Minister for Finance and Corporate Affairs, Government of India, in Parliament on July 05, 2019. India is all set to become US$ 3 trillion economies by the end of FY20. Total expenditure for 2019-20 is budgeted at Rs 2,786,349 crore (US$ 417.95 billion), an increase of 14.09 percent from 2018-19 (budget estimates).
Highlights of Union Budget 2019-20
- Overview of the economy
- India was a US$ 1.85 trillion economy in 2014 and it has reached US$ 2.7 trillion in five years, the fastest growing major economy and the sixth largest economy in the world, compared to 11th largest in 2013-14.
- Metro rail network of 657 km has become operational in the country.
- India target to become US$ 5 trillion economies in the next five years and might become a US$ 10 trillion economy in the next eight years thereafter.
- The Indian economy grew at 6.8 percent in 2018-19 and fourth quarter growth slumped to 5.8 percent which was a 17 percent quarter low.
- Movement of cargo on Ganga is estimated to rise four times in the next four years.
Major Expenditure Items
- Total capital expenditure will be Rs 876,209 crore (US$ 131.43 billion) for 2019-20.
- Centrally sponsored schemes have been allocated Rs 331,610 crore (US$ 49.74 billion) in 2019-20.
- The defense budget is Rs 305,296 crore (US$ 45.79 billion) for the first time in 2019-20.
- Amount of Rs 174,300 crore (US$ 26.14 billion) has been approved for pension in the budget 2020.
Labour and Youth Welfare
- National Sports Education Board to be set up under Khelo India to prepare youth for new age skills, Artificial Intelligence, IoT, Big Data, 3D Printing, Virtual Reality, etc.
- National Research Foundation to be established to fund, coordinate and promote R&D.
- Rs 400 crore (US$ 60 million) provided for ‘World Class Institutions’ for FY20
- “Study in India” to bring foreign students to higher educational institutions
- The Government of India has decided to extend the pension benefit to about three crore retail traders & small shopkeepers whose annual turnover is less than Rs 1.5 crore (US$ 0.22 million) under “Pradhan Mantri Karam Yogi Maandhan Scheme.
Support for Farmers
- Government is planning to form 10,000 new Farmer Producer Organizations, to ensure economies of scale for farmers over the next five years.
- The government will work with State Governments to allow farmers to benefit from e-NAM (National Agriculture Market).
- The government might replicate “one count: Zero Budget Farming” model which can help in doubling our farmers’ income in time for our 75th year of Independence.
- Ministry of Railways has been allocated Rs 94,071 crore (US$ 14.11 billion) in 2019-20.
- The government has suggested the investment of Rs 5,000,000 crore (US$ 750 billion) for railways infrastructure between 2018-2030.
- Metro rail network has reached to 657 Km.
- Operating ratio improved by 95 percent in 2019-20.
- Government has announced to invest Rs 10,000,000 crore (US$ 1.5 trillion) in infrastructure over the next five years
- To upgrade 1,25,000 km of road length over the next five years, the estimated cost of Rs 80,250 crore (US$ 12.03 billion) is envisaged under Pradhan Mantri Gram Sadak Yojana-III (PMGSY)
- 30,000 km of PMGSY roads have been built using Green Technology, Waste Plastic, and Cold Mix Technology.
- Government has ensured power availability to states at affordable rates through model – One Nation, One Grid.
- Government has proposed to permit investments made by Foreign Institutional Investor’s (FIIs)/Foreign Portfolio Investments (FPIs) in debt securities issued by Infrastructure Debt Fund.
- Individual taxpayers with annual income up to Rs 500,000 (US$ 7,500) will get full tax rebate and hence will not be required to pay any tax.
- Tax Deducted at Source (TDS) of 2 percent on cash withdrawal exceeding Rs 1 crore (US$ 0.15 million) in a year from a bank account to promote less cash economy
- The effective tax rate for individuals having taxable income above Rs 2 crore (US$ 0.30 million) has been increased.
- The limit for applicability of lower corporate tax rate of 25 percent increased from Rs 250 crore (US$ 37.50 million) to Rs 400 crore (US$ 60 million)
- Enhanced interest deduction up to Rs 350,000 (US$ 5,250) for purchase of an affordable house.
- The government increased income tax surcharge for HNIs (high net worth individuals) earning more than Rs 2 crore (US$ 0.30 million) a year. Those earning between Rs 2-5 crore (US$ 0.30-0.75 million) will have shell out 3 percent more, with surcharge rate being increased from 15 percent to 25 percent. Those earning above Rs 5 crore (US$ 0.75 million) will have to shell out a surcharge of 37 percent, from current 15 percent.
- No charges or Merchant Discount Rate (MDR) on the specified digital mode of payments. Large enterprises must compulsorily provide these methods.
Vision for the Next Decade:
- The become a US$ 3 trillion economy by the end of 2019
- Make in India with emphasis on MSMEs, Start-ups, defense manufacturing, automobiles, electronics, fabs and batteries, and medical devices
- Building physical and social infrastructure
- Digital India reaching every sector of the economy
- India plans electricity, clean cooking facilities for all Indian families by 2022.
- To ensure ‘Har Ghar Jal’ by 2024
- 125,000 km of road to be upgraded over next 5 years at a cost of Rs 80,250 crore (US$ 12.03 billion)
- Aims to achieve housing for all by 2022
- Blue Economy
- Healthy society – Ayushman Bharat, well-nourished women & children. Safety of citizens
- Team India with Jan Bhagidari. Minimum Government Maximum Governance.
- 19.5 million households to be built in rural areas.
Writer: Sakshi Gupta