From PM Modi, 6 Pre-Election Perks Including GST Help For Small Businesses

The government has recently announced a series of measures to try to win over farmers, small business owners and the less well-off, after the ruling party suffered setbacks in state elections and with a general election due in months. The measures are likely to be a drain on finances in Asia’s third-biggest economy, where Prime Minister Narendra Modi’s government is trying to stick to a decade-low fiscal deficit target of 3.3 per cent of the gross domestic product.  But PM Modi’s ruling Bharatiya Janata Party (BJP) has promised even more perks ahead of the general election, which must be held by May.  “They will be for development, they will be for transformation,” Ravi Shankar Prasad, the minister for law, justice, and information technology, told Parliament this week, referring to inducements for the electorate.  “Who wins or loses, the people will decide. We are confident when elections happen, the country’s public will again give a big majority to the ruling coalition led by Narendra Modi.”  News agency Reuters reported this week that the Reserve Bank of India could transfer an interim dividend of Rs. 30,000 crore-Rs. 40,000 crore ($4.3 billion-$5.8 billion) to the government by March to help meet the fiscal deficit target as spending rises ahead of the election.  Following are steps the government has taken, in addition to proposals for farm-loan waivers worth billions of dollars after the main opposition Congress defeated the BJP in Madhya Pradesh, Rajasthan and Chhattisgarh in state assembly elections late last year.  Help for small businesses  The government on January 10 announced a change in Goods and Services Tax (GST) rules that would exempt an additional 20 lakh small businesses.  Businesses with annual sales of up to Rs. 40 lakh ($56,700) will be exempt from GST. Currently, firms with an annual turnover of up to Rs. 20 lakh are exempt.