UNION BUDGET 2019-20

An Introduction

After a pre-election interim Union budget presented in February by former Finance Minister Shri Arun Jaitley, the Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman made her maiden Budget speech and presented the Union Budget 2019-20 on 5^th July 2019 before the Parliament.  And after the Modi Government was re-elected to power following the 2019 Lok Sabha elections, this is the first budget to be presented under the Narender Modi 2.0 Government.

So, before moving into the highlights of the Budget, let the achievements of the first phase of the Government of the Modi be recognized:

1. 1 trillon dollar added to Indian economy over the last 5 years (compared to over 55 years taken to reach the first trillon dollar)
2. India is now the 6^th largest economy in the world.
3. Patents issued more than three times in 2017-18 as against the number in 2014.
4. In addition to, ball set rolling for a New India, planned and assisted by the National Institutional for Transforming India (NITI) Aayog.
5. Average amount spent on food security per year almost doubled during 2014-19 compared to 2009-14.

Key highlights of the Budget are as follows:

1. Tax Reforms

2. Direct Taxes

• The lowest tax rate of 25% is now expanded to include all companies with an annual turnover of up to Rs. 400 crore.
• Similarly, the surcharge levied on individuals have been enhanced of 3% having taxable income from Rs. 2 crore to Rs. 5 crore and of 7% having taxable income of Rs. 5crore and above. This has been done so that the people in the highest brackets of the income need to contribute more to the nation’s growth and development.
• Therefore, the position of India in ‘ease of doing businesses’ has considerably increased from 172 in 2017 to 121 in 2019.
• And direct tax revenue increased by over 78% in the past 5 years to Rs. 11.37 lakh crore.

Modernization of Tax Administration

Making tax simplification and ease of living by leveraging technology:

• Interchangeability of PAN and Aadhar – Those who don’t have PAN can file their tax returns using Aadhar and Aadhar can be used wherever is required.
• Pre-filling of Income Tax Returns – Now, the pre-filled tax returns with details of several incomes and deductions are to be made available and the Information is to be collected from Banks, Stock exchange, mutual funds, etc.
• Faceless e-assessment-  The Government is going to launch a Scheme of Faceless Assessment in electronic mode involving no human interface, this year. So, the Central Cell shall be the single point of contact between the taxpayer and the Department.
• Affordable Housing – Additional 1.5 lakhs tax relief for interest paid on loans borrowed up to 31^st March 2020 for purchase of house valued up to Rs. 45 lakhs.
• Boost to Electric Vehicles – Additional tax deduction of Rs. 1.5 lakhs on interest paid on electric vehicle loans.
• Other Direct tax measures – To reduce the genuine hardships of taxpayers higher tax threshold for launching prosecution for non-filing of returns has been instituted and also an appropriate class of persons exempted from the anti-abuse provisions of Section 50CA and Section 56 of the Income Tax Act.

1. Indirect Taxes

the Government has made Custom Duty proposals in such a way to promote the idea of ‘Make in India’. Therefore, to provide level playing field to the domestic industry, the Government has enhanced the custom duties on 36 items. Some of them include cashew kernels, PVC, tiles, auto parts, marble slabs, optical fiber cable, CCTV camera etc. And 5% basic Custom Duty imposed on imported books. Above all, the essentials of custom duty proposals include:

• Reducing import dependency
• Protection to the MSME sector,
• Similarly, Promoting clean energy,
• Curbing non-essential imports
• And Correcting inversions.

The Government has also reduced Customs duty  on certain raw materials and capital goods such as:

• Capital goods required for the manufacture of specified electronic goods.
• Wool fiber, Wool Tops
• Inputs for Artificial Kidney
• Fuels for nuclear power plants

Defence

As defence is a national priority and it requires an immediate requirement of modernization and up gradation, therefore defence equipment not manufactured in India. So, the Government has exempted defence from basic customs duty.

Grameen Bharat/ Rural India

Since more than half of the population of the country is below the poverty line. Therefore, various schemes have introduced in this year’s budget to uplift people from rural India.

To improve the growth of any country it is important to start from the lowest grade of people. If these new schemes including all the aspects such as providing of the Housing, connectivity between two rural areas, are not been implemented then the situation of the poor will worsen more.

Dwelling on the rural issues, the Ujjwala and Saubhagya Yojana has transformed the lives of every rural family and by that, the ease of their living has dramatically improved.

Above all, the budget promises electricity and clean cooking facility to all rural families by 2022. The various schemes are:

• Pradhan Mantri Awas Yojana – Gramin (PMAY-G)

Under this, the Government will provide  1.95 crore houses with amenities like toilets, electricity and LGP connections during its second phase (2019-20 to 2021-22) to eligible beneficiaries

• Pradhan Mantri Matsya Sampada Yojana (PMMSY)

Department of Fisheries will establish A robust fisheries management framework.

• Pradhan Mantri Gram Sadak Yojana (PMGSY)

There is a target of connecting the eligible and feasible habitations. 30,000 Kms. of PMGSY roads have been built using Green Technology, thereby reducing carbon footprint. However,  the road length is going to be upgrad over the next five years.

• Scheme of Fund for Upgradation and Regeneration of Traditional Industries (SFURTI)

The government will set up Common Facility Centres (CFCs)  to facilitate the traditional industries.

• Scheme for Promotion of Innovation, Rural Industry, and Entrepreneurship’ (ASPIRE)

Creating Infrastructure and entrepreneurship in the rural industry is very important for the growth of the nation. Therefore, 10,000 new Farmer Producer Organizations are to be formed, to ensure economies of scale for farmers.

So, the farmers who are already being trained in Zero Budget Farming for some states need to be replicated to other states.

