Finance Minister Nirmala
Sitharaman presented the Union
Budget 2020, the first of the new decade, to Parliament. Here are the
important key highlights from the Budget:
Three prominent themes of the Budget:
Aspirational
India: Better standards of living with access to health, education and better
jobs for all sections of the society. Three components of Aspirational India
a) Agriculture, Irrigation, and Rural Development
b) Wellness, Water, and Sanitation
c) Education and Skills
Economic
Development for all: “Sabka Saath , Sabka Vikas , Sabka Vishwas”.
Caring
Society: Both humane and compassionate; Antyodaya as an article of faith.
Here are the key highlights from the Budget Speech
This is
the Budget to boost income and purchasing power of Indians
Financial
Year 2021 fiscal deficit target at 3.5% of GDP
Financial
Year 2020 fiscal deficit revised to 3.8% from 3.3% of GDP
Financial
Year 2021 net government borrowing estimated at Rs 5.36 lakh crore
Centre’s
debt down from 52.2% in 2014 to 48.7% in 2019
4%
growth surpassed in 2014-19 with average inflation of 4.5%
Rs 4.99
lakh crore government borrowing estimated in Financial Year 2020
India
is now 5th largest economy in world. Central Government debt reduced to 48.7%
of GDP from 52.2 per cent in March 2014
Government
to yield more space to private sector
Government
to strive to ensure ease of living for every citizen
Government
has taken several steps to formalisation of economy.
Important Announcements
Provision
of Rs 8,000 crore over five years for Quantum Technologies and it’s
applications.
GIFT
City to have an International Bullion Exchange, enabling better price discovery
of gold
India
will host G20 Presidency in 2022, Rs 100 crore to be allocated for making
preparations for this historic occasion, where India will drive global economic
agenda
Govt
wants to improve the life of the people through Rs 100 lakh crore
infrastructure pipeline projects.
GST as
historic structural reform; it integrated country economically
GST has
resulted in efficiency gains in transport and logistics sector, inspector raj
has vanished, it has benefitted MSME Consumers who have got a annual benefit of
Rs 1 lakh crore by GST.
6
million new taxpayers have been added.
Average
household now saves nearly 4% more on the monthly basis after implementation of
GST.
Govt
says aim is to achieve seamless delivery of services through digital
governance.
GST
resulted in Rs 1 lakh crore gains to consumers, removed inspector raj and
helped transport sector.
India
uplifted 271 million people out of poverty.
Fundamentals
of economy strong, inflation well contained, banks cleaned up accumulated
loans.
Finance
Minister lists out welfare schemes like affordable housing scheme, DBT and
Ayushman Bharat
Taxation
New optional tax slabs: New income tax slabs will be
available for those who forgo exemptions.
Taxable Income Slabs
Tax
Rates
Upto Rs. 5 Lakh
Nil
Rs. 5 Lakh to Rs. 7.5
Lakh
10%
Rs. 7.5 Lakh to Rs. 10
Lakh
15%
Rs. 10 Lakh to Rs. 12.5
Lakh
20%
Rs. 12.5 Lakh to Rs. 15
Lakh
25%
Rs. 15 Lakh and above
30%
To
simplify the tax system and lower tax rates, around 70 of more than
100 income tax deductions and exemptionshave been removed.
Dividend
Distribution Tax (DDT) abolished; Companies will not be required to pay DDT;
dividend to be taxed only at the hands of recipients, at applicable rates.
15%
concessional tax rate for new power generation companies.
Tax on
cooperative societies reduced to 22% without exemptions.
Interest
and penalty will be waived for those who wish to pay the disputed amount till
March 31.
Government
to look at ensuring that contracts are honoured.
Proposes
new National Policy on Official Statistics to improve data collection and
dissemination with the help of technology.
Rules
of origin requirements in Customs Act to be reviewed, to ensure FTAs are
aligned with the conscious direction of our policy: Finance Minister
Aadhaar-based
verification of taxpayers is being introduced; instant online allotment of PAN
on the basis of Aadhaar.
