Presenting the first Union Budget of the third decade of 21st century, Finance Minister Nirmala Sitharaman on Saturday unveiled a series of far-reaching reforms, aimed at energising the Indian economy through a combination of short-term, medium-term, and long-term measures.
3 prominent themes of Budget
Aspirational India: Better standards of living with access to health, education and better jobs for all sections of the society
Economic Development for all: 'Sabka Saath, Sabka Vikas, Sabka Vishwas'
Caring Society: Both humane and compassionate, Antyodaya as an article of faith.
Three broad themes are held together by corruption-free, policy-driven good governance.
Three components of aspirational India
* Agriculture, Irrigation, and Rural Development
* Wellness, Water, and Sanitation
* Education and Skills
Income tax slabs
* Those earning up to Rs 5 lakh in a year will pay no tax.
* Income between Rs 5-7.5 lakh, the tax rate is 10 pc.
* Income between Rs 7.5-10 lakh, the tax rate is 15 pc.
* Income between Rs 10-12.5 lakh, tax rate cut to 20 pc from 30 pc.
* Income above 15 lakh rupees will continue to be taxed at 30 pc.
* A person earning Rs 15 lakh per anum and not availing any deductions will now pay Rs 1.95 lakh tax in place of Rs 2.73 lakh.
* The new personal income tax regime entails an estimated revenue foregone amounting to Rs 40,000 crore per year.
Entrepreneurship
* Investment clearance cell to provide 'End-to-End' facilitation and support to entrepreneurial youth.
* Developing five new smart cities in collaboration with states in PPP mode.
* Encouraging the manufacture of mobile phones, electronic equipment and semiconductor packaging.
* National technical textiles mission to position India as a global leader.
Government debt
* The government's debt has reduced to 48.9 per cent from 52.2 per cent, while presenting the Union Budget in the Lok Sabha.
* With renewed vigour, under PM's leadership, we commit ourselves to present the people of India with all humility and dedication. People have reposed faith in our economic policy, said Sitharaman.
16-action points for agriculture
* Rs 2.83 lakh crore to be allocated for 16-action points:
I. Rs 1.60 lakh crore for agriculture, irrigation and allied activities
II. Rs 1.23 lakh crore for rural development and Panchayati Raj
Agriculture credit
* Rs 15 lakh crore target set for the year 2020-21
* PM-Kisan beneficiaries to be covered under the KCC scheme
* Comprehensive measures for 100 water-stressed districts proposed.
Blue economy
* Rs 1 lakh crore fisheries' exports to be achieved by 2024-25
* 200 lakh tonnes fish production targeted by 2022-23
* 3,477 Sagar Mitras and 500 Fish Farmer Producer Organisations to involve youth in fisheries extension
Kisan rail
* To build a seamless national cold supply chain for perishables
* Express and Freight trains to have refrigerated coaches
Krishi udaan
* Both international and national routes to be covered
* North-East and tribal districts to realize Improved value of agri-products
* One-Product One-District for better marketing and export in the Horticulture sector
PM-Kusum to be expanded
* 20 lakh farmers to be provided for setting up stand-alone solar pumps
* Another 15 lakh farmers to be helped to solarise their grid-connected pump sets
* Scheme to enable farmers to set up solar power generation capacity on their fallow/barren lands and to sell it to the grid.
Village storage scheme
* 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
* Warehousing in line with Warehouse Development and Regulatory Authority norms
* Financing on Negotiable Warehousing Receipts (e-NWR) to be integrated with e-NAM
Livestock
* Doubling of milk processing capacity to 108 million MT from 53.5 million MT by 2025
* Artificial insemination to be increased to 70 per cent from the present 30 pc.
* MNREGS to be dovetailed to develop fodder farms.
Wellness, water and sanitation
* Rs 69,000 crore allocated for the overall healthcare sector
* Rs 6400 crore out of Rs 69,000 crore PMJAY.
