Union Budget 2020 : Nirmala Sitharaman
India’s Finance Minister Nirmala Sitharaman today presented the Union Budget 2020-2021 in the Lower House of Parliament. This is the second budget of Modi Government 2.0. In 2 hours 40 minutes Budget Speech, Smt. Nirmala Sitharaman has made some significant proposals for Tax matter & educational sectors development. Check some very important points of Union Budget 2020.
Key Highlights of Union Budget 2020
- Simplified income tax regime with low tax rates
- New tax rates optional for those not availing any exemption
- Zero Income tax for those whose earnings upto Rs.5 Lakh
- 10% income tax for income upto 5-7.5 lakh
- 15% income tax for 7.5-10 lakh
- 20% income tax for Rs.10-12 lakh
- 25% income tax for Rs.12.5-15 lakh
- 30% income tax for incomes above Rs.15 lakh
- Around 70 exemption removed under the new regime
- Government abolish Dividend Distribution Tax (DDT)
FM Nirmala Sitharaman: To improve consumption demand, private investment and public spending and since revenue side could not be pressed further, without violating FRBM (Fiscal Responsibility and Budget Management), we had to relax fiscal deficit target by 0.5%. #Budget2020 pic.twitter.com/shEojnfGEi
— ANI (@ANI) February 1, 2020
- Dividend to be taxes in the hand of recipients
- Corporate Tax cut to 15% for power generation companies
- 100% tax exemption for SWFs (Foreign Sovereign Wealth Funds) for infra investment
- Custom duty raised for footwear and furniture
- AADHAR based tax verification introduced
- Tax holiday for developer of affordable housing extended
- Tax on cooperative societies proposed to be reduced to 22 percent with surcharge and cess, as against 30% at present
- Central government to provide ₹99,300 crore for educational sector in FY21
- This year’s Economy Survey 2020 projected economic growth to rebound and hit 6%-6.5% in the next financial year starting April 1.
- Custom duty on fan upped to 20% vs 10%. Custom duty on specified goods used in refrigerators & ac hiked to 12.5% vs 10%.
- ₹100 lakh crore to be invested on infrastructure over the next 5 years
- Rs. 103 lakh crore worth projects; launched on 31st December 2019
- More than 6500 projects across sectors, to be classified as per their size and stage of development
- A single window e-logistics market to be created
- Concessional 5% withholding tax entended to municipal bonds
- Focus to be on generation of employment, skills and making MSMEs competitive
- National Skill Development Agency to give special thrust to infrastructure-focused skill development opportunities
- Project preparation facility for infrastructure projects proposed
- ₹1.7 lakh crore proposed for transport infrastructure in 2020-21
- A dividend distribution tax for companies will be scrapped, entailing a revenue loss of ₹250 billion
- Tax on cigarettes and other tobacco products to be increased
- The government raised fiscal deficit target to 3.8% of the GDP from 3.3% pegged earlier for 2019-20 due to revenue shortage.
- Union Finance Minister Nirmala Sitharaman announced that the Centre this year has allocated ₹9,000 crore for the welfare of senior citizens. Also, the government has allocated ₹53,700 crore for the uplift of Scheduled Tribes, and ₹85,000 crore for the welfare of Scheduled castes and Other Backward Classes.
- “The government will launch “TB harega desh jeetga” (TB will be defeated and the country will win) campaign to eliminate tuberculosis by 2025,” said Sitharaman while presenting the budget.
- Union Budget 2020 allocated ₹69,000 crore for healthcare sector. Out of the total amount, ₹6,400 crore will be sanctioned for Ayushman Bharat Yojna.
- India to provide ₹273 billion or promotion of industry and commerce
- Firms operating old thermal power plants advised to shut units if emission norms not met
- India to allocate ₹44 billion for clean air incentives in cities with over 1 million people
- FY21 divestment target pegged at ₹2.1 lakh crore
- Government to sell govt stake in IDBI Bank to private investors
- Government plans to sell stake in LIC through IPO, said Nirmala Sitharaman
- Fiscal deficit target pegged at 3.5% of GDP
- 150 higher education institutions to offer apprenticeship diplomas by March 2021. Government will promote ‘Study In India’ initiative.
Key Budgetary Allocations
- FY21 agriculture allocation ₹1.38 lakh crore
- Rural development allocation ₹1.23 lakh crore
- Agriculture and rural allocation ₹2.83 lakh crore
- Agriculture credit target ₹15 lakh crore
- Education allocation at ₹99,300 crore
- Healthcare allocation at ₹69,000 crore
- Transport infra allocation at ₹1.7 lakh crore
Skill India & Connective India proposals in Union Budget 2020
- Government proposed ₹3,000 crore for ‘Skill India’ to provide relevant skill training to the youth in the country
- Finance Minister Nirmala Sitharaman said ₹6,000 crore allocated for BharatNet programme
- Around 1 lakh gram panchayats to be linked with BharatNet this year
Clean Year & Pollution Free Cities and Swachh Bharat Mission (Proposals in Budget 2020)
- Power plants with emissions above prescribed limits will be asked to close down.
- India’s commitment towards tackling climate change made at Paris conference kick starts from January 1, 2021.
- Nirmala Sitharaman said ₹4,400 crore has been allocated for states that work towards clean air.
- The Finance Minister announced that the total allocation proposed for Swachh Bharat Mission is ₹12,300 crore
- Nirmala Sitharaman said the NDA government is “committed to Open Defecation Free (ODF) plus in order to sustain ODF behavior and to ensure no one is left behind.”
- ₹8,000 crore allocated over 5 years for National Mission On Quantum Technology
Health Sectors Proposals :
- Union Budget 2020 provided an additional ₹69,000 crore for the health sector
- Finance Minister proposed to attach a medical college to a district hospital in PPP model
Indian Railway Announcement :
- 4 station re-development projects in railways via PPP models
- To develop solar capacity in Indian railways
- Plan more Tejas like trains to connect tourist locations
- Govt to launch ₹18,600 crore worth Bengaluru Suburban Transportation project
- ₹20,000 crore for the renewable energy sector
- Indian Railways will set up Kisan Rail in public–private partnership (PPP) mode for cold supply chain to transport perishable goods.
Construction Planning :
- 2500 access control highway
- 9000 km eco-development corridors
- 200 coastal and port roads
- 2000 km strategic highways
- Delhi-Mumbai expressway and 2 other corridors will be completed by 2023
- Finance Minister Nirmala Sitharaman proposes to provide ₹1.7 lakh crore for transport infrastructure in 2020-21
- Cente to provide 20% equity for Bengaluru Suburban Transportation Raj
- 100 more airports to be developed by 2024 to support Central government’s “Udaan” scheme
- Govt has pegged the agricultural credit target at ₹15 lakh crore for fiscal 2020-21.
- Nabard refinance scheme will be expanded
(With Inputs from Livemint, Economics Times & Loksabha TV)
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