The Finance Minister said that customs duty has been raised on footwear and furniture. Health cess on import of medical equipment has also been imposed in the Budget.
The government extended additional Rs 1.5 lakh tax benefit on interest paid on affordable housing loans to March 2021. Income Tax Act to be amended to allow faceless appeals against tax orders on lines of faceless assessment. The finance minister proposed a scheme to bring down litigation in direct taxation scheme. There are 4.83 lakh direct cases pending in various appellate forums.
The Budget proposes a deferment of tax payment by employees on ESOPs from startups by five years. The tax on cooperative societies proposed to be reduced to 22 per cent plus surcharge and cess, as against 30 per cent at present, Sitharaman said. The date of approval of affordable housing projects for availing tax holiday on profit earned by developers has been extended by one year.
A concessional tax rate of 15 per cent has been extended to power generation companies. The government has proposed 100 per cent tax concession to sovereign wealth funds on investment in infra projects. 20 per cent tax for individuals annually earning between Rs 10 lakh and Rs 12.5 lakh, 25 per cent for income between Rs 12.5 lakh and 15 lakh, 30 per cent for above Rs 15 lakh income under the new slab. A concessional withholding rate of 5 per cent on interest payment to non-residents has been extended up to June 30, 2022.
The new income tax rates will be optional, the finance minister said. A person earning Rs 15 lakh per anum and not availing any deductions will pay Rs 1.95 lakh tax in place of Rs 2.73 lakh. She said Rs 40,000 crore per annum will be revenue foregone from new income tax rates for individuals. She said the government has removed 70 exemptions, deductions with a view to further simplify tax regime. The Dividend Distribution Tax has been shifted to individuals instead of companies.
The government has proposed 10 per cent tax for income between Rs 5 lakh and Rs 7.5 lakh per anum for those who forego deductions and exemptions. Those earning up to Rs 5 lakh in a year will pay no tax. She also added that new income tax rates will be optional. For example. a person earning Rs 15 lakh per anum and not availing any deductions will pay Rs 1.95 lakh tax in place of Rs 2.73 lakh now. Rs 40,000 crore per annum will be revenue foregone from new income tax rates for individuals.
The finance minister said the recent cut in corporate tax to cause loss of substantial revenue in short run, and the economy will reap huge returns in due course. Income tax rates will be significantly reduced for those who forego reliefs, exemptions. For income between Rs 7.5 lakh and Rs 10 lakh per annum , tax rate has been reduced to 15 per cent from 20 per cent.
All flagship schemes of the government are provided for in the Budget. Expected tax buoyancy will take time. Net market borrowings would be Rs 4.99 lakh crore in FY 20; Rs 5.36 lakh crore in next fiscal.
The Budget has proposed debt-exchange traded funds comprising of mainly government securities. To address liquidity constraints of NBFCs and housing finance corporations, partial credit guarantee scheme to be launched by the government. The government will also sell part of its holding in LIC. Amendments to be made to enable NBFCs to extend invoice financing to MSMEs, says Finance Minister.
The government proposed a scheme to provide subordinate debt for entrepreneurs of MSMEs to be introduced. The government has asked RBI to extend debt restructuring window for MSME by a year to March 31, 2021. A National Recruitment Agency to be set up for conducting common online eligibility tests for recruitment to non-gazetted posts. The government proposed to increase investment limit of FPIs in corporate bonds from 9 per cent to 15 per cent. Certain government securities will be open for foreign investors, FM said. Rs 22,000 crore already provided as support to infrastructure project pipeline, she added.
The government proposed to put a robust mechanism in place to monitor health of banks. The finance minister said the depositors' money is absolutely safe. The government is holding the balance in IDBI banks to be sold to private retail investors. The government also proposed amendments to facilitate separation of government pension trust from PFRDA.
The Finance Minister said that a clean, reliable, robust financial sector is required to achieve USD 5 trillion economy. A robust mechanism is in place to monitor health of all commercial banks. She added that Rs 3.50 lakh cr has been infused as capital in public sector banks in past years. On the other hand, deposit insurance for depositors has been increased to Rs 5 lakh from Rs 1 lakh.
