The first Budget of this new decade is #JanJanKaBudget. It combines futuristic vision with a definitive action plan for growth. The Budget will boost income, investment, demand and consumption. It will strengthen our financial systems and the credit flow- Prime Minister Narendra Modi
Budget 2020, presented on 1st of February, lays the groundwork for India’s continuing progress and development. This visionary budget focuses on giving a boost to the economy, and aims at economic empowerment of every citizen in the country.
Aspirational India On the Back of Increased Farmer Incomes
This budget aimed to ensure a good deal for all sections of our society, focusing on better standards of living, access to health services, education and jobs. It laid out a sixteen-action point programme approach to reform Agriculture, Irrigation and Rural development, Wellness, Water and Sanitation and Education and Skills. A massive amount of Rs 2.83 lakh crore has been allocated for agriculture, allied sectors and rural development.
To reduce loss of perishable agricultural goods, Kisan Rail scheme has been announced, whereby more cold storage rakes shall be added. Along with this, a revolutionary step of Krishi Udaan has also been announced, to utilise airways and help our farmers become exporters. In a major step to ensure the Anna Daata also becomes Urja Daata, 20 lakh farmers will be provided support for setting up stand-alone solar pumps under PM-KUSUM, and another 15 lakh farmers will have their pump sets solarized and connected to the grid. This will significantly augment farmer incomes, and increase savings from reduced dependence on diesel.
A major boost to fisheries and fish processing via Sagar Mitra has been announced, with formation of fish farmer producer organisations and Sagar Mitras to provide coastal youth with employment generation and fish processing in coastal states like Bengal and Tamil Nadu.
Viability Gap Funding (VGF) scheme to set up efficient warehouses at the block/taluk level by Food Corporation of India (FCI) and Central Warehousing Corporation (CWC) has been announced. Village women will be encouraged to become ‘Dhaanya Lakshmis’, by enabling women’s SHGs to run a Village Storage unit, thus generating holding capacity and reducing logistics cost. To address the issue of water stress, a comprehensive plan for 100 water stressed districts is being formed.
Ease of Living
To ensure affordable medical treatment for all, a VGF approach shall be adopted to set up hospitals in the PPP mode, especially in aspirational districts where presently there are no Ayushman Bharat empanelled hospitals. This would also generate large scale employment opportunities for youth. To expand medical education in India, medical colleges will also be built attached to existing district hospitals in PPP mode.
To ensure quality education for students from deprived sections of the society and those lacking access to higher education, degree level full-fledged online education programmes will be offered by the Top 100 ranked institutions. Rs 99,300 crores have been allocated to education sector.Another big step for job-seekers was the announcement of a National Recruitment Agency, that will conduct computer based online test for recruiting in non-gazetted posts across every district.
Economic development – Supporting Entrepreneurship
A large emphasis within the budget was on entrepreneurship, acknowledging the fact that entrepreneurs are wealth and job creators. A National technical textiles mission has been set up to position India as global leader in technical textiles. Further, the Budget announced a forthcoming National Logistics Policy. Plans for massive development of infrastructure were specified, with targets of 2,500 km access control highways, 9,000 km economic corridor, and 2,000km strategic highways being announced.
Additionally, expansion of the National Gas Grid to 27,000 km and the completion of the Jal Marg Vikas project in National waterway 1 to realize PM Modi’s vision of ‘Arth Ganga’ of economic activity along river banks were laid out. Moreover, 100 new airports will also be built and all gram panchayat level institutions will be provided with digital connectivity byBharat net to connect 1 lakh gram panchayats.
A new scheme NIRVIK intends to provide higher insurance cover and reduced premium for small exporters and ensure seamless export led growth. Bringing major relief to depositors, the deposit insurance cover in bank has been hiked to Rs 5 lakh from Rs 1 lakh.
Further, it has also been proposed to make necessary amendments to Factory Regulation Act to ensure NBFCs lend more to MSMEs and debt restructuring window has been extended by a year benefitting 5 lakh MSMEs. For the Startup India registered firms, announcements on easing taxation on ESOPs and profits have been made. Audits for small traders, shopkeepers and small businesses with a revenueturnover of upto Rs 5 crores has been waived.
An Investment Clearance Cell to provide end to end clearances, give access to land banks and other facilities via a portal will also be institutionalized.
In a massive move, the government has also proposed to sell a part of its holding in LIC by way of Initial Public Offer (IPO).
An India That Cares and Nurtures
To ensure social welfare in India, several critical measures were announced. 6 lakh anganwadi workers will now be provided with smartphones to upload the nutrition status of 10 crore Households. Mission Indradhanush has been expanded to cover 12 more diseases.Rs 85,000 crore has been provisioned for development of SC and other backward classes and Rs 53,700 crores for STs.
Further, to give culture and history a fillip, five archaeological sites will be developed as iconic sites with onsite museums – Rakhigarhi, Hastinapur, Shibsagar, Dholavira, Adichennalur.Also, commitment to protect environment was demonstrated, with the government incentivizing states that ensure cleaner air by allocating Rs 4,400 crores.
Bonanza Tax Reforms Unveiled
Income tax rates have been effectively reduced for incomes of up to Rs 15 lakh, based on an optional scheme that payers can avail. To further prevent harassment by tax inspectorate, the government has also announced a faceless appeal system on the lines of the faceless tax assessment system. Moreover, the government committed to removing criminal liability for taxation related acts that are civil in nature.The Vivad Se Vishwas Scheme has been announced to reduce tax litigation. Under Vivad se Vishwas, only the disputed amount needs to be paid with all interests and penalties that have been accrued to be waived.
Noting the necessity of sovereign wealth funds investing big in India, the government announced a tax exemption on their interest, dividend and capital gains in infrastructure and notified sectors before March 2024. Additionally, sweeteners for the bond market in the form of better withholding incentives, including for bonds issued by municipal corporations were put out.
