Highlights of Union Budget 2019-20

The Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman made her maiden Budget Speech today and presented the Union Budget 2019-20 before the Parliament. Here are the Highlights of Union Budget 2019-20.

The key highlights of Union Budget 2019

  1. Ten Points of Vision
  2. Direct Tax
  3. Indirect Tax
  4. Growth and Inflation
  5. Reforms
  6. Financial Sectors and Markets
  7. Infrastructure and Industry
  8. Farm Sector
  9. Social Sector and Education
  10. Miscellaneous

1) Ten POINTS OF VISION

  • Building social infrastructure among 10 points of vision
  • Building a pollution-free environment among 10 points of vision
  • Digital India in every sector among 10 points of vision
  • Make in India with stress on MSME in 10 points of vision
  • Water management, clean rivers among 10 points of vision
  • Export of food grain in 10 points of vision
  • Ayushman Bharat, clean India among 10 points of vision
  • Space programs, the safety of citizen in 10 points of vision

2) DIRECT TAX

  • Increasing surcharge on income over 20 mln rupees/year
  • Faceless tax scrutiny case selection to be on a random basis
  • Propose 2% TDS on 10 mln rupee/yr cash withdrawal from banks
  • Propose to take a slew of measures to boost digital payments
  • Launching automated, faceless assessment of tax
  • To make pre-filled tax return forms available
  • To make Aadhaar, PAN interchangeable to file tax returns
  • Tax proposals aim to stimulate growth, housing
  • Direct tax mop up 11.37 trillion rupees FY19 vs 6.38 trillion FY14
  • Seeing double-digit growth in direct tax revenue annually
  • Corporate tax now 25% for cos with 4 bln rupees/yr revenue
  •  Corporate tax cut to cover 99.3% of all cost

3) INDIRECT TAX

  • To raise the road, infra cess on petrol, diesel by 1 rupee/ltr
  • To up special additional excise on diesel by 1 rupee/ltr
  • To up special additional excise on petrol by 1 rupee/ltr
  • Proposing certain amendments to the Customs Act
  • Raising customs duty on precious metals to 12.5%
  • Raising customs duty on gold
  • Customs duty being exempted on some parts of e-vehicles
  • 5% customs duty being imposed on imported books
  • To implement a fully-automated GST refund module
  • GST led to lower rates on almost all commodities
  • Tax deduction of 150,000 rupees on e-vehicle loan interest
  • Extra 150,000-rupee tax deduction on some small home loans
  • RBI, banks to absorb merchant discount rate at small shops
  • No merchant discount rate on e-transaction at small shops

4) GROWTH and INFLATION

  • Well within the capacity to reach $5-trillion economy in a few years
  • India to become a $3-trillion economy in FY20
  • India now 6th largest economy vs 11th five years ago

5) REFORMS

  • Need to continue undertaking structural reforms
  • Need to continue structural reforms to reach a $5-trillion aim
  • Need to invest in job creation in MSMEs
  • Need to invest heavily in digital India, job creation
  • $5-trillion economy target is imminently achievable
  • Gone are the days of policy paralysis
  • Wish to propose many initiatives to kick-start growth
  • Reforms needed in power tariffs
  • To soon announce policy package for power tariffs
  • Model tenancy law to soon be finalized
  • Propose several reform measures for rental housing
  • PPP to fast develop a track, rolling stock, freight svcs
  • To have the blueprint for water grids, gas grids, airways
  • Examining the performance of UDAY scheme
  • One nation, one grid to ensure power connectivity
  • 2 more terminals at Sahibganj, Haldia to be functional soon
  • Movement of cargo in river Ganga to rise 4 times in 4 yrs