Finance Minister Nirmala Sitharaman: Robust mechanism is in place to monitor health of all schedule commercial banks and depositors money is absolutely safe— ANI (@ANI) February 1, 2020
The government proposed amendments in Companies Act to decriminalise civil offences and also proposed major reform in recruitment of non-gazetted staff. The finance minister said data must have credibility, National Policy on statistics to be brought in. Rs 100 crore allocated for hosting G-20 Summit The govt proposed Rs 30,757 crore for Jammu and Kashmir, and Rs 5,958 for Ladakh for fiscal 2020-21.
Nirmala Sitharaman was rather stern on tax harassment as she said that Tax harassment cannot be tolerated. Taxpayer charter will also be part of statute. She said, "We wish to enshrine in the statutes a taxpayer charter through this Budget. Our govt remains committed to taking measures to ensure that our taxpayers are free from tax harassment of any kind."
Finance Minister Nirmala Sitharaman: We wish to enshrine in the statutes a taxpayer charter through this Budget. Our govt remains committed to taking measures to ensure that our taxpayers are free from tax harassment of any kind. pic.twitter.com/brF2T2onGm— ANI (@ANI) February 1, 2020
The government has proposed a tribal museum in Ranchi, Jharkhand. Five archaeological sites in Haryana, UP, Assam, Gujarat and Tamil Nadu, to be developed with on-site museums. The government has allocated Rs 3,150 crore for the ministry of culture, Rs 2,500 crore for the ministry of tourism. Power plants with emissions above prescribed limits will be asked close down.
Finance Minister Nirmala Sitharaman: 5 archaeological sites to be developed as iconic sites with on-site museums -Rakhigarhi, Hastinapur, Shivsagar, Dholavira and Adichanallur pic.twitter.com/9wl9wk9WXW— ANI (@ANI) February 1, 2020
Rs 4,400 crore allocated for states that work towards clean air. PM KUSUM to be expanded to provide two million farmers in setting up standalone solar pumps. Wealth creators will be respected in the country. National Security is also top priority for this government, the finance minister said.
Nirmala Sitharaman said Rs 85,000 crore was allocated for SCs and OBCs in Budget for FY 2020-21. The government has proposed Rs 53,700 crore for welfare of schedule tribes and Rs 9,500 crore for senior citizens and divyangs for 2021-22.
The government will bring out policy for data centre parks throughout the country, said Sitharaman. The government proposed discoms to replace conventional meters with smart pre-paid meters, option to consumers to choose electricity suppliers. Fiber to home through BharatNet to link 1 lakh gram panchayats this year and Rs 6,000 crore will provided for BharatNet in FY21. Alongside, Rs 8,000 crore outlay will be provided for National Mission on Quantum Technology and Application over 5 years. On the other hand, all public institutions at gram panchayat levels such as police stations and post offices to be connected digitally, says FM.
Gross enrolment ratio for girls across all levels of education is higher than boys. To achieve higher export credit, a new scheme is being launched which provides higher insurance cover and reduces premium. The government allocated Rs 28,600 crore for programmes specifically for women. The finance minister said 150 higher institutes to start apprentice training for general category students. Rs 35,600 crore allocated for nutritional related programme in FY21. A task force to be set up to recommend marriageable age for women.
In the budget 2020-21, Rs 1.7 lakh crore has been provided for transport infrastructure. State governments need to replace conventional electricity meters with prepaid smart meters in three years, Sitharaman said. Rs 22,000 crore allocated to Power and Renewable Energy sector in 2020-21. Natural gas pipeline grid to be expanded to 27,000 km from over 16,000 km. Further reforms for transparent price discovery for natural gas will be undertaken, Sitharaman said.
She also added that from this year, digital refund of duties and taxes of Centre, states and local bodies will be made to exporters. The government will set up project preparation facilities for infrastructure sector, national logistic policy soon. Meanwhile, she said 100 more airports will be developed by 2025 to support Udaan scheme. The government will also consider corporatisation of at least one major port and listing it on stock exchange.
The budget includes a proposal for setting up large solar power capacity alongside rail track, which is under consideration. More Tejas type trains will connect tourist destinations. 1,150 trains to be run in PPP mode, also four stations to be redeveloped with help of private sector.
Nirmala Sitharaman emphasised that the government's vision is to make each district an export hub. She also proposed National Technical Textile mission with an outlay of Rs 1,480 crore over four years to cut down imports. She also mentioned that Rs 27,300 crore will be provided for the development and promotion of industry and commerce, while Rs 103 lakh crore infra project pipeline will be launched in December-end.
