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Details Analysis of Union Budget 2020

Nirmala Sitharaman -First Full time female finance minster.The longest budget speech at 2 hours and 41 minutes. (still she could not complete it due to ill health).The word “Budget” originates from the French “bougette” or leather bag.

The theme of Budget “Ease of Living”

The budget is woven around three prominent themes:

1.Aspirational Indiain which all sections of the society seek better standards of living, with access to health, education and better jobs.

2.Economic developmentfor all -“SabkaSaath, SabkaVikas, SabkaVishwas”.

3.Caring Societythat is both humane and compassionate, where Antyodaya is an article of faith.

Achievements of Indian Economy

  • India now the fifth largest economy of the world.
  • 7.4% average growth clocked during 2014-19 with inflation averaging around 4.5%.
  • 271 million people raised out of poverty during 2006-16.
  • FDI elevated to US$ 284 billion during 2014-19 from US$ 190 billion during 2009-14.

India is the 5th largest economy in the world in terms of GDP.

Central Government debt reduced to 48.7% of GDP (March 2019) from 52.2% (March 2014).

  • Highest ever number of people in the productive age group (15-65 years) in India.
  • GST removed many bottlenecks in the system.

Future Aim for sustaining India’s unique global leadership, driven by Digital Revolution

  • To achieve seamless delivery of services through Digital governance
  • To improve physical quality of life through National Infrastructure Pipeline
  • Risk mitigation through Disaster Resilience
  • Social security through Pension and Insurance penetration.

Rupee Come from

Rupee goes to

GOVERNANCE

1.STRUCTURAL REFORMS

2.DIGITAL REVOLUTION

3.INCLUSIVE GROWTH

STRUCTURAL REFORMS –GST & IBC

  • 20 per cent reduction in turn around time for trucks.
  • Benefit to MSMEs through enhanced threshold and composition limits.
  • Savings of about 4 per cent of monthly spending for an average household.
  • In last 2 years, 60 lakh new taxpayers added and 105 crore e-way bills generated
  • Honourable exit through IBC

Clean, corruption-free, policy driven, good in intent and most importantly trusting in faith.

Taxpayer Charterto be enshrined in the Statute will bring fairnessand efficiency in tax administration.

Companies Act to be amended to build into statutes, criminal liability for certain acts that are civil in nature.

Other laws with such provisions are to be corrected after

DIGITAL REVOLUTION

Shift to DBT -During 2018-19, `7 lakh crore transferred through DBT.

Next wave  of Digital revolution

Digital Governance

Improve physical quality of life through National Infrastructure Pipeline

Social Security through Pension and Insurance penetration.

INCLUSIVE GROWTH

Governance guided by “Sabka Saath, Sabka Vikas, Sabka Vishwas” with focus on:

• Preventive Healthcare: Provision of sanitation and water

• Healthcare: Ayushman Bharat

• Clean energy: Ujjawalaand Solar Power

• Financial Inclusion, Credit support and Pension

• Affordable Housing

• Digital penetration

FINANCIAL SECTOR

  • Deposit Insurance Coverage to increase from Rs.1 lakh to Rs.5Lakh per depositor.
  • Eligibility limit for NBFCs for debt recovery under SARFAESI Act proposed to be reduced to asset size of Rs.100 crore or loan size of  Rs.50 Lakh.
  • Proposal to sell balance holding of government in IDBI Bank
  • Separation of NPS Trust for government employees from PFRDAI.
  • Specified categories of government securities would be opened  for non resident investors
  • New debt ETF proposed mainly for government securities.

