Finance Minister Nirmala Sitharaman presented her second Budget in the Lok Sabha on 1st February.
The Budget 2020 focusses on enhancing the purchasing power of people and boosting their personal income. Sitharaman began her Budget speech by reciting a Kashmiri poem pointing towards a united and blooming India.
The Budget introduces several new schemes besides allocating new funds for the already running Government schemes such as PM-Kisan, Ayushman Bharat, Swachh Bharat Mission, and others
Budget 2020 is focussed on 3 major themes Aspirational India; Economic Development for all & A Caring Society. The Budget allocates funds and proposes new schemes for every sector under these three themes.
The year 2019 has been a bit challenging in terms of economic growth and development globally as well as nationwide.
A steep decline in the GDP growth rate was witnessed during the July-September quarter of 2019 in India; GDP stood at its lowest at 4.5 percent.
The Union Budget 2020 is focused on reviving the Indian Economy in this fiscal through changes in Income Tax Slabs, taxation reforms, policy changes for Real Estate Sector, the resurgence of Automobile Sector, encourage privatization in CPSEs, boost for MSMEs, Bank reforms and so much more.
Highlights of the Budget 2020:
Theme: Aspirational India; Economic Development for all & A Caring Society
Languages used in Union Budget 2020: Hindi, English, Kashmiri, French, Tamil,
Theme 1: ASPIRATIONAL INDIA
• Budget is aimed at doubling farmer income by 2022 by: State governments to implement national laws such as Contract Farming, 2018, APMC, 2017 and Model Agriculture Land Leasing Act, 2016; Comprehensive measures to be undertaken for 100 water-stressed districts; Provide stand-alone solar pumps to around 20 lakh farmers; Over 15 lakh farmers with barren lands will be allowed to solarise their farms and Balanced use of fertilisers to transform current incentive regime
• “Aathichudi by Auvaiyar. Bhoomi Thiruthi Unn”: It means to take care of your own land first
• Village Storage Scheme run by self-help groups: Women self-help groups can now get help from NABARD or Mudra.
• The horticulture sector has exceeded the production of foodgrains by around 311 million metric tons of production. The government will help those states that work for ‘one product, one district’.
• Integrated Farming Systems to be developed in rain-fed areas
• Negotiable Warehousing Receipts Financing has crossed Rs 6,000 crore.
• Budget fixes the target of Agricultural Credit at Rs 15 lakh crore.
• All beneficiaries of PM Kisan scheme will now be covered under the Kisan Credit Card (KCC) scheme.
• MNREGA will be merged for creating fodder farms.
• Fish production to be raised to 200 lakh tones by 2022-23
• Indian Railways to set up “Kisan Rail” so that farm goods can be quickly transported. It will also be used for cold storage of goods through PPP model.
• Ministry of Civil Aviation will launch Krishi UDAN on international and national routes.
Wellness, Water and Sanitation
• Budget allocates Rs 12,300 crore for Swachch Bharat Mission
• Budget talks about the “Fit India Movement” in the context of India’s fight against the NCDs – non-communicable diseases.
• Budget seeks to set up hospitals in Indian Tier-II and Tier-III cities under the PPP model.
• Jan Aushadhi Kendra will be expanded.
• Budget allocates Rs 69,000 crore for the Health sector
• Union Budget 2020 proposes foreign direct investment, FDI and External Commercial Borrowings (ECB) in education.
• As per the budget, 150 higher education institutions will start apprenticeships in 2020-21.
• Urban Local Bodies have been asked to provide internship opportunities for freshers and engineers for a period of one year.
• A degree level online education programme will be launched to provide quality education to deprived sections students.
• INDSAT exam will be conducted in Asian and African countries under the Study in India programme.
• Budget proposes to set up “National Police University” and “National Forensic Science University”.
• Budget proposes to attach a Medical College to every existing district hospitals under the PPP model.
• The Budget allocates Rs 99,300 crore for the Education sector and Rs 3000 crore for Skill development.
Theme2: ECONOMIC DEVELOPMENT
• Union Budget 2020 proposes to set up an “Investment Clearance Cell” to offer services such as to be set free investment advisory, land banks and others. An online portal will be launched in this regard.
• A new scheme proposed in electronics manufacturing to spur investments.
• National Technical Textiles Mission proposed.
• All ministries will issue quality standards. A new scheme,
• New scheme “NIRVIK” announced for fewer duties and taxes on exported products. The scheme will be launched in 2020-21.
