Union Budget 2019 -2020

Union Budget 2019 -2020

In the Interim budget,

  1. A new scheme “Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)” was launched to extend direct income support at the rate of Rs. 6,000 per year to farmer families, having cultivable land up to 2 hectares.
  2. The government created a Department of Fisheries to provide sustained and focused attention towards development of Fisheries.
  3. Another scheme, ‘Pradhan Mantri Shram-Yogi Maandhan’, was also launched. It aims to benefit at least 10 crore labourers and workers in the unorganized sector.
  4. Individual taxpayers having taxable annual income up to Rs.5 lakhs will not be required to pay any income tax
  5. For the first time, the country’s defence budget increased over Rs. 3 lakh crore.

Budget 2019-2020

  • The theme of this budget revolves around the aim of the government to make India a $5 trillion economy by 2024.
  • The government has already been working on the “Reform, Perform and Transform” principle and will continue to do so.
  • The budget was presented in the Parliament by the Union Finance Minister, Nirmala Sitharaman.

Banking and Financial Sector

  • NPAs of commercial banks reduced by over Rs. 1 lakh crore over the last year.
  • Rs. 70,000 crore proposed to be provided to PSBs to boost credit

Development of MSMEs

  • Pradhan Mantri Karam Yogi Maandhan Scheme Pension benefits to about three crore retail traders & small shopkeepers with annual turnover less than Rs. 1.5 crore.
  • Rs. 350 crore allocated for FY 2019-20 for 2% interest subvention (on fresh or incremental loans) to all GST-registered MSMEs, under the Interest Subvention Scheme for MSMEs

Focus on Digital Payments

  • The government is focusing on discouraging the practice of making business payments in cash. It proposes to levy Tax Deduction at Source (TDS) of 2% on cash withdrawal exceedin Rs 1 crore in a year from a bank account.
  • Also, no charges or Merchant Discount Rate is to be imposed on customers as well as merchants.
  • Necessary amendments will be made in the Income Tax Act and the Payments and Settlement Systems Act, 2007 to give effect to these provisions.

Direct Tax Reforms

  • A surcharge of 3 % on individuals having taxable income from Rs. 2 crore to Rs. 5 crore and 7 % for those with taxable income of Rs. 5 crore and above is announced in the budget.
  • The budget proposes to extend the benefit of lowered corporation tax of 25% to all companies having a turnover of Rs. 400 crore.
  • This would cover 99.3% of the companies.

Indirect Tax Reforms

  • Defence equipment not manufactured in India exempted from basic customs duty Increase in Special Additional Excise Duty and Road and Infrastructure Cess each by Rs. 1 per litre on petrol and diesel
  • Custom duty on gold and other precious metals increased
  • Basic Customs Duty increased on cashew kernels, PVC, tiles, auto parts, marble slabs, optical fibre cable, CCTV camera etc.

Social Sector Reforms

1) Water management

  • Constitution of a New Jal Shakti Mantralaya by integrating the existing Ministry of Water Resources, River Development and Ganga Rejuvenation and Ministry of Drinking Water and Sanitation to look at the management of our water resources and water supply in an integrated and holistic manner
  • Jal Jeevan Mission to achieve Har Ghar Jal (piped water supply) to all rural households by 2024
  • To focus on integrated demand and supply side management of water at the local level.
  • 1592 critical and over exploited Blocks spread across 256 District being identified for the Jal Shakti Abhiyan.
  • Compensatory Afforestation Fund Management and Planning Authority (CAMPA) fund can be used for this purpose.

2) Women Empowerment

  • Budget 2019-2020 gives the title “Naari Tu Narayani” for the women of India.
  • A Committee proposed with Government and private stakeholders for moving forward on Gender budgeting.

3) Youth

  • India is working to bring in a new National Education Policy to transform India’s higher education system to one of the global best education systems.
  • It also moots for the creation of Gandhipedia portal by National Council for Science Museums to sensitize youth and society about positive Gandhian values.
  • The government also proposes to lay focus on new-age skills under the Pradhan Mantri Kaushal Yojana like Artificial Intelligence (AI), Internet of Things, Big Data, 3D Printing,
  • Virtual Reality and Robotics, which are valued highly both within and outside the country, and offer much higher remuneration

Rural-specific Reforms

1. Under Pradhan Mantri Matsya Sampada Yojana

  • Department of Fisheries will establish a robust fisheries management framework to address critical gaps in strengthening the value chain, including infrastructure, modernization, traceability, production, productivity, post-harvest management, and quality control.