Tax proposals

  • Concessional corporate tax rate of 15 per cent to new domestic companies in manufacturing and power sector.
  • Tax concession for sovereign wealth fund of foreign governments and other foreign investments.
  • Simplified GST return shall be implemented from 1st April 2020.
  • Refund process to be fully automated.
  • Tax benefits to Start-ups by way of deduction of 100 per cent of their profits are enhanced by increasing turnover limit and period of eligibility.
  • Concessional tax rate for cooperatives proposed.
  • Turnover threshold for audit of MSMEs increased.
  • Extension of time limits pertaining to the tax benefits for affordable housing.
  • Issuance of Unique Registration Number to all charity institutions for easy tax compliance.
  • Health cess to be imposed on imports of medical equipment given these are made significantly in India.
  • Dividend Distribution Tax removed

Income Tax changes

Around 70 of the existing exemptions and deductions (more than 100) to be removedin the new simplified regime.

Remaining exemptions and deductions to be reviewed and rationalised in coming years.

New tax regime to be optional-an individual may continue to pay tax as per the old regime and avail deductions and exemptions.

Faceless appealsto be enabled by amending the Income Tax Act.

ASPIRATIONAL INDIA

The three components of Aspirational India are-

a) Agriculture, Irrigation and Rural Development

b) Wellness, Water and Sanitation

c) Education and Skills

16 Action points to Focus on

  • Farmer’s Income
  • Blue Economy
  • Storage
  • Animal Husbandry

Rs. 2.83 lakh crore to be allocated for the 16 Action Points

  • Rs. 1.60 lakh crore for Agriculture, Irrigation & allied activities.
  • Rs. 1.23 lakh crore for Rural development & Panchayati Raj.

Agriculture credit:

Rs. 15 lakh crore target set for the year 2020-21.

PM-KISAN beneficiaries to be covered under the KCC scheme.

NABARD Re-finance Scheme to be further expanded.

Comprehensive measures for 100* water-stressed districts proposed.

Blue Economy:

Rs. 1 lakh crore fisheries’ exports to be achieved by 2024-25.

200 lakh tonnes fish production targeted by 2022-23.

3477Sagar Mitrasand 500 Fish Farmer Producer Organisations to involve youth in fisheries extension.

Growing of algae, sea-weed and cage culture to be promoted.

Framework for development, management and conservation of marine fishery resources.

Kisan Railto be setup by Indian Railways through PPP:

To build a seamless national cold supply chain for perishables (milk, meat, fish, etc.)

Express and Freight trainsto have refrigerated coaches.

Krishi Udaanto be launched by the Ministry of Civil Aviation:

Both international and national routes to be covered.

North-East and tribal districts to realize Improved value of agri-products.

One-Product One-Districtforbetter marketing and export in the Horticulture sector.

Balanced use of all kinds of fertilizers -traditional organic and innovative fertilizers.

Measures for organic, natural, and integrated farming:

Jaivik KhetiPortal –online national organic products market to be strengthened.

Zero-Budget Natural Farming(mentioned in July 2019 Budget) to be included.

PM-KUSUMto be expanded:

20 lakh farmers to be provided for setting up stand-alone solar pumps.

Another 15 lakh farmers to be helped to solarise their grid-connected pump sets.

Scheme to enable farmers to set up solar power generation capacity on their fallow/barren lands and to sell it to the grid.

Village Storage Scheme

ØTo be run by the SHGs to provide farmers a good holding capacity and reduce their logistics cost.

ØWomen, SHGs to regain their position asDhaanya Lakshmi.

NABARD to map and geo-tag agri-warehouses, cold storages, reefer van facilities, etc.

Warehousing in line with Warehouse Development and Regulatory Authority (WDRA) norms:

Viability Gap Funding for setting up such efficient warehouses at the block/taluk level.

Food Corporation of India (FCI) and Central Warehousing Corporation (CWC) to undertake such warehouse building.

Financing on Negotiable Warehousing Receipts (e-NWR) to be integrated with e-NAM.

Livestock

  • Doubling of milk processing capacity to 108 million MT from 53.5 million MT by 2025.
  • Artificial insemination to be increased to 70% from the present 30%.
  • MNREGS to be dovetailed to develop fodder farms.
  • Foot and Mouth Disease, Brucellosis in cattle and Peste Des Petits ruminants (PPR) in sheep and goat to be eliminated by 2025.

