HIGHLIGHTS OF UNION BUDGET 2019-20
“15”
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PRESS
INFORMATION BUREAU
GOVERNMENT
OF INDIA
******
Key
Highlights of Union Budget 2019-20
New Delhi, July 5, 2019
Ashadha 14, 1941
The Union Minister for Finance and Corporate
Affairs Smt. Nirmala Sitharaman made her maiden Budget Speech today and
presented the Union Budget 2019-20 before the Parliament. The key highlights of
Union Budget 2019 are as follows:
10-point Vision for the decade
·
Building Team India with Jan Bhagidari: Minimum Government Maximum Governance.
·
Achieving green
Mother Earth and Blue Skies
through a pollution-free India.
·
Making Digital India reach every sector of the
economy.
·
Launching Gaganyan,
Chandrayan, other Space and Satellite
programmes.
·
Building physical and social infrastructure.
·
Water, water management, clean rivers.
·
Blue Economy.
·
Self-sufficiency and export of food-grains, pulses,
oilseeds, fruits and vegetables.
·
Achieving a healthy society via Ayushman Bharat, well-nourished women
& children, safety of citizens.
·
Emphasis on MSMEs, Start-ups,
defence manufacturing, automobiles, electronics, fabs and batteries, and
medical devices under Make in India.
Towards a 5 Trillion Dollar Economy
·
“People‟s hearts filled with Aasha (Hope), Vishwas (Trust),
Aakansha (Aspirations)”,
says FM.
·
Indian economy to become a 3 trillion dollar
economy in the current year.
·
Government aspires to make India a 5 trillion
dollar economy.
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·
Need for investment in: o
Infrastructure.
o Digital economy.
o Job creation in small and medium
firms.
·
Initiatives to be proposed for kick-starting the
virtuous cycle of investments.
·
Common man‟s life changed through MUDRA loans for ease of doing business.
·
Measures
related to MSMEs:
o Pradhan
Mantri Karam Yogi Maandhan Scheme
§
Pension benefits to about three
crore retail traders & small shopkeepers with annual turnover less than Rs.
1.5 crore.
§
Enrolment to be kept simple,
requiring only Aadhaar, bank account and a self-
declaration.
o Rs. 350
crore allocated for FY 2019-20 for 2% interest subvention (on fresh or
incremental loans) to all GST-registered MSMEs, under the Interest Subvention Scheme for MSMEs.
o Payment platform for MSMEs to be created to enable filing of bills and payment thereof, to eliminate delays in government payments.
·
India‟s first indigenously
developed payment ecosystem for transport, based on National Common Mobility
Card (NCMC) standards, launched in March 2019.
·
Inter-operable transport card runs
on RuPay card and would allow the holders to pay for bus travel, toll taxes,
parking charges, retail shopping.
·
Massive push given to all forms of physical
connectivity through:
o Pradhan Mantri Gram Sadak Yojana.
o Industrial
Corridors, Dedicated Freight Corridors.
o Bhartamala and Sagarmala projects, Jal Marg Vikas and UDAN Schemes.
·
State road networks to be developed in second phase
of Bharatmala project.
·
Navigational capacity of Ganga to be enhanced via
multi modal terminals at Sahibganj
and Haldia
and a navigational lock at Farakka by
2019-20, under Jal Marg Vikas Project.
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·
Four times increase in next four
years estimated in the cargo volume on Ganga, leading to cheaper freight and
passenger movement and reducing the import bill.
·
Rs. 50 lakh crore investment needed in Railway Infrastructure during
2018-2030.
·
Public-Private-Partnership
proposed for development and completion of tracks, rolling stock manufacturing
and delivery of passenger freight services.
·
657 kilometers of Metro Rail network has become
operational across the country.
·
Policy interventions to be made
for the development of Maintenance,
Repair and Overhaul (MRO), to
achieve self- reliance in aviation segment.
·
Regulatory roadmap for making
India a hub for aircraft financing and leasing activities from Indian shores,
to be laid by the Government.
·
Outlay of Rs. 10,000 crore for 3 years approved for
Phase-II of FAME Scheme.
·
Upfront incentive proposed on
purchase and charging infrastructure, to encourage faster adoption of Electric
Vehicles.
