New Delhi, July 5: Plunging high over the estimations for the Union Budget, the nation at large seems satisfied for the rural angle provided, uplifting each and every class, sector and model of the society. With no changes in the personal income tax rates made for the individuals, traditional red ‘bahi-khata’ has focused on easing lifestyles, building infrastructure, empowering women, farmers; taking the economy to new heights.
This being the first of its kind budget, being presented by the recently elected Finance Minister for the second term of the Modi reign, it has left no precinct unturned for the national evolution. With the first session focussing on the rural aspects of the coverage, the second session in the house specifically centred over urban developments.
Banking and Finance :
With the NPAs in PSU banks reducing by over Rs 1 lakh crore in the last year, the Finance Minister has allotted Rs 70,000 crores to boost deep pockets. The said banks are also to be provided with one time 6 month credit guarantee of Rs 1 lakhs to buy high rated pool assets of sound NBFCs.
“The government is setting an enhanced target of Rs 1,05,000 crore for disinvestment and will continue with disinvestment of PSUs in the non-financial space”, said the Finance Minister.
Further lauding the honest taxpayers for filing direct and indirect tax returns, FM Sitharaman said that the tax collection had increased to 11.37 lakh crore to 2018-19 from 6.37 lakh crore from 2013-14, the growth being 78 per cent. She also declared 25 per cent tax for all the companies with annual turnover of Rs 400 crore. While there are no changes in personal income tax rates, the budget has increased the custom duty by 2 per cent on gold.
MSME sector :
Given the government of India’s latest Make in India push, along with a significant jump in the FDI flows, the Indian MSMEs sector is poised for rapid growth and integration with major global value chains.
Allocating Rs 350 crores for 2 per cent interest subvention for all GST-registered MSMEs on fresh or incremental loans, the Budget papers enhanced pension theory for shopkeepers and retailers with turnover less than Rs. 1.5 crore to be launched under Pradhan Mantri Karma Yogi Maan Dhan Scheme.
Further proposing 100 per cent Foreign Direct Investment for insurance intermediaries, the Centre has decided to provide pension benefit for 3 crore retail traders and shopkeepers. “India’s Micro, Small, and Medium Enterprises base is the largest in the world after China. The sector provides a wide range of services and is engaged in the manufacturing of over 6,000 products ranging from traditional to hi-tech items”, she said.
Zero Budget Farming :
Focusing over the need for a new deal to deal with rural Indian evolution, the traditional ‘bahi-khata’ noted it’s all efforts to be at the core of ‘Gaon, Garib and Kisan’.
Driving the force to apply ease of doing business to farmers and the fishermen community, FM Sitharaman said that these two were significant and most crucial to the nation’s development. “We should go back to basics on zero-budget farming. We need to replicate this model across the nation”, she affirmed.
The financial document also focused on doubling the farmer’s income by 2022. For this, it further decoded zero budget farming where the costs of raising the main crop are offset by the income that farmers earn from intercrops. “We'll invest widely in agricultural infrastructure”, the Finance Minister said.
Education Policy Sector :
Research and innovation forms the base of inventions, is what is widely believed. Considering this, FM Sitharaman proposed to establish a National Research Foundation to fund and promote research, a proposal which is likely to have been taken from the draft new education policy already in public domain.
“NRF will assimilate the research grants being given by various ministries independent of each other. It will further ensure that the overall research eco-system in the country is strengthened with focus on identified thrust areas relevant to our national priorities and towards basic science without duplication of effort and expenditure. We would work out a very progressive and research oriented structure for NRF. " the finance minister said in her Budget 2019 speech.
Besides providing funding, NRF will take care of the need to seed and build research capacity in universities and colleges through a formal mechanism of mentoring that will be instituted. Further, the document announced to launch a ‘Study in India’ initiative, encouraging the exchange of foreign students.
