Ending all the speculations around the budget, the finance ministry has clarified that the upcoming budget on 1st February will be an interim budget. The clarification has come amid media reports and speculation that the government could present a full budget.
As per the tradition, the centre presents an interim budget or a vote on account in the election year. "This Budget will be called Interim Budget 2019-20 and, therefore, don't have any confusion on this issue," a finance ministry spokesperson told reporters.
Interim budget is presented only for a period of three months and the full fledged budget is presented by the new government in July. Some governments in the past have made big-ticket announcements in the interim budget.
The announcement would mean that any concessions in the direct taxes would not be introduced. According to the convention, the government refrains from announcing any direct tax proposals in the interim budget that might require an amendment to the Income Tax Act.
Indirect tax changes
Previous governments have changed indirect tax rates but since the goods and services tax (GST) now comes under the purview of GST council, the parliament can only change customs rates. It is to be noted that there is no law in the constitution that stops a government from presenting a sixth full Budget.
There were media reports that the centre is planning to increase Tax Slab thresholds from Rs 2.5 to 5 Lakhs. The news of the possibility of the introduction of universal basic income (UBI) was also making rounds but the clarification made by the finance ministry has not ended all the speculations.
The Finance Bills that accompany the Interim Budget are short 7-10 page documents which extend the existing budgetary provisions from April 30 to July 31. Moreover, the government does not bring Finance Bill or present the Economic Survey in an Interim Budget.
This year, Piyush Goyal will be presenting the Budget on 1st February. He was given the additional charge of finance ministry after Arun Jaitley left for the US for medical treatment. To mark the beginning of printing of budget documents Halwa ceremony, the annual pre-budget ritual was held in presence of Ministers of State for Finance Pon Radhakrishnan and Shiv Pratap Shukla.