Registration
of charity institutions to be made completely electronic, donations made to be
prefilled in IT return form to claim exemptions for donations easily
100%
tax concession to sovereign wealth funds on investment in infrastructure
projects.
Tax on
Cooperative societies to be reduced to 22 per cent plus surcharge and cess, as
against 30 per cent at present.
To end
tax harassment, new taxpayer charter to be instituted. Tax harassment will not
be tolerated.
Proposes
to amend Companies Act to bring criminal liability in certain areas.
To
amend I-T Act to allow faceless appeals.
To
launch new direct tax dispute settlement scheme — Vivaad se Vishwaas scheme.
Indirect Tax
Basic
customs duty on imports of news print and light-weight coated paper reduced
from 10% to 5%.
Customs
duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.
Excise
duty proposed to be raised on Cigarettes and other tobacco products, no change
made in the duty rates of bidis.
Customs
duty rates revised on electric vehicles and parts of mobiles.
5%
health cess to be imposed on the imports of medical devices, except those
exempt from BCD.
Lower
customs duty on certain inputs and raw materials like fuse, chemicals, and
plastics.
Higher
customs duty on certain goods like auto-parts, chemicals, etc. which are also
being made domestically.
Fiscal numbers & Allocations
Defence
gets Rs 3.37 lakh crore as the defence budget
Rs 2.83
lakh crore allocated to agriculture and irrigation.
Rs 1.23
lakh crore for Rural development and Panchayti Raj.
Rs
4,400 crore for clean air; Rs 53,700 crore for ST schemes; Rs 85,000 crore for
SC,OBCs schemes; Rs 28,600 for women specific schemes; Rs 9,500 crore for
senior citizen schemes.
Rs
30,757 crore rupees for Union Territory of J&K; Rs 5,958 crore rupees for
Union Territory of Ladakh.
FY20
fiscal deficit revised to 3.8% from 3.3% in the current fiscal. For FY21,
fiscal target seen at 3.5%.
Net
market borrowing for FY20 at Rs 4.99 lakh crore; For FY21 it’s pegged at Rs
5.36 lakh crore.
Nominal
GDP growth for 2020-21 estimated at 10%.
Receipts
for 2020-21 estimated at Rs 22.46 lakh crore. Expenditure at Rs 30.42 lakh
crore.
Agriculture
PM
KUSUM scheme will be expanded to 20 lakh farmers.
Supporting
states to focus on one product for one district so as to make way for
Horticulture to gain momentum.
Change
in incentive scheme for chemical fertilisers. We will encourage balanced use of
all fertilizers, a necessary step to change the incentive regime which
encourages excessive use of chemical fertilizer
Will
help 15 lakh farmers to set up solar sets.
Krishi
UDAN scheme for agricultural exports on international and national routes. This
will also improve value realization in North East and tribal districts.
Railways
will set up Kisan Rail through PPP arrangement, for transportation of
perishable goods.
For
better marketing and export, supporting states will focus on one product for
one district, so that high focus is given at district level for horticulture to
gain momentum
Zero
Budget farming focus of the government.
MGNREGS
to be used to develop fodder farm.
Jaivik
Kheti Portal – online national organic products market to be
strengthened.Agriculture market needs to be liberalised; govt proposes to
handhold farmers
Comprehensive
measures for 100 water-stressed districts being proposed
Government
will help 20 lakh farmers for setting up solar pumps; Farm market will to be
liberalized.
Railways
More
Tejas-like trains for tourists.
150 new
train to be introduced on PPP basis; Four stations will be also be
redevelopment with the help of PPP.
Large
solar power capacity to be set up alongside rail tracks, on land owned by
Railways
Rs
18,600 crore worth Bengaluru suburban transport project launched; 20% equity
will be provided be the Centre.
Banking
Encourage
PSBs to approach capital markets for fund raising.
