The ruling Bharatiya Janata Party‘s National Democratic Alliance government presented its last budget for the party’s five year tenure, on February 1, 2019. The budget is an interim one, as all citizens of India will vote at the general elections in May, and the party that gets elected will release a full-fledged budget in July this year.
The federal government pledged $10.56 billion to support small farmers, a pension scheme for workers in the informal sector, and reduced the tax burden for the lower middle class as it looked to rally support from voters before a national election.
–> 120 million small farmers will be paid $85 annually. The budget allocates more funds for a rural jobs guarantee initiative and rural development.
–> $2.6 billion has been allocated for the construction of rural roads.
–> Farmers affected by severe natural calamities will get 2% interest subvention plus an additional 3% interest subvention upon timely repayment.
–> Nearly 100 million workers in the informal sector will receive a monthly pension of $40 after they are 60 years of age.
–> Those earning up to $7142 per year will be exempted from paying income tax – this step will benefit 30 million low income people.
–> $4.3 billion has been allocated to defense expenditure.
Gene Fang, associate managing director at Moody’s sovereign risk group said the budget announcements did not change the rating agency’s stance on India. Moody’s rates India at “Baa2” with a “stable” outlook.
The interim budget focuses mainly on farmers who comprise more than 60 percent of India’s 1.3 billion population. “India is solidly back on track and marching toward growth and prosperity. India was expected to expand 7.2 percent this fiscal year,” acting finance minister Piyush Goyal said, “keeping its slot as one of the world’s fastest growing major economies.”
Last updated: December 26th, 2025
