Union Budget 2019 Highlights: A Directional Budget For The Next 5 Years
Finance Minister Nirmala Sitharaman presented her maiden budget in the Lok Sabha under the Modi 2.0 Government, becoming only the second woman to present the Union Budget. This budget was set to be a directional budget, setting the tone for the next 5 years and envisage a vision towards an India which progresses holistically across all sectors and adapts new technologies, with an equal focus on “ease of doing business” as well as “ease of living in India”. With areas such as infrastructure, agriculture, and connectivity drawing a lot of attention, here are the top Union Budget 2019 highlights:
Aiming For A Bigger Economy
- One of the key initial Union Budget 2019 highlights involved the Government setting out a target of becoming a USD 3 trillion economy in FY20, with the hopes to build a USD 5 trillion economy in the subsequent years following that
- The Government plans to further accelerate the mega projects that were initiated during the past 5 years. They will be doing so by simplifying procedures, incentivizing performance and making the best possible use of technology
- The Government would initiate changes to kick-start domestic and foreign investment, increasing the circulation of money in the economy
- The FM drew connection of NDA’s ambitious “Make In India” campaign with “Swadeshi” movement, saying that these movements encouraged local enterprises and self-reliance
- Nirmala Sitharaman also emphasized on the ‘Vision for the Decade’ that was presented in the interim budget and contained 10 points:
- Building physical and social infrastructure
- Digital India reaching every sector of the economy
- Pollution free India with green Mother Earth and Blue Skies
- Make in India with particular emphasis on MSMEs, Start-ups, defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices
- Water, water management, clean Rivers
- Blue economy
- Space programmes, Gaganyan, Chandrayan and Satellite programmes
- Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables
- Healthy society – Ayushman Bharat, well-nourished women & children. Safety of citizens
- Team India with Jan Bhagidari. Minimum Government, Maximum Governance
Union Budget 2019 Highlights: Infrastructure and Housing (Road, Railways and Aviation)
- The Government has given a massive push to all forms of physical connectivity through Pradhan Mantri Gram Sadak Yojana, industrial corridors, dedicated freight corridors, Bhartamala and Sagarmala projects, Jal Marg Vikas and UDAN Schemes
- The Bharatmala programme would help develop national road corridors and highways, while Sagasrmala would enhance port connectivity, modernization and port-linked industrialization
- The Jal Marg Vikas project for capacity augmentation of navigation on National Waterways is aimed at smoothening internal trade carried through inland water transport
- According to the FM, the railway infrastructure would need an investment of 50lakh crores between 2018 and 2030; PPP (Public-Private Partnerships) to be used for faster development and delivery of passenger freight services
- Through UDAAN, the number of operational airports has crossed 100 and the Government will be further working on the project for greater presence in the aviation sector
- One Nation, One Grid: Comprehensive restructuring of the National Highways Programme will be done, to ensure the creation of National Highways Grid of desirable capacity
- Movement of cargo on Ganga is estimated to rise 4 times in 4 years. The Government also envisions using rivers for cargo transportation, hopefully decongesting roads and railways
Union Budget 2019 Highlights: Focus On Affordable Housing
- To provide further impetus to ‘Housing for All’ by 2022, additional deduction of INR 1.5 lakh on interest paid on loans borrowed up to 31 March 2020 for purchase of house up to INR 45 lakh was discussed
- Nirmala Sitharaman said that the current rental laws are archaic, and a modern tenancy law will be finalized. To promote rental housing, this law will be designed and circulated to states
- Through this budget, 1.95 crore houses are proposed to the beneficiaries in the second phase of PMAY.
Union Budget 2019 Highlights :Farmer Welfare and Water Security
- The Government aims to form 10,000 new Farmer Producers Company (FPOs) and measures would be taken to allow farmers to benefit from e-NAM.
- FM proposes 80 livelihood incubators and 20 tech incubators to develop 75,000 entrepreneurs in the Agriculture under ASPIRE.
