After a populous pre-election budget in February, which enabled the Modi government to form the second term of power, the Union Finance Minister Nirmala Sitharaman, today announced a budget aimed at boosting infrastructure and foreign investment, just when the economy is showing signs a slow-down.
The budgets key focus remains on the announcements that assert no changes in personal income tax rates, hikes excise duty on fuel, increased tax rate for super rich and provide additional tax relief for home loan holders. Among another prominent pronouncement, Union Minister Sitharaman said the digital payments will get cheaper, ATM-like One Nation One Card for pan-India travel will be launched and new model rental laws will boost affordable housing.
The key features of Union Finance Minister budget for the 2019-20:
An increase in basic customs duty on certain items in order to promote the cherished goal of Make in India. Import of defense equipment not manufactured in India is being exempted from basic customs duty. Customs duty on gold to be increased. According to the Budget, import duty to be hiked on gold and precious metals to 12.5%, from the current level of 10%. Increase in special additional excise duty and road and infrastructure cess each one by 1 rupee a litre on petrol and diesel
In a pragmatic approach, the Union Minister of Finance chose not to change the income tax slab rates remain unchanged but announced a slew of new income tax proposals. In order to provide further stimulus to affordable housing, an additional deduction of 1.5 lakh rupees on interest paid on loans borrowed up to 31 March 2020 for purchase of house up to ₹45 lakhs. Additional income tax deduction of 1.5 lakh rupees on the interest paid on the loans taken to purchase electric vehicles
In order to dispirit the practice of making business payments in cash, the government proposes to levy TDS of 2% on cash withdrawal exceeding ₹1 crore in a year from a bank account. Additionally, PAN and Aadhaar are now interchangeable: More than 120 crore Indians now have Aadhar card, therefore for ease of taxpayers
Public sector banks to be provided 70,000 crore rupees to boost capital and improve credit. For purchase of high-rated pooled assets of financially sound Non-Banking Finance Companies amounting to 1 lakh crore rupees during 2019-20, one-time six-month partial credit guarantee to be given to public sector banks (PSBs). India's sovereign external debt to GDP is among the lowest globally at less than 5%. The Government will start raising a part of its gross borrowing program in external markets in external currencies. A new series of coins of Re 1, ₹2, ₹5, ₹10, ₹20 easily identifiable to the visually impaired were released by the PM on 7th March 2019. These coins will be made available for public use shortly.
In a bid to, improve the footprint of India's overseas presence and to provide better public services to local Indian communities’ four new embassies to be opened in 2019-20. Regulatory authority over the housing finance sector to be returned from National Housing Bank to RBI.
To further encourage women entrepreneurship, the Women Self Help Group (SHG) Interest Subvention Programme to be expanded to all districts in India. Non-performing asset (NPA) recovery of ₹4 lakh crore over the last four years, NPAs down by ₹1 lakh crore in the last one year. In an attempt to boost start-up scenario in the country, exclusive TV program exclusively for start-ups to be started, the channel will be designed and executed by start-ups themselves.
The current day budget also proposes to consider issuing Aadhaar Card for Non-Resident Indians (NRIs) with Indian passports after their arrival in India without waiting for the mandatory 180 days.
New National Educational Policy to be yielded to transform the Indian educational system with major changes in higher as well as school system to be designed. India will be made open defecation free on 2 October 2019, as per the dream of Prime Minister Narendra Modi.
Jal Shakti Ministry will look at the management of water resources and water supply in an integrated attempt and will work with states to ensure 'Har Ghar Jal', to all rural households by 2024 under 'Jal Jeevan Mission'. The government will invest widely in agricultural infrastructure and support private entrepreneurship in driving value addition to farmers produce and those from allied activities too, like bamboo, timber and also for generating renewable energy.
In a bid to boost PM Modi’s Swachha Bharat Mission, 9.6 crore toilets have been constructed since 2 October 2014 with over 5.6 lakh villages been converted to open defecation free. The mission will be further expanded to undertake sustainable solid waste management in every village. The government will frame a policy for making India a global hub of aircraft financing and leasing activities. The idea is to encourage new industries to come up, leveraging India’s existing capabilities that will add more quality jobs.
In the second phase of PMAY, 1.95 crore houses are proposed to the beneficiaries. The government will invite suggestions for further opening up of FDI in the aviation sector, media, animation AVGC and insurance sectors in consultation with all stakeholders. 100% FDI will be permitted for insurance intermediaries.
Credit Guarantee Enhancement Corporation will be set up in 2019-20, an action plan to deepen markets for long-term bonds with a specific focus on infrastructure sector to be put in place. Pension benefit to be extended to around 3 crore retail traders and shopkeepers with an annual turnover less than ₹1.5 crore under Pradhan Mantri Karam Yogi Man Dhan Scheme.
A comprehensive restructuring of the National Highways Programme will be done, to ensure the creation of National Highways Grid of desirable capacity. Railway infrastructure would need an investment of 50 lakh crores between 2018 and 2030; PPP to be used to unleash faster development and delivery of passenger freight services.
The Indian economy will grow to become a $3 trillion economy in the current year itself. It is now the sixth largest in the world. 5 years ago it was in the 11th position. The average amount spent on food security per year approximately doubled during 2014-19 compared to the preceding five years.
Vision for the decade:
From 1.85 trillion dollars in 2014, the economy has reached 2.7 trillion US dollars within five years. We are well within the capacity to reach $5 trillion in economies in the next few years.
The first term of Prime Minister Narendra Modi led NDA government stood out as a performing government. Between 2014 and 2019, we provided rejuvenated center-state dynamic, cooperative federalism, GST Council and a strident commitment to fiscal discipline; set the ball rolling for New India.