Union Budget 2020: Here’re the key highlights

Bhubaneswar: Union Finance Minister Nirmala Sitharaman is all set to table the Budget 2020 in Parliament at 11 am today.  This will be her second Budget presentation after the demise of former Minister Arun Jaitley.

Instead of carrying a briefcase, an age-old tradition, Finance Minister Nirmala Sitharaman is back with ‘Bahi Khata’ to table her second budget in the Lok Sabha.

Ayushman Bharat, wealth creators, PM Kisan doubling income, ease of living and national security being top priority are the main reforms of the country under PM Modi, Sitharaman said in her budget.

Yesterday, Chief Economic Adviser KV Subramanian had suggested that the Government should focus on growth rather than being rigid on fiscal deficit in times of slowing economy.

“The Government can look at option of increasing market borrowing to fund higher expenditure in 2020-21,” he said adding that if need be, the government can resort to higher market borrowing this fiscal.

Here’re the key highlights:  

• GST reforms will continue including a simplified return-filing form. Refund has been simplified and has been fully automated. Aadhaar-based taxpayer verification will be done.
• Registration of charity institutions to be made completely electronic, donations made to be pre-filled in IT return form to claim exemptions for donations easily.
• Concessional corporate tax cut to be extended to new domestic companies engaged in power generation
• 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.
• The concessional 5% withholding tax has been extended  to municipal bonds. Cooperatives are taxed at 30 percent now. The cooperatives can choose a 22 percent tax with 10 percent surcharge and 4 percent cess with no exemptions.
• Govt abolishes dividend distribution tax. Companies will no longer be required to pay DDT. A total of Rs 25,000 crore is revenue foregone due to DDT abolition, says FM adding that this will make India an attractive investment destination.
• Currently more than 100 exemptions provided in 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
• A person who earns Rs 15 lakh per annum and is not availing any deductions will now pay Rs 1.95 lakh tax in place of Rs 2.73 lakh.
• For earnings between Rs 10 lakh to 12.5 lakh, the tax rates have been slashed to 20% tax  from existing 30%. “New Income Tax regime is optional. All exemptions will he taken away if opted for, says FM.

