Free cooking gas, health plan for low earners

India’s finance minister yesterday announced a federal budget with a string of populist giveaways, from affordable housing to a health plan for millions of the poor, in an attempt to woo voters ahead of national elections next year.

Speaking

in Parliament, Finance Minister Arun Jaitley also announced a liberalisation of agricultural exports, which will increase from $30 billion (Dh110 billion) a year to $100 billion, to help push up crop prices for farmers. Exports of many agricultural products have long been restricted by regulations.

The government will also help build more than 5 million affordable houses for the poor in the next financial year, which goes from April 1 to March 31.

Tax on stocks

India’s stock market took a hit after Jaitley announced a 10 per cent tax on some long-term capital gains, saying stock market returns were “quite attractive and it was time to bring them under the ambit of capital gains tax.”

He announced no changes for personal income tax rates.

“This is an election budget,” said M.S. Unnikirishnan of the Confederation of Indian Industry, a powerful trade group. “It’s good at the macro level with the government keeping the fiscal deficit at 3.5 per cent of the gross domestic product.” India’s economy totals $2.5 trillion. To help millions of farmers, Jaitley increased the prices for rice and other crops to at least 50 per cent higher than the cost of production. Prices are currently set at a 20 per cent markup. He also increased the target for farm loans by 10 per cent to more than Rs10 billion ($150 million).

Thousands of farmers take their own lives each year in India as failed harvests force them to borrow money. They often mortgage their lands.

The minister announced a health protection programme for 100 million poor families, providing free hospitalisation up to Rs500,000, or $7,500, a person. He also said 80 million women would be given free connections for liquefied cooking gas, which cost about $45 apiece, and 40 million poor families would get free electricity connections.