6) FINANCIAL SECTOR, MARKETS

  • STT to be limited to the gap between settlement, strike price
  • Propose some leeway in Securities Transactions Tax
  • Propose to implement steps to make tax compliance easier
  • Bad loan tax norms for most NBFCs at par with banks
  • Need for greater parity in the tax treatment of NBFCs vs banks
  • CBDT to make provisions for pending assessment of startups
  • Start-ups not to face scrutiny in terms of share premium
  • Taking steps to resolve an angel tax issue for startups
  • To start a scheme for foreign cos in the advanced technology sector
  • To start a scheme to invite foreign cos in sunrise sectors
  • To give PSU banks 700 bln rupees capital
  • Banks’ NPAs reduced by more than 1 trillion rupees last year
  • Domestic credit growth rose to 13.8%
  • To let all NBFC to participate in trade receivable platform
  • Propose to return regulation over housing fin cos to RBI
  • Propose more power to RBI over NBFCs in Finance Bill
  • One-time, six-month guarantee to PSU banks to buy some NBFC loans
  • Fundamentally sound NBFCs should get funding from banks, MFs
  • To undertake steps to improve governance in PSU banks
  • The provision coverage ratio of banks highest in 7 years
  • Six PSU banks enabled to come out of prompt corrective action
  • To start raising part of borrowing from external market in FX
  • To boost retail participation in CPSE ETFs
  • India’s sovereign external debt to GDP ratio of less than 5%
  • To offer ETF participation via ELSS-like system
  • Setting a divestment target of 1.05 trillion rupees for FY20
  • Govt to reinitiate process of Air India divestment
  • Onshore insurers’ net owned funds need cut to 10 bln rupees
  • * Strategic divestment of PSUs to remain a priority
  • Mulling below 51% stake in PSUs on a case-to-case basis
  • To raise the cap on foreign shareholding in some PSUs
  • Steps to separate NPS Trust from PFRDA
  • Financial gains from cleaning banking sector now visible
  • FDI inflows remain robust despite global headwinds
  • Important to increase retail invest in T-bills
  • Propose to create a platform for listing social enterprises
  • To work with regulators for AA bonds as collateral for repo
  • Asked SEBI to mull hiking minimum public shareholding to 35%
  • Propose to rationalize existing KYC norms for FPIs
  • India needs 20-trillion-rupee estimated investment every year
  • To put in place action plan to deepen long-term bond mkt
  • Action plan to deepen the market for long-term bonds
  • Invest driven growth requires access to low-cost capital
  • To create a payment platform for MSMEs
  • Large infrastructure can be built on land owned by CPSEs
  • To allow FPIs to subscribe to listed debt papers of REITs
  • Propose to merge NRI, FPI investment scheme routes
  • To mull hiking FDI limit in media, insurance, animation cos
  • Contemplating annual global investors meet in India
  • Propose 100% FDI in insurance intermediaries
  • To examine suggestions to further open up FDI in aviation
  • FDI flows rose 6% to $64.37 bln in FY19
  • Propose to make India a more attractive FDI destination
  • To take steps for RBI, SEBI depositories’ interoperability
  • To allow FPIs to subscribe to listed debt papers of REITs
  • Propose to merge NRI, FPI investment scheme routes
  • To mull hiking FDI limit in media, insurance, animation cos
  • Contemplating annual global investors meet in India
  • Propose 100% FDI in insurance intermediaries
  • To examine suggestions to further open up FDI in aviation
  • FDI flows rose 6% to $64.37 bln in FY19
  • Propose to make India a more attractive FDI destination
  • To take steps for RBI, SEBI depositories’ inter-operability
  •  To allow FPI to invest in listed debt securities of InvITs
  • Will take steps to meet 25% public holding in listed PSUs
  • Need to encourage the continued growth of startups