• Income Tax Rates slashed to 10% for Earnings between Rs 5-7.5 Lakh, 15% for Rs 7.5-10 Lakh, 20% for Rs 10-12.5 Lakh.
  No tax for people earning upto 5 lakh. 10% income tax between 5-7.5 lakh, 15% between 7.5-10 lakh, 20% between 10-12.5 lakh, 25% between 12.5 and 15 lakh and 30% above 15 lakh.
• The FY21 total expenditure at Rs 30.42 lakh crore. Net Market Borrowing for FY20 at Rs 4.99 lakh crore and net market borrowing for FY21 at Rs 5.36 lakh crore.
• Revised expenditure estimate for FY20 at Rs 26.99 lakh crore. Revised receipts for FY21 at Rs 19.32 lakh crore.
• Govt estimated nominal growth of GDP for the year 2020-21 on the trends available, at 10%.
• The govt proposes to sell a part of its stake in LIC through IPO. It means LIC will go public and the Govt will raise funds through IPO.
• Fiscal deficit target revised to 3.8 per cent of GDP. For the FY21 the target has been revised to 3.5 per cent.
• Since financial inclusion the FM says that a clean, reliable and robust financial sector is critical for robust economy.  The Govt has infused Rs 3.5 crore capital into PSU banks. A few among them will be encouraged to move capital market for fundraising purposes. The deposit insurance cover will be hiked to Rs 5 lakh from Rs 1 lakh, says says adding that all deposits will be safe. NBFC Eligibility for SARFAESI Act reduced to Rs 100 crore from Rs 500 crore AUM.Remaining stakes in IDBI Bank to be sold.
• FM announces budget allocation of Rs 30,000 crore for development of Jammu and Kashmir and Rs 5,000 crore for Ladakh.
• Stable and predictable business environment is key for government. Contracts Act will be strengthened to ensure that all contracts are honoured.
• India will host G20 Presidency in the year 2022 for this FM allocates Rs 100 crore for preparations.
• Govt will institute a tax payer’s charter in law to ensure tax payers are free against tax harassment.
• Special focus is on climate change. India’s commitment under the Paris Agreement action will kick-in from January 1, 2021. The Government has decided to shut power plants with higher emissions. Those land will be used for other purposes. The government will encourage plans to have clean air by the state governments with allocation of Rs 4,400 crore.
• A tribal museum will be set up in Ranchi and 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. A 100 more airports will be developed under UDAN by 2024. A total of Rs 2,500 crore will be allocated for tourism promotion in FY21.
• Five archeological sites to be developed as iconic sites. That included Rakhi Gadi in Haryana, Hastinapur in UP, Dholavira in Gujarat, Shivsagar in Assam and Adichanallur in Tamil Nadu.
• Rs 85,000 crore has been allocated for empowerment of Scheduled Caste and Rs 53,700 crore for Scheduled Tribes and Allocation of Rs 9,500 crore for senior citizens for FY21.
• ‘Beti bachao, Beti Padhao’ has yielded tremendous results, gross enrolment ratio of girls across all levels of education now higher than boys. Sitharaman announces allocation of Rs 35,600 crore for nutrition-related programmes in FY21. Further,  Rs 28,600 crore will be allocated for programs meant especially for women.
• FM proposes a new scheme of smart meters. 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.
• 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. An allocation of Rs 6,000 crore will be provided for BharatNet.
• Govt proposes to set up Data Centre Parks. This will help is storing and dissemination of data better. Rs 8000 crore allocated over the next five years for quantum technology related computing.
• A governance framework for ports will be set up. It will also look at one major port and its listing on the stock exchanges. The 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.
• 100 more airports will be developed to provide support to the PM Udaan scheme. Doubling of airlines’ fleet will help cater to the high traffic growth. But the crucial link here is the availability of pilots. Nearly all airlines face pilot shortage. The government needs to have scheme to have more trained pilots.
• For Railways:

-Setting up a large solar power capacity alongside the rail tracks on the land owned by the Railways.

-More station redevelopment programs.

-More Tejas like trains to connect major tourist attractions.

-More high speed trains like the one between Ahmedabad and Mumbai will begin.

-Bengaluru suburban rail will be provided the required boost.

• FM proposes a special plan to include young engineers, management graduates and economists
• FM proposes a scheme on encourage manufacturing of mobile phones, semi conductor packaging and electronic equipment. A detailed scheme with details will be released soon.
• 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. Each district will have to be developed as an export hub. The government’s 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.
• On entrepreneurship she says, “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. We will create more opportunities for startup owners. Investment clearance cell will be set up for entrepreneurs. These individuals will be offered assistance in funding as well and a portal will be set up for this purpose
• India imports technical textile worth 6 million dollar. FM proposes a new scheme for setting up manufacturing units of technical textiles.  All ministries during the course of this year will launching quality orders.
• FM announces an allocation of Rs 3,000 crore for the Skill India programme. “There exists a huge demand abroad for teachers, paramedical staff and caregivers. But their skills do not match the required ones by employers,” Sitharaman says.
• She proposes a national Police university and a national forensic science university. The govt also proposes to  start an SAT exam for students of Asia and Africa to promote “study in India” programme.
• FM announces new education policy. Under its scheme, urban local bodies will provide internship to young engineers for a year. On degree level online education courses, the programme can be provided by colleges in the top 100 list by National Educational Institute List. New courses will be introduced in 150 universities by 2026.
• TB Harega, Desh Jeetega campaign will be strengthened to end TB 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. Finance Minister says 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 says. There are 20,000 empaneled 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 aspitational districts where first priority will be given.
• For Jal Jeevan mission, Rs 11,500 crore allocation will be provided in this financial year
• Govt allocates Rs 12,300 crore for Swachh Bharat mission in budget 2020. “Our government is committed to open-defecation free (ODF) plus in order to sustain ODF behaviour. Solid waste management and grey water management are important,” says Sitharaman
• FM proposes to expand Jan Aushadhi scheme to provide for all hospitals under Ayushmann Bharat by 2025
• Viability gap funding window is proposed for setting hospital under PPP model. Those districts that do not have Ayushmann Hospital will be taken up first.
• FM presents 16 points to indicate Govt’s focus on farmers and agriculture. She says that the Govt will encourage states to take up model agriculture laws.