·
Only advanced-battery-operated
and registered e-vehicles to be incentivized under FAME Scheme.
·
National Highway Programme to be
restructured to ensure a National Highway Grid, using a financeable model.
·
Power at affordable rates to states ensured under „One Nation, One Grid‟.
·
Blueprints to be made available for gas grids,
water grids, i-ways, and regional airports.
·
High Level Empowered Committee
(HLEC) recommendations to be implemented: o Retirement of old & inefficient plants.
o Addressing low utilization of gas
plant capacity due to paucity of Natural Gas.
·
Cross subsidy surcharges,
undesirable duties on open access sales or captive generation for industrial
and other bulk power consumers to be removed under Ujjwal DISCOM Assurance Yojana
(UDAY).
·
Package of power sector tariff and structural
reforms to be announced soon.
·
Reform measures to be taken up to promote rental housing.
·
Model
Tenancy Law to be finalized and circulated to the states.
·
Joint development and concession mechanisms to be used for public infrastructure and affordable housing on land parcels held
by the Central Government and CPSEs.
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·
Measures
to enhance the sources of capital for infrastructure financing:
o Credit Guarantee Enhancement Corporation to be set
up in 2019-2020.
o Action plan to be put in place to deepen the market for long term bonds
with focus on infrastructure.
o Proposed transfer/sale of investments by FIIs/FPIs (in debt securities
issued by IDF-NBFCs) to any domestic investor within the specified lock-in
period.
·
Measures
to deepen bond markets:
o Stock
exchanges to be enabled to allow AA rated bonds as collaterals.
o User-friendliness
of trading platforms for corporate bonds to be reviewed.
·
Social
stock exchange:
o
Electronic fund raising platform under the
regulatory ambit of SEBI. o Listing social enterprises and
voluntary organizations.
o To raise capital as equity, debt
or as units like a mutual fund.
·
SEBI to consider raising the
threshold for minimum public shareholding in the listed companies from 25% to
35%.
·
Know Your Customer (KYC) norms
for Foreign Portfolio Investors to be made more investor friendly.
·
Government to supplement efforts
by RBI to get retail investors to invest in government treasury bills and
securities, with further institutional development using stock exchanges.
·
Measures
to make India a more attractive FDI destination:
o FDI in sectors like aviation,
media (animation, AVGC) and insurance sectors can be
opened further after multi-stakeholder examination.
o Insurance Intermediaries to get
100% FDI.
o Local sourcing norms to be eased
for FDI in Single Brand Retail sector.
·
Government to organize an annual
Global Investors Meet in India, using National Infrastructure Investment Fund
(NIIF) as an anchor to get all three sets of global players (pension, insurance
and sovereign wealth funds).
·
Statutory limit for FPI
investment in a company is proposed to be increased from 24% to sectoral
foreign investment limit. Option to be given to the concerned corporate to
limit it to a lower threshold.
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·
NRI-Portfolio Investment Scheme
Route is proposed to be merged with the Foreign Portfolio Investment Route.
·
Cumulative resources garnered through
new financial instruments like Infrastructure Investment Trusts (InvITs), Real
Estate Investment Trusts (REITs) as well as models like Toll-Operate-Transfer
(ToT) exceed Rs. 24,000 crore.
·
New Space India Limited (NSIL), a PSE,
incorporated as a new commercial arm of Department
of Space.
·
To tap the benefits of the
Research & Development carried out by ISRO like commercialization of
products like launch vehicles, transfer to technologies and marketing of space
products.
Direct Taxes
·
Tax rate reduced to 25% for companies with annual
turnover up to Rs. 400 crore
·
Surcharge increased on
individuals having taxable income from Rs. 2 crore to Rs. 5 crore and Rs. 5
crore and above.
·
India‟s Ease of Doing Business ranking under the
category of „paying taxes‟ jumped
from 172
in 2017 to 121 in the 2019.
·
Direct tax revenue increased by over 78% in past 5
years to Rs. 11.37 lakh crore
Tax Simplification and Ease of living - making
compliance easier by leveraging technology:
·
Interchangeability
of PAN and Aadhaar
o
Those who don‟t have PAN can file tax returns using
Aadhaar. o Aadhaar can be used wherever PAN
is required.
