On July 5, 2019, Finance Minister Nirmala Sitharaman presented her maiden Union Budget on behalf of the NDA-2 government.
Sitharaman kicked off this year's Budget announcement by stating that India is to become a $3 trillion economy by FY20, and expected to rise to $5 trillion by 2024.
Here are 10 major takeaways from this year's Union Budget announcement
1. Taxation
- Personal Tax: no changes in the tax slabs - those with income under Rs. 5 lakh pay no tax
- Super Rich: Increase in surcharges by 7% for those earning between Rs. 2 crore and Rs. 5 crore, and 3% for those earning above Rs. 5 crore, annually
- Corporate Tax: Lower rate of 25% corporate tax applicable to corporations having annual turnover of Rs. 250 crore has now been expanded to cover those having a turnover of Rs. 400 crore
- Special Excise duty and Road and Infrastructure Cess increases on petrol and diesel by ₹1 per litre each
- Aadhaar/Pan to be used interchangeably for the filing of tax returns
2. Public Finances
- Fiscal deficit reduced to 3.3% for FY 20, down from the 3.4% as the revised estimate of FY19
- Total budget of approximately ₹28 lakh crore
- The economy is worth $2.8 trillion, is estimated to reach $5 trillion in 5 years
3. Affordable Housing
- Pradhan Mantri Awas Yojana (Grameen): Proposal of setting up 1.95 crore houses equipped with toilets, electricity and LPG connections to eligible beneficiaries
- Pradhan Mantri Awas Yojana (Urban): 26 lakh houses have been completed, while 47 lakh houses are under construction
- Interest deduction for affordable housing, up to a value of Rs. 45 lakh, increased to Rs. 3.5 lakh from Rs. 2 lakh
4. Banks/PSUs
- Allocation of Rs 70,000 crore for PSU bank recapitalisation, of which ₹40,000 crore will go toward sustainable bank growth
- Government successful in the PSB consolidation, bringing the number down by 8
- Govt to re-initiate Air India disinvestment
- Loan recovery stands at ₹4 lakh crores in 4 years, and the disinvestment target stands at ₹1.05 crores for this year
5. MSMEs/Startups
- Pradhan Mantri Karam Yogi Man Dan Scheme: Extend pension benefit to 3 crore retail traders with an annual turnover of less than Rs. 1.5 crore
- Creation of payment platform for MSMEs for easy payment of bills
- Integrate traditional artisans and creative persons with the global market
- 10,000 new farmer producer organisations (FPOs) for ensuring market reach for farmers.
- Extended the period of exemption from capital gains from sale of startups
- Startups not required to justify fair market value of shares issued to investors in Category II Alternative Investments Funds
- Rs. 350 crore allocated for 2% interest subvention to all GST registered MSMEs on all fresh and incremental loans in current year.
- Launch of an exclusive TV channel for startups under Doordarshan bouquet to provide a platform for startups to disseminate information
- Expansion of self-help groups to all districts. Loan of upto Rs. 1 lakh to be provided to one woman in every self-help group under Mudra Yojana.
6. Public Infrastructure
- Railway station modernisation programme - to be launched this year
- Railways:
- Encourage to invest more in suburban rail network through special purpose vehicles
- Enhance metro rail network through public-private partnerships
- Roads: Carry out comprehensive restructuring of National Highway programme
- 1,25,000 km of roads to be upgraded under Pradhan Gram Sadak Yojana under Phase III for an estimated cost of Rs. 80,250
7. Education
- National Research Foundation (NRF) to fund, coordinate and to promote research in the country
- NRF to assimilate research grants given by various ministries
- A focus on training new age skills like AI, VR, robotics, 3D printing
- Allocation of Rs. 400 crore for world-class higher education institutions in FY20
- Study in India programme to attract foreign students
8. Green Tech/ Renewable Energy
- GST rate for electric vehicles reduced from 12% to 5%
- Incentive on purchase of charging infrastructure
- Additional income tax deduction of Rs. 1.5 lakh on interest paid on loans taken to buy electric vehicles
- Tax benefits for manufacturers of products like lithium batteries and solar chargers
9. Investment
- Liberalise FDI in aviation, media animation and insurance intermediaries
- Hike statutory limits for foreign investments in certain companies
- Creation of social stock exchange under SEBI to help organisations raise capital through equity, debt or a unit of mutual fund
- Centre proposes tax benefits to incentivise investments in GIFT City
10. Space
- New Space India (NSIL) has been incorporated as commercial arm of ISRO to harness India's space ability commercially
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