– Comprehensive measures for 100 water stressed districts.
– PM Kusum scheme removes dependence on kerosene and encourages use of solar power in agriculture.

-Govt will encourage balanced use of fertilisers.

-NABARD will take up an exercise of mapping and geo tagging agricultural warehouses, cold storage and other inventory storages

-A village storage scheme is proposed to be managed by SHGs. This will help farmers store more and reduce logistics costs. Women in the village will be responsible for managing this seamless storage mechanism.

-Krishi UDAAN scheme will be launched by Aviation Ministry.

-Horticulture sector with its current produce exceeds the production of food grains. We will now take it to, One Product One District.

-Financing of negotiable warehousing receipts will be integrating other e-services.

– Agricultural credit availability for 2021 has been set at 15 lakh crore.

– Our govt aims to eliminate the foot and mouth disease in sheep and goat by 2025

-Doubling of milk production of 53.5 million metric tonne of milk to 103 metric million tonne by 2025.

-Our govt will involve youth in fishery sector. We hope the rural youth will work as Sagar Mitras and also form Fish Farmer Organisation

-Under Antodaya scheme, SHGs will be further taken forward and made stronger.

• Farmers’ income will be doubled by 2022, says FM.  A total of 6.11 crore farmers  have been insured under Fasal Bima. However, hand-holding of farm-based activities needs to be done in cooperation with states.
• Efforts we have made in last 5 years and the enthusiasm and energy of our youth are the ignition of our growth
• Our government t is committed to doubling farmers income by 2022.  We have provided for 11 crore farmers through PM Kisan Beema Yojana.  Provision of annual assistance to the farmer is made sure through PM Kisan yojana. Agricultural markets needs to be opened and liberalised. Fisheries, animal husbandry and dairy needs to be provided for
• India’s foreign direct investment increased from a level from 12 per cent to almost double in past 5 years. Central government debt has declined to 48 per cent as of now from 52 per cent in March 2014.
• Sitharaman recites Kashmiri poem written by Pandit Dina Nath Kaul at Parliament. “Our country like a Shalimar garden, like lotus in Dal lake, the best country in the world,” she reads out the translation of the verse.
• Former prime minister Rajiv Gandhi had expressed concerns that common people were not getting benefits of welfare schemes. They were getting only 15 paise for every rupee invested by the Centre. Prime Minister Narendra Modi has increased that manifold to make sure every paisa reaches the grassroots, says FM
• There is paradigm shift in governance. The govt has focused on structured growth. It has also lead to significant boost for MSMEs. An average household spends 4 per cent on its monthly expenditure. The Govt has added 60 lakh taxpayers in past 4 years.
• The budget aims at making people employed, business should be healthy. This budget also aims to fulfill aspirations of all minorities, women and people from SCs and STs.  The GST has facilitated formalization of the economy, says Sitharaman in her budget speech.
• This budget focuses on structural reforms: FM
• Sitharaman pays tribute to late visionary leader Arun Jaitely. She quotes Jaitley as saying “It will be an India where the Centre and states will work together unanimously towards harmony. With the GST neither the state nor the Centre will lose their sovereignty”.
• This is the budget to increase income of people of India and enhance their purchasing power: FM
• FM presents Budget 2020.
• Prime Minister Narendra Modi and Home Minister Amit Shah arrived at Parliament ahead of presentation of union budget 2020-21.
• Printed copies of budget reach Parliament.