Our economy was $1.85 trillion when we assumed power (in 2014) and it reached $2.7 trillion (in five years since), finance minister Nirmala Sitharaman said tabling the Union Budget 2019-20 in the Lok Sabha on Friday.
Sitharaman became the first woman minister to present a budget in Lok Sabha in the history of India.
- Sitharaman said Modi government has set the ball rolling for new India. “Mazboot Desh Ke Liye Mazboot Nagrik” is the government’s objective. People of India validate 2 goals –national security, economic growth,” she said.
- Simplification of procedures, reduce red tape, make the best use of tech. Building social infra, Digital India, Pollution-free India, Make-in-India are government’s vision.
- India is set to become a $3 trillion economy this year. Heavy investment needed in infra and for job creation in MSMEs. India to enter into aircraft financing and leasing activities, soon.
- Movement of cargo on Ganga is estimated to rise 4 times in 4 years. Railway infra would need an investment of 50 lakh crores between 2018 and 2030; PPP to be used to unleash faster development and delivery of passenger freight services ₹50 trillion till 2030. The government envisions using rivers for cargo transportation, which will also decongest roads and railways.
- A comprehensive restructuring of National Highways Programme will be done, to ensure the creation of National Highways Grid of desirable capacity. The government envisions using rivers for cargo transport, it will also decongest roads and railways.
- The ambitious project of Bharatmala will enhance road connectivity and Sagarmala will help port and waterways connectivity. These along with other such initiatives such as Udaan scheme will improve India’s infrastructure and enable connectivity and bridge the rural and urban divide, she adds.
- The Modi govt will expand FDI in aviation, media, insurance. Trading in corporate bonds would be made user-friendly. Sitharaman promises to take steps to deepen the corporate bond market. The finance ministry has proposed to SEBI to increase public-holding in listed companies to 35% from 25%.
- 100% FDI will be permitted for insurance intermediaries. Annual global investors’ meet in India with top industrialists, top digital tech, top venture funds. Proposal to create an electronic fundraising platform for listing social enterprises.
- Loans up to 1 crore within 59 minutes policy implemented last year. Under the interest subvention scheme, this year, 350 crores allocated for 2019-20. For 2% interest subvention for GST registered entities on fresh or on incremental loans.
- Modi government intends to invest Rs 100 lakh crores over the next 5 years in infrastructure. RBI once again to get regulation authority over the housing sector, from National Housing Bank. Non-Banking Financial Companies will also be allowed to participate on TReDs platform.
- For the purchase of high rated pooled assets of financially-sound NBFCs amounting to one lakh crores in the current financial year, the government will provide one-time six months partial credit guarantee to PSBs to the first loss of up to 10 per cent.
- Huge relief to taxpayers, this includes self-employed, salaried and senior citizens, when their annual taxable income exceeds over Rs 5 lakhs, they do not have to pay taxes. The tax collection has increased to 11.37 lakh crore to 2018-19 from 6.37 lakh crore from 2013-14. The government is setting an enhanced target of Rs 1,05,000 crore for disinvestment during FY20 and will continue with disinvestment of PSUs in the non-financial space as well, she says.
- As a corporate gift a lower rate of 25% corporate tax for turnover of up to Rs 400 crores. Only 0.7 per cent would remain out of this policy. Earlier it was 25 per cent up to Rs 250 crores.
- GST reduced to 5 per cent from 12 per cent on electric vehicles and a global manufacturing hub proposed. Rebate of 1.5 per cent on the purchase of electric vehicles. 1.5 lakh tax rebate in the manufacturing of electric cars.
- The Budget proposes to move to an Electronic Invoice System wherein invoice details will be captured in a central system at the time of issuance. “This will eventually be used to prefill the taxpayers’ returns. There will be no need for a separate e-way bill. To be rolled out from January 2020, the electronic invoice system will significantly reduce the compliance burden”, said the finance minister.
- GST simplification: The threshold exemption limit for a supplier of goods is proposed to be enhanced from Rs. 20 lakhs to an amount exceeding Rs. 40 lakhs. Tax payers having an annual turnover of less than Rs. 5 Crore shall file quarterly return. Free accounting software for Return preparation has been made available to small businesses. A fully automated GST refund module shall be implemented. Multiple tax ledgers for a tax payer shall be replaced by one.
- On the Customs duty, the Finance Minister said the proposals are driven with the objectives of securing the country’s borders, achieving higher domestic value addition through Make in India, reducing import dependence, protection to MSME sector, promoting clean energy, curbing non-essential imports, and correcting inversions.
- The Budget proposes to increase Special Additional Excise duty and Road and Infrastructure cess each by one rupee a litre on petrol and diesel. “Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol,” the Finance Minister said. Sitharaman also announced an increase in customs duty on gold and other precious metals from 10% to 12.5%.