Union Budget for 2019-20 was presented before the parliament by the Minister of Finance and Corporate Affairs Nrimala Sitharaman on July 5, 2019. This budget followed the interim budget announced before the 2019 Lok Sabha elections. The government aimed at boosting investment at a time when the economy is showing signs of slowdown through this budget.
Some highlights and salient features of this budget are:
- Personal income tax rates remained unchanged but additional surcharge was levied upon super rich – 3% surcharge on an income of Rs. 2 Crore and 7% on Rs. 5 Crore and above
- Corporate tax was reduced to spur growth. The rate of Corporate Tax was slashed from 30% to 25% for businesses with turnover of up to 400 Crores
- An additional cess of 1 rupee was levied on Petrol and Diesel
- Customs duty on Gold and other precious items was increased from 10% to 12.5%
- Advisory to GST council to reduce tax on electric vehicles from 12% to 5%
- Custom duty raised on items like tiles, cashew kernels, vinyl flooring, auto parts, synthetic rubber digital video recorders and CCTV cameras to promote domestic manufacturing.
- Interchange-ability of PAN and Aadhaar card to file Income Tax returns
- Additional Rs. 1.5 Lakh tax relief on home loan for purchase of house up to 45 lakhs.
- Rental laws to be reformed to promote house renting.
- Government’s external debt to GDP is among the lowest in the world. Fiscal deficit in financial year 2019 at 3.3% of GDP.
- Government plans to launch a new ‘one nation one transport card’. It will be a universal card to travel on various modes of transport like metro, road and railways.
- Public Private Partnership to be used for faster development and delivery of passenger freight services.
- Comprehensive restructuring of National Highways to form a National Highway Grid and use rivers for transport of cargo to decongest roads and railways.
- Women SHG interest subvention programme to be expanded to all districts of India under ‘Nari to Narayani’ Scheme.
- Loans up to 1 Lakh to be provided to SHG women members under Mudra Scheme. Verified women SHG member having a ‘Jan Dhan’ account can avail Rs. 5000 over draft facility.
- Government to continue divestment of select CPSEs and modify the present policy of retaining 51% stake in PSUs
- Divestment target for financial year 2020 set to 1.05 lakh crore.
- Budgetary allocation to railways is Rs. 65837 crores and outlay for capital expenditure is increased to highest ever amounting to 1.60 lakh crore
- New PPP model to be adopted to develop railways across India. Railways to be encouraged to invest more in suburban rail networks via SPV
- Dedicated freight corridor project to be completed by 2022. Massive program for modernization of railway stations to be launched.
Micro, Small and Medium Enterprises
- Easing of Angel Tax for start-ups. Angel tax won’t require scrutiny from I-T department for start-ups. E-verification mechanism for establishing investor identity and source of funds for start-ups.
- 2% interest subvention for GST-registered MSME on fresh or incremental loans.
- Pension benefit extended to retail traders with annual turnover less than Rs 1.5 crore.
- New payment platform for MSMEs to be created.
- Government to launch ‘Study in India’ programme to attract foreign students in higher education.
- To unveil new education policy to propose changes in school, higher education
- Allocate Rs. 400 crore for world-class higher education institutions in financial year 2020
- National research foundation to fund, coordinate and to promote research in the country.
- New Higher Education Commission with focus on higher autonomy.
Foreign Direct Investment
- Local sourcing norms will be relaxed for the single-brand retail sector.
- Govt to open FDI in aviation, insurance, animation AVGC and media.
For Rural India
- Gaon, Garib and Kisan are the focus of our government.
- New Jal Shakti ministry will work with states to ensure Har Ghar Jal for all rural houses by 2024.
- Pradhan Mantri Gram Sadak Yojana phase 3 is envisaged to upgrade 1, 25,000 km of road length over the next 5 years. To invest Rs 80,250 cr for up gradation of roads under PM Gram Sadak Yojana.
- Government will set up 100 new clusters for 50,000 artisans in FY 20.
- Govt to promote innovative zero Budget farming. 80 Livelihood business incubators and 20 technology business incubators to be set up in 2019-20 under ASPIRE to develop 75,000 skilled entrepreneurs in agro-rural industries.
- 10,000 new farm produce organisations to be setup.
- India has emerged as a major space power. It is time to harness our ability commercially. A public sector enterprise, New Space India Limited (NSIL) has been incorporated to tap benefits of ISRO.
The budget focuses on reducing red tape, making best use of technology, building social infrastructure, digital India, pollution free India, make in India, job creation in Micro, Small and Medium Enterprises (MSMEs) and investing heavily in infrastructure.