For India’s water security, certain resolutions have  made such as:

• Jal Shakti Mantralaya to look at the management of our water resources and water supply.
• Jal Jeevan Mission to achieve Har Ghar Jal to all rural households by 2024.
• To focus on integrated demand and supply side management of water at the local level.

Common man’s life changed through MUDRA (Micro Units Developments and Refinance Agency Bank) loans for ease of doing business.

There is a need for investment in:

• Infrastructure
• Digital Economy
• Job creation in small and medium firms.

Therefore, for the growths of the small and medium firms, some measures related to MSMEs (Micro, Small and Medium Enterprises) are  initiated:

• Pradhan Mantri Karam Yogi Maandhan Scheme

Payment platform for MSMEs to be created to enable filing of bills and payment thereof, to eliminate delays in government payments.

• National Common Mobility Card (NCMC)

India’s first ecosystem for transport, based on National Common Mobility Card (NCMC) standards, launched in March 2019.

• Jal Marg Vikas Project
•  Similarly,  Maintenance, Repair and Overhaul (MRO)

So, for the development of Maintenance, Repair and Overhaul (MRO) and to achieve self-reliance in aviation segment policy interventions will be there.

• National Highway Programme
• One Nation, One Grid

Power at affordable rates to states ensured under ‘One Nation, One Grid’.

• Swachh Bharat Abhiyan

Swachh Bharat Abhiyan is one of the most successful projectss of the Modi Government. Government has constructed 9.6 crore toilets since Oct 2, 2014. More than 5.6 lakh villages have become Open Defecation Free. And in future, this mission will  expand to undertake sustainable solid waste management in every village.

• Pradhan Mantri Gramin Digital Saksharta Abhiyan

Nowadays, internet service has become one of the most basic services in every district as well as Panchayat. The Bharat-Net will develop a gap between rural-urban divide.

Shahree Bharat/ Urban India

It is important to focus on the rural India, but at the same time it is also necessary to give focus on the urban India. And for the development of urban India the schemes initiated are:

• Pradhan Mantri Awas Yojana- Urban (PMAY-Urban)
• The Government has regulated urban India with the establishment of new houses.However,  Over 26 lakh houses completed of which nearly 24 lakh houses delivered to the beneficiaries.
•  National Council for Science Museums is developing Gandhipedia to sensitize youth and society about Gandhian values.

Youth

For any nation youth is the most important factor for the country. India, is the developing country, therefore what the youth of India pursue today will definitely help in increasing the GDP of the country tomorrow. The future of India is somewhere dependant on the Youth and therefore it is important to make such policies for the betterment of them and indirectly for the country.

• New National Educational Policy- Government  is  launching New National Education Policy which will propose major changes both in school and higher education. National Research Foundation (NRF) proposes to fund, coordinate and promote research in the country.
• More than three times the fund raised for the previous year, Rs. 400 crore is being provided for “World Class Institutions” for the financial year 2019-20.
• Khelo India Scheme-  This scheme is expanding with all necessary financial support to upgrade the performance of any Youth. Because the makers know that the sport is a simultaneous factor with the studies.

Naari Tu Narayaani/ Women

If we want to know the people of the house, for e.g. what their nature is; how they are etc we should see how they treat the women in their houses. Likewise, it is important to treat the women of the country in the right way because in the end they are the nurturers of the world.

• A Committee proposed with Government and private stakeholders for moving forward on Gender budgeting.
• And, Government shall pay an Overdraft of Rs. 5,000/- to every verified woman Self Help Group member having a Jan Dhan Bank Account.

Banking and Financial Sector

Banking and Financial Sector is a major factor in the working of the country. So different rate of interest in various scenarios affects the demand and supply of the country and indirectly it affects the GDP of the country.

• Domestic credit growth increased to 13.8%.
• And non Performing Assets of commercial banks reduced by over Rs. 1 lakh crore over the last year.

Measures related to Public Sector Banks

• The government shall provide 70,000 crores to PSBs to boost credit.
• Enabling customers of one PSBs to access services across all PSBs.
• Similarly, Government shall take steps to empower account holders to have control over the deposit of cash by others in their accounts.

Measures related to Non-Banking Financial Companies

• Proposals for strengthening the regulatory authority of RBI over NBFCs to be placed in the Finance Bill.
• Therefore, the requirement of creating a Debenture Redemption Reserve will be done away with to allow NBFCs to raise funds in public issues.

Measures related to Central Public Sector Enterprises

• Encouragement of Retail participation  in CPSEs.
• The target of Rs. 1,05,000/- crore of disinvestment receipts set for the Financial Year 2019-20.
• Similarly, new series of Coins of One Rupee, Two Rupees, Five Rupees, Ten Rupees and Twenty Rupees, easily identifiable to one visually impaired to be made available for public use shortly.

Roadmap for future

It is essential to have the roadmap for the future as to work towards the plan:

• Simplification of procedures
• Incentivizing performance
• Similarly, Red-tape reduction
• Making the best use of technology
• Accelerating mega performance and services initiated and delivered so far.

10-point vision for the decade

• Building Team India with Jan Bhagidari: Minimum Government Maximum Governance.
• Achieving Green Mother Earth and Blue Skies through a pollution free India.
• Similarly, Making Digital India reach every sector of the economy.
• Launching Ganganyan, Chandrayan, other Space and Satellite programmes.
• Building physical and social infrastructure.
• Water, water management, clean rivers.
• Blue Economy.
• Self-sufficiency and export of food grains, pulses, oilseeds, fruits and vegetables.
• Achieving a healthy society via Ayushman Bharat, well-nourished women and children, safety of citizens.
• And emphasis on MSMEs, Start-ups, defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices under Make in India.