Finance Minister Nirmala Sitharaman today presented the Union Budget 2020-21 in the Lok Sabha.
On Friday, the Finance Minister tabled in Parliament the pre-Budget Economic Survey for 2019-20, which projected the state of the economy and outlined its challenges. The survey was released by Chief Economic Adviser Krishnamurthy Subramanian.
The Union Budget is the financial statement of the government, detailing its revenue and expenditure in the past, as well as estimated spending and projections for the coming year.
This year’s Union Budget as per the Finance Minister, is based on three themes/ideas, Aspirational India, Economic development and A Caring Society.
Sitharaman proposed that the Central government will provide ₹99,300 crores for the educational sector in FY21. New education policy will be revealed soon, said Sitharaman.
This year’s Economy Survey projected economic growth to rebound and hit 6%-6.5% in the next financial year starting April 1.
Sitharaman in her speech said customs duty on footwear and furniture is being raised. She added that Make in India is giving dividends and that the government will provide health services to all.
Sitharaman also said that the exemptions from customs duty have been given in public interest from time to time.
GST reforms will continue including a simplified return-filling form. The refund has been simplified and has been fully automated, said Nirmala Sitharaman. Aadhaar-based taxpayer verification will be done.
A total of 4.83 direct tax cases pending in various forums. So a new direct tax dispute settlement under ‘Vivad se Vishwaas Scheme’. Further, no penalty will be charged if taxpayers pay by March 31, 2020. Here, only the disputed tax amount has to be paid.
Sitharaman said that in order to ease deduction donation it is important to pre-fill information of those who are donating. This will result in hassle-free claims for individuals claiming tax exemptions.
Nirmala Sitharaman said that for affordable housing, the deduction of Rs 1, 50,000 will be extended to loan sanction by one year. Tax holiday on profits of developers involved in affordable housing projects will be extended by one year to March 2021.
Sitharaman says the concessional 5% withholding tax has been extended to municipal bonds. Cooperatives can now choose a 22 percent tax with a 10 percent surcharge and 4 percent cess with no exemptions.
The corporate tax cut will be available for power generation companies as well. The government will grant 100% exemptions for sovereign wealth funds in infrastructure and other notified sector with a minimum lock-in of three years. The rate of withholding tax has been extended to 2023 for FPIs.
Companies will no longer be required to pay DDT. A total of Rs 25,000 crore is revenue foregone due to DDT abolition, said Sitharaman. This will make India an attractive investment destination according to the finance minister.
Sitharaman said currently more than 100 exemptions provided in the I-T Act. Now around 70 of them have been removed in the simplified regime. Remaining will be reviewed over the coming years to simplify the system.
On making the announcement on income tax, Sitharaman said that the tax proposals would bring ease of compliance. A new personal income tax regime would be reduced who forego deductions and exemptions. The tax of only 10 percent will be charged to Rs 5 lakh-7.5 lakh income as against the prevailing 20 percent rate. From Rs 7.5 lakh-10 lakh income, a tax rate of 15 percent against 20 percent prevailing rate. For income Rs 10-12.5 lakh, a rate of 20 percent as against 30 percent earlier. For income between Rs 12.5 lakh-15 lakh will be taxed at 25 percent as against 30 percent. For those at Rs 15 lakh plus income, the tax will be 30 percent.
NEW INCOME TAX SLABS VS EARLIER –
– 10% for income between Rs 5 lakh-7.5 lakh against 20%.
– 15% for income between Rs 7.5 lakh-10 lakh against 20%
– 20% for income between Rs 10-12.5 lakh against 30%
– 25% for income between Rs 12.5 -15 lakh against 30%
– 30% for income above Rs 15 lakh
Issue of fiscal deficit is expected to be addressed in every budget. Government has undertaken tax reforms for this. The government estimates fiscal deficit on 3.8 per cent of GDP in FY20 and 3.5 per cent for BEFY21, said Sitharaman.