Infrastructure Development :
Giving a massive push to the infrastructural development in India, the Budget for New India declared to invest Rs 100 lakh crores in infrastructure in the coming 5 years period, where an expert committee will be set up to recommend structure of financing for the same.
The Government moved to undertake comprehensive restructuring of the national highway programme. Envisioning to use rivers for cargo transportation, the budget took over to enhance navigational capacity of Ganga. “The government also aims to decongest roads and railways while the phase 2 of the bharatmala project will soon begin”, said the Finance Minister.
“Connectivity is the lifeline of the economy”, she said stressing at various rejuvenating projects such as BharatMala, Sagarmala and UDAN, that aid in bridging rural urban divide and improving Indias’s transport infrastructure.
Sitharaman further proposed that a public private partnership (PPP) be used to unleash faster development and delivery of passenger freight services for railway projects to boost the connectivity. "Railways will be encouraged to invest in suburban railways through special purpose vehicles and enhance metro rail network through PPPs," she said.
Approving the rail and metro projects for 300 km across the country, the lady Minister said that 657 km of metro rail network had become operational across country while railway infrastructure would need Rs 50 lakh crore investment till 2030.
Nari tu Narayani – Women Empowerment :
Highlighting the issue of women empowerment in her maiden Union Budget speech, India’s first full-time woman Finance Minister referred to the contribution of women in the success and growth of India. “It has been India’s tradition-naari tu narayani”, she said.
She said that with the announcement concerning women, the government wanted to reinforce its approach which went beyond women-centric initiatives to women-led initiatives. The NDA government has always supported women and will continue to do so.
Announcing a new initiative, the Finance Minister said that the government proposed to expand Women self-help group interest subvention programme to all districts in the country. Encouraging more and more women to come forward and shine, she further announced that one woman in each SHG would be made eligible for loan up to Rs 1 lakh under the Modi government’s Mudra scheme.
Space Business :
In a major boost to India's space research sector, the Union Budget noted the Indian Space Research Organisation (ISRO) to have a new commercial arm, New Space India Limited (NSIL) aiming to help the Indian space agency commercialise its launch vehicle and other state of the art technologies in the global space market.
“The new commercial arm will focus on production and marketing of space-based products and services, including launch and applications; transfer of technology developed by ISRO Centers and constituent units of DoS; marketing of some spin-off technologies and products, both in India and abroad; and any other subject, which the Centre deems fit”, said FM Sitharaman.
Defence Budget :
Keeping the financial outlay for the defence sector constant as it was in the Interim Budget, FM Sitharaman said that the import of defence equipment had been exempted from basic customs duty.
“Defence has an immediate requirement of modernisation and upgradation. This is a national priority. For this purpose, import of defence equipment that are not being manufactured in India are being exempted from the basic customs duty”, she noted.
The budgetary allocation according to the interim budget for the defence sector crossed ₹3 lakh crore for the first time, as opposed to the allocation of ₹2.95 lakh crore in 2018.
Start-ups in India :
Waking ahead to boost thousands of start-ups in India, the NDA-led government has announced a host of incentives to release the entrepreneurial spirit, as noted by the lady Minister.
These include a TV programme exclusively for start-ups, easing foreign direct investment rules into start-up segments like grocery, e-commerce and food delivery and proposing a host of enhancements to the digital payment systems ecosystem that would help fintech start-ups.
The other initiatives consist of incentives for electric vehicles that would help EV start-ups, ensuring that they do not feel the heat of angel tax from I-T authorities.
The financial outlook has also proposed 100% FDI in insurance intermediaries, a classification that most digital insurance start-ups fall in. Apart from this, the government has allowed 100% FDI in single brand retail and proposed removing the 30% local sourcing norms.
This being an all-inclusive budget, it observed no major changes while noting a set of developments to be undertaken in the coming five years. Focusing over India’s soft powers, the Union Budget this time, totally went on to revamp the extant policies, stepping up towards ‘New India’ and aiming to earn the title of a 3 trillion dollar economy by the end of 2019.