 3.3 percent for year 2018-19 and taken further steps to consolidate fiscal deficit in year 2019-20. However, considering the need for income support to farmers, we have provided Rs. 20,000 crore in 2018-19 RE and Rs. 75,000 crore in 2019-20 BE. If we exclude this, the fiscal deficit would have been less than 3.3 percent for 2018-19 and less than 3.1 percent for year 2019-20.”

To give respite to distressed farmers, Goyal announced a direct income support of Rs 6,000 per year to those holding cultivable land up to two hectare, a move that would benefit 12 crore farmers and cost the exchequer Rs 75,000 crore annually.

The scheme, named Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), has been made applicable from the current fiscal itself, and first installment of Rs 2,000 will be transferred directly into the bank account of farmers before March.

About Rs 20,000 crore extra has been provided for the scheme in the revised estimate for the current fiscal.

Apart from direct income support to farmers, Finance Minister Piyush Goyal, in the Interim Budget for the 2019-20, also announced extended interest subsidy on loans availed for animal husbandry and fishery as well as those farmers affected by severe natural calamities.

Consequently, the total budget allocation for agriculture and allied activities is projected higher at Rs 1,49,981 crore for the 2019-20 fiscal, when compared to the revised estimate of Rs 86,602 crore for this fiscal.