* Augmenting local water sources, recharging existing sources, and promoting water harvesting and desalination
* Cities with million-plus population to be encouraged to achieve the objective during the current year itself
* Rs12, 300 crore allocation for Swachh Bharat Mission in 2020-21
* Emphasis on liquid and greywater management
* Focus also on Solid-waste collection, source segregation, and processing.
Education and skills
* Rs 99,300 crore for the education sector and Rs 3,000 crore for skill development in 2020-21
* New Education Policy to be announced soon
* National Police University and National Forensic Science University proposed for policing science, forensic science, and cyber-forensics.
* Degree level full-fledged online education program by Top-100 institutions in the National Institutional Ranking Framework.
* 150 higher educational institutions to start apprenticeship embedded degree/diploma courses by March 2021.
* External Commercial Borrowings and FDI to be enabled for the education sector
Industry commerce, investment
* Rs 27,300 crore allocated for 2020-21 for development and promotion of industry and commerce.
* Investment Clearance Cell to provide 'end to end' facilitation and support
* Five new smart cities proposed to be developed
* Scheme to encourage the manufacture of mobile phones, electronic equipment and semi-conductor packaging proposed
* National Technical Textiles Mission to be set up at an estimated outlay of Rs 1,480 crore
* New scheme NIRVIK to be launched to achieve higher export credit disbursement, which provides for higher insurance coverage, reduction in premium for small exporters, and simplified procedure for claim settlements.
Infrastructure
* Rs 100 lakh crore to be invested on infrastructure over the next 5 years
* Rs 103 lakh crore worth projects, launched on December 31, 2019
* A National Logistics Policy to be released soon to clarify roles of the Union Government, State Governments and key regulators.
* National Skill Development Agency to give special thrust to infrastructure-focused skill development opportunities.
* Rs 1.7 lakh crore proposed for transport infrastructure in 2020-21.
Highways
* Accelerated development of highways to be undertaken including 2500 km access control highways, 9000 km of economic corridors, 2000 km of coastal and land port roads, and 2000 km of strategic highways.
* Delhi-Mumbai Expressway and two other packages to be completed by 2023.
* Chennai-Bengaluru Expressway to be started.
* Proposed to monetise at least 12 lots of highway bundles of over 6000 km before 2024
Indian railways
* Large solar power capacity to be set up alongside rail tracks, on land owned by railways
* Four station re-development projects and operation of 150 passenger trains through PPP
* More Tejas-type trains to connect iconic tourist destinations
* High-speed train between Mumbai and Ahmedabad to be actively pursued
* 148 km long Bengaluru Suburban transport project at a cost of Rs 18,600 crore to have fares on the metro model.
* Central government to provide 20 per cent of the equity and facilitate external assistance up to 60 per cent of the project cost
* 550 Wi-Fi facilities commissioned in as many stations
* Zero unmanned crossings
* 27,000-km of tracks to be electrified
Caring society
* Allocation of Rs 35,600 crore for nutrition-related programmes proposed for 2020-21
* Rs 28, 600 crore proposed for women-specific programmes
* Rs 85,000 crore proposed for 2020-21 for the welfare of Scheduled Castes and Other Backward Classes
* Rs 53,700 crore provided to further development and welfare of Scheduled Tribes
* Enhanced allocation of Rs 9,500 crore provided for 2020-21 for Senior Citizens and Divyang
Governance
* Clean, corruption-free, policy-driven, good in intent and most importantly trusting in faith
* Taxpayer Charter for fairness and efficiency in tax administration
* An independent, professional and specialist National Recruitment Agency (NRA) for conducting a computer-based online Common Eligibility Test for recruitment.
* New National Policy on Official Statistics to promote the use of the latest technologies including AI.
Development of Northeast
* Improved flow of funds using the online portal by the government
* Greater access to the financial assistance of Multilateral and Bilateral funding agencies.
* Development of Union Territories of J&K and Ladakh: Rs 30,757 crore for the financial year 2020-21.
