BUDGET SUMMARY WITH MAJOR HIGHLIGHTS OF THE INTERIM BUDGET 2019-20
- Interim Budget 2019-20 was presented in Parliament by the Union Minister for Finance Shri Piyush Goyal.
- Besides having a major Scheme for the farmers, it provides tax sops and sets the Developmental Agenda for the years to come.
Budget at a glance
Key message in the Interim Budget 2019-20
- Moving towards realizing a ‘New India’ by 2022 –
- Clean and healthy India with universal access to toilets, water and electricity to all
- An India where Farmers’ income would have doubled
- Ample opportunities to youth and women to fulfil their dreams
- An India free from terrorism, communalism, casteism, corruption and nepotism
Vision for the next Decade
- Foundation for India’s growth and development laid in the past 5 years
- Poised to become a Five Trillion Dollar Economy in the next five years
- Aspire to become a Ten Trillion Dollar Economy in the next 8 years thereafter
Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)
- To extend direct income support at the rate of Rs. 6,000 per year to farmer families, having cultivable land upto 2 hectares.
- PM-KISAN is launched with an outlay of Rs.75,000 crore for the FY 2019-20 and Rs.20,000 crore in the Revised Estimates of FY 2018-19.
- Under this Scheme, Rs.2,000 each will be transferred to the bank accounts of around 12 crore Small and Marginal farmer families, in three equal installments.
- This programme would be made effective from 1st December 2018 and the first installment for the period upto 31st March 2019 would be paid during this year itself.
Department of Fisheries
- To provide sustained and focused attention towards development of Fisheries, the Government has decided to create a separate Department of Fisheries.
- The FM announced 2% interest subvention to the farmers pursuing the activities of animal husbandry and fisheries, who avail loan through Kisan Credit Card.
- Further, in case of timely repayment of loan, they will also get an additional 3% interest subvention.
Rashtriya Gokul Mission
- Allocation of Rs.750 crore for Rashtriya Gokul Mission has been announced for the current year itself.
- Setting up of Rashtriya Kamdhenu Aayog to upscale sustainable genetic upgradation of cow resources and to enhance production and productivity of cows has also been announced.
Pradhan Mantri Shram-Yogi Maandhan
- To provide pensionary benefits to at least 10 crore labourers and workers in the unorganised sector a new Scheme called ‘Pradhan Mantri Shram-Yogi Maandhan’ is announced.
- Scheme is for the unorganised sector workers with monthly income upto Rs. 15,000.
- A sum of Rs.500 crore has been allocated for the Scheme.
- This pension yojana shall provide them an assured monthly pension of Rs. 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age.
- An unorganised sector worker joining pension yojana at the age of 29 years will have to contribute only Rs. 100 per month till the age of 60 years.
- A worker joining the pension yojana at 18 years, will have to contribute as little as Rs. 55 per month only.
- The Government will deposit equal matching share in the pension account of the worker every month.
- Individual taxpayers having taxable annual income up to Rs.5 lakhs will not be required to pay any income tax.
- Persons having gross income up to Rs. 6.50 lakhs are not required to pay any income tax if they make investments in provident funds, specified savings and insurance etc.
- Additional deductions such as interest on home loan up to Rs. 2 lakhs, interest on education loans, National Pension Scheme contributions, medical insurance and medical expenditure on senior citizens etc, are also provided for in the Interim Budget 2019-20.
- Thus, tax benefit of Rs. 18,500 crores is proposed to be provided to an estimated 3 crore middle class and small taxpayers comprising self-employed, small business, small traders, salary earners, pensioners and senior citizens.
- For salaried persons, Standard Deduction is being raised from the current Rs.40,000 to Rs.50,000. This will provide additional tax benefit of Rs. 4,700 crores to more than 3 crore salary earners and pensioners.
- Exemption on levy of income tax on notional rent on a second self-occupied house is also now proposed. Currently, income tax on notional rent is payable if one has more than one self-occupied house.
- TDS threshold on interest earned on bank/post office deposits is being raised from Rs. 10,000 to Rs.40,000.
- TDS threshold for deduction of tax on rent is proposed to be increased from Rs. 1,80,000 to Rs.2,40,000 for providing relief to small taxpayers.
Simplification of Direct Tax System
- FM said that the Government has been successful in bringing down average inflation to 4.6% over last five years, which is lower than the inflation during the tenure of any other Government.
- The average rate of inflation during previous five years 2009-2014 was a backbreaking 10.1%, he pointed out.
- The fiscal deficit has been brought down to 3.4% in 2018-19 RE from the high of almost 6% seven years ago, the FM mentioned.
- He said, the Current Account Deficit (CAD), against a high of 5.6% six years ago, is likely to be only 2.5% of GDP this year.
- We contained the fiscal deficit notwithstanding the Finance Commission’s recommendations increasing the share of the States from 32% to 42% in central taxes, which we accepted in the true spirit of cooperative federalism, thereby transferring significantly higher amounts to the States.