2. Continuation of Ujjwala Yojana and Saubhagya Yojana –

  • Both these schemes have brought about major impact on the lives of rural families. It is expected that by 2022, every single rural family, except those who are unwilling to take the connection will have electricity and a clean cooking facility.

3. Pradhan Mantri Awas Yojana – Gramin (PMAY-G)

  • Under this Yojana, a total of 1.54 crore rural homes have been completed in the last five years.
  • The second phase of this Yojana will go on till 2021-2022 and it is proposed to provide 1.95 crore houses during this 2nd phase. The houses are provided with amenities like toilets, electricity and LPG connections.

4. Promoting livelihood through SFURTI and ASPIRE

  • SFURTI or the Scheme of Fund for Upgradation and Regeneration of Traditional Industries aims to facilitate cluster based development of traditional industries to make them more productive, profitable and capable for generating sustained employment opportunities.
  • As per the budget, the scheme will focus on promoting clusters based on bamboo, honey and khadi.
  • Around 100 new clusters will be set up during 2019-20 generating opportunity for 50,000 artisans.
  • Further, the technology upgradation of these industries will be done under the ASPIRE (Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship) scheme. 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs) will be set up in 2019-20 to develop 75,000 skilled entrepreneurs in agro-rural industry sectors.

Make in India

  • The budget proposes to promote investments in Sunrise Advanced Technology industries and in start-ups.
  • The budget has enhanced the target of over one lakh 5,000 crore of disinvestment in 2019-20.
  • To resolve the “angel tax” issue, the start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums.

Foreign Direct Investment

  • India’s FDI inflows in 2018-19 remained strong at US$ 64.375 billion marking a 6% growth over the previous year.
  • The Government will examine suggestions of further opening up of FDI in aviation, media (animation, AVGC) and insurance sectors in consultation with all stakeholders and suggested measures.

Others:

  • The budget has come up with a new scheme of Pradhan Mantri Laghu Vyapari Mann- Dhan Yojana.
  • Under this scheme, pension benefits will be extended to about 3 crore retail traders & small shopkeepers whose annual turnover is less than Rs.1.5 crore.
  • The budget also proposes to streamline multiple labour laws into a set of four labour codes.
  • Also, there is a proposal to impose to a nominal basic excise duty on tobacco products and crude.
  • Affordable housing gets further encouragement in the form of additional tax deduction of Rs.1.5 lakh beyond Rs. 2 lakh of interest paid on loans borrowed upto 31st March, 2020 for purchase of an affordable house valued up to Rs. 45 lakh.

Physical Infrastructure and Connectivity

  1. The budget proposes to invest Rs. 100 lakh crore in infrastructure in the next 5 years.
  2. Reiteration of the existing schemes such as Pradhan Mantri Gram Sadak Yojana, industrial corridors, dedicated freight corridors, Bharatmala and Sagarmala projects, Jal Marg Vikas and UDAN Schemes to promote physical connectivity.
  3. Upgradation in the existing scheme includes the coverage of state road networks during the second phase of Bharatmala project and enhancement of the navigational capacity of Ganga under the Jal Marg Vikas Project
  4. India’s first Common Mobility Card
  • This is India’s first indigenously developed payment ecosystem for transport, based on the National Common Mobility Card (NCMC).
  • The multi-purpose card runs on RuPay cards and can be used by the holder to pay for bus travel, toll taxes, parking charges and retail shopping.

5) Boost to railways

  • The railways budget was merged with the general budget in 2017. The present budget mentions a need of investment of Rs. 50 lakh crores between 2018-2030 in the railway infrastructure.
  • It proposes to use Public- Private Partnership to unleash faster development and completion of tracks, rolling stock manufacturer and delivery of passenger freight services.

6. Focus on One Nation One Grid

  • To further strengthen the connectivity infrastructure, the government will focus on building on the model of One Nation, One Grid to ensure power connectivity.

7) India’s increasing global presence has made it imperative for India to have an outward outlook and frame
policies that can improve India’s relations with other countries. Keeping this in mind, certain points that are
mentioned in the budget include:

  1. Proposal to issue Aadhaar Card for NRIs with Indian Passports on their arrival without waiting for 180 days
  2. Mission to integrate traditional artisans with global markets proposed, with necessary patents and geographical indicator