Revised expenditure estimate for FY20 at Rs 26.99 lakh crore, added Sitharaman. Revised receipts for FY21 at Rs 19.32 lakh crore.
Government to sell part of its stake in LIC, which was the biggest highlight of budget 2020.
Sitharaman said IFSC has the potential to become a centre of finance. It has 19 insurance entities already. This will enable India to enhance its position, create more jobs and better price of gold.
Subordinate debt for entrepreneurs of MSMEs (Micro small and medium enterprises) will be provided and will be treated as quasi-equity, said Sitharaman.
More than 5 lakh MSME benefited from debt restructuring last year. Government has asked RBI to consider extending the window of debt structuring by one year to March 2021 for this purpose.
PFRDA (Pension Fund Regulatory and Development Authority) Act will be amended to separate NPS Trust of government employees from PFRDA.
Making the big announcement in the budget, Sitharaman said deposit insurance cover will be hiked to Rs 5 lakh from Rs 1 lakh.
On Financial sector budget, Sitharaman says Financial inclusion is key. A clean, reliable and robust financial sector is critical for a robust economy, she says. Infused Rs 3.5 crore capital into PSU banks. A few among them will be encouraged to move capital market for fundraising purposes. She added that deposit insurance cover will be hiked to Rs 5 lakh from Rs 1 lakh. She reiterated that all deposits are safe. NBFC Eligibility for SARFAESI Act reduced to Rs 100 crore from Rs 500 crore AUM.
India will host G-20 residency in 2022 during the 75th year of India’s independence. During this event, India would be driving global economic advantage and an allocation of Rs 100 crore has been done for this purpose.
Stable and predictable business environment is key for the government. Contracts Act will be strengthened to ensure that all contracts are honoured, said Nirmala Sitharaman.
On Tax Reforms, Sitharaman said businesses will need to be confident. A tax-payer charter will be institutionalised in the budget. This will be building trust, she added. Government will ensure that citizens need not worry about tax harassment.
Sitharaman said governance and financial inclusion is needed. Governance should be clean and corruption-free, she said. Trusting every citizen including aspirational youth, farmers, senior citizens and hard-working women is key, added Sitharaman.
Ayushman Bharat, wealth creators being respected, PM Kisan doubling income, ease of living happening through it, national security being top priority are the main reforms of the country under PM Modi, said Nirmala Sitharaman.
Nirmala Sitharaman quoted poet Thiruvalluvar and said there are five jewels for a country, which is one without illness, one with wealth, it will have good crops, it should have happiness as well as safety/security.
Climate change will be looked at. India’s commitment under the Paris Agreement action will kick-in from January 1, 2021. Power plants with higher emissions will have to be closed. This land will be used for other purposes. Government will encourage plans to have clean air by the state governments with allocation of Rs 4,400 crore, said Sitharaman.
Five archaeological sites will be set up with museums on-site in Rakhi Gadi in Haryana, Hastinapur in UP, Dholavira in Gujarat, Shivsagar in Assam and Adichanallur in Tamil Nadu. A tribal museum will be set up in Ranchi, Jharkhand. Maritime site will be set up in Lothal. A total of Rs 3,100 crore has been set aside for Culture Ministry in FY21. 100 more airports will be developed under UDAN by 2024.
Sitharaman said for SC/OBC relief, a proposal of Rs 85,000 crore for FY21. For STs, Rs 53,700 crore will be provided. Allocation of Rs 9,500 crore for senior citizens for FY21.
On Women Budget 2020, Sitharaman said gross enrollment of girls under Beti Bachao Beti Padhao is higher than boys.
The gross enrollment of girls is 94.32 percent in elementary levels, 81.32 per cent in secondary level and 59.7 per cent in higher secondary level. She added that women are a priority especially pregnant women and lactating women. More than 6 lakh Anganwadi workers are equipped to upload status of more than 10 crore households This scale is unprecedented.