Growth and FDI
- The FM stated that a stage for high growth in decades to come, has now been set, after a wave of next generation path breaking structural reforms over the last five years, including introduction of GST and other taxation reforms.
- We are the fastest growing major economy in the world with an annual average GDP growth during last five years higher than the growth achieved by any Government since economic reforms began in 1991.
- From being the 11th largest economy in the world in 2013-14, we are today the 6thlargest in the world, the FM said in his Budget speech.
- He said India could attract massive amount of as much as $239 billion of FDI during the last 5 years, when most of the FDI was allowed to come in through the automatic route.
Enhanced allocations for major Schemes
- Announcing an allocation of Rs.60,000 crores for MGNREGA for Budget Estimates 2019-20, the FM said that additional allocations will be made, if required.
- Pradhan Mantri Gram Sadak Yojana (PMGSY) is being allocated Rs.19,000 crore in BE 2019-20 as against Rs.15,500 crore in RE 2018-19.
- Allocation for Integrated Child Development Scheme (ICDS) is being increased from Rs.23,357 crore in RE 2018-19 to Rs.27,584 crore in BE 2019-20.
- A substantial increase is proposed in the allocation for welfare of the Scheduled Castes and Scheduled Tribes.
- The allocation of Rs.56,619 crore made in BE of 2018-19 for Scheduled Caste, further increased to Rs.62,474 crore in RE is proposed to be enhanced to Rs.76,801 crore in BE for 2019-20, an increase of 35.6% over BE of 2018-19.
- For the Scheduled Tribes also, proposed allocation in 2019-20 BE is Rs.50,086 crore as against Rs.39,135 crore in BE 2018-19, an increase of 28%.
Pradhan Mantri Awas Yojana
- During the period 2014-18, a total number of 1.53 crore houses have been built under the Pradhan Mantri Awas Yojana.
- By March 2019, all households will be provided with electricity connection.
- Till now, 143 crore LED bulbs have been provided in a mission mode which has resulted in saving of Rs.50,000 crore for the poor and middle class.
- Ayushman Bharat is providing medical treatment to nearly 50 crore people in the country, around 10 lakh patients have already benefited through free treatment for medical treatment which would have otherwise cost them Rs. 3,000 crores.
- Lakhs of poor and middle-class people are also benefiting from reduction in the prices of essential medicines, cardiac stents and knee implants, and availability of medicines at affordable prices through Pradhan Mantri Jan Aushadhi Kendras.
Massive scale up of healthcare
Reaching out to the most deprived
- FM said under the Ujjwala Yojana aiming delivery of 8 crore free LPG connections, more than 6 crore connections have already been given and the remaining will get free gas connections by next year.
Women’s development to Women led development
National Artificial Intelligence Portal
- National Artificial Intelligence Portal will also be developed soon as a part of the National Programme on ‘Artificial Intelligence.
The Department of Industrial Policy and Promotion
- The Department of Industrial Policy and Promotion will now be renamed as the Department for Promotion of Industries and Internal Trade.
- The FM stated that the GeM, created by the present Government two years ago, resulted in average savings of 25-28% and the platform will now be extended to all CPSEs.
- Transactions of over Rs. 17,500 crores have taken place so far.
- The Finance Minister announced that for the first time, the country’s Defence Budget will be of over Rs.3 lakh crore.
Civil Aviation Sector
- The Finance Minister pointed-out that domestic air traffic passengers have doubled during the last five years, leading to large number of jobs also being created.
- The number of operational airports has crossed 100 with the commissioning of the Pakyong airport in Sikkim.
- Arunachal Pradesh came on the air map recently and Meghalaya, Tripura and Mizoram have come on India’s rail map for the first time.
Infrastructure : Strengthening the Backbone
Railway Budget at a glance
- The Railways’ overall capital expenditure programme is of Rs. 1,58,658 crores.
- The FM, who is also holding the portfolio of Railway Ministry, announced that the Operating Ratio is expected to improve from 98.4% in 2017-18 to 96.2% in 2018-19 (RE) and further to 95% in 2019-20 (BE).
- India’s installed solar generation capacity has grown over ten times in last five years.
- FM said that our commitment to promote renewable energy is reflected in setting up the International Solar Alliance, the first treaty based international inter-governmental organisation headquartered in India.
- This sector is now creating lakhs of new age jobs.
- The FM announced that in Entertainment industry, which is a major employment generator, regulatory provisions will now rely more on self-declarations.
- To promote entertainment industry, the Single window clearance for ease of shooting films, now available only to foreigners, will also be made available to Indian filmmakers.
- We will also introduce anti-camcording provisions in the Cinematograph Act to control the menace of piracy, he said.
Five Trillion Dollar Economy
- FM said that we are poised to become a Five Trillion Dollar Economy in the next five years and aspire to become a Ten Trillion Dollar Economy in the next 8 years thereafter.