Deen Dayal Antyodaya Yojana

0.5 crore households mobilized with 58 lakh SHGs for poverty alleviation.

ASPIRATIONAL INDIA

The three components of Aspirational India are-

a) Agriculture, Irrigation and Rural Development

b) Wellness, Water and Sanitation

c) Education and Skills

Healthcare and Wellness

Rs. 69,000 crore allocated for overall Healthcare sector.

Rs. 6400 crore forPM Jan Arogya Yojana(PMJAY):

More than 20,000 hospitals already empanelled under PMJAY

Viability Gap Funding window proposed for setting up hospitals in the PPP mode.

Aspirational Districts with no Ayushman empanelled hospitals to be covered in the first phase.

Targeting diseases with an appropriately designed preventive regime using Machine Learning and AI.

Jan Aushadhi Kendra Schemeto offer 2000 medicines in all districts by 2024.

TB Harega Desh Jeetegacampaign launched -commitment to end Tuberculosis by 2025.

National Family Health Surveys

show falling IMR and Under 5 mortality rate

Water

Rs. 3.60 lakh crore approved forJal Jeevan Mission:

Rs. 11,500 crore for the year 2020-21.

Augmenting local water sources, recharging existing sources, and promoting water harvesting and de-salination.

Cities with million-plus population to be encouraged to achieve the objective during the current year itself.

Sanitation

Rs.12,300 crore allocation forSwachh Bharat Missionin 2020-21:

Commitment toODF-Plusin order to sustain ODF behaviour.

Emphasis on liquid and grey water management.

Focus also on Solid-waste collection, source segregation, and processing.

Education and Skills

Rs. 99,300 crore for education sector in 2020-21.

Rs. 3000 crore for skill development in 2020-21.

New Education Policy to be announced soon

üNational Police University

üNational Forensic Science University

proposedfor policing science, forensic science, and cyber-forensics.

Degree level full-fledged online education program by Top-100 institutions in the National Institutional Ranking Framework.

Up to 1-year internship to fresh engineers to be provided by Urban Local Bodies.

Budget proposes to attach a medical college to an existing district hospital in PPP mode.

Encourage large hospitals with sufficient capacity to offer resident doctors, DNBcourses under the National Board of Examinations.

Special bridge courses to be designed by the Ministries of Health, and Skill Development:

To fulfil the demand for teachers, nurses, para-medical staff and care-givers abroad.

To bring in equivalence in the skill sets of the workforce and employers’ standards.

150 higher educational institutions to start apprenticeship embedded degree/diploma courses by March 2021.

External Commercial Borrowings and FDI to be enabled for education sector.

Ind-SAT proposed for Asian and African countries as a part of Study in India program.

Economic Development

1.Industry, Commerce and Investment

2.Infrastructure

3.New Economy

Industry, Commerce and Investment

Rs. 27,300 crore allocated for 2020-21 for development and promotion of Industry and Commerce.

Investment Clearance Cellproposed to be set up:

oTo provide “end to end” facilitation and support.

oTo work through a portal.

Scheme to encourage manufacturing of mobile phones, electronic equipment and semi conductor packaging.

National Technical Textiles Mission for a period of 4 years.

NIRVIK Scheme for higher export credit disbursement launched.

  • Higher insurance coverage
  • Reduction in premium for small exporters
  • Simplified procedure for claim settlements.

A scheme to provide subordinate debt for entrepreneurs of MSMEs

Scheme anchored by EXIM Bank and SIDBI to handhold MSMEs in exports markets

Turnover of Government e-Marketplace (GeM) proposed to be taken to Rs 3 lakh crore.

Scheme for Revision of duties and taxes on exported products to be launched.

Exporters to be digitally refunded duties and taxes levied at the Central, State and local levels, which are otherwise not exempted or refunded.

Zero Defect-Zero Effect” manufacturing.

Infrastructure

Rs.100 lakh crore to be invested on infrastructure over the next 5 years.