·
Pre-filling
of Income-tax Returns for faster, more accurate tax returns
o Pre-filled tax returns with
details of several incomes and deductions to be made
available.
o Information to be collected from
Banks, Stock exchanges, mutual funds etc.
·
Faceless
e-assessment
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o To be carried out initially in cases requiring verification of certain
specified transactions or discrepancies.
Affordable housing
·
Additional deduction up to Rs. 1.5 lakhs for
interest paid on loans borrowed up to 31st
o Overall
benefit of around Rs. 7 lakh over loan period of 15 years.
Boost to Electric Vehicles
·
Additional income tax deduction of Rs. 1.5 lakh on
interest paid on electric vehicle loans.
·
Customs duty exempted on certain parts of electric
vehicles.
Other Direct Tax measures
·
Simplification of tax laws to reduce genuine
hardships of taxpayers:
o Higher
tax threshold for launching prosecution for non-filing of returns
o Appropriate class of persons exempted from the anti-abuse provisions of
Section 50CA and Section 56 of the Income Tax Act.
Relief for Start-ups
·
Capital gains exemptions from sale
of residential house for investment in start-ups extended till FY21.
·
„Angel tax‟ issue resolved-
start-ups and investors filing requisite declarations and providing information
in their returns not to be subjected to any kind of scrutiny in respect of valuations
of share premiums.
·
Funds raised by start-ups to not require scrutiny
from Income Tax Department
o E-verification mechanism for
establishing identity of the investor and source of funds.
·
Special administrative arrangements for pending
assessments and grievance redressal
o No inquiry in such cases by the
Assessing Officer without obtaining approval of the
supervisory officer.
·
No scrutiny of valuation of shares issued to
Category-II Alternative Investment Funds.
·
Relaxation of conditions for carry forward and set
off of losses.
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·
Interest on certain bad or
doubtful debts by deposit taking as well as systemically important non-deposit
taking NBFCs to be taxed in the year in which interest is actually received.
International Financial Services Centre (IFSC)
·
Direct tax incentives proposed for an IFSC:
o 100 % profit-linked deduction in
any ten-year block within a fifteen-year period.
o Exemption from dividend distribution tax from current and accumulated
income to companies and mutual funds.
o Exemptions
on capital gain to Category-III Alternative Investment Funds (AIFs).
o Exemption
to interest payment on loan taken from non-residents.
Securities Transaction Tax (STT)
·
STT restricted only to the
difference between settlement and strike price in case of exercise of options.
Indirect Taxes
Make In India
·
Basic Customs Duty increased on
cashew kernels, PVC, tiles, auto parts, marble slabs, optical fibre cable, CCTV
camera etc.
·
Exemptions from Custom Duty on
certain electronic items now manufactured in India withdrawn.
·
End use based exemptions on palm stearin, fatty
oils withdrawn.
·
Exemptions to various kinds of papers withdrawn.
·
5% Basic Custom Duty imposed on imported books.
·
Customs duty reduced on certain raw materials such
as:
o Inputs for artificial kidney and
disposable sterilised dialyser and fuels for nuclear
power plants etc.
o Capital goods required for
manufacture of specified electronic goods.
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·
Defence equipment not manufactured in India
exempted from basic customs duty
Other Indirect Tax provisions
·
Export duty rationalised on raw and semi-finished
leather
·
Increase in Special Additional
Excise Duty and Road and Infrastructure Cess each by Rs. 1 per litre on petrol
and diesel
·
Custom duty on gold and other precious metals
increased
·
Legacy Dispute Resolution Scheme
for quick closure of pending litigations in Central Excise and Service tax from
pre-GST regime
Grameen Bharat / Rural India
·
Ujjwala Yojana and Saubhagya Yojana have transformed the lives of every rural family, dramatically improving ease of their
living.
·
Electricity and clean cooking facility to all
willing rural families by 2022.
·
Pradhan Mantri Awas Yojana – Gramin (PMAY-G)
aims to achieve "Housing for All"
by 2022:
o Eligible beneficiaries to be
provided 1.95 crore houses with amenities like toilets,
electricity and LPG connections during its second
phase (2019-20 to 2021-22).