- He said that there has been a Growth of 18% in Direct Tax Collections in 2017-18 and increase in tax base by as many as 1.06 crore people filing income tax returns for the first time in FY 2017-18, mainly on account of demonetization.
- FM said that he is proposing, through the Finance Bill, necessary amendments to levy Stamp duties on one instrument relating to one transaction and get collected at one place through the Stock Exchanges.
- The duty so collected will be shared with the State Governments seamlessly on the basis of domicile of buying client, he said.
Total expenditure and Fiscal Deficit
- In all the total expenditure is to increase from Rs.24,57,235 crore in 2018-19 RE to Rs.27,84,200 crore in 2019-20 BE.
- A rise of Rs.3,26,965 crore or approximately 13.30%.
- This reflects a high increase considering low inflation. The fiscal deficit of year 2019-20 is estimated to be 3.4% of GDP.
- The FM pointed out that after completion of the fiscal deficit consolidation programme, the Government would now focus on Debt consolidation.
- He said We have maintained the glide path towards our target of 3% of fiscal deficit to be achieved by 2020-21.
- India’s Debt to GDP ratio was 46.5% in year 2017-18.
- The FRBM Act prescribes that the Debt to GDP ratio of the Government of India should be brought down to 40% by 2024-25.
Jan Dhan-Aadhaar-Mobile (JAM) and Direct Benefit Transfer
- In the last five years, nearly 34 crore Jan Dhan bank accounts opened
- Aadhaar now near universally implemented
- Ensure the poor and middle class receive the benefits of Government schemes directly in their bank accounts by eliminating middlemen
Steps against corruption
- Government walked the talk on corruption and ushered in a new era of transparency: FM
- RERA and Benami Transaction (Prohibition) Act have brought transparency in real estate
- The Fugitive Economic Offenders Act, 2018 to help confiscate economic offenders
- Government conducted transparent auction of natural resources such as coal & spectrum
Drive against Black money
- Undisclosed income of about Rs 1,30,000 crore brought under tax through initiatives like Black money Law, Fugitive Criminal offenders Act, Demonetisation etc.
- Benami assets worth Rs 6,900 crore have been attached
- 18% growth in Direct tax
Banking Reforms and Insolvency and Bankruptcy Code (IBC)
- The IBC has institutionalized a resolution-friendly mechanism
- Government has stopped the culture of phone banking: FM
- Government adopted 4Rs approach of recognition, resolution, re-capitalization & reforms
- Government has implemented measures to ensure ‘Clean Banking’
- Government has already recovered Rs. 3 lakh crores in favour of banks and creditors
- Government has invested Rs. 2.6 lakh crore for recapitalization of public sector banks
Ten dimensions of Vision for India of 2030
- India would be a modern, technology driven, high growth, equitable and transparent society
- To build physical as well as social infrastructure and to provide ease of living
- To create a Digital India, digitize government processes with leaders from youth
- Making India pollution free by leading transport revolution with Electric Vehicles and focus on Renewables
- Expanding rural industrialisation using modern digital technologies to generate massive employment
- Clean Rivers, safe drinking water to all Indians and efficient use of water through micro-irrigation
- Besides scaling up of Sagarmala, Coastline and Ocean waters powering India’s development and growth
- Aim at our space programme – Gaganyaan, India becoming the launch-pad of satellites for the World and placing an Indian astronaut into space by 2022
- Making India self-sufficient in food, exporting to the world to meet their food needs and producing food in the most organic way
- A healthy India via Ayushman Bharat with women having equal rights and concern for their safety and empowerment
- Transforming India into a Minimum Government Maximum Governance nation with pro-active and responsible bureaucracy.
Customs and trading across borders
- Customs duties on 36 capital goods abolished
- Digitization of import and export transactions
- RFID technology to improve logistics
Digital India Revolution
- More than 3 lakh Common Service Centres (CSCs) exist to deliver services to the citizens
- India now leading the world in the consumption of mobile data
- Monthly consumption of mobile data increased by over 50 times in the last five years
- Under Make in India, mobile and parts manufacturing companies increased from 2 to more than 268 providing huge job opportunities
- GST made India a common market
- GST led to increased tax base, higher collections and ease of trade
- Inter-state movements now faster, more efficient, and hassle free
- Responsive and sensitive reduction of tax rates – Most items of daily use now in the 0% or 5% tax slab
- Relieving the businesses and service providers-
- Exemptions from GST for small businesses doubled from Rs. 20 lakhs to Rs. 40 lakhs
- Small businesses having turnover up to Rs. 1.5 crore pay only 1% flat rate and file one annual return only
- Small service providers with turnover upto Rs.50 lakhs can opt for composition scheme and pay GST at 6% instead of 18%
- Soon, businesses comprising over 90% of GST payers to be allowed to file quarterly return
- Encouraging GST revenue trends – The average monthly tax collection in the current year is Rs. 97,100 crore per month as compared to Rs. 89,700 crore per month in the first year