While the Interim Budget 2019 announced on February 1 by the then Finance Minister Piyush Goyal, focused on easing income tax burden for salaried employees and boosting agri-schemes among others, the Union Budget 2019-20 by the BJP led government in India, and announced on 6th July by the current Finance Minister (FM), Nirmala Sitharaman focused on the following factors:
- A concrete road-map to transform the state of agriculture in India
- Empower the poor
- Strengthen entrepreneurs and enterprises
- Simplify tax system and GST
- Promote digital transactions
- Increase participation of women in the country
- Modernize infrastructure and expedite developmental work
NOTE: Announced tax benefits for salaried individuals as per Interim Budget 2019 to continue during FY2019-20.
Now, let us grab a quick look into highlights of the Union Budget 2019-20.
RAIL and INFRASTRUCTURE
Here are rail and infra related announcements by the FM of India:
- Railway infrastructure to get Rs. 50 lakh crore investment between 2018 and 2030.
- Continuous efforts under the Bharatmala programme to develop and build highways and roads.
- Continuous efforts under Sagarmala project to enhance port connectivity.
- To decongest railways and roads, importance to be given to rivers for cargo transportation.
- 25 lakh kilometres of roads to be upgraded under various ongoing schemes.
- New metro rail projects were approved during 2018-19. In 2019, 210 kilometre of metro lines operational already.
- Proposal of Rs 100 lakh crore investments for infrastructure through 5 years.
- National Common Mobility Card launched by PM Modi in March 2019 to allow people to pay multiple transport charges throughout the country. This card runs on RuPay card. It enables people to pay parking charges, bus charges, etc.
Here are investment-related announcements by the FM of India:
- Social Stock Exchange under SEBI proposed.
- 100% FDI permitted for insurance intermediary.
- The country witnessed 6% y-o-y growth in foreign investment despite global slippages.
- Proposal to merge NRI portfolio investment scheme route with FPI route to encourage NRI investment in Indian capital market.
- Government may organize a yearly meet for global investors in India.
- Streamlining KYC to make it a hassle-free experience for foreign portfolio investors.
Here are women development related announcements by the FM of India:
- The recent election witnessed a record turnout of female voters at par with males. The FM said that the ruling government has a record of 78 women MPs in the House.
- Given increased involvement of women in every walk of life, the government wishes to motivate and facilitate role of females – ‘Nari to Narayani’.
- Women SHG Interest Subvention Programme to be extended to all districts of the country in order to encourage women entrepreneurship.
- Verified Woman SHG members with Jan Dhan Account to be allowed an overdraft of Rs. 50,000.
- One female in every SHG to be eligible for Rs. 1 lakh loan under the MUDRA scheme.
FARMING and AGRICULTURE
Here are farming and agriculture-related announcements by the FM of India:
- Several steps to be taken to double farmers’ income by the year 2020.
- Aim to provide water to all rural homes under the ‘Har Ghar Jal’ scheme. The Jal ministry to focus on providing adequate drinking water.
- Government to work with states in order to allow agriculturists and farmers get benefit under eNAM or National Agriculture Market.
- Ease of living and ease of doing business to apply to farmers as well.
EDUCATION and SPORTS
Here are education and sports-related announcements by the FM of India:
- ‘Study in India’, a new programme to be initiated to make India an attractive hub for higher education. This initiative will be for exchange of foreign students.
- Proposal for establishment of National Research Foundation to coordinate and fund research in India.
- Under ‘Khelo India’, National Sports Education Board to be set up for development of sports-persons and popularization of sports at all levels.
Here are banking-related announcements by the FM of India:
- Public sector banks to get Rs. 70,000 crore for recapitalization in order to boost credit.
- Regulation authority for Housing Finance Companies transferred to RBI from National Housing Board.
- One-time six-month partial credit guarantees for purchase of high-rated pooled assets up to Rs. 1 lakh crore of financially sound NBFCs by government to Public Sector Banks for a first loss up to 10%.
- A new series of coins, including that for Rs. 20 will be made available shortly for public use.
- 1 lakh crore, the disinvestment target for FY20.