To help
bank depositors, government increases depositor insurance to Rs 5 lakh from
current Rs 1 lakh.
Banking
Regulation Act to be amended to strengthen Cooperative banks.
Education
Rs
99,300 crore allocated for education sector, Rs 3,000 crore rupees for skill
development
Degree-level
full-fledged online education programme to be offered by institutes in top 100
in National Institutional Ranking Framework
New
Education Policy to be announced soon.
To
bring in equivalence in the skill sets of the workforce and employers’
standards.
150
higher educational institutions to start apprenticeship embedded degree/diploma
courses by March 2021.
To
launch 2 new National science scheme
National
Police University and National Forensic Science University proposed for
policing science, forensic science, and cyber-forensics.
External
commercial borrowings and FDI to be leveraged to improve the education system.
A
medical college to be attached to a district hospital in PPP mode, viability
gap funding to be set up for setting up such medical colleges.
US-like
SAT exam to be held in African and Asian countries for benchmarking foreign
candidates who wish to Study In India
Jobs
National
recruitment agency: New common entrance test for non-gazetted government jobs
and public sector banks.
Special
bridge courses to be designed by the Ministries of Health, and Skill
Development: To fulfil the demand for teachers, nurses, para-medical staff and
care-givers abroad.
Urban
local bodies to provide internships for young engineers for a period of up to
one year.
Housing
Tax
holiday for affordable housing extended by one year.
Additional
deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an
affordable house extended till 31st March, 2021.
Investment
Government
plans to sell part of its holding in Life Insurance Corporation (LIC) by way of
Initial Public Offering.
Certain
specified categories of government securities will be open fully for NRIs,
apart from being open to domestic investors
FPI
limit in corporate bonds raised to 15% from 9%.
Government
doubles divestment target for the next fiscal at Rs 2.1 lakh crore.
Expand
Exchange Traded Fund by floating a Debt ETF, consisting primarily of govt.
securities
Start-ups & MSME
New
Simplified return for GST from April 2020
Start-ups
with turnover up to Rs. 100 crore to enjoy 100% deduction for 3 consecutive
assessment years out of 10 years.
App-based
invoice financing loans product to be launched, to obviate problem of delayed
payments and cash flow mismatches for MSMEs.
Amendments
to be made to enable NBFCs to extend invoice financing to MSMEs
Tax
burden on employees due to tax on ESOPs to be deferred by five years or till
they leave the company or when they sell, whichever is earliest.
Turnover
threshold for audit of MSMEs to be increased from Rs 1 crore to Rs 5 crore, to
those businesses which carry out less than 5% of their business in cash.
Infrastructure
Young
engineers and management graduates will be roped in for infrastructure projects
under Project Preparation Facility.
About
Rs 22,000 crore already provided for supporting National Infrastructure
Pipeline.
Investment
Clearance Cell to set up through a portal, will provide end-to-end
facilitation, support and information on land banks
National
Logistics Policy will soon be released, creating single window e-logistics
market.5 new Smart cities to be set up via PPP model.
Rs 1.7
lakh crore allocated to transportation.
100
more airports to be set up by 2024 to support UDAN scheme.
Accelerated
development of highways will be undertaken; Delhi-Mumbai expressway and two
other projects to be completed by 2023.
NHAI to
monetize 12 lots of highway bundles of over 6,000 km before 2024.
Telecom
New
policy for private sector to build Data Centre Parks.
Rs
6,000 crore for BharatNet programme; Fibre to Home connections under BharatNet
will be provided to 1 lakh gram panchayats this year itself
Tourism
Rs
2,500 crore for tourism promotion.
5
archaeology sites to be developed for world-class museums
Rakhigarhi
(Haryana)
Hastinapur
(Uttar Pradesh)
Shivsagar
(Assam)
Dholavira
(Gujarat)
Adichanallur
(Tamil Nadu)
4 more
museums from across the country to be taken up for renovation and re-curation.
