Yet another historic budget in the NDA’s era. Breaking the age-old tradition of carrying a usual leather briefcase, Nirmala Sitharaman was seen carrying a traditional ‘Bahikhata’ (Wrapped in red cloth and tied with a gold string) with India’s national emblem shining on it. That was the moment of realization that we have finally moved ahead from the slavery of westerners and their customs.
From the past few months, the NDA government is putting ahead the vision of India for being a $5 trillion economy. This budget added more power to this vision. This budget definitely shows the commitment of the Government towards ‘Sabka Sath Sabka Vishwas’ theme. This budget has a universal appeal from poor to rich, from small stores to big businesses. From environment protection to promoting Gandhian principles, from rural infrastructure to harnessing India’s space abilities.
Though, there has been a lot of outrage on social media about “Inheritance Tax”. As per some sources Government was about to introduce the new Inheritance Tax in the Budget 2019-20 but nothing goes usual in the NDA Government. No Inheritance Tax has been added. It just came out as a rumour.
Today, India is the fastest growing major economy in the world. From the 11th largest economy in 2013-14 to 6th largest economy in 2019-20 we have taken a big jump. Aiming for a $5 trillion economy is most feasible in such a scenario.
Now, let’s look into the Budget 2019-20 and what’s in it for everyone:
- No income tax for less than 5 lakh per annum income.
- To enhance the ease of tax-payers, PAN and Aadhaar to be made interchangeable. ITR can be filed without PAN by quoting Aadhaar.
- Enhanced interest deduction up to Rs. 3.5 lakh for purchase of an affordable house.
- Sabka Vishwas Legacy Dispute Resolution Scheme proposed for quick closure of service tax and excise related litigations.
- Tax benefits for corporate taxpayers.
- Schemes like Mudra, Ujjwala, Saubhagya etc. to continue and expand their beneficiaries base.
- Additional income tax deduction of Rs 1.5 lakh on the interest paid on loans for EVs.
- It is proposed that several reform measures will be taken up to promote rental housing
MSMEs & Corporates:
- The lower rate of 25% is applicable to firms with an annual turnover of Rs 400 crore, earlier it was up to 250 crores. This will cover 99.3% of all companies.
- Measures are being rolled out to ease filing returns and tax compliance. Taxpayers with an annual turnover of less than Rs 5 crores will have to file only quarterly returns now.
350 crore rupees allocated for 2% interest subvention for all GST-registered MSMEs on fresh or incremental loans.
- To promote digital payment, now the business establishments with an annual turnover of Rs 50 crore will offer a low-cost digital mode of payments to customers and no charges or merchant discount rates shall be imposed on customers as well as merchants.
- To discourage the practice of making business payments in cash, the Government proposed to levy TDS of 2% on cash withdrawal exceeding Rs 1 crore a year from a bank account.
- An electronic invoice system is proposed by the Government that will eliminate the need for a separate e-way bill.
- Start-ups and investors who file requisite declarations and documents will not be subjected to tax scrutiny. An e-verification mechanism will be added.
- Government has proposed a TV program for the start-ups & stand-up India Scheme.
- An overdraft of 5,000/- INR will be allowed to every verified woman SHG member having a Jan Dhan account.
- Rs. 1 lakh loan under MUDRA scheme for one woman in every SHG.
- To further encourage women entrepreneurship, Women SHG Interest Subvention Programme to be expanded to all districts in India
Agriculture, Rural, Labour & Poor Class:
- 95 crore houses proposed to be provided under PMAY Grameen by 2021.
- “Four Labour Codes” Government proposing to streamline multiple labour laws.
- By 2022, 100% Power & LPG connections to every single rural family.
- Pradhan Mantri Man Dhan Scheme: Pension benefits to 3 crore shop owners with an annual turnover of less than Rs 1.5 crore.
- Jal Jeevan Mission – To ensure Har Ghar Jal by 2024.
- Pradhan Mantri Matsya Sampada Yojana: The department of fisheries will address critical gaps in the value chain, including production, quality control etc.
- 100 business incubators to be set up in 2019-20 under ASPIRE to develop 75,000 skilled entrepreneurs in Agro-rural industries.
- Pradhan Mantri Grameen Digital Saksharata Abhiyan – Internet connectivity to all.
- 100 new clusters to be set up in 2019-20 under SFURTI. It will enable 50,000 artisans to join the economic value chain.
- Ease of doing business to extend to farmers and they should not face state-level arbitrages
Upgrading Education System:
- World Class Institutions in 2019-20 – 400 crore Rs. allotted, which is more than 3 times the revised estimates of the previous year.
- Gyan Initiative has started.
- Study in India initiative will be started for the exchange of foreign students.
- Increase efforts to improve the skills of youth in the current trends such as Artificial Intelligence, Robotics etc.
- Focus on Global Education Model.
- A Gandhipedia is being developed to sensitize youth and society at large on positive Gandhian values
- Investment of Rs 50 lakh crore between 2018 and 2030.
- PPP (Public-Private Partnership) for faster, efficient and proper development of railway infrastructure.
- Special Purpose Vehicles (PSVs) will be encouraged for the suburban railway network development.
- Development of inland waterways will reduce the pressure on Indian Railways.
Vision of faster, more punctual and safer trains journey and thus focus on modernisation of the railway infrastructure.
- Elimination of all manned level crossings in the coming years.
Infrastructure for all:
- Rs 100 lakh crore for infrastructure development for the next 5 years.
- To bridge the urban and rural gap – Bharatmala Project to enhance road connectivity, Sagarmala for waterways connectivity & Udaan for air connectivity.
- “One Nation, One Grid” for power availability to states at affordable rates.
- We are facing a severe water shortage in many areas. To improve the condition Jal Shakti Mantrayala has been constituted. 1592 critical blocks over 256 districts identified for Jal Shakti Abhiyan.
- Harnessing the space power: New Space India Limited, a public sector enterprise, has been incorporated to tap the benefits of R&D carried out by ISRO.
- 25 lakh KM of roads will be upgraded
Few other major decisions by the government:
- To popularize sports at all levels, National Sports Education Board for development of sportspersons to be set up under Khelo India.
- The government will develop 17 iconic tourism sites as world-class tourist centres.
- The government is setting an enhanced target of Rs 1,05,000 crore for disinvestment during FY20.
- Proposed to SEBI to increase the threshold of public shareholding in listed companies from 25% to 35%.
- Propose to increase special additional duty and road and infrastructure cess on diesel and petrol by Re 1.
- 3% Increase in the surcharge for individuals with incomes between 2 to 5 cr. 7% increase in the surcharge for incomes above 5 cr.
- A new series of coins will be made available for public soon.
- Import of defence equipment is being exempted from basic customs duty. It is important for modernization of the defence system
Along with all this, the Government highlighted achievements of the NDA in the last 5 years and how they have been successful in making India fastest growing major economy in the world. One of the key success of this government is able to hold the inflation rates in single digits consistently from the last 5 years. Government is able to attract a whopping amount of FDI in the country. Central Govt. Debt as a percentage of GDP has been falling from the last 5 years. India’s sovereign external debt to GDP ratio is amongst the lowest globally at less than 5% now. This shows the Government’s intent to take the country to the new heights and we are pretty much sure that this budget is one more positive step towards the big vision of $5 trillion economy and at the same time maintaining the ideology of “Sabka Sath Sabka Vishwas”.
This article is co-authored with Prasad Karwa.