Here are tax-related announcements by the FM of India:
- For the convenience and ease of taxpayers, ITR can be now filed without PAN and quoting only Aadhar to make interchangeability of PAN card and Aadhar card possible.
- Surcharge enhanced to 3% and 7% for individuals with income of Rs. 2-5 crore and above Rs. 5 crore, respectively. This measure is taken with a view of increasing tax contribution from those belonging to a high income level.
- NEFT, RTGS, UPI, BHIM, Aadhaar Pay etc should be used to promote digital transactions. Business establishments with Rs. 50 crore annual turnovers must use these payment modes. No merchant discount rates or charges to be imposed on merchants or customers, as banks and RBI to absorb these costs.
- To bolster growth of MSME sector further, interest subvention of 2% provided for incremental or fresh loans. This will help to keep supply chain intact.
- Lower rate of 25% applicable on companies with annual turnover of Rs. 250 crore extended to firms with annual turnover up to Rs. 400 crore. This step covers 99.3% of all firms.
- Taxpayers with less than Rs. 5 crore as annual turnover to file only quarterly returns.
- 2% TDS levied on cash withdrawal exceeding Rs. 1 crore in a year from bank account for business payments. This measure is oriented to discourage practice of cash transactions.
- To tackle Angel Tax issue, investors and start-ups filing requisite declarations not to be scrutinized in terms of valuation of share premium. E-verification mechanism to be set up for this purpose.
- Additional income tax deduction of Rs. 1.5 lakh provided on interest paid on loans to purchase electric vehicles.
- Proposal of extending exemption period to 31/03/2021 for capital gains arising from selling of residential houses for investment purpose in start-ups.
- STT or Securities Transaction Tax proposed to be limited to the difference between strike price and settlement of options.
- Additional deduction of Rs. 1.5 lakhs provided to self-occupied house owners on interest paid towards loans taken under affordable housing schemes. The relevant house owners will be able to enjoy tax relief of Rs. 3.5 lakhs from the previously Rs. 2 lakhs, till March 2020.
- Import of defence equipment exempted from basic custom duty to promote modernization of the Defence sector of India.
- Custom duty on gold hiked by 2.5%.
- Custom duty exempted on certain parts of electric vehicles.
- Increase by Re. 1/litre on road and infrastructure cess and special additional duty on petrol and diesel.
Here are housing-related announcements by the FM of India:
- A modern tenancy law to be established and given to states.
- Several reform measures to be taken up to promote rental housing.
- Proposal of 1.95 crore houses to be provided under the PMAY Grameen by 2021.
Here are a few other announcements made by the Finance Minister of India:
- Government to create payment platform for MSMEs to help file bills and payment on the platform itself.
- Proposal to consider issuing Aadhaar card without waiting for 180 days to NRIs with Indian Passports when they arrive in India.
- A social stock exchange, ‘Electronic Fundraising Platform’ to be set up for listing voluntary organizations and social enterprises working for social welfare objectives.
- Approval given to 18 new diplomatic missions in Africa.
- Bharat New, under Pradhan Mantri Grameen Digital Saksharata Abhiyan, targets internet connectivity to local bodies of every panchayat in India. It is to be speeded under the Universal Service Obligation Fund.
- Pension benefit extended to around 3 crore shopkeepers and retail traders with annual turnover lower than Rs. 1.5 crores under the Pradhan Mantri Karam Yogi Man Dhan Scheme.
- Public-Private partnership in power grid to unleash faster development.
- The department of fisheries to address critical gaps in production, post-harvest management, production, and value chain.
- New Space India Limited, which is a public sector enterprise, has been established to maximize benefits of R&D carried out by the Isro. The firm is set to lead commercialization of different space products.
- Government aims to provide power and LPG to all households, electricity and cooking gas to all rural household by 2022.
- Labour laws to streamline into four basic labour codes.
The FM had also said that India is set to become a $3 trillion economy this year. It had taken India over 55 years to reach $1 trillion dollar economy, but in the last 5 years, the country added another $1 trillion. Further, with the announcements made in Union Budget 2019-20, India may see a significant push in reforms for infrastructure, agriculture, development, women-empowerment, taxation, and other sectors.