The FM, Niramala Sitharaman, on Saturday, established
a new optional personal income tax plan and declared multi-billion dollar farm,
infra and healthcare package to restore growth in the country. Emphasizing on
capacity building and empowerment of marginalised sections of the society while
saving the wealth makers, Sitharaman told that the Budget of 2020-21 will improve
the income and purchasing capacity of the people. Additionally, Finance minister
increased the bank depositors’ insurance coverage from Rs 1 lakh to Rs 5
Here are the major highlights from Nirmala Sitharaman’s Budget speech:
Expenditure: The government plans to expend Rs 30,42,230 crore in 2020-21 and it is 12.7% higher than the modified estimation of 2019-20.
* New optional tax slabs: New income tax slabs will be accessible for those who go without exemptions.
To make simpler the tax system and reduce
tax rates, approximately 70 of
above 100 income tax deductions and exemptions have
* Dividend Distribution Tax (DDT) removed; there will not any requirement for the companies to pay DDT; dividend to be taxed only at the hands of receivers, at appropriate rates.
* Cash reward system visualized to incentivize customers to ask for invoice.
15% concessional tax rate for new power
* Tax on cooperative societies decreased to 22% without exemptions.
* 100% tax concession to sovereign wealth funds on venture in infrastructure schemes.
* Tax on Cooperative societies to be lessened to 22 per cent plus extra and cess, as against 30 per cent at present.
To end tax harassment, new taxpayer contract to be introduced. According to FM, Tax harassment will not be endured.
* Suggests revising Companies Act to acquire
criminal problems in certain areas.
* To change I-T Act to permit faceless appeals.
* To start new direct tax dispute settlement scheme – “Vivaad se Vishwaas” scheme.
* Interest and penalty will be waived for those who want to pay the disputed amount till March 31.
* Government to look at guarantee that contracts are honoured.
* Recommends new National Policy on Official Statistics to advance data collection and spreading with the help of technology.
Rules of origin necessities in Customs Act to be checked, to ensure FTAs are allied with the conscious direction of our policy: FM
* Aadhaar-based verification of taxpayers is being established to remove dummy or non-existent units; immediate online allotment of PAN based on Aadhaar.
Registration of charity institutions to be made totally electronic, donations made to be pre-filled in IT return form to assert exemptions for donations easily.
* Tax holiday for inexpensive housing extended by 1 year. Further deduction up to Rs. 1.5 lakhs for interest paid on loans taken for a reasonable house extended till 31st March, 2021.
* Govt plans to sell part of its share in Life Insurance Corporation (LIC) by way of Initial Public Offering.
* Certain specified categories of government securities will be opened completely for NRIs, despite being open to domestic investors
* FPI limit in corporate bonds increased to 15% from 9%.
* Government doubles divestment mark for the next fiscal at Rs 2.1 lakh crore.
* Increase Exchange Traded Fund by floating a Debt ETF, consisting mainly of govt. securities.
Indirect Tax :
* Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.
Excise duty suggested to be raised on Cigarettes and other tobacco products, no modification made in the duty rates of bidis.
Basic customs duty on imports of news print and light-weight coated paper decreased from 10% to 5%.
* Customs duty rates changed on electric vehicles and mobile accessories.
* 5% health cess to be inflicted on the imports of medical devices, apart from those exempt from BCD.
* Lesser customs duty on specific inputs and raw materials like fuse, chemicals, and plastics.
*Higher customs duty on specific goods like auto-parts, chemicals, etc. which are also being made domestically.
Startups & MSME:
* Tax load on employees because of tax on ESOPs to be delayed by five years or till they leave the company or when they sell, whichever is earliest.
* New Simplified return for GST from April 2020
* Start-ups with income up to Rs. 100 crore to enjoy 100% deduction for 3 successive assessment years out of 10 year ..
Turnover threshold for audit of MSMEs to be raised from Rs 1 crore to Rs 5 crore, to those businesses which perform less than 5% of their business in cash.
* App-based invoice financing loans product to be launched, to prevent problem of delayed payments and cash flow mismatches for MSMEs.