The finance minister said the Delhi-Mumbai Expressway will be completed by 2023, and the Chennai-Bengaluru Expressway will be launched. Meanwhile, 550 Wifi facilities have been commissioned at railway stations.
The government proposed to set up Investment Clearance Cell to give investors free investment advisory, land banks and facilitate clearances even at state level. Youth and fishery extension work will be enabled by rural youth as Sagar Mitras. 500 fish farmer producing organisations will be set up. India needs to boost domestic manufacturing and attract investment in electronic manufacturing, Sitharaman said. Milk processing capacity to be doubled by 2025. The government also proposed a scheme for manufacturing of cell phones, semi conductors and other electronic devices.
Sitharaman said National Police University and National Forensic University are being proposed. Degree level full-fledged online education programme by institutions ranked in top 100. The government proposed to attach medical colleges with district hospitals on PPP model to deal with shortage of doctors. Special bridge courses will be designed for teachers, nurses, para medical staff and caregivers. Rs 99,300 crore allocated for education sector, Rs 3,000 crore for skill development in FY21, she said.
The government proposed Rs 3.6 lakh crore towards piped water supply to households. Nirmala Sitharaman said the Centre will announce a new education policy soon. The government received over two lakh suggestions on it. She also added that steps will be taken to attract external commercial borrowing, FDI in education sector. The government proposed to start programme for urban local bodies to provide opportunities for internship to young engineers.
Proceeds from taxes on medical devices would be used to support setting up of hospitals, Sitharaman said. There will be viability gap funding for setting up hospitals in those districts with no empanelled hospitals under Ayushman Bharat. Viability gap funding will be provided to set up warehouses for agri products, too. An anti-TB campaign will be launched to eliminate TB by 2025, says FM. She also proposed to expand Jan Aushadhi Kendras in all districts of the country to provide medicines at affordable rates. The allocation for Swachh Bharat for 2020-21 stands at Rs 12,300 crore.
The Finance Minister added that NABARD refinance scheme will be expanded. She mentioned that one horticulture crop in one district on cluster basis will be promoted. The government has also proposed the conservation of marine fishery.
The finance minister said fish production will be raised to 200 lakh tonnes by 2022. The government also proposed to expand coverage of artificial insemination to 70 per cent from 30 per cent to increase livestock productivity.
Sitharaman said FCI and Warehousing Corporation of India to build warehousing facility on their land. NABARD will map and geo-tab 162 million tonne capacity agri warehouses across the country. Self Help Groups will be allowed to set up agri storage facilities in villages. Krishi Udaan will be launched by Civil Aviation Ministry to transport agri products to national as well international destinations. The Indian Railways will set up Kisan Rail in PPP mode for cold supply chain to transport perishable goods. Horticulture with 311 MT exceeds production of food grains. The Agri credit target set up at Rs 15 lakh cr for FY21, the FM said.
States asked to adopt three central model laws on agricultural land leasing, marketing and contract farming. Balanced use of fertiliser will bring about change in prevailing regime of providing incentive for use of chemical fertiliser, Sitharaman said. The government proposed plans to help farmers use proper manure and little water, encourage balanced use of fertilizers.
CM Arvind Kejriwal: Budget will reflect how much BJP cares about people of Delhi
Chief Minister Arvind Kejriwal on Saturday said that the Union Budget 2020, which is being presented merely a few days ahead of the Assembly election in Delhi, will reflect how much the BJP cares about the people of the city. Kejriwal said that in view of the upcoming Assembly polls, Delhi should get more prominence in the Budget.
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Sitharaman said the agricultural market needs to be liberalised. The government proposed to handhold farmers and a 16-point action plan to boost agriculture and farmers welfare. The government is proposing comprehensive measures for 100 water-stressed districts. 20 lakh farmers will be provided funds for setting up standalone solar pumps on barren/fallow lands, Sitharaman said.
Sitharaman said the government's aim is to achieve seamless delivery of services through digital governance. "Everything that we do, speak through budget, everything that government does is for the country. We have insured 6.11 crore farmers under the Pradhan Mantri Fasal Bima Yojna. Agri services need copius investments," she added.