·
Pradhan
Mantri Matsya Sampada Yojana (PMMSY)
o A robust fisheries management
framework through PMMSY to be established by the Department of Fisheries.
o To address critical gaps in the
value chain including infrastructure, modernization,
traceability, production, productivity,
post-harvest management, and quality control.
·
Pradhan
Mantri Gram Sadak Yojana (PMGSY)
o Target of connecting the eligible
and feasible habitations advanced from 2022 to 2019
with 97% of such habitations already being provided
with all weather connectivity.
o 30,000 kilometers of PMGSY roads
have been built using Green Technology, Waste Plastic and Cold Mix Technology, thereby reducing carbon footprint.
o 1,25,000 kilometers of road
length to be upgraded over the next five years under
PMGSY III with an estimated cost of Rs. 80,250
crore.
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(SFURTI)
o Common
Facility Centres (CFCs) to be setup to facilitate cluster based development
for making traditional industries more productive, profitable and
capable for generating sustained employment opportunities.
o 100 new clusters to be setup during 2019-20 with special focus on
Bamboo, Honey and Khadi, enabling 50,000 artisans to join the economic value
chain.
·
Scheme for
Promotion of Innovation,
Rural Industry and
Entrepreneurship‟
(ASPIRE) consolidated.
o 80 Livelihood Business Incubators (LBIs) and 20 Technology Business
Incubators (TBIs) to be setup in 2019-20.
o 75,000
entrepreneurs to be skilled in agro-rural industry sectors.
·
Private entrepreneurships to be
supported in driving value-addition to farmers‟ produce from the field and for
those from allied activities.
·
Dairying through cooperatives to
be encouraged by creating infrastructure for cattle feed manufacturing, milk
procurement, processing & marketing.
·
10,000 new Farmer Producer Organizations to be formed, to ensure economies of
scale for farmers.
·
Government to work with State Governments to allow
farmers to benefit from e-NAM.
·
Zero Budget Farming in which few states‟ farmers are already being trained to
be replicated in other states.
·
India‟s water
security
o New Jal
Shakti Mantralaya to look at the management of our water resources and
water
supply in an integrated and holistic manner
o Jal Jeevan
Mission to achieve
Har Ghar Jal
(piped water supply)
to all rural
households
by 2024
o To focus
on integrated demand and supply side management of water at the local
level.
o Convergence with other Central and State Government Schemes to achieve
its objectives.
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o 1592 critical and over exploited Blocks spread across 256 District being
identified for the Jal Shakti Abhiyan.
o Compensatory Afforestation Fund Management and Planning Authority
(CAMPA) fund can be used for this purpose.
·
Swachh
Bharat Abhiyan
o 9.6 crore toilets constructed since
Oct 2, 2014.
o More than
5.6 lakh villages have become Open Defecation Free (ODF).
o Swachh Bharat Mission to be expanded to undertake sustainable solid
waste management in every village.
·
Pradhan
Mantri Gramin Digital Saksharta Abhiyan,
o Over two
crore rural Indians made digitally literate.
o Internet
connectivity in local bodies in every Panchayat under Bharat-Net to bridge
rural-urban
divide.
o Universal Obligation Fund under a PPP arrangement to be utilized for
speeding up Bharat-Net.
Shahree Bharat/Urban India
·
Pradhan
Mantri Awas Yojana – Urban (PMAY-Urban)-
o Over 81
lakh houses with an investment of about Rs. 4.83 lakh crore sanctioned of
which
construction started in about 47 lakh houses.
o Over 26
lakh houses completed of which nearly 24 lakh houses delivered to the
beneficiaries.
o Over 13
lakh houses so far constructed using new technologies.
·
More than 95% of cities also declared Open
Defecation Free (ODF).
·
Almost 1 crore citizens have downloaded Swachhata
App.
·
Target of achieving Gandhiji‟s
resolve of Swachh Bharat to make
India ODF by 2nd October 2019.
o To mark this occasion, the Rashtriya
Swachhta Kendra to be inaugurated at Gandhi Darshan, Rajghat on 2nd
October, 2019.