3150
crore proposed for Ministry of Culture for 2020-21.
An
Indian Institute of Heritage and Conservation under Ministry of Culture
proposed; with the status of a deemed University.
Sanitation
Rs 3.6
lakh crore allocated to water sanitation and pipeline project; Rs 12,300 crore
for Swachh Bharat.
Our
government is committed to Open Defecation Free country, in order to sustain
ODF behaviour and to ensure no one is left behind.
Healthcare
Rs
69,000 crore allocated to healthcare sector.
6400
crore (out of Rs. 69,000 crore) for PM Jan Arogya Yojana (PMJAY):
Indradhanush
immunization plan expanded to cover 12 new diseases,.
Viability
gap funding window to be set up to cover hospitals, with priority given to
aspirational districts that don’t have hospitals empanelled under Ayushman
Bharat.
Propose
Rs 35,600 crore nutrition-related plan.
Jan
Aushadhi Kendra Scheme to offer 2000 medicines and 300 surgicals in all
districts by 2024.
Over 6
lakh anganwadi workers have been equipped with smartphones to upload the
nutrition status of 10 crore households.
Nominal
health cess on import of medical equipment to be introduced to encourage
domestic industry and generate resources for health services.
A new
scheme to provide higher insurance cover, reduced premium for small exporters
and simplified procedure for claims
Targeting
diseases with an appropriately designed preventive regime using Machine
Learning and AI
Energy
Finance
Minister urges all states and UTs to replace conventional energy meters by
pre-paid smart meters in 3 years, this will give consumers the freedom to
choose supplier and rate as per their requirements.
Advise
to shut thermal plants if they don’t meet emission norms.
Expansion
of National Gas Grid from 16,200 km to 27,000 km along with reforms to deepen
gas markets, enable ease of transactions and transparent price discovery
Rs
22,000 crore allocated to to power and renewable energy.
Livestock
MNREGS
to be dovetailed to develop fodder farms.
Foot
and Mouth Disease, Brucellosis in cattle and Peste Des Petits ruminants (PPR)
in sheep and goat to be eliminated by 2025.
Deen
Dayal Antyodaya Yojana – 0.5 crore households mobilized with 58 lakh SHGs for
poverty alleviation.
Milk
processing capacity to be doubled to 108 tonne from 53 tonne by 2025.
Artificial
insemination to be increased to 70% from the present 30%.
Village Schemes
Food
Corporation of India (FCI) and Central Warehousing Corporation (CWC) to
undertake such warehouse building.
Financing
on Negotiable Warehousing Receipts (e-NWR) to be integrated with e-NAM.
State
governments who undertake implementation of model laws (issued by the Central
government) to be encouraged.
Viability
gap funding to be provided for setting up warehouses.
Financing
on Negotiable Warehousing Receipts to be integrated with e-National
Will
further expand on SHGs for alleviation of poverty.
To be run
by the SHGs to provide farmers a good holding capacity and reduce their
logistics cost.
Women,
SHGs to regain their position as Dhaanya Lakshmi.
NABARD
to map and geo-tag agri-warehouses, cold storages, reefer van facilities, etc.
Warehousing
in line with Warehouse Development and Regulatory Authority (WDRA) norms:
Viability
Gap Funding for setting up such efficient warehouses at the block/taluk level.
Agricultural Market
Agri
credit target raised to Rs 15 lakh crore from Rs 12 lakh crore.
Milk
processing capacity to be doubled to 108 tonne from 53 tonne by 2025.
NABARD
Refinancing Scheme to be further expanded.
MGNREGS
to be used to develop fodder farm.
Will
further expand on SHGs for alleviation of poverty.
Fisheries
Fish
production to be raised to 200 lakh tonnes by 2022-23
Youth
and fishery extension work to be enabled by rural youth as Sagar Mitras,
forming 500 fish farmer producing organizations
Framework
for development, management and conservation of marine fishery resources to be
put in place.
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