* The Union Territory of Ladakh has been provided with Rs 5,958.
Financial sector
* Reforms accomplished in PSBs: 10 banks consolidated into 4, Rs 3,50,000 crore capital infused, governance reforms to be carried out to bring in transparency and greater professionalism in PSBs.
* Scheduled Commercial Bank's health under monitoring through a robust mechanism, keeping depositors' money safe.
* Government to sell its balance holding in IDBI Bank to private, retail and institutional investors through the stock exchange.
Disinvestment
* Government to sell a part of its holding in LIC by way of Initial Public Offer (IPO)
Fiscal management
* For the FY 2019-20: Revised estimates of expenditure at Rs 26.99 lakh crore and revised estimates of receipts estimated at Rs 19.32 lakh crore.
* For the year 2020-21, nominal growth of GDP estimated at 10 pc, receipts estimated at Rs 22.46 lakh cr, and expenditure at Rs 30.42 lakh cr.
* Fiscal deficit of 3.8 pc estimated in RE 2019-20 and 3.5 pc for BE 2020-21.
* Market borrowings: Net market borrowings at Rs 4.99 lakh crore for 2019-20 and Rs 5.36 lakh crore for 2020-21.
* A good part of the borrowings for the financial year 2020-21 to go towards capital expenditure that has been scaled up by more than 21 per cent.
Direct tax
* Around 70 of the existing exemptions and deductions (more than 100) to be removed in the new simplified regime.
* Remaining exemptions and deductions to be reviewed and rationalised in coming years.
* New tax regime to be optional - an individual may continue to pay tax as per the old regime and avail deductions and exemptions.
* Measures to pre-fill the income tax return initiated so that an individual who opts for the new regime gets pre-filled income tax returns and would need no assistance from an expert to pay income tax.
* New regime to entail estimated revenue forgone of Rs 40,000 crore per year.
Corporate tax
* Tax rate of 15 per cent extended to new electricity generation companies
* Indian corporate tax rates now amongst the lowest in the world
* Dividend Distribution Tax (DDT) removed making India a more attractive investment destination. Rs 25,000 crore estimated annual revenue is forgone.
Start-ups
* Start-ups with turnover up to Rs 100 crore to enjoy 100 pc deductions for three consecutive assessment years out of 10 years.
* Tax payment on ESOPs deferred.
MSMEs to boost less-cash economy
* Turnover threshold for audit increased to Rs 5 crore from Rs 1 crore for businesses carrying out less than 5 per cent business transactions in cash.
* Tax concession for foreign investments: 100 pc tax exemption to the interest, dividend and capital gains income on the investment made in infrastructure and priority sectors before 31st March 2024 with a minimum lock-in period of three years by the Sovereign Wealth Fund of foreign governments.
Affordable housing
* Additional deduction up to Rs 1.5 lakh for interest paid on loans taken for an affordable house extended till 31st March 2021.
* Date of approval of affordable housing projects for availing tax holiday on profits earned by developers extended till 31st March 2021.
Indirect tax
* GST: Cash reward system envisaged to incentivise customers to seek invoice.
* Simplified return with features like SMS based filing for nil return and improved input tax credit flow to be implemented from April 1, 2020, as a pilot run.
Customs Duties: Customs duty raised on footwear to 35 pc from 25 pc and on furniture goods to 25 pc from 20 pc.
* Basic customs duty on imports of newsprint and light-weight coated paper reduced from 10 pc to 5 pc.
* Customs duty rates revised on electric vehicles and parts of mobiles
* 5 pc 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.
Indian economy
* India now the fifth largest economy of the world.
* 7.4 per cent average growth clocked during 2014-19 with inflation averaging around 4.5 pc.
* 271 million people raised out of poverty during 2006-16.
* India's Foreign Direct Investment elevated to US$ 284 billion during 2014-19 from US$ 190 billion during 2009-14.
* Central government debt reduced to 48.7 pc of GDP (March 2019) from 52.2 pc (March 2014).