• Budget proposes to make each district an export hub.
• Budget allocates Rs 27,300 crore for development of industry and commerce in 2020-21
• National Infrastructure Pipeline to offer employment opportunity
• Government to form a National Logistics Policy soon
• It proposes to build the Chennai-Bengaluru Expressway
• Electrification of around 27000 km of railway lines achieved within 100 days of Modi Government formation in 2019.
• A large solar power capacity proposed for the Indian Railways. It will be built along the rail track on the Railways owned lands.
• Bengaluru Suburban Rail Project proposed; budget allocates Rs 18,600 crore for this project
• By 2024, the Government would monetize 12 lots of national highways
• With the help of UDAN scheme, 100 airports will be built by 2024
• The fleet of Aircraft will be increased to 1200 planes by 2024
• Rs 1.7 lakh crore allocated for transport infrastructure
• Prepaid Smart Meters: States will have to replace existing energy meters with the prepaid smart meters.
• Budget allocates Rs 22,000 crore for the Power and Renewable Energy Sector.
• The national gas grid will be expanded from 16200 km to 27000 km.
• A new policy will be launched for the construction of data centre parks by the private sector.
• Bharat Net to link 1 lakh gram panchayats through Fibre to Home connections
• Budget allocates Rs 6000 crore for the Bharat Net programme
• It provides Rs.8,000 crore in the next 5 years for “National Mission on Quantum Technology and Applications”.
Theme 3: A CARING SOCIETY
• ‘Beti Bachao, Beti Padhao’: Enrollment of girls in schools is higher than the boys.
• Rs 35,600 crore will be provided for nutrition-related programmes
• Task Force will be constituted to look into the issue of girls of low age entering motherhood
• It allocates Rs 85,000 crore for development of SCs and OBCs
• It allocates Rs 53,700 crore for STs development
• It allocates Rs 9,000 crore for Senior citizens and persons with disabilities
Art & Culture
• The government will constitute “Indian Institute of Heritage and Conservation” as a deemed university
• 5 archaeological sites to be developed as top-notch sites; these sites are
Hastinapur, Uttar Pradesh
Adichanallur, Tamil Nadu
• The government will build a Tribal Museum in Ranchi.
• The budget allocates Rs 3150 crore for the Ministry of Culture
The Tourism Sector will grow at 7.8% to Rs 1.88 lakh crore.
• The Coalition for Disaster Resilient Infrastructure will be implemented from January 2021.
• It allocates Rs 4,400 crore to promote clean air in cities with a population of over 1 million people.
• To avoid the case of citizen harassment, a taxpayer charter will be enshrined in the statutes.
• For recruitment in non-gazetted posts in banks, National Recruitment Agency will be constituted for both government and public sector banks.
• It proposes the creation of the New National Policy on Official Statistics
• Deposit insurance cover has been increased tremendously from Rs 1 lakh to Rs 5 lakh. Your deposits
• Disinvestment in Banks: Government’s share in IDBI Bank will be sold to the private sector.
MSME & Corporate Sector
• The budget proposes a new scheme for MSMEs in the context of subordinate debt.
• The debt recast window of MSME is extended by one year to March 31, 2021.
• Certain categories of government securities will now be opened for Non-Resident Investors.
• The FPI Limit in Corporate bond has increased to 15%.
Strategic Disinvestment & Privatization
Finance Minister Sitharaman proposes to sell the Government’s stake in the Life Insurance Corporation of India (LIC). For this purpose, the LIC IPO will be launched.
Note: Budget calls for the overhaul of certain centrally sponsored schemes which includes central government debt which is not a part of market borrowings, however, is used for funding expenditure.
Income Tax Reforms
Budget 2020 transforms the Income Tax regime by introducing new tax slabs and rates. It creates income slabs of upto Rs 5 lakh, from 5 lakh to 7.5 lakh, from 7.5 lakh to 10 lakh, from 10 lakh to 12.5 lakh, from 12.5 lakh to 15 lakh and above.
Key Details about Union Budget
- Union Budget is referred to as “Annual Financial Statement” in the Indian Constitution.
- It is presented on the first day of February every year.
- It comes into effect at the beginning of the financial year, that is, 1 April.
- It is presented through Finance Bill and Appropriation Bill.
- The approval of Lok Sabha is required for the implementation of the Union Budget.
- Stages of Union Budget: Estimates of Revenue & Expenditure; First Estimate of Deficit, Narrowing of Deficit and Presentation & Approval of budget.
Source: The Hindu