7) INFRASTRUCTURE and INDUSTRY

  • To invest 100 trillon rupees in infrastructure over the next 5 years
  • To set up a panel on long-term funding for infrastructure
  • Need to invest heavily in infrastructure
  • Rail infra may need an investment of 50 trillon rupees 2018-2030
  • The 2nd stage of Bharatmala to help develop state roads
  • To incentivize advanced vehicle battery manufacturing
  • Need to develop inland waterways for cargo movement
  • To comprehensively restructure national highway programme
  • 210 km of new metro lines operationalized in 2019
  • Launching national common mobility card
  • To leverage engineering skill for project maintenance work
  • Public infra, affordable housing to be taken up in FY20
  • To aid cluster-based development of traditional industries
  • To use more PPP mode for the metro rail network
  • Railways to be encouraged to use SPVs for suburban projects
  • To use USOF, PPP mode for speeding up BharatNet
  • To deal with tax issues of start-ups later in the speech
  • To start a TV program exclusively for startups

8) FARM SECTOR

  • Every rural family to have gas, power connectivity by 2022
  • All rural families to have electricity connection by 2022
  • Govt keeps Antyodaya at the core of all its policies
  • Villages, poor, farmers at the centre of every govt plan
  • Gaon, Garib, Kisan at the center of every govt plan
  • To invest wisely in agriculture infrastructure
  • Bamboo, khadi, honey to be a focus for cluster development
  • To invest 802.5 bln rupees to upgrade rural roads in 5 years
  • To upgrade 125,000 km of rural roads in 5 years
  • 30,000 km roads under PM Sadak Yojana built with green technology
  • All-weather roads provided to 97% of habitation
  • To have a robust framework for fisheries mgmt network
  • 19.5 mln homes to be given till 2022 in PM rural house plan
  • 15 mln homes completed under PM rural house plan
  • APMCs shouldn’t hamper farmers from getting a fair price
  • Zero-budget farming to be promoted
  • Hope to form 10,000 farmer producer organisations
  • Aiming oilseed self-sufficiency, to help cut import bill
  • Ease of doing business, living should apply to farmers too
  • To create infrastructure for cattle feed manufacturing
  • Will support private companies to add value for farm producers
  • Zero-budget farming can help double farmers’ income

9) SOCIAL SECTOR and EDUCATION

  • See rapid urbanization as an opportunity, not challenge
  • Constructed 96 mln toilets since Oct 2, 2014
  • To expand Swachh Bharat plan to undertake solid waste mgmt
  • India to be open-defecation-free by Oct 2
  • Over 95% of cities have become open-defecation free
  • Identified 1,592 blocks for Jal Shakti Abhiyan
  • To use CAMPA funds for Jal Shakti plan
  • Aim water connection to every household by 2024
  • To set up national research foundation to assimilate all grants
  • To bring a new national education policy
  • Will bring in new national educational policy
  • 3 mln workers joined the govt pension plan so far
  • Banks to provide assistance under the Stand-Up India scheme
  • Stand-Up India scheme to continue till 2025
  • Expect fewer labor disputes as laws get streamlined
  • Propose to develop 17 iconic tourism sites
  • Propose digital repository for tribal heritage
  • Propose to revamp India Development Assistance Scheme
  • Opened 5 new embassies in Africa FY19, to open 4 more
  • Propose to launch a mission to integrate traditional artisans

10) MISCELLANEOUS

  • Election 2019 mandate was full of hope for new India
  • Voters stamped their approval on a performing government
  • People of India voted for national security, economic growth
  • Have set the ball rolling for new India
  • Govt provided fiscal discipline during 2014-2019
  • Average food security amount almost doubled during 2014-19
  • Our last-mile delivery stood out, reached everywhere
  • Will further simplify the procedure, reduce red tape
  • Mega programs initiated in the 1st term will continue
  • We don’t look down upon legitimate profit-earning
  • To take a step for the virtuous cycle of domestic, foreign investment
  • * Time right for India to enter aircraft financing, leasing
  • Launched co to tap ISRO’s capabilities commercially

What do you think of Highlights of Union Budget 2019-20? 

Source: PRESS INFORMATION BUREAU GOVERNMENT OF INDIA

About Ashish Mohta

An analyst who writes about undiscovered,unknown and untalked topics for people who want to to know more about India and Indians.

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