National Infrastructure Pipeline:

  • Rs. 103 lakh crore worth projects; launched on 31st December 2019.
  • More than 6500 projects across sectors, to be classified as per their size and stage of development.

A National Logistics Policy to be released soon:

National Skill Development Agency to give special thrust to infrastructure-focused skill development opportunities.

Project preparation facility for infrastructure projects proposed. to actively involve young engineers, management graduates and economists from Universities. Rs.1.7 lakh crore proposed for transport infrastructure in 2020- 21.

Roads:

Accelerated development of Highways.

Airports:

100 more airports to be developed by 2024 to support Udaan scheme. Air fleet number expected to go up from present 600 to 1200 during this time.

Ports & Water-ways:

  • Corporatizing at least one major port and its listing on stock exchanges to be considered.
  • Governance framework keeping with global benchmarks needed for more efficient sea-ports.
  • Economic activity along river banks to be energised as per Arth Ganga concept.

Railways: Five measures:

  • Large solar power capacity to be set up alongside rail tracks, on land owned by railways.
  • Four station re-development projects and operation of 150 passenger trains through PPP.
  • More Tejas type trains to connect iconic tourist destinations.
  • High speed train between Mumbai and Ahmedabad to be actively
  • 148 km long Bengaluru Suburban transport project

Power:

Efforts to replace conventional energy meters by prepaid smart meters

Rs.22, 000 crore proposed for power and renewable energy sector in 2020-21.

Expansion of national gas grid from the present 16200 km to 27000 km proposed.

Further reforms to facilitate transparent price discovery and ease of transactions.

New Economy

  • Knowledge Translation Clusters for emerging technology sectors
  • Scaling up of Technology Clusters harbouring test beds and small scale manufacturing facilities.
  • National Mission on Quantum Technologies and applications with an outlay of Rs.8000 crore proposed.

1. Women & child, social Welfare

2. Culture and Tourism

3. Environment and Climate Change

3. Caring Society

Women & child, social Welfare

Allocation of Rs. 35,600 crore for nutrition-related programmes proposed for the FY2020-21.

Rs.28,600 crore proposed for women specific programs.

6 lakh anganwadi workers equipped with smart phones

Issue about age of a girl entering motherhood – proposed to appoint a task force to present its recommendations in six months’ time.

Financial support for wider acceptance of technologies,

identified by Ministry of Housing and Urban Affairs to ensure no manual cleaning of sewer systems or septic tanks, to be provided.

Rs. 85,000 crore proposed for 2020-21 for welfare of Scheduled Castes and Other Backward Classes.

Rs. 53,700 crore provided to further development and welfare of Scheduled Tribes.

Enhanced allocation of Rs. 9,500 crore provided for 2020-21 for senior citizens and Divyang.

5 archaeological sites to be developed as iconic sites with onsite Museums:

  • Rakhigarhi (Haryana)
  • Hastinapur (Uttar Pradesh)
  • Shivsagar (Assam)
  • Dholavira (Gujarat)
  • Adichanallur (Tamil Nadu)

Environment & Climate Change

Allocation -Rs.4400 crore for 2020-21.

Proposal to close the old thermal power plants with

carbon emission above the pre-set norms.

States that are formulating and implementing plans for ensuring cleaner air in cities above one million to be encouraged.

PM launched Coalition for Disaster Resilient Infrastructure (CDRI) with Secretariat in Delhi. Second such international initiative after International Solar Alliance.

National Recruitment Agency (NRA)

An independent, professional and specialist National

Recruitment Agency (NRA) for conducting a computer based online Common Eligibility Test for recruitment.

A test-centre in every district, particularly in the Aspirational

Districts.

A robust mechanism to be evolved for appointment including direct recruitment to various Tribunals and specialised bodies to attract best talents and professional experts.

New Statistics Policy

Promote use of latest technologies including AI.

Lay down a road-map towards modernised data collection, integrated information portal and timely dissemination of information

*India’s growth data controversy

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