* Amendments to be made to facilitate NBFCs to expand invoice financing to MSMEs
Fiscal numbers & allotments:
FY20 fiscal deficit changed to 3.8% from 3.3% in the current fiscal. For FY21, the fiscal target seen at 3.5%.
* Variation of 0.5%, consistent with Section 4(3) of FRBM Act.
* Total market borrowing for FY20 at Rs 4.99 lakh crore; For FY21 it’s flat at Rs 5.36 lakh crore.
Nominal GDP growth for 2020-21 calculated at 10%.
* Receipts for 2020-21 assessed at Rs 22.46 lakh crore. Expenses are at Rs 30.42 lakh crore.
* Defence obtains Rs 3.37 lakh crore as the defence budget
* Rs 2.83 lakh crore to be assigned for the 16 Action Points; Rs 1.6 lakh crore alloted to agriculture and irrigation; Rs 1.23 lakh crore for Rural development and Panchayti Raj.
* Rs 4,400 crore for clean air; Rs 53,700 crore for ST schemes; Rs 85,000 crore for SC, OBCs schemes; Rs 28,600 for women specific schemes; Rs 9,500 crore for senior citizen schemes.
* Rs 30,757 crore rupees for Union Territory of J&K; Rs 5,958 crore rupees for Union Territory of Ladakh.
* To assist bank depositors, government enhances depositor insurance to Rs 5 lakh from current Rs 1 lakh.
* Support PSBs to approach capital markets for fund raising.
* Banking Regulation Act to be amended to reinforce Cooperative banks.
Jobs: * National recruitment agency: New common entrance test for non-gazetted government jobs and public sector banks.
* Special bridge courses to be formulated by the Ministries of Health, and Skill Development to fulfil the demand for teachers, nurses, para-medical staff and care-givers abroad.
* Urban local bodies to give internships for young engineers for a duration of up to one year.
5 new Smart cities to be set up via PPP model.
* Rs 1.7 lakh crore allocated to transportation.
* 100 more airports to be set up by 2024 to help UDAN scheme.
* Faster development of highways will be carried out; Delhi-Mumbai expressway and two other projects to be finished by 2023. Chennai-Bengaluru Expressway to be begun.
* NHAI to monetize 12 lots of highway packages of over 6,000 km before 2024.
* Young engineers and management graduates will be involved for infrastructure projects under Project Preparation Facility.
* Around Rs 22,000 crore already given for supporting National Infrastructure Pipeline.
* Rs 6,000 crore allocated for BharatNet programme; Fibre to Home connections under BharatNet will be supplied to 1 lakh gram panchayats in current year itself.
* New policy for private sector to make Data Centre Parks.
* 5 archaeology sites to be developed for world-class museums
1. Rakhigar ..
2. Hastinapur (Uttar Pradesh)
3. Shivsagar (Assam)
4. Dholavira (Gujarat)
5. Adichanallur (Tamil Nadu)
* Rs 2,500 crore for promotion of tourism
* Proposal of an Indian Institute of Heritage and Conservation under Ministry of Culture; with the status of a deemed University.
* 4 more museums from all over the country to be taken up for renovation and re-curation.
* Proposal of Rs.3150 crore for Ministry of Culture for 2020-21.
* Maritime museum to be set up at Lothal- the Harrapan age maritime site near Ahmedabad, by Ministry of Shipping.
* Expansion of National Gas Grid from 16,200 km to 27,000 km along with improvements to deepen gas markets, allow ease of transactions and transparent price discovery
* Rs 22,000 crore allotted to power and renewable energy.
* FM advises all states and UTs to change conventional energy meters by pre-paid smart meters in 3 years, this will provide consumers the freedom to choose supplier and rate as per their necessities.
* Advise to close thermal plants if they don’t meet release norms.
5 measures for Railways:
*Large solar power capacity to be set up alongside rail tracks, on land owned by Railways
* More Tejas-like trains for tourists.
* 150 new train to be launched on PPP basis; Four stations will be also be redevelopment with the help of PPP.
Education:* Rs 99,300 crore allocated for education sector, Rs 3,000 crore rupees for skill development
* External commercial borrowings and FDI to be utilized to advance the education system.
A medical college to be connected to a district hospital in PPP mode, viability gap funding to be set up for starting such medical colleges.
* US-like SAT test to be held in African and Asian countries for benchmarking foreign candidates who desire to Study In India
* Degree-level full-fledged online education programme to be offered by institutes in top 100 in National Institutional Ranking structure
* New Education Policy to be announced soon.
* 150 higher educational institutions to start apprenticeship embedded degree/diploma courses by March 2021.
* To launch 2 new National science scheme
National Police University and National Forensic Science University planned for policing science, forensic science, and cyber-forensics.
FM says agriculture market should be liberalised;
Wide-ranging measures for 100 water-stressed districts being proposed
* PM KUSUM scheme will be extended to 20 lakh farmers.
Government will support 20 lakh farmers for setting up solar pumps; Farm market will to be liberalized.
Another 15 lakh farmers to be supported to solarise their grid-connected pump sets.
Scheme to let farmers to set up solar power generation capacity on their fallow/barren lands and to sell it to the grid.
* Krishi UDAN scheme for agricultural exports on international and national routes which will also develop value realization in North East and tribal districts.
* Railways will set up Kisan Rail through PPP arrangement, for transportation of perishable goods.
* For improved marketing and export, supporting states will focus on one product for one district, so that more focus is given at district level for horticulture to gain momentum
* MGNREGS to be used to improve fodder farm.
Milk processing capacity to be doubled to 108 tonne from 53 tonne by 2025.
Artificial insemination to be increased from the present 30% to 70%.
MNREGS to be merged to develop fodder farms.
Foot and Mouth Disease, Brucellosis in cattle and Peste Des Petits ruminants (PPR) in sheep and goat to be eradicated by 2025.
Deen Dayal Antyodaya Yojana – 0.5 crore households activated with 58 lakh SHGs for poverty alleviation.
Village Storage Scheme:
* Will further increase on SHGs for alleviation of poverty.
* To be run by the SHGs to offer farmers a good holding capacity and decrease their logistics cost.
* Women, SHGs to resume their position as Dhaanya Lakshmi.
* NABARD to map and geo-tag agri-warehouses, cold storages, reefer van facilities, etc.
* Project for development, management and preservation of marine fishery resources to be put in place.
* Fish production to be increased to 200 lakh tonnes by 2022-23
*Youth and fishery expansion work to be facilitated by rural youth as Sagar Mitras, forming 500 fish farmer producing organizations.
* Rs 3.6 lakh crore allocated to water sanitation and pipeline project; Rs 12,300 crore for Swachh Bharat.
* Rs 69,000 crore allocated to healthcare sector.
* Rs. 6400 crore (out of Rs. 69,000 crore) for PM Jan Arogya Yojana (PMJAY):
* Indradhanush immunization plan extended to cover 12 new diseases,.
* Recommendation Rs 35,600 crore nutrition-related plan.
* Jan Aushadhi Kendra Scheme to offer 2000 medicines and 300 surgicals in all districts by 2024.
* More than 6 lakh anganwadi workers have been given smartphones to upload the nutrition status of 10 crore households.
Besides these, three important themes of the Budget:
Aspirational India: Better standards of living with access to health, education and better jobs for all sections of the society. Three parts of Aspirational India
a) Agriculture, Irrigation, and Rural Development
b)Wellness, Water, and Sanitation
c) Education and Skills
Economic Development for all: “Sabka Saath , Sabka Vikas , Sabka Vishwas”.
Caring Society:< Both humane and compassionate; Antyodaya as an article of faith.
* Provision of Rs 8,000 crore over five years for Quantum Technologies and it’s applications.
* GIFT City to have an International Bullion Exchange, allowing better price discovery of gold
* India will host G20 Presidency in 2022, Rs 100 crore to be allocated for making preparations for this historic occasion, where India will drive global economic agenda
* This is the Budget to improve income and purchasing power of Indians, says Sitharaman.