Finance Minister Nirmala Sitharaman tabled the Union Budget for Financial Year 2020-21 in the Lok Sabha. Union budget of 2020 is centered around three things- Aspirational India, Economic Development and a caring society
Sitharaman said, “This budget will boost income and purchasing power of the people.”
Here are the highlights of Budget 2020-21:
For FY21, the capital expenditure for the year has been increased to more than Rs 30 lakh crores, which is 12% higher than the previous fiscal. It can be seen as a strong signal by the Government to boost the core sectors of the economy.
# GDP deficit
The nominal GDP growth for FY21 will be revised to 10%.
Revenue deficit targeted at 2.7% of GDP, higher than the revised estimate of 2.4% in FY19-20.
The fiscal deficit is targeted at 3.5% of GDP, lower than the revised estimate of 3.8% in FY19-20.
Five new smart cities are going to be developed.
Private sector to be encouraged to build data center parks throughout the country to boost data connectivity and localization.
Rs 1.7 lakh crores allotted for providing transport infrastructure.
The government has also proposed a 100% tax concession to sovereign wealth funds on investing in infra projects.
Railways have been given budgetary allocation around Rs. 70,000 crores and an outlay for capital expenditure of Rs. 1.61 lakh crores. It is said that around 1,150 trains will run under a public-private partnership. The private sector will help in redeveloping four stations. Indian railway has also promised to start Kisan Rail for farmers. Tejas types of trains will be introduced on the fast track mode.
For the construction of new lines are allocated funds of Rs. 12,000 crores, for gauge conversion fund of Rs. 2,250 crores is allocated, Rs. 5,786.97 crores are given for rolling stock and around Rs. 1,650 crores for signaling and telecom services.
Around 100 new airports to developed by the year 2025 under the UDAN scheme to promote regional air connectivity.
Amount of Rs. 2,500crores will be given to boost tourism.
Five archaeological sites at Rakhigarhi (Haryana), Hastinapur (Uttar Pradesh), Shivsagar (Assam), Dholavira (Gujarat) and Adichanallur (Tamil Nadu) to be developed with onsite museums depicting their historical significance.
# Agriculture Sector
The government is going to help farmers by making plans so that they can use proper manure and little water. The government has estimated the credit outgo at Rs 15 lakh crore for FY 2020-21.
The government has also planned to incentivize farmers to go solar. Farmers with barren lands can install solar panel systems to monetize their fields.
Twenty lakh farmers will get funds for their standalone solar pumps under an expansion of the PM KUSUM scheme.
The online portal on ‘Jaivik kheti’ will be strengthened.
Food Corporation of India and Warehousing corporation is going to build warehousing facilities on farmers’ land.
# Education and Skill Development
Around Rs., 1 lakh crores will be given for education and Rs. 3,000 crores to skill development. The government is allocating Rs. 8,000 crores for National Mission on Quantum Computing and Technology.
The government has planned to expand the Mission Indradhanush and adding hospitals to its flagship healthcare scheme ‘Ayushmaan Bharat’. An amount of Rs. 69,000 crores have been allocated to healthcare and Rs 6,400 crores is given for Jan Arogya Yojana. The government has aimed at a target spending of 2.5 percent of GDP till 2025 on healthcare.
# Water and Sanitation
The government is going to introduce an action plan to ease water problems in India by helping 100 districts. Rs. 3.6 lakh crores allocated for setting up piped water supply to households. Around Rs. 12,300 crores allocated for Swachh Bharat for the fiscal year 2020-21.
# Employment and Entrepreneurship
FM is going to make an entrepreneur’s lives easier by setting up a new investment clearance cell. Single investment clearance window to be set up for promoting entrepreneurship. The National policy is said to be released soon for making MSME’s more competitive.
The government also plans to boost the manufacturing of mobile phones, electronic equipment under the ‘Make in India’ program.
The government is also going to set up a national recruitment agency of non-gazetted posts.
# Textiles and Exports
Rs 1,480 crores is to be given for the National Textile Mission. Narvik (Niryat Rin Vikas Yojana) scheme to be provided for enhanced insurance cover and reduced premium on small exporters.
# Social Welfare
Senior Citizens and specially-abled ‘Divyang’ are going to get enhanced allocation ofRs 9,000 crores.
To ensure clean air in cities Rs 4,400 crores will be allocated.
For the welfare of scheduled tribes, Rs 53,700 crores will be given. Rs 85,000 crores will be provided for the welfare of the SC and other backward classes.
This time the bank deposit insurance coverage is increased to Rs. 5 lakhs from existing Rs. 1 lakh.
Rs. 30,757 crores allocated for Jammu and Kashmir and Rs. 5,958 crores to be given to Ladakh.
The government is going to introduce LIC IPO and is also going to sell part holding in LIC, also in IDBI. Few specified categories of government securities will be opened fully for NRI’s.
# Income Tax Slab Rates
Salaried professionals earning up to Rs. 5 lakhs are exempt from paying taxes.
New tax slab will be optional for salaried professionals in the taxable salary bracket between Rs. 5-15 lakhs.
- 10% tax for taxable income between Rs 5-7.5 lakhs against the current 20%
- 15% tax for taxable income between Rs 7.5- 10 lakhs against the current 20%
- 20% tax for taxable income between Rs 10-12.5 lakhs against the current 30%
- 25% tax for taxable income between Rs 12.5-15 lakhs against the current 30%
In case they opt for reduced tax slab rates, they will not get any exemptions under Section 80C, 80CCD, 80D, NPS, Housing loan interest, etc.
No change in tax rates for those who are earning more than 15 lakhs.
FM has proposed to remove the unpopular dividend distribution tax.
New power generation companies will pay 15 percent under the new tax regime.
The government has extended an additional Rs 15 lakhs tax benefit on interest paid on housing loans to March 2021.
‘Vivid see Vishwas’ scheme for direct taxpayers whose appeals are pending. Also, the government is going to launch instant allotment of PAN on the basis of existing Aadhaar details.