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o Gandhipedia being developed by National Council for Science Museums to sensitize youth and society about positive
Gandhian values.
·
Railways to be encouraged to
invest more in suburban railways through SPV structures like Rapid Regional
Transport System (RRTS) proposed on the Delhi-Meerut route.
·
Proposal to enhance the
metro-railway initiatives by: o Encouraging more PPP initiatives.
o Ensuring completion of sanctioned
works.
o Supporting transit oriented
development (TOD) to ensure commercial activity around
transit hubs.
Youth
·
New National Education Policy to be
brought which proposes o
Major changes in both school and higher education
o Better Governance systems
o Greater focus on research and
innovation.
·
National
Research Foundation (NRF) proposed
o To fund,
coordinate and promote research in the country.
o To
assimilate independent research grants given by various Ministries.
o To
strengthen overall research eco-system in the country
o This
would be adequately supplemented with additional funds.
·
Rs. 400 crore provided for “World Class Institutions”, for FY
2019-20, more than three times the revised estimates for the previous year.
·
„Study in India‟ proposed to bring foreign
students to study in Indian higher educational institutions.
·
Regulatory systems of higher
education to be reformed comprehensively: o To promote greater autonomy.
o To focus on better academic
outcomes.
·
Draft legislation to set up Higher Education Commission of India (HECI),
to be presented.
·
Khelo
India Scheme to be expanded with all necessary financial
support.
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·
National Sports Education Board for
development of sportspersons to be set up under Khelo India, to popularize sports at all levels
·
To prepare youth for overseas
jobs, focus to be increased on globally valued skill-sets including language
training, AI, IoT, Big Data, 3D Printing, Virtual Reality and Robotics.
·
Set of four labour codes
proposed, to streamline multiple labour laws to standardize and streamline
registration and filing of returns.
·
A television program proposed
exclusively for and by start-ups, within the DD bouquet of channels.
·
Stand-Up India Scheme to be
continued for the period of 2020-25. The Banks to provide financial assistance for demand based businesses.
Ease of Living
·
About 30 lakh workers joined the Pradhan Mantri Shram Yogi Maandhan Scheme
that provides Rs. 3,000 per month as pension on attaining the age of 60
to workers in unorganized and informal sectors.
·
Approximately 35 crore LED bulbs
distributed under UJALA Yojana
leading to cost saving of Rs. 18,341 crore annually.
·
Solar stoves and battery chargers
to be promoted using the approach of LED bulbs mission.
·
A massive program of railway station modernization
to be launched.
Naari Tu Narayani/Women
·
Approach shift from
women-centric-policy making to women-led initiatives and movements.
·
A Committee proposed with
Government and private stakeholders for moving forward on Gender budgeting.
·
SHG:
o Women SHG interest subvention
program proposed to be expanded to all districts.
o Overdraft of Rs. 5,000 to be
allowed for every verified women SHG member having
a Jan Dhan Bank Account.
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o One woman per SHG to be eligible for a loan up to Rs. 1 lakh under MUDRA
Scheme.
India‟s Soft Power
·
Proposal to consider issuing
Aadhaar Card for NRIs with Indian Passports on their arrival without waiting
for 180 days.
·
Mission to integrate traditional
artisans with global markets proposed, with necessary patents and geographical
indicators.
·
18 new Indian diplomatic Missions
in Africa approved in March, 2018, out of which 5 already opened. Another 4 new
Embassies intended in 2019-20.
·
Revamp of Indian Development Assistance Scheme
(IDEAS) proposed.
·
17 iconic Tourism Sites being developed into model
world class tourist destinations.
·
Present digital repository aimed
at preserving rich tribal cultural heritage, to be strengthened.
Banking and Financial Sector
·
NPAs of commercial banks reduced by over Rs. 1 lakh
crore over the last year.
·
Record recovery of over Rs. 4 lakh crore effected
over the last four years.
·
Provision coverage ratio at its highest in seven
years.
·
Domestic credit growth increased to 13.8%.
·
Measures
related to PSBs:
o Rs. 70,000 crore proposed to be
provided to PSBs to boost credit.
o PSBs to leverage technology,
offering online personal loans and doorstep banking,
and enabling customers of one PSBs to access
services across all PSBs.
o Steps to be initiated to empower
accountholders to have control over deposit of cash
by others in their accounts.
o Reforms to be undertaken to
strengthen governance in PSBs.
·
Measures
related to NBFCs:
o Proposals for strengthening the
regulatory authority of RBI over NBFCs to be placed
in the Finance Bill.
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o Requirement of creating a Debenture Redemption Reserve will be done away
with to allow NBFCs to raise funds in public issues.
o Steps to
allow all NBFCs to directly participate on the TReDS platform.
·
Return of regulatory authority
from NHB to RBI proposed, over the housing finance sector.
·
Rs. 100 lakh crore investment in
infrastructure intended over the next five years. Committee proposed to
recommend the structure and required flow of funds through development finance
institutions.
·
Steps to be taken to separate the NPS Trust from
PFRDA.
·
Reduction in Net Owned Fund
requirement from Rs. 5,000 crore to Rs. 1,000 crore proposed:
o To
facilitate on-shoring of international insurance transactions.
o To enable opening of branches by foreign reinsurers in the International
Financial Services Centre.
·
Measures
related to CPSEs:
o Target of
Rs. 1, 05,000 crore of disinvestment receipts set for the FY 2019-20.
o Government to reinitiate the process of strategic disinvestment of Air
India, and to offer more CPSEs for strategic participation by the private
sector.
o Government to undertake strategic sale of PSUs and continue to
consolidate PSUs in the non-financial space.
o Government to consider going to an appropriate level below 51% in PSUs
where the government control is still to be retained, on case to case basis.
o Present policy of retaining 51% Government stake to be modified to
retaining 51% stake inclusive of the stake of Government controlled institutions.
o Retail
participation in CPSEs to be encouraged.
o To
provide additional investment space:
§
Government to realign its holding
in CPSEs
§
Banks to permit greater
availability of its shares and to improve depth of its market.
o Government to offer an investment option in ETFs on the lines of Equity
Linked Savings Scheme (ELSS).
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o Government to meet public shareholding norms of 25% for all listed PSUs
and raise the foreign shareholding limits to maximum permissible sector limits
for all PSU companies which are part of Emerging Market Index.
·
Government to raise a part of its
gross borrowing program in external markets in external currencies. This will
also have beneficial impact on demand situation for the government securities
in domestic market.
·
New series of coins of One Rupee,
Two Rupees, Five Rupees, Ten Rupees and Twenty Rupees, easily identifiable to
the visually impaired to be made available for public use shortly.
Digital Payments
·
TDS of 2% on cash withdrawal exceeding Rs. 1 crore
in a year from a bank account
·
Business establishments with
annual turnover more than Rs. 50 crore shall offer low cost digital modes of
payment to their customers and no charges or Merchant Discount Rate shall be
imposed on customers as well as merchants.
Mega Investment in Sunrise and Advanced Technology Areas
·
Scheme to invite global companies
to set up mega-manufacturing plants in areas such as Semi-conductor Fabrication
(FAB), Solar Photo Voltaic cells, Lithium storage batteries, Computer Servers,
Laptops, etc
o Investment linked income tax
exemptions to be provided along with indirect tax benefits.
Achievements during 2014-19
·
1 trillion dollar added to Indian
economy over last 5 years (compared to over 55 years taken to reach the first
trillion dollar).
·
India is now the 6th largest
economy in the world, compared to 11th largest
five years ago.
·
Indian economy is globally the 3rd largest
in Purchasing Power Parity (PPP) terms.
·
Strident commitment to fiscal
discipline and a rejuvenated Centre-State dynamic provided during 2014-19.
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·
Average amount spent on food
security per year almost doubled during 2014-19 compared to 2009-14.
·
Patents issued more than trebled in 2017-18 as
against the number in 2014.
·
Ball set rolling for a New India, planned and
assisted by the NITI Aayog.
Roadmap for future
·
Simplification of procedures.
·
Incentivizing performance.
·
Red-tape reduction.
·
Making the best use of technology.
·
Accelerating mega programmes and services initiated
and delivered so far.
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DSM/RM/BB/AS/KA/PJ/SG
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