- Boost to agro-rural industries through cluster Pradhan Mantri Matsya Sampada Yojana launched based development under SFURTI scheme with focus on bamboo, honey and khadi clusters. The scheme will address critical gaps in strengthening value chain, including infrastructure, modernization, production, productivity and quality control.
- “Annadata ko kyun urjadata nahi bana sakte?”, The FM emphasizes that ‘Ease of Doing Business’ and ‘Ease of Living’ should apply to farmers too.
- Water supply in an integrated and holistic manner would help ensure ‘Har Ghar Jal’ by 2024. The campaign would focus on integrated demand and supply side management at local level, creation of local infrastructure for rainwater harvesting, groundwater recharge and household wastewater management.
Union Budget 2019 Highlights: Start-ups And MSME Sector
- The FM stated that trading in corporate bonds would be made user-friendly and strong steps would be taken by the Government to deepen corporate bond market
- Following this budget, an interest subversion scheme would be introduced: 2% interest subvention on fresh loans to MSMEs and loans up to INR 1 crore for MSMEs within 59 minutes
- To address delays in payment, the Government would also create a payment platform for MSMEs to enable filing of bills and payment on the platform
- Nirmala Sitharaman has proposed a social stock exchange for listing social enterprises. Social Stock Exchange in the making to take capital markets closer to the masses. The Government also proposed to create electronic fund-raising platform
- Pension to traders with turnover under INR 1.5 crore proposes pension scheme for small traders and extending pension benefits to around 3 crore retail traders and shopkeepers with an annual turnover less than INR 1.5 crores under Pradhan Mantri Karam Yogi Man Dhan Scheme
- India requires investments of INR 20 lakh crores every year. In light of that, minimum public holding in companies to be raised to 35% from 25% now
- To consider higher FDI in aviation, media and insurance. The Government is contemplating organizing an annual investors’ global meet in India, with them using national investment fund to get industrialists, sovereign wealth funds and VC funds
Union Budget 2019 Highlights : Education
- The Government plans to establish a National Research Foundation to identify thrust areas of national importance. National Research Foundation will accumulate funds by all ministries and use it to prioritize and avoid duplication of research
- Finance Minister launches ‘Study in India’ programme to bring more foreign students into India, with the aim of making India a hub an educational hub
- Kaushal Vikas Yojana would allocate INR 400 crores under ‘World Class Institutions’ for financial year 2019-2020 and 10 million youth to take up industry-relevant skill training
Union Budget 2019 Highlights: Banking & Financial Sector
- Expected to be a boon for the banking sector, the budget would allocate INR 70,000 to PSU banks for boosting the economy.
- To avoid conflict of interest and ease of operations, regulation of housing finance companies has been proposed to move from NHB to RBI.
- FM states that the Government is set to allow FIIs and FPIs investment in debt securities issued by NBFCs.
Budget 2019 Highlights: Electric Vehicles
- Customs duties have been exempted from certain parts of the EV to promote greater demand and supply for electric vehicles and help in the larger e-mobility ecosystem
- Following this budget, additional Income Tax deduction of up to Rs.1.5 lakh would be provided for loans taken to purchase electric vehicles
- Proposal to make India an EV and solar PV Cells manufacturing hub with added incentives. This is in continuation with reduction of GST on electric vehicles from 12% to 5%
Union Budget 2019 Highlights: Taxation – Direct Taxes, GST, etc.
- This budget has not proposed any changes in personal income tax rates.
- The Government has implemented an increase in surcharge on super rich: 3% surcharge for INR 2 crore income; 7% on INR 5 crore and above.
- Annual turnover limit for 25% corporate tax has been raised to INR 400 crores from INR 250 crores
- Following this budget, PAN and Aadhaar would now be interchangeable: More than 120 crore Indians now have Aadhar card, therefore for ease of taxpayers, the Government will now allow those who don’t have PAN to file returns by simply quoting Aadhar number and use it wherever they require to use PAN
- Fully automated GST Refund module shall be implemented; multiple tax ledgers to be replaced by one; invoice details to be captured in a central system
- The Government has increased customs duty on gold from 10% to 12.5%
- This budget has also hiked petrol and diesel cess by INR 1/liter