This budget is woven around the theme: Aspirational India, Economic development and caring society, Sitharaman said.
Sitharaman said India is now the 5th largest economy in the world. The Central government debt reduced to 48.7% of GDP from 52.2 per cent in March 2014, and India uplifted 271 million people out of poverty, she said.
We have added 16 lakh new taxpayers to the system, she said. She said during 2014-19, the government brought a paradigm shift in governance. She termed the GST as a historic structural reform and said it integrated the country economically. "This Budget aims to fulfil aspirations of people. The average household now saves 4 pc in monthly expense after rollout of GST," she said.
"With renewed vigour, under PM's leadership, we commit ourselves to present the people of India with all humility and dedication. People have reposed faith in our economic policy," Sitharaman said. She said the Budget aims at boosting income, purchasing power of people. She said the fundamentals of economy are strong, inflation is well contained and banks cleaned up accumulated loans.
At the start of her Budget speech, Finance Minister Nirmala Sitharaman paid tribute to late Finance Minister Arun Jaitley and remembered his contributions towards bringing the GST regime.
#WATCH Live via ANI FB: Finance Minister Nirmala Sitharaman presents the full Budget of the second term of the Narendra Modi government. https://t.co/3mo97GEPcV (Source: Lok Sabha TV) pic.twitter.com/RzuEOBusaD— ANI (@ANI) February 1, 2020
The Union Cabinet headed by Prime Minister Narendra Modi approved the Budget for the financial year beginning April 1, that may see measures to lift the economy from the worst economic slowdown in 11 years. Meanwhile, Congress hoped it would provide relief to the salaried class.
Budget2019=— Randeep Singh Surjewala (@rssurjewala) February 1, 2020
Farm distress surged,
Public spending fell,
GDP nose dived!
Yet, Modiji gave Corporate Tax Cuts of âÂÂ¹1,45,000Cr
Let #Budget2020 give tax cuts to Salaried Class & invest in Rural India
#WATCH Delhi: Finance Minister Nirmala Sitharaman and MoS Finance Anurag Thakur arrive at the Parliament, to attend Cabinet meeting; Presentation of Union Budget 2020-21 at 11 am pic.twitter.com/J217IqrVUr— ANI (@ANI) February 1, 2020
The Union Cabinet meeting will be held at 10:15 am on Saturday, ahead of the presentation of the Union Budget 2020-21 in Parliament. Earlier, Sitharaman, who carried a 'Bahi-Khata', met President Ram Nath Kovind, accompanied by MoS Finance Anurag Thakur and other officials from her ministry.
(Photo: Pallav Paliwal)
The oldest book in the Budget Press library
#BehindtheMinister— Office of Mr. Anurag Thakur (@Anurag_Office) January 31, 2020
On the eve of #Budget2020, we’re sharing..amongst the oldest books in the #Budget Press Library; it narrates India’s economic transition since 1947.
The Budget Speech is perhaps the most guarded of all speeches,undergoing multiple drafts till its made public! pic.twitter.com/YSYhx6PxoI
Sensex plunges 279.01 points to 40,444.48 ahead of Union Budget; Nifty drops 81.45 pts to 11,880.65.
Sitharaman's second Budget is expected to announce measures to restore economic growth and to set out a clear road map for achieving the ambitious target of USD 5 trillion economy by 2025. Investments have failed to pick up despite corporate tax cuts and other stimulus measures, higher FDI inflows, plans to consolidate state-owned banks and monetary easing. After corporate tax cuts in September last year, speculation is rife about possible reduction in personal income taxes. A combination of an increase in the basic exemption limit and/or the introduction of a differentiated tax rate structure for higher incomes may be on the cards.
Finance Minister Nirmala Sitharaman and her team arrive to meet President Ram Nath Kovind, ahead of presentation of Budget.
(Photo: Pallav Paliwal)
Finance Minister Nirmala Sitharaman will on Saturday present the budget of the second term of the Narendra Modi government. This will also be the second budget for Sitharaman, who became the second woman finance minister after Indira Gandhi to do so in the history of independent India. Sitharaman will present the full-year budget for the year ending March 2021. The Budget speech will begin at around 11 am today with Sitharaman beginning it with an address to the speaker of Lok Sabha. Usually, the duration of the presentation ranges from 90 to 120 minutes.