Sitharaman proposed task-force on six months on this matter. An allocation of Rs 35,600 crore for nutrition-related programmes in FY21. Further, Rs 28,600 crore will be allocated in FY21 by government for women-linked programmes.
An allocation of Rs 8,000 crore has been set up for the National Mission on Quantum Computing and Technology.
Mapping of genetic landscape is critical for India. Two national-level science schemes to be set up for getting a comprehensive national-level database.
Sitharaman said India has embraced sharing economy with aggregators displacing regular businesses. A policy will be set up to build data centre parks throughout the country. All public institutions at Gram Panchayat levels will be provided with digital connectivity. Fibre to home through BharatNet will link 100,000 Gram Panchayats in FY21 itself. An allocation of Rs 6,000 crore will be provided for BharatNet.
A new scheme of smart meters will be launched. Here, the prepaid meters will give freedom to give consumers to choose supplier and rate as per their requirement. A total allocation of Rs 22,000 crore will be given to power and renewable sector, says Sitharaman.
More TejasExpress -type trains will be set up for tourist destinations, says FM. A governance framework for ports will be set up. It will also look at one major port and its listing on the stock exchanges. Government will provide 20% equity for Bengaluru Suburban Transportation Project. This will be a Rs 18,600 crore project. An allocation of Rs 1.7 lakh crore for transport infrastructure will be provided in FY21, says Sitharaman.
A total of 12 lots of highway bundles will be monetised by 2024, Sitharaman says.
Sitharaman said National Infrastructure Pipeline involves 6,500 projects. NSDC will help skill development in the infrastructure sector. A total of 9,000 km of economic corridor will be set up. Chennai-Bengaluru expressway will also be started, says FM. Delhi-Mumbai Expressway To Be Completed By 2023, she added.
Sitharaman proposes allocation of Rs 27,300 crore for industry and commerce In FY21.
A new scheme Nirvik will be offered for exporters. This will have lower premiums and a faster claims settlement. Refund to exporters the duties levied including electricity and VAT which have been not refunded. This will be launched this year itself, said Sitharaman.
The governments’ e-marketplace has a lot of opportunities for SMEs. A total allocation of Rs 27,300 crore for development of industry and commerce in FY21, said Sitharaman.
Sitharaman said there is a cost advantage for electronics manufacturing in India but it needs more investment. Further, the government proposes a scheme for manufacturing of cell phones, semiconductors and other electronic devices which can be used for the manufacture of medical devices as well. A detailed scheme with details will be released soon.
Sitharaman said India for a millennium has been rich in skills in metallurgy and trading. Entrepreneurship is the spirit of India and has been its strength. Indians have given up greener pastures to come back to India and look at local challenges, she added. Government aims to create more opportunities for startup owners. Investment clearance cell will be set up for entrepreneurs, she added.
There is a huge demand for teachers, nurses, paramedical staff and caregivers abroad. However, their skill-sets do not match standards and needs to be improved. A total of Rs 3000 crore will be given for skill development, she added.
Degrees can be taken online soon and will be offered by the Top 100 NIRF ranked institutes, said Nirmala Sitharaman. IND-SAT exam will be held for Asian and African students for scholarships to ‘Study in India’. Police Academy and Forensic Sciences will be set up, she added
She added that NEP will be announced soon. Education sector needs greater finance to attract good teachers. ECBs and FDI will look for the education sector. A total of 150 higher education institutes will have apprenticeship programmes by March 2021. Urban local bodies will provide fresh engineers with a job opportunity for one year. This will help engineers learn on the job.
Sitharaman said Rs 3.6 lakh crore for Jal Jeevan Mission has been approved. This will look at augmenting local water resource, desalination, water harvesting and renewing older sources in FY21.
‘TB Harega, Desh Jeetega’, the campaign will be strengthened to end TB (tuberculosis) by 2025 in the country. A total of Rs 69.000 crore has been provided for the healthcare sector of which PM Jan Arogya Yojana will get Rs 6,400 crore.
Sitharaman said there is a holistic vision of healthcare. Mission Indradhanush has been extended to cover new diseases and new vaccines. Fit India is part of it, she said.
There are 20,000 empanelled hospitals in Ayushman Bharat and need more in Tier 2 and 3 cities to benefit poor in these areas. PPP mode hospitals will be set up under viability gap funding to look at areas where there are no hospitals. This will be 112 aspirational districts where first priority will be given.
Sitharaman said, there is a shortage of qualified medical doctors both general practitioners and specialists; it is proposed to attach a medical college to a district hospital in PPP mode; details of the scheme to be worked out soon.
Allocation of Rs 12,300 crores for Swachh Bharat Mission for year 2020-21.
Nirmala Sitharaman said for agriculture and allied activities an allocation of Rs 2.83 lakh crore has been made for FY21. This includes agriculture, irrigation, rural development, Panchayati Raj.
Doubling of milk-producing capacity will be to 108 MT by 2025 from 53.5 MT. Government aims to raise 200 lakh tons of fish production and there will be Sagar Mitras who will be the fish farmers, said Sitharaman. Added to this is the production of algae and caged cultivation as well, she added.
Farm markets need to be liberalised and the government is proposing to hand-hold farmers, Finance Minister Nirmala Sitharaman said on Saturday. Presenting the Budget for 2020-21, Sitharaman said the government is proposing a 16-point action plan to boost agriculture and farmers’ welfare.
Sitharaman said agricultural services need copious investments, and added that the government has insured 6.11 crore farmers under the Pradhan Mantri Fasal Bima Yojna.
This is the budget to boost income and enhance purchasing power. At the beginning, it gives a sign of things to come.
Aspirations, Economic development, Caring Society, an ‘ACE’ in the making aimed towards a $5 trillion economy by 2024-25. If achieved with the right efforts, is in the right direction, says Sitharaman.
‘Kisan Rail will be set up by Indian Railways on PPP goods for transport of perishable goods. Added to this is Krishi Udan by civil aviation that will help value realization in North-East India and tribal areas. High focus will be one product in one district as far as the horticulture sector is concerned. Zero budget natural farming will be operationalised and thrust will be on organic farmer’, said Sitharaman.
Farmers to be allowed to set up solar units on barren/fallow lands. Nirmala Sitharaman quotes Atichudi of Saint Avaiyar and says that farmland should have sufficient manure and water and not an excessive one. She said the government aims to revise incentives for use of chemical fertilisers. Warehouse building incentives will also be given by the government for the farmers. The thrust, she says, is to offer viability gap funding and Mudra loans will also be provided for such self-help groups. Here, women will be the ‘dhanya Laxmi’ in the villages, she added.
PM Kusum Scheme reduced dependence on diesel and kerosene and relied on social energy. Total of 20 lakh farmers can set up standalone solar pumps, she says. Further, she said that government can help 15 lakh solarise grid-connected pump sets, says finance minister Nirmala Sitharaman. Farmers can also use barren land for solar energy and have a livelihood out of it, she added.
Will double farmer income by 2022, said Finance Minister. She said hand-holding of farm-based activities needs to be done. This, she said, can be done in cooperation with states. Presents a 16-point action plan for this purpose.
Digital revolution will see the next wave. Will achieve seamless delivery of services through this, said Nirmala Sitharaman.
Technology like machine learning, robotics, AI along with number of productive age group (15-65 years) are cross-cutting streams in India, said, finance minister. This is special to India, says Nirmala Sitharaman.
Central government’s debt has come down to 48.7% in March 2019 from 52.2% in March 2014 and it aims to fulfil aspirations of people: Sitharaman.
Nirmala Sitharaman speaks about the importance of Indian citizens getting employment. She says, “Our people should be gainfully employed, our businesses should be healthy, for all minorities, women and people from SCs and STs, this Budget aims to fulfil their aspirations.”