While presenting the union budget in the parliament on February 1st 2020, Finance Minister Nirmala Sitharaman said, “In May 2019, Prime Minister Narendra Modi received a massive mandate to form the government again. People of India have unequivocally given their janaadesh for not just political stability, but have also reposed their faith in our economic policy. This is a budget to boost their income and enhance their purchasing power.”
The second budget of Modi government’s second term in power is centred on three things - Aspirational India, Economic development, and a Caring Society. Central government is to provide Rs. 99,300 crore for educational sector in FY21. New education policy will be revealed soon, said Sitharaman. The budget focused on boosting the rural income and raising the purchasing power of the people by cutting the income tax rates.
Here are the key highlights of the Full Union Budget 2020 from Finance Minister Nirmala Sitharaman’s speech
The defence budget was increased to Rs. 3.37 lakh crore for 2020-21 against last year’s Rs. 3.18 lakh crore.
Rs 1.13 lakh crore has been set aside out of the total allocation for capital outlay to purchase new weapons, aircraft, warships and other military hardware.
The revenue expenditure has been pegged at Rs 2.09 lakh crore which includes expenses on payment of salaries and maintenance of establishments.
Upto Rs 5 lakh: No tax
Rs 5-7.5 lakh income: reduced to 10 from 20%
Rs 7.5 lakh to 10 lakh: reduced to 15 from 20%
Rs 10-12.5 lakh: reduced to 20% from 30%
Rs 12.5-15 lakh: reduced to 25% from 30%
Rs 15 lakh: 30% (No change)
Dividend distribution tax abolished.
Around 70 of more than 100 income tax deductions and exemptions have been removed, to simplify tax system and lower tax rates
To boost start-ups, tax burden on employees due to tax on Employee Stock Options to be deferred by five years or till they leave the company or when they sell, whichever is earliest
Option to be provided to cooperative societies to be taxed at 22% plus 10% surcharge and 4% cess, with no exemptions or deductions. To also be exempted from Minimum Alternative Tax.
Under Vivad Se Vishwas Scheme, taxpayer to pay only amount of disputed tax, will get complete waiver on interest and penalty, if scheme is availed by March 31, 2020.
Aadhaar based verification of taxpayers is being introduced. A system to be launched soon, for instant online allotment of PAN on the basis of Aadhaar, without the need for filling any application form.
Total allocation for Swachh Bharat is around Rs. 12,300 crore for this year.
Central government’s debt has come down to 48.7% in March, 2019 from 52.2% in March, 2014.
GDP growth for the year 2020-21 is estimated at nominal 10%
Receipts for 2020-21 is estimated at 22.46 lakh crore rupees
Expenditure at is 30.42 lakh crore rupees
Revised expenditure estimate is at Rs. 26.99 Lakh Cr for FY 21
Estimate Fiscal deficit is at 3.8% vs target of 3.3% of GDP
Corporate tax is at 15% lowest in the world
Turnover threshold for audit is raised to Rs. 5 Crore from Rs. 1 Crore
The government allocated Rs. 2826.92 crore to the sports budget for the next financial year.
The government gave a substantial hike of Rs 291.42 crore to its flagship Khelo India programme for development of sports at the grassroot and youth level.
The highest reduction was for National Sports Federations with Rs. 245.00 crore being allocated in the Union budget.
Incentives for sportsperson has been proposed to be slashed from Rs. 111 crore to Rs. 70 crore. The budget for National Sports Development Fund will also be reduced to Rs. 50.00 from the earlier Rs. 77.15 crore.
The government also reduced the allocation to Sports Authority of India from the revised Rs. 615 crore to Rs. 500 crore.
National Welfare Fund for Sports persons will continue to get the same amount of Rs. 2 crore as earlier, while, at Rs. 50 crore, there was also no change in the allocation for the enhancement of sports facilities in Jammu and Kashmir.
Laxmi Bai National Institute of Physical Education will, however, gets Rs. 55 crore, Rs. 5 crore more than the last budget.
Finance Minister listed 16-point action plan for farmers, towards the goal of doubling farmers income by 2022
Agricultural credit target has been set at Rs. 15 lakh crore. NABARD Refinancing Scheme to be further expanded.
Will encourage state governments who implement following model laws: Model Agricultural Land Leasing Act of 2016; Model Agricultural Produce and Livestock Marketing Act of 2017; Model Agricultural Produce and Livestock Contract Farming and Services Promotion and Facilitation Act of 2018
Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan (PM KUSUM) to be expanded to provide 20 lakh farmers in setting up standalone solar pumps
2.83 lakh crore rupees allocated for agriculture and allied activities, irrigation and rural development
Encourage balanced use of all fertilizers, a necessary step to change the incentive regime which encourages excessive use of chemical fertilizers
Village Storage Scheme run by SHGs, will provide holding capacity for farmers, women in villages can regain their status as Dhaanya Lakshmi
Krishi UDAN will be launched by the Ministry of Civil Aviation on international and national routes, improving value realization in North East and tribal districts
Milk processing capacity to be doubled by 2025
Indian Railways will set up Kisan Rail through PPP arrangement, for transportation of perishable goods
Fish production to be raised to 200 lakh tonnes by 2022-23
A medical college to be attached to a district hospital in PPP mode, viability gap funding to be set up for setting up such medical colleges.
Rs. 3,000 crore for skill development.
IND-SAT exam to be held in African and Asian countries, for bench-marking foreign candidates who wish to study in India.
Degree-level full-fledged online education program to be offered by institutes in top 100 in National Institutional Ranking Framework.
Government announces Rs 99,300 crore outlay for education sector in 2020-21.
New Education Policy to be announced soon.
Urban local bodies across the country to provide internships for young engineers for a period of up to one year.
8,000 crore rupees over five years to be provided for quantum technologies and applications.
Finance minister Nirmala Sitharaman on Saturday said India will host the G-20 Presidency in 2022 and Rs. 100 crore has been allocated for this purpose.
During this meeting, India would be able to drive the global economic and development agenda, the finance minister said while presenting the Budget for 2020-21 in Parliament.
India would be able to drive considerably the global economic and development agenda during this presidency, she said.
The G20 (or Group of Twenty) is an international forum for the governments and central bank governors from 19 countries and the European Union.
The Budget provides an additional Rs. 69,000 crore for the health sector and proposes to expand Jan Aushadhi Kendras in all districts of the country to provide medicines at affordable rates.
Nominal health cess on import of medical equipment to be introduced, to encourage domestic industry and generate resources for health services.
Deposit Insurance Coverage to be increased from 1 lakh rupees to 5 lakh rupees.
We wish to enshrine in the statute a taxpayers' charter. I would like to reassure taxpayers that we remain committed to taking measures to eliminate tax harassment.
To achieve higher export credit, a new scheme being launched which provides higher insurance cover, reduced premium for small exporters and simplified procedure for claim settlements.
Rs. 27,300 crore rupees for development of industry and commerce.
Investment Clearance Cell to set up through a portal, will provide end-to-end facilitation, support and information on land banks.
Amendments to be made to enable NBFCs to extend invoice financing to MSMEs.
Government proposes to sell a part of its holding in LIC by initial public offer.
100 more airports to be developed by 2024 to support the UDAN scheme.
1.7 lakh crore rupees to be provided for transport infrastructure in the coming financial year.
More Tejas-type trains to connect iconic destinations.
Accelerated development of highways will be undertaken. Delhi-Mumbai expressway and two other projects to be completed by 2023. Monetization of 12 lots of highway bundles of over 6,000km before 2024
National Logistics Policy will soon be released, creating single window e-logistics market.
Project Preparation Facility to be set up for preparation of infrastructure projects, actively involving young engineers and management graduates.
Fibre to Home connections under Bharat Net will be provided to 1 lakh gram panchayats this year itself, 6,000 crore rupees provided for Bharat Net.
National Gas Grid to be expanded from 16,200 km to 27,000 km.
Gross Enrolment Ratio is now higher for girls than for boys at all levels under 'Beti Bachao Beti Padhao'.
Rs. 28,600 crore rupees provided for programmes which are specific to women.
Rs. 35,600 crore rupees for nutrition-related programmes in 2020-21.
Over 6 lakh anganwadi workers have been equipped with smartphones to upload the nutrition status of 10 crore households.
85,000 crore rupees for Scheduled Castes and Other Backward Classes in 2020-21.
53,700 crore rupees for Scheduled Tribes.
Enhanced allocation of 9,500 crore rupees for Senior citizens and Divyangs.
Five archaeological sites to be developed as iconic sites.
Rs. 2,500 crore rupees to be allocated for tourism promotion, in 2020-21.
Rs. 3,150 crore rupees to be provided for culture ministry in 2020-21.
Parameters and incentives to be provided to states who take measures for cleaner air in cities above 1 million population - 4,400 crore rupees allocated for this.
India will host G20 Presidency in 2022, 100 crore rupees to be allocated for making preparations for this historic occasion, where India will drive global economic agenda.
Note: Page created with